Three weeks have now gone since the referendum, when the British people decided to leave the EU: three weeks in which our currency lost 10% of its value against the euro and there could be worse to come, the property market has been left in uncertainty and forecasts for overall economic growth have been revised down.
Simply put, everyone in the UK has suddenly realised their politicians had no plan in place to face the consequences of a victory for Leave: Tories and Labour have been busy dealing with their internal, Shakespearean-like turmoil (‘Et tu, Brute?‘), Farage resigned from everything but his well-paid job in Brussels, Boris Johnson is still cleaning away the fragments of his crashed PM job dream.
So, what to do if you are concerned about your (little) savings? Betting on dollars, commodities, gold? Buying a property? And if so, where? Here there are five ideas that someone with a little capital could consider.
1. Invest in London. Whilst buying a house in London is almost impossible for the ordinary saver, you could still purchase a garage or a dismissed allotment. Big items can be extra risky (and many millionaires are now holding back), but small investments in London seem to be and to remain on the safe side, as they carry reasonable (i.e. not too high) costs and are usually easy to sell and revert to cash.
2. Invest in the Euro zone. Whilst I would not trade currency (unless you are a professional trader, of course), investing in the Euro zone would allow you to diversify your portfolio. Obviously, not anyone can invest in Paris or Milan: but a little house near Aix-en-Provence or in Tuscany could prove to be a smart medium-term investment available to the ordinary saver, and a place where you could like to spend your holidays, get some rent or enjoy your retirement. Arrange your finance here in the UK: low interest rates are going to stay, and bureaucracy here is more tolerable than abroad.
3. Invest in education. People think of university fees and other similar opportunities as costs: that’s a common mistake. Investing in your own development would allow you to progress in your career, or indeed to find a new one. It could be expensive, as you would find out, but money in bank is not giving you any interest, and maybe you don’t have enough to buy anything else than that MSc you’ve always dreamed about. Well, that MSc, statistically, would give you a much higher RoI than a flat in London.
4. Invest in good health. Really. Pursuing a healthy life style, a sound diet and a less stressful existence would give you extra years and gears. They come with a cost (maybe you can decide you can afford to work part-time? How much was that gym membership you could not believe your ears when you heard it the first time?), but chance are you won’t regret them.
5. Invest in your own business. Yes, that one you have always talked about with your friends. If you run things in a cautious way, you can start it without too much disruption to your own personal life and finance. Minimise starting costs, and try to involve only one person you could trust 100%, like a daughter, or your retired father-in-law. Start from analysing the cash flow, and ensure you identify how money can get in ASAP.
Unless you are Mark Zuckerberg, do not invest in IT, shares and companies you know nothing about: the co-founder of Facebook could afford to lose money, but can you? You don’t want to make any decision without carefully considering all implications. And yet, be sure you make a decision, eventually, and stick with it: if nothing else, Brexit has reminded us a thing or two on what happens when we fail to plan…