Risk 4

"But I don't want to take any risks with my Money". Yeah yeah I have heard this one many times and that's fine as long as you are happy to run the risk, the very considerable risk, that leaving funds on deposit with a bank is as risky as can be. Take this week's announcements that Inflation is over 3%, now that's actually OK because an economy to improve has to expand and therefore inflation is an effect of more money in the system. So there you are with your "totally protected bank account" and all I can say is that it won't lose but it won't gain. If inflation is running at say 3% and your interest rate is say 2% that is a guaranteed loss in my view. So its safe but is it?

Let's get your head around this, I will pause for breath while you get yours, (and relax) when you put money in the bank did you realise you are lending it to them? No! well you are and if you think about it you will slap your head at the obvious! Put a tenner in the bank and and they will seek to lend say £8 of that at 12% if they can. As an advert I heard recently "DO THE MATH".

So if you are going to lend to someone have you considered lending some to the likes of British Gas or Marks and Spencer's. Well you can, perhaps not M&S or the gas people, but in essence it is possible. They will borrow it from you at a good rate and promise to pay it back at some point in the future. But which company do you choose to lend to - Simple you don't an IFA will do it for you and he will manage it and continue to monitor the progress.

So there you are it could be risky to lend to the banks because you may not get a good return but the yield from the investment I have described could be as risk free but a better return and if your IFA is good he will ensure you can have the money back at any time. He's that good.

Now I am sure you all need to get on with other things so I off to enjoy my favourite sport it's called "Wind (as in clock) up the banks".