How To Invest: Personal Finances

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But why do you have to "learn" about investing at all?

Obviously you want to make more money.

But there is a much more pressing reason: the economic climate makes you an investor whether you like it or not.

Inflationary pressures of the 1970's and early 1980's eroded the wealth of many. This was especially the case for those individuals on fixed incomes from savings and pensions. Perversely, and simultaneously, fortunes were made by those fortunate enough to be in beneficial investments, such as property and precious metals.

A more profound change followed.

With the advent of increased wealth, and the accompanying availability of disposable income, came consumerism and the need to plan for the future: for the family well-being and for a happy and prosperous retirement. With the increases in longevity, the latter has become even more necessary, yet harder to achieve. These changes in wealth and need required servicing.

The Financial Services industry was born.

Money, and all the places we could invest, were opened up to aggressive advertising, marketed, and sold as packaged products.

The "Big Bang" in financial services had arrived.

Overnight even simple everyday decisions became bewildering.

And in addition: schemes offering products for time-shares, tax planning, school fees, inheritance tax, and offshore investment accounts and insurance.

What about the Stock Markets?

In fact, they only led to much more stringent investor protection, although this is still far from perfect. Governments have tried, at various times, to curtail the excesses and regulate the markets. This, until recently, has been undertaken by the Government of individual countries, but the banking crisis of the last decade means that a more global approach is necessary.

The boom of the Russian (and Russian satellite countries) economy, and the Chinese (and other Asian countries) market economies, alongside the creation of the ever-expanding European Union hold uncertainties for the economy and monetary system.

It has had an impact on the world economy.

The US economy has historically had an effect on us all. When that is booming we prosper: when it is in the doldrums the world economies have followed suit.

But that is changing: emerging economies are no longer as reliant on the US economy. In fact it is the US economy that is becoming more reliant on emerging markets to sustain the illusion of wealth.

What these events show is that the pace of change is always accelerating.

The result is more risk for the unwary and uninformed, but increased opportunity for the knowledgeable. The upside is that the internet arrived, and with it online investing, and the opportunity for everybody to become knowledgeable.

I say "opportunity" for you must take advantage of the information that is presented - that is if it has been made available!

In this series of articles the information you need to understand how to invest your personal finances will be laid bare in simple terms as an 'Investing for Beginners' tutorial program.