24
I March 2018
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Becoming a Savings and Investments Millionaire.
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FINANCIAL MATTERS
SHABAB GULFRAZ Shabab Gulfraz is our resident Finance expert.
I went to an event last week, and someone asked me a question about whether it was possible to become a millionaire just from saving funds in an ISA and other investments, and if so how easy it is. I just thought to myself, god why is it when someone finds out I am an IFA does the first thing that come into their mind always be around making money. Anyhow, his question got me thinking because so long as someone plans financial matters right, there is nothing stopping them from building a million pound portfolio from putting away regular amounts of money over a long period of time. Now coming to becoming a savings millionaire, is it possible, well yes it is. There has been recent research from Hargreaves Lansdown highlighting that the number of ISA millionaires in their client bank has increased from 3 in 2012 to circa 168 in the current year. They say, “building a million pound ISA portfolio is not just about putting the
full annual allowance in and banking on a rising market. Successful investors have built a coherent strategy, taking a sensible amount of risk, being committed, and building a long term view� As an investor and also an adviser, I agree with the above comment. This is because based on my clients that have amassed wealth in their portfolios, the wealth has been amassed due to usually having a balanced mainstream view of investments where the assets are actually not the high flying shares, but instead funds, which are mapped to the clients risk matrix. So, what are my top tips then with reference to building yourself a snug nest egg for the future. I guess the first tip would be to actually start investing and putting a small money aside until you are actually comfortable with investments. The second tip is to use your annual ISA and savings allowance efficiently; therefore, ensuring all investments are
tax efficient. With reference to risk my view would be do not take undue risk, and please do not go over the top. It is always better to take a managed risk, and make some returns, rather than risking funds in high risk funds with a very high level of volatility that you are not going to be comfortable with. In my view it is these people that think it’s a get rich quick scheme that lose funds, and are the real losers when it comes to investing. This is because once someone suffers a loss in my view it will hit them psychologically and they might not invest again; therefore, potentially one bad experience inevitably stopping them from investing in the future. Overall, I would encourage you all to invest, but please invest appropriately, and if you are unsure or uncomfortable undertaking investments yourself, then take some professional advice. However, please do not put all your eggs in one basket, and just invest all your money.
Shabab is an experienced financial adviser and a business development consultant with a passion for working with businesses who are both ambitious, and responsive to changing market trends whilst specifically focusing on the needs of both new and existing clients. Although he provides holistic financial planning advice to clients he also specialises in investment planning, pension planning, and inheritance tax planning strategies. He has significant experience with all aspects of ethical, and Shariah compliant investments for thae private and corporate client. In addition to this he has sound understanding of commercial and business legal issues after completing a Post Graduate Diploma in Legal Practice, and later completing a Masters in Business Administration (MBA). The MBA led to a greater interest in change management and financial management within the workplace.