As I’m not, by birth, British, this may sound like a foreign concept to many of our readers. Broken down, the class was a glorified hand-holding exercise, put in place to help timid teenagers bond with their peers in the hope of alleviating four long years of academic solitude.
In Britain, my colleagues assure me, this class is replaced by alcohol.
While developing a close-knit social circle during these years can be vitally important over the long-term, I could never help but feel the education system missed a trick when it came to adding practical skills to students’ lives.
In the investment world, we are often told that because of the compounding effect of interest and reinvested dividends, the longer your investment time horizon, the easier it is to build a pot of capital capable of financing any of a number of life’s milestones.
Yet as many of us are shuffled away from home for the first time, we often lack the basic budgeting and saving habits that could set us up for the rest of our lives.
The numbers certainly back up this view. Anyone who had put £1,000 in the FTSE 100 20 years ago, for example, would have £4,228.24 now – and this is including the financial collapse of 2008 and the dotcom bubble in the early 2000s.
Performance of £1,000 invested in FTSE 100 over 20 years
Source: FE Analytics
By comparison, someone who had put £1,000 into the market a mere two years ago would have less than half as much – just £1,369.92 – even though the market has generally rallied over that period.
Yet many of us delay saving and investing for our future, caught up in a plethora of distractions and responsibilities.
However, much like I felt at university, in large part this negligence is due to the lack of guidance out there for people who are just finding their feet when it comes to financial decisions.
One of the unintended consequences of the Retail Distribution Review (RDR) has been the advice void left for anyone who has a relatively limited amount of money to invest.
We have launched FE Trustnet Investazine in an effort to start plugging that gap, combining the in-depth analysis you have come to expect from our website with the education investors need to make informed decisions about their financial future.
In the latest edition of Investazine, we have set out to help readers build a financial plan to cover the ever-increasing cost of education.
To find out more, download the latest edition of the magazine here.
As ever, your feedback is vital, so if you have any pressing questions about building your investment portfolio, please leave a comment below or send us an email.
