I started off on the normal path to success…. After completing my MBA at Birmingham University, I worked in the Corporate Finance team at Singer & Friedlander. I was then headhunted to join the Senior Banker group at ABN Amro and after several years I became one of the founding members of their Financial Sponsors team within the Corporate Finance Franchise. From there I went on to become Head of Investment Management at Strutt & Parker Real Estate Financial Services and then he joined Topland (one of the World’s largest private property companies) as a Director. That was considered “successful”
I had a Porsche a nice house, a good job…..
Thought I was pretty successful. "All that and a cup of tea”.
Turns out - I wasn’t.
I was a director of one of the World’s largest private companies in my 30’s. Anyone "looking in"….would be impressed.
But they didn’t see my pension statement. I kept that to myself.
On the face of it…..it didn’t look too bad. But there were an awful lot of “assumptions”.
One was about INFLATION. Let’s just say it was LOW.
I didn’t care. Inflation WAS low.
Retiring was a long way away.
Fortunately, 12 years ago, I did a bit of maths.
The question was really simple. What happens to my pension if we get inflation?
I crunched a few numbers (I can be a bit of a nerd).
Now it gets depressing…..
If you assume an inflation rate of 8% over the next 10 years - The present value factor is 0.463
Let’s say your pension pot is worth £1,000,000.
Bear with me, this is a bit boring. If you the multiply that pot by the present value factor, that means if we get 8% inflation for 10 years, in today’s money, it’s worth about £463,000
It gets worse.
If you apply an annuity rate of 4.5% that gives you an income of less than £21,000 a year - I assumed I'd retire at 60.
When I’d crunched the numbers annuity rates were A LOT HIGHER. But it still didn’t look very good.
I just stared at the screen - Unbelievable.
Back to TODAY. Things have got a lot worse.
£21,000 a year…..seriously? What about AFTER 10 years? I’m hoping to live longer than that!
I did this simple maths in my early 40’s.
I had a choice. Do nothing or something.
I chose SOMETHING.
I packed in my well paid job (I was raking in well over £100,000 a year) and started researching commodities. I was convinced they were the future. People thought I was mad.
Come to think of it. That does sound a little bonkers. My investments went well. I was asked to write a Newsletter for Moneyweek called Metals & Miners. Following this, I was asked to work with Jim Rickards on Gold Speculator, a Newsletter run by Agora Financial. This was great, but I was still worried about inflation
What about inflation? I told people - they didn’t listen. They do NOW.
8% inflation…..are you crazy? It was then running at less than 2%.
No-one believed me.
At the time of writing it’s over 10% and it could get WORSE. A lot WORSE…..please do something….or you’ll ALWAYS be scared of that heating bill and not being able to afford the food you want. I’m sure you NEVER want to worry about those kind of things. This is why I wrote my book. I’ve learnt a lot and wanted to share it with YOU.