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10 financial planning tips for gaining pounds in 2013

Losing pounds from your waist but adding pounds to your pocket should be the aim for the next 12 months.


by Michelle McGagh on Jan 02, 2013 at 11:36

10 financial planning tips for gaining pounds in 2013

Everyone wants to lose a few pounds of weight but gain a few pounds in their pocket as part of their New Year resolutions. Here are 10 ways for your to boost your financial health in 2013.

Scott Gallacher, director of Leicester-based independent financial advice firm Rowley Turton, recommends making small tweaks to your finances to boost your income and make sure your family is protected.

Gallacher's top tips are:

Keep a spending diary

‘Before you start sorting out your finances you need to know where all your money is going,’ said Gallacher.

If you never have any spare cash to save at the end of the month then you are more than likely frittering away money absent-mindedly. It’s surprising just how much the small purchases add up, including cups of coffee and sandwiches or magazines.

By keeping a spending diary, even for a month, you can see what unnecessary expenses you are shelling out for.

Set a budget

When you figure out where all your money goes by keeping a spending diary the next step is then to create a budget.

Cutting out unnecessary expenses does not mean living like a hermit, it has to be a realistic budget, said Gallacher.

‘Do you really need to spend £3 a day on fancy coffee?’ he said. ‘But make sure the budget is realistic and allows you treats otherwise it will instantly fail.’

Increase your income

When the economy is tough it may not be easy to convince your boss to give you a pay rise but if you can take on extra shifts then it may be worth doing.

Many people also boost their income by selling unwanted items on eBay or other auction and marketplace sites. And if you have a hobby, such as cake-making or woodwork, see whether you can make money from it.

Maximise your perks

Although most people are signed up to their employers’ pension scheme you probably aren’t getting the most out of your workplace.

Many employers offer different types of insurance, such as life insurance or dental insurance, and even savings schemes.

‘Many bigger companies offer valuable staff benefits such as pensions, savings schemes and staff discounts,’ said Gallacher. ‘Make sure you are taking full advantage of all of these benefits as they are equivalent to an extra pay rise.’

For those who are not part of their workplace pension scheme, the government plans to ensure they join through auto-enrolment.

Review your mortgage

The first question to answer is whether you are on the best mortgage deal. The mortgage market has become more competitive since the summer and the introduction of the government’s Funding for Lending scheme.

If you can swap mortgages without incurring high charges then moving to a lower interest rate will save you thousands of pounds. However, if you cannot move without paying a penalty then look at overpaying your mortgage to reduce the term of your mortgage and build up equity more quickly.

‘Check you have the best possible deal as this could save you literally hundreds of pounds a week,’ said Gallacher. ‘If affordable you should look to increase your monthly repayments as this could help you knock years off your mortgage.’

Repay your debt

This is a common sense approach to managing your finances; there is no point building up a pot of money that accrues little interest when you have debts that charge you more in interest.

By keeping to a budget and working out where your money is frittered away you should have more money to pay off your debt. Start with your most expensive borrowings first, such as credit cards. 

Insure yourself

Insuring yourself and your wages is also insuring your family and making sure they are protected should anything happen to you.

There are two main types of cover: income protection, which replaces income if you are made redundant or unable to work; or critical illness which pays out if you become ill.

‘You and your wages are your most important assets, don’t forget this and make sure you are insured against ill health or death. You should speak to an independent financial adviser to ensure that any insurance you have is competitive,’ he said.

Start a pension or increase your contributions

If you haven’t started saving for old age then you need to start now. The earlier you start saving the better thanks to the power of compound interest; in fact someone who starts saving at the age of 20 will have around 50% more in their pension when they retire than someone who starts saving exactly the same each month from the age of 30.

We will all have to rely less on the government in retirement so you need to make sure you are prepared and have enough money to support yourself, whether that’s starting saving or increasing your contributions.

‘It’s never too early to start saving for your retirement,’ said Gallacher. ‘You want to enjoy your retirement drinking Chardonnay in the south of France, not eating baked beans on toast in Cleethorpes.’

Build an emergency fund

Saving for your future is important but so is making sure you have a pot of money to dip into should the worst happen, whether that’s a prang in the car or a broken down boiler.

Gallacher said that not having an emergency fund is often the reason for getting into debt as people have to turn to the credit cards.

‘The reason many people get into debt is because they do not have any savings to start with. Ideally you should have an emergency fund of between three and six months expenditure,’ he said.


High street savings rates are low and are expect to remain that way so the only way to make money, as long as you don’t need short-term access to your cash, is to invest in the stock market.

The most tax efficient way to do this is to invest through a stocks and shares ISA. Everyone has an allowance of £11,520 in 2013/14 and any profit you make on your investments rolls up tax-free and can be taken out tax-free.

‘The stock market has historically given much better long term returns that deposit accounts and with savings rates at historic lows consider becoming an investor rather than a saver,’ said Gallacher.

72 comments so far. Why not have your say?

Tony Peterson

Jan 02, 2013 at 15:43

Start a pension! Don't you know pensions are a scam designed to increase the wealth of fund managers, and governments as well, not you. Opt out. DIY in an ISA.

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Robert Hersee

Jan 02, 2013 at 16:16

I agree . Worst feature of all is the compulsion to convert at least 75% of your penson savings into an annuity when you retire, the return from which is completely unpredictable at the outset.

Particularly for a 20% taxpayer with a reasonable degree of self-discipline, the ISA route is the way to go.

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Anthony O' Grady

Jan 02, 2013 at 22:24

Still believe that for higher rate taxpayers the tax relief offered by pensions is attractive, including the tax free lump sum. If the Govt did away with either/both then that would be a game changer.

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Anthony O' Grady

Jan 02, 2013 at 22:25

PS. How many people actually like these new pop ups?

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Graham Bailey

Jan 03, 2013 at 08:33

Only reason i have my pension is that its matched contributions by my company so even it under performs it would have to drop below 50% before its no good. Otherwise I would be down the ISA route wholehertedly, cash saved tax free, don't get taxed at maturity and can access all your money all of the time without it being locked up in annuitys etc. Just wish I had the liquidity to run both options

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Jeremy Bosk

Jan 04, 2013 at 07:43

I still get these pop ups despite trying to use ad blocker to stop them. I have ad blocker set to minimum so that the site still can claim that I saw the non-intrusive ads i.e. those that do not pop up, blink, animate or make noises. I am in favour of Citywire making a profit from advertising so that I do not have to pay a subscription for a worthwhile service. But if these annoyances keep on, I will surely engage the full strength of technology to stop all advertising on the site.

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Dislexic Landlord

Jan 05, 2013 at 09:30

I hate the Pop ups too LOL

How do I stop them ?????

Pensions biggest con the British public ever had they only make real money for the owners and fund managers

as has been said above DIY and Isa is the only way forward Good shares with a good dividend

The other con since the 1960s is the house you live in is an investment

If I had my time over again I would rent my home and invest my money in BTL

With good yeilding propertys (buy and Hold never sell)

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Alan Anderson

Jan 05, 2013 at 10:05

Forget the Eurozone; forget the Fiscal Beach; forget the Asset Bubble. It's the Popups. That is the issue for 2013. Happy New-ish Year!

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Ian Craig

Jan 05, 2013 at 10:26

I agree - pensions are a scam. Hand over your cash; then sit back and watch the rules change - usually for the worse.

Pension fund deficits? Who remembers companies taking pension contribution holidays in the 90's? Gordon Brown looting with taxes on dividends? How about moving back retirement age? Who got booted out of final salary in the last 10-15 years? How about the lowered minimum annual increase (5% to 2.5%) because of the introduced contribution to the pension disaster fund? I tried to manage my wife's contribution pension; but, despite the glossy literature, I've not managed to break through the red-tape to do so.

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Rob Walker

Jan 05, 2013 at 10:34

It doesn't mention the money wasted by being over-insured (perhaps too much Financial Services in this article, as usual). Many employers give a multiple of income payout in the event of an employees death which, combined with mortgage protection insurance povides a tidy sum. Insurers play on the guilt of customers leaving their families 'destitute' - but at what cost to the here and now? Some contents insurance is double-covered by many peple on holiday/car/home insurance etc etc.

.....and Yes, Pop-ups are Pants!

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Gerry Simpson

Jan 05, 2013 at 11:17

Ian Craig has hit the nail on the head, it's the rule changes on long term products that kill them off as far as i'm concerned.

If I make a long term commitment then it should be honoured in the full, if that cannot be guaranteed, I'm out, as any self respecting dragon would say.

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TA via mobile

Jan 05, 2013 at 11:57

@Tony Peterson

Hello again! It's been a while old buddy.

I see you're back making sweeping statements which, as usual, make little sense to the wealthy, or indeed those with the sense to chose the best products.

You see, if you tell anyone with grey matter and enough earnings that they can make 40% in a year, they'd take it. That's why tax relief is an incentive. Ok you get taxed on the way out, but did you know the ways around that? Nah, I didn't think you did you fountain of wisdom!

So these are disigned to make money for the fund managers...and do you think there aren't ways of minimising those costs? Trackers maybe? Wraps where pension charges are. Around 0.2% per annum? No I didn't expect you DIYers to know about those things cos you're too busy worrying about paying for anything other than cynicism!

Great comments Scott. Keep up your good work.

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John Harmer

Jan 05, 2013 at 12:28


Inflation will destroy it (it is lowish now but who knows what will happne in hte future).

The Government will steal your pension fund, They have already don eso they will do so again. NEST is an example of the Government stealing.

Instead have lots of children and throw your self at their mercy

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TA via mobile

Jan 05, 2013 at 12:49

@John Harmer

Another example of one who knows little but harmful enough to shout as if omnipotent... Otherwise known as a dithering idiot.

Anyone who is a significant earner who doesn't take advantage of pension tax relief is simply thick. A little knowledge can be dangerous as they say...

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John Harmer

Jan 05, 2013 at 13:11

You do realise I hope that pension tax relief is effectively clawed back when the pension is paid, probably or possibly at a different rate as it was given. (May be higher or lower- it is impossible to know). So in reality as far as the tax man is concerned a pension is simply deferred pay. And pension contributions ignore the time value of money.

In the meantime that pay has been destroyed by inflation and is probably valueless. I know. It has happened to me.

I always k now when I have made a good point. The abuse starts.

I stand by my assessment.

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Dislexic Landlord

Jan 05, 2013 at 13:19

FAO Anon

AS you say ???

you're too busy worrying about paying for anything other than cynicism!

Im very cynical about IFA,s in genaral as are lots on Citywire by the sounds of it

The pensions industry has a lot to answer from there has been a list of probs over the years and its just turned folk with knowlage of finance totaly off

Pensions have there place but its only for 40% tax payers for the rest on low incomes there hopless

IFA,s are a bit like consultants who come into large companys when the management has lost its way

and you all know what the definition of a consulat is and i quote

a person you pay to tell you the time by your own watch

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John Harmer

Jan 05, 2013 at 13:34

Never ever trust an IFA.

Never ever trust the FSA.

Never ever trust the Government.

Sorry you are on your own.

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TA via mobile

Jan 05, 2013 at 13:51

@ John Harmer

So tell me how pensions are decimated by the time value of money? Explain to us how that is worse off than say a savings account. I take it you know the taxation withing the wrapper? Doubt it but there's always a chance!

As for you asking others to never trust an IFA...thank God.

Lots of research shows complaints against IFAs are lesser than bank staff or tied advisers. It's likely that you experienced shoddy advice due to refusing to pay for quality or seeking a adviser who applealed to your greeed of wanting to make money.

Either way now IFAs can just tell you DIY half wits to foxtrot oscar as there are worthy high earners who will benefit from their services on an ongoing basis. Anyone who thinks an IFA is out there to beat the market or "make money" apart from suitable financial planning is thick. Any IFA who also thinks they can beat the market is also thick...

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Tony Peterson

Jan 05, 2013 at 13:51

John Harmer

You've got the measure of the industry - which happily is shrinking.

I think those insolent, infantile ("cos") semi-literate ("disigned") anonymous posters who work in that industry but never declare their interest, are just spouting their unwarranted insults for fear their job will go next.

TA, I am not your "old buddy". Old, yes. I have been collecting a ludicrously shrinking (in real terms) private pension for 17 years. For the benefit of those who have not yet reached pension age, my experience (as one who has) is that taking the tax bribe was the most crappy, useless investment that I ever made. I am, however, much luckier than those taking annuities today.

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TA via mobile

Jan 05, 2013 at 14:24

Now the Tony, don't go all emotional on me. You really think my typing on a bloody annoying mobile device and using cos makes me somewhat dumb? You're losing you insight in your old age buddy.

The industry in shrinking for sure. That is because IFAs must now sell themselves and their value first. The choice is with the consumer. Many can't afford it. Many won't pay for it cos they believe they don't need it, or they can DIY. And those who fall into that category won't be big earners anyway.

The fact remains that big earners and busy people will pay an IFA to take care of their matters.

As for you Tony old boy, started planning your care home fees? Time value of money will affect that planning you see. Hope your kids can tolerate you by then...

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Dislexic Landlord

Jan 05, 2013 at 14:35

oh anon from mobile

can I ask you in what context do you class a BIG Earner ?????

Wealth is a very funny thing

In my book wealth buys me freedom to live my life on my own terms

Im no longer a wage slave (Im pleased to say)

I answer to no body other than the customers who live in homes I own

For me freedom is worth a great deal I dont need holidays as my life is one long holidayt

I had dinner with a GP freind of mine the other day and he told me he earns more now than he ever has but he is still overdrawn in the bank at the end of the month

i dont think my nett income will be as high as his so compaired to me is he a big earner

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Tony Peterson

Jan 05, 2013 at 14:38

Nice person that TA, isn't he? Such a concern for my welfare!

He will be happy, no doubt to know, that my wife and I can safely budget for care, should we need it, for long enough for us to break a few longevity records.

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John Harmer

Jan 05, 2013 at 14:57

The calculations are very difficult to understand and vary depending on personal and financial circumstances.

The disadvantage of a pension is the lack of flexibility. The enforced annuity is a killer.

There is a company pension which is really deferred pay. Growth is dependent on salary progression and tenure of employment none of which are guaranteed or within your control.

Then there is a personal pension. There are rules about annuities. And drawdown. As you should know the Government tried to change the rules late last year. They failed but will try again

But the key to whether a pension is good value is investment performance. Over the last ten years or so investment performance in the UK has been very bad and looks like being even worse in the future.

And neither of course is there any guarantee of investment performance.

So I consider flexibility is the key. Pensions do not give this. An ISA is much better

There is the tax relief but that is clawed back when the pension is taken. With an ISA you can invest at 6% tax free minimum. In a few years that compensates for the tax relief.

So in order of preference I suggest:

1. have lots of children,

2. have an Isa

3. have a personal pension preferably a SIPP.(but do not invest in British assets)

4. have a employers pension scheme (but do try to get out of it on good terms)

Lastly do your homework. Do not trust advisors. It is your money and your life

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Dislexic Landlord

Jan 05, 2013 at 15:08

Is there anyone who likes IFA,s

judgeing by this blog there down with Estate Agents ,Double Glazing Salesmen and Banks

bloggers on here are all intrested in investment otherwise we would not be here

you would have thought the bloogers here would use IFA,s but its the total oppersite

or do IFA,s make a liveing from the genaral Public who have very little intrest in financial matters

it makes you think

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James E.

Jan 05, 2013 at 15:47

If you don't save for your retirement, you will be poor. You are already paying for all those who didn't.

If you don't, do you expect the next generation to pay for your indolence? Because, they won't as there will not be enough money to go around.

You are arguing about different "wrappers" i.e pensions v isas, this is not the problem, it's doing nothing or too little that's the problem.

Investment professionals find it hard/impossible to beat the market, how do expect DIY investors to do any better? What you are describing is "gambling".

Do it full time or stop kidding yourselves, you will never be the next Warren Buffett.

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TA via mobile

Jan 05, 2013 at 16:01

Now then Tony, let's just hope you're savvy enough to pay for a quality care home as opposed to sommat cheap given your nack of not wanting to pay for quality. Mind you depends on what inheritance you wish to pass down...

@John Harmer

You've still not answered my question. What do you mean my the time value of money and inflation decimating a pension fund?

Mind you, I'm still laughing at your recommendations. Have lots of kids? And who's going to pay for their upbringing? Not the anti-evolutionary benefits system I hope? Only a fool (or someone with lots of money) will have "loads of kids" with the expectation of supplementing retirement!

"Have a employers pension scheme but do get out of it on good terms"

> Are you for real?!

I mean this comment alone can rule out your possession of logic or sense. You are a perfect example of what I've said before in that a little knowledge can be very dangerous. Whatever you do don't go and give advice to others... It is laughable at best and downright dangerous in any other form.

@Disleksick Land Lordship

IFAs down with estate agents and double glazing salesmen? I wonder where Land Lords come in? Preferrably in the zoo going by what most tenants say - you're nothing but a bunch of parasites according to most!

A lesson for all you half wits...a rule of life:

One gets wealthy by taking money out of another's pocket and transferring it into their own. Anyone in business or services earns a living by that simplified concept. It gets bad only when you take advantage out of the vulnerable. And IFAs did that by targetting vulnerrable savers, or, those who wanted to make the highest returns. Salesmen do that by selling you what they have when you might not necessarily need it. Doctors do so by recommending medication (knowing they get points and kickbacks) and operations privately. Lawyers do it by putting in the fear and spending more time than is perhaps needed. Landlords do that by screwwwing their tenants....what's the difference old chap?

Just amusing to see you DIY half wits try to justify why you're so much higher than shoddy IFAs! Get a life and watch Big Brother.

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John Harmer

Jan 05, 2013 at 16:20

Caveat emptor

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John Harmer

Jan 05, 2013 at 16:26


Salary 100 Tax 20 After tax 80. Invest at 6% compund In four years it is over 100.

100 is still 100

The government trying to restrict tax relief on pension contributions.Be aware.

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Tony Peterson

Jan 05, 2013 at 16:29

No wonder so many people detest IFA's, if TA is typical of them.

Abusive, sneering, illogical, irrational, he uses plenty of words he appears not to know the meaning of ( e.g. "emotional"), and he writes like a snarling, cornered animal.

Perhaps that's what he is - one with his livelihood threatened by those of us who have managed to secure our retirements to a degree that would surprise him if only he knew.

My paternal feelings towards this poor young man and his ilk are the same as Falstaff's towards lawyers.

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Dislexic Landlord

Jan 05, 2013 at 16:31

@Disleksick Land Lordship

IFAs down with estate agents and double glazing salesmen? I wonder where Land Lords come in? Preferrably in the zoo going by what most tenants say - you're nothing but a bunch of parasites according to most!

you know sticks and stone ect ect nah nah nana

how childish can you get makeing such comments empty vessals make the most noise

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Dislexic Landlord

Jan 05, 2013 at 16:34

you know its really funny how IFA,s turn nasty

Ive always said IFA,s are East End Boys in West End Suits

If anyone goes to them and pays for advice they really need there heads looking at

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John Harmer

Jan 05, 2013 at 16:35

To James E.

You have a choice. Children are no guarantee of a secure old age. Nor is a pension. But you can have fun spending rather than saving.

I am doing both.

The point is that in an age when no government can or will reduce inflation saving is a lot less attractive.

And the British government, like most government, has a vested interest in encouraging inflation.

You have a choice. Enjoy yourself now or take a chance and save knowing that your savings being destroyed.

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James E.

Jan 05, 2013 at 16:36

"Tax relief" is just a diversion. A pension contribution is/should be giving up some income today and investing it until you are no longer working. If you haven't received any income, you don't pay tax.

What these twat politicians especially Ed Balls!, are trying to do is to get you to pay tax i.e. by restricting "Tax relief" on income you have NEVER received! i.e. you would only get 20% tax saving.

This is madness. Let those f***ers give some of their bloated pension benefits before they start dishing out the pain to people who actually create the wealth to pay these parasites.

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Dislexic Landlord

Jan 05, 2013 at 16:39

Tony I could not have put your last blogg better myself

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Jan 05, 2013 at 16:50

Save for a pension - I saved into a pension all my working life, yes I got 20% tax relief and I amassed £56.500.

Now I have an annuity of £200.35 a month. Just about enough to take me out of benefits. My SIPP had charges for just about everything and in the end HARGREAVES LANSDOWN charged me £1429 just for arranging it the annuity, (they told me there were no charges at the time, just slipped it in the small print). No advice, just a couple of emails, a call or two and a letter.

The only people who make any money out of pensions are the likes of Hargreaves and Lansdown. I would have been better putting it into the average Investment Trust savings scheme, or spending it!!

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Tony Peterson

Jan 05, 2013 at 16:55

At least TA has given us "half-wits" his rule of life.

So that's how he hopes to get wealthy. Pickpocketing.

Unsurprising. But he must see himself as the "quality" end of pickpocketing.

I don't really think he has the knack (he couldn't spell that either).

He absolutely embodies what stinks about the financial services industry. He sees himself as one entitled to take from the suckers who have sought his services.

There's a word for him.

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TA via mobile

Jan 05, 2013 at 17:10

@John Hamer. So could you elaborate on your numerical example? An £80 contribution into a pension vs £80 saving vs whatever alternative you're proposing? Just be clear would you?

@Tony Peterson

So you think because of DIYers like you my job is under threat? It's about as daft as thinking teachers are under threat cos of the internet - I mean why send kids to school when they can self learn over the net whilst watching Jeremy Kyle?

You see Tony, I get paid retainer fees by everyone I look after. Most new prospects give me 2 fingers when I say I only take on retainer clients. You know why? Cos they think I'm too expensive, don't like straight talk, want me to give discounts, want no advice and just "set up" investments etc.

But let's look at those who do pay retainers. All earn over £150k pa. All have over £500k invested under my control. All get an annual statement showing what has been charged and how the advice has benefited them. Oh and at the end they get a no quibbles money back guarantee if they think I'm not worthy. You know what? No one has asked for any money back. I wonder why that is? And you think I'd want dithering idiots as clients who tell me what to do and don't value a service? Sad for you Tony grandad is that there are many wealthy people who continue to hire us every year. At the same time there are many who tell us to FO cos we're so different...and because we're on a retainer with a guaranteed income, we can pick who we want to work with.

So no grandad...I'm not under threat and can continue coming here laughing at you half wits.

Dislexic Landlord - I'm not getting angry. Just saying what you said, but looks like you can't handle it. Yes some IFAs are shoddy - just like you landlords who tenants refer to as parasites!

I can't wait for the reintroduction of the Rent Acts!

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TA via mobile

Jan 05, 2013 at 17:15

Ah Tony, you have taken my analogy quite literally. In your old age you seem unable to grasp the message behind that example. Do I really have to explain it to you old boy? It's like teaching grandads to suck eggs...

As for my speling - you really think I am going to put effort in when I'm using a phone? Your fingers can use one of them can't you? How I crave your paternalism my dear...

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John Harmer

Jan 05, 2013 at 17:27

80 compounded at 6% for four yeares 101. If in a pension fund it is taxed at 20% leaving 80.

If it is an ISA it is not taxed leaving 100.

Your choice.

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TA via mobile

Jan 05, 2013 at 17:30

@John Harmer

Harmer by name you are old fella!

Please tell me:

1. Where you'd get 6% compound guaranteed for 6 years

2. Where you found out a pension fund (not income via annuity) pays tax at 20%

We are all awaiting your answer to the above...

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Dislexic Landlord

Jan 05, 2013 at 17:31

Dear Ta

I can take lots of name calling its normaly from IFA,s strange enough

I hope my customer think im careing helpfull and a good bussiness women

You cant be good at bussiness unless you do have the three words from above

You will find Good Landlords play by the rule book and in my opinion its the only way to do bussiness

The problem with IFA,s is its not your rule book you are in genaral Sales Men who fire the bullets from Life companys

once you have sold a product you have very little say on what happens performace terms and conditions changes in govt policy

where the bussiness I run is down to me 100% sink or swim I cant blame anyone else

I can use phrases like past performace is no garantee ect ect or its an illastration only

Pensions are solong term and most likely after 30 years the person who sold it will no longer be around to blame

I bought a pension when i was 25 the guy who sold it worked for Canada Life

Canada Life dont even have a sales force now or a local office you have to ring a call center now for info at the cost of 20p per min from a mobile phone

Hardly good customer service and there still chargeing me fees

As for the rent act that will never happen again private landlords are filling the gap of councils and Houseing Asscations

If we dont provide rentable accomadation who will the country is broke

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Tony Peterson

Jan 05, 2013 at 17:45


A few points worth your consideration. Your pension treatment is far more outrageous than that of Equitable Life with-profits annuitants, currently receiving compensation for maladministration after a long campaign for justice.

With a pot of £56,500 under your own control, you could secure a rising income from selected FTSE 100 stocks of over £300 a month for starters, and one where the capital did not die with you. I think you, and almost all presently retiring individuals, have a case against IFAs, fund providers, the Bank of England, and successive governments.

For starters, your MP, and a call for the Parliamentary Ombudsman to adjudicate would be in order. Get a campaign going. I for one will donate to the fighting fund.

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TA via mobile

Jan 05, 2013 at 17:54

@Dilexic Landlord

You see those 3 qualities you might have. And so do most IFAs. Just cos a few are rotton doesn't mean everyone is. And if you believe they are then you are just thick. Your experience was in dealing with Canada Life's tied salesforce. I wonder whether IFAs call you names cos you're having a go at them? But then again who cares.

Look at my example above and you'll see that my clients, just like your tenants, think I have the same 3 qualities.

Looking from above you can also see the harm idiots like John Harmer does when they go around giving advice to others when not knowing basic facts. It really does epitomise why top qualityy IFAs will not waste time on these morons.

@Tony Peterson

No response to my situ I see as opposed to saying everyone has a legitimate claim against everyone else.

Remember I said you must be one bitter individual with a very bored housewife?

Looks like I'm right old buddy!

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John Harmer

Jan 05, 2013 at 21:25


An investment of 100 costs the pension holder 80 because of tax relief.

The 100 will vary in value and when the pension holder comes to take out his pension it may be worth more or less than 100. Nobody knows (In fact he cannot take it out- he has to buy an annuity or comply with the Gad rules.). Undercurrent legislation it will be taxed at 20% so the pension holder ends up with 80 (for instance)

So he has had to wait many years to get what he could have had immediatly. (And refer to brackets above). Hence the time value of money.

On this analysi a pension is a way of reducing your wealth.

investment, including pensions, nothing, repeat nothing is guaranteed. Nor is life.

But there are many good stocks with a dividend yield of over 6%. If you search on Wikipedia you will find them within 15 minutes.

For instance there is Telstra, the Australian equivalent of BT, or Veolia the French water and sewage utility.

All it take is a few minutes work. Cost 15 minutes of your time. If you have an IFA fire him.

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Dislexic Landlord

Jan 06, 2013 at 08:28


I wish you would not use words like THICK

I dont think anyone here is THICK I think most are switched on otherwise they would not be reading about Money matters

IFA,s have a very bad track record and its because youtake the brunt of the problems that have been caused by your masters the Life Companys

The List goes on and on

Endownent miss selling

Pension Miss selling

Equiltable Life Fiasco

Poor Performace

Stupid pridictons of performance I think 13% on pension Quotes

PPI which was sold by IFA,s and Banks

The genaral public have a very poor view of your industry

There is good and bad in every industry but the problem with yours is that you cant control what happens when you have sold a pension or a Investment

Also the govt changes rules all the time again you cant control this

I have quite a few freinds who have took advice from IFA,s and have regreted it it

They have started pensions and investments only to find charges and poor performance have effected there lives Big Style

Ie they cant retire or they cant pay of there house

when a person is told that there Pension Plan will not meet the Goals that were set at the start of the arrangement they feel cheated and hurt

and are told wel lit was all in the small print that was provided in a glossy Brocher from a Life Company

And Salt is rubbed in the wound whan there told you need to save Longer and put more money in the same product that has let them down from the start

The only product you sell which really says what is says on the can is Life Cover you pay a prumum you have a sum assured and if you die the family gets payed

This is where Life Companys started after all

If an IFA is really worth there pay why cant they work on payed by results

Myself as a Landlord Im payed on results as are most bussiness owners

hope i havent gone on too long but you may see my point its not a personal jibe its just what I see as a Life insurance Company Customer

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TA via mobile

Jan 06, 2013 at 08:55

Now then @John Harmer

Your interpretation is fundamentally flawed on many fronts. In fact it is laughable that you're able to come on a blog like this and put forward such an argument. It's like trying to justify 2+2 = nuts

1. Yes an investment of £80 will be £100 because of tax relief. What if they are a high rate payer?

2. Since when has a well managed pension fund remained at its original value at vesting age, assuming it is over the long term? You'd have to have been a thick DIYer or had a dumb IFA for this to have happened. Yes, it can happen over the short term but over the long term nearly every fund has increased above inflation. So your time value of money argument is a flat tyre.

3. You're right. Nothing is guaranteed. But then you say there are stocks paying 6% guaranteed! I ask again: are you for real?

Effective management of a portfolio over the long term guaranteed growth above inflation. It's a fact.

4. Your incorrect fact about it being tax free within an ISA but taxable within a pension confirms you know sweet FA about the technicalities of these things and its merits. Yet you have the nerve to say don't trust advisers!

5. You finally add spice to the night by saying 15 minutes of research online will find you 6% yielding stocks and that is better value than paying for an IFA!!


It is likely that you are neither a high earner or have significant investments. It is also likely that you struggled to pass 11+.

You are an embarrassment to hard core DIYers like uncle Tony. Ok, he's had issues with IFAs and doesn't like em, but at least he seems to know what he's doing. You're not his love child are you?

May all those half wits who DIY and possess your attributes fail like you have.

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John Harmer

Jan 06, 2013 at 09:48

Actually I am a multi millionaire.

This correspondence is closed.

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TA via mobile

Jan 06, 2013 at 13:57

@dislexic landlord

Yes you are right with some points. Many have been the salesmen of life companies and were incentivised to earn a living via commission. So they had to sell to earn a living. It also just happens that many people don't like paying fees so preferred the commission route.

Now there's little point in me trying to convince you about the merits of what fee-based financial planners do and it would make sense to address the points you've raised because the overall view is a tad out of date.

1. Endowments weren't a bad "sale". The fact is that most of the underlying investments did not perform as expected due to poor fund management. In theory they were great, but I'm sure had people been told that a repayment mortgage will guarantee debt freedom whilst an endowment had a risk, most would have dismissed the endowment. Commission on offer encouraged salesmen to say you're likely to get a surplus.

2. Projections and pension "misselling". These are done as per regulatory guidelines - so blame them and not advisers. Pensions were not missold at the start as the Tory government actively encouraged people to take charge of their destiny and move away from the state and final salary schemes. Again commission encouraged fantasies. Recently advisers churned pensions for commission and that was definitely misselling. Now that commission has gone, we'll have less of this.

3. PPI - these were sold mainly by banks 90% as opposed to IFAs so don't have a go at them.

4. Equitable life - what the heck has that got to do with IFAs?! Again appealing to investor greed and making unsustainable promises.

5. Poor fund performance - again nothing to do with IFAs unless they sold the concept of "making money". Only a fool will try and win a client by saying they can predict the market and make money. They are there to manage wealth and not make predictions.

I feel for your friends and I've heard many similar stories. But there's always successful stories as well and I can tell you that the most successful entrepreneurs entrust their IFAs with their money and a pension is a key tax planning vehicle for that. As is the advice. Eg. When you decide to call it a day (let's say you have 50 properties) how best is it to distribute? Don't tell me an accountant knows best cos they're mainly reactive and generally poor.

But as for asking me not to refer to people as THICK, looking at John Harmer's answers I beg to differ!

@John Harmer

You might be a multi millionaire, but you're still one hell of a thick individual. Running away with your tail between your legs after making factually incorrect statements yet providing all of us with some memorable moments!

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Dislexic Landlord

Jan 06, 2013 at 17:02

Hi Annon

Thank you so much for the answers

its been intresting subject you industry will have an up hill strugle fee or no fees

I stand by my thoughts which in a way is sad as a profesional you would have thought that I would have faith in the Life Insurance world

Ive met some nice IFA,s over the years and my problemis not with IFA,s its the companys who products they sell

I did personaly have a problem with PHI

I took out the policy and did every thing above board with the help of an IFA and when I did have an accident at work the Life company Swiss Life did every thing in there power not to pay me

The IFA who sold the policy was helpless to do anything it taught me that life companys can not be trusted

You only fire the bullets that are made by life companys and have very little ifluance on any of the small print when the life company becomes un helpfull

Ilike most on here invest my self personaly ISA stock and shares because I just have the faith in the Life insurance world im sorry to say

I agree accountans no very little other than arrangeing accounts

In this world you can only look after yourself and i think most DIY,s feel the same especialy after all the let downs over the past 20 years

IFA,s do what they think as right but the reality from the life insuraance world is very differant

I never set out to be a big Landlord it all happend by accident I love the bussiness I dont think i will ever sicken of being a Landlord

Hopefully my bussiness will pass to my son and his children in a family trust

as higher rate taxpayer I have arranged a small pension because of lack of earned income my pension contrabutions are in the region of 3k a year

so im not holding my breath the great thing about property is you can leave it to the next genarations and hopefully they will be more secure in thefuture when im gone

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Dislexic Landlord

Jan 09, 2013 at 15:39

I have just read this link and it shows how bad pensions have done in the last few years

And there was very little any IFA could do about the results of poor penisons

I would think most IFA,s must hate giveing this sort of news to a customer who wants to finish work

and they are powerless to help there customer

but guess what they and the life companys have made there money via commision and charges

thats the problem with IFA,s they get rewared even when they fail makes my blood boil

you would not get away with it in any other bussiness

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John Harmer

Jan 09, 2013 at 15:57

So never ever trust an IFA. And never ever have a pension. An Isa is much better value

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Dislexic Landlord

Jan 09, 2013 at 16:04

Hi John

You know that and I know that just the genaral public dont because most are conned by the TAX RELIFE

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Ian Craig

Jan 09, 2013 at 16:09

I never really thought about rubbing shoulders with IFA's on CityWire, but I guess our shared common interest on seeing "how the bones shake out" has lumped us together on CityWire.

The other consideration of mine is whether there is any benefit in continuing to invest in pensions when the likely pension bumps into higher-rate tax. It's all a bit worrying as Corporation Tax is looking vulnerable, so Income Tax increases (or other trickery) may reduce the delayed benefit.

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John Harmer

Jan 09, 2013 at 16:29

Note also that if you have a pension fund the government will change the rules. Osborne tried to do that in the last statement . He will try again.

Pensions are a useful source of cash for governments throughout the world. Ours is no different.

Remember. The government is your enemy. And they have police and prisons to force you to comply with their rules.

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TA via mobile

Jan 09, 2013 at 18:05

@Dislexic Landlord

For the last time let me tell you that an IFA is not there to beat the market. If they earn renewal commission for promising to do that then the client has the power to switch it off. If the IFA charges for services and it comes out of the portfolio there's absolutely nothing wrong with that. Get it into your head that its a payment for advice and a service - not to beat the market.

@John Harmer

I'm amazed that you have the nerve to still come here and talk about pensions as if you know what you're talking about - when its proven you made factually incorrect comments about the taxation within a pension. You are thick as has been proven!

@Ian Craig - you're right about the high rate margins and benefits. But remember, tax relief is there as an incentive to save. A high rate payer puts in £60 effectively meaning the growth is on £100. In the end he gets back another £25. So for a net contribution of £35 he has £100 - not bad in building wealth. There are many other ways a pension is used to maximise wealth and accelerate wealth accumulation but there's no point explaining them here. Ask thick millionaire John Harmer!

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Dislexic Landlord

Jan 10, 2013 at 08:29


You miss my point too

answer this question Please

When I was sold a Pension and Life Insurance Investments by a IFA why was I given Fund Performance

and given illastrations of around 13% on pension Plans and told that the Fund Manager had out performed the market time and time again

Performance for the above is vital otherwise why would anyone invest in the first place in pensions and life contracts

I can see your point in tax planning IHT and such like but not in performance related product which depends on beating inflation and provideing a pension to live on for the rest of the customers lives

I would think 99% of all customers were shown performace records its justpart of selling highlight the best parts of theproduct

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TA via mobile

Jan 11, 2013 at 23:29

Landlord - see my previous comment where I explained that the 13% illustration was what the regulator said. Not what was decided by an IFA.

Let's simplify what you went through.

1. You went to get advice

2. IFA (or you) decided a pension was suitable

3. IFA selected a pension provider

4. IFA has to select a fund manager (usually the provider's own)

5. IFA can therefore only quote what that manager has done over the past

6. The funds did not achieve 13% pa

7. You got frustrated

You see, had the IFA chosen asset classes and created a strategy and rebalanced annually, you'd have made closer to double digits over time. Since he just left the money there perhaps, things went wrong.

So there, the 13% is what was asked to be quoted on an illustration but the regulator. Blame them and not IFAs. But blame the IFA for convincing you that they were able to beat the market (and for not managing your money).

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Dislexic Landlord

Jan 12, 2013 at 07:46

So we blame the regulator for all the pension performace probs

You must be a very special IFA never to sell past peformace or a fund manager who has done well in his sector

All the IFA,s ive ever met said this will make you better off One said talk to me know and your Finacial future will be better

Thats why we all invest in the first place its not for the fun of it its to make money

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Anthony O' Grady

Jan 12, 2013 at 08:32

All western Governments will go bankrupt, but before they do so they will print money remorselessly. Remember Ben Bernanke is an economic disciple of Robert Mugabe. The only way that western Govts can shed their debt is to defraud their creditors with devalued currency. Of course if running ever higher deficits really worked then we wouldn't need taxation, but of course it doesn't work, it ends in disaster.

Equities will grow artificially in a money printing environment, but precious metals will fare even better. Buy physical gold and especially physical silver. You can't print either, and there is NO counterparty risk.

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Anthony O' Grady

Jan 12, 2013 at 08:34

PS. Sorry to Interrupt the private debate guys but I thought I might stray back towards the question.

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Jeremy Bosk

Jan 12, 2013 at 09:38

There are a number of problems with precious metals. The demand is driven by speculation and paranoia. They provide no income. Unless you live in Fort Knox, they cost money to store and to insure. Unless you keep them on the premises you cannot be sure that they are where the dealer says they are. Various countries are repatriating their gold stored overseas or demanding a physical audit because they do not trust the overseas banks. Is a dealer more trustworthy than a government?

Since the present problem is government induced deflation - austerity - I see no reason to fear short or medium term inflation. Rail fares, agricultural produce and utility bills aside, we are in a period of deflation. Food prices and arguably carbon fuels will come down in price again.

Manufactured goods are cheaper than ever. As an example, in 1988, anxious to get on the internet, I bought a 2 kilobyte per second PC modem for £200. (It is the kit that turns computer signals into telephone compatible signals and then back again at the other end, or its modern wireless equivalent). A modern router, capable of handling 16 megabytes per second and also capable of wireless operation is available for under £50. That is a quarter of the price, dual function and 8,000 times faster.

Which is an excellent reason not to worry about inflation as well as an excellent reason not to invest in electronic hardware makers.

Meanwhile most people. fearful of their jobs and their pensions, are busy saving, not spending and so adding to the deflationary forces. Every week another chain of high street retailers goes bust, half due to the shift on line and half due to lack of effective consumer demand. Economist speak: effective demand is when you want something AND can pay for it.

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Dislexic Landlord

Jan 12, 2013 at 09:39

well im saying nothing more

i wont be useing IFA,s

If I invest for makeing money IFA,s are not the place to look for it as stated above

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John Harmer

Jan 12, 2013 at 09:54

To Jeremy Bosk.

I could not decide whether you are a follower of Keynes or Hayak or some new economist of whom I havenot heard.

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Jeremy Bosk

Jan 12, 2013 at 12:46

John Hamer

To a man with a hammer, everything looks like a nail.

I try to keep a complete tool kit :-)

Philosophically, I am an empiricist who uses whatever works. I try not to be dogmatic and to see the wider interest. So I sometimes argue for what I believe is the public interest against my private interest. I hate eretic arguments - where the aim is to be like a barrister in court and win the argument with every weapon short of outright lies - regardless of truth. My social values are liberal.

Jane Austen wrote a novel called Sense and Sensibility. It contrasts people who while having feelings, do not abandon reason; with those who allow their emotions to overcome their reason. I try to be in the former camp.

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Anthony O' Grady

Jan 12, 2013 at 13:41


How to completely miss the whole point of owning precious metals in five elongated paragraphs.

The Fed began printing money after the collapse of LTCM and has carried on printing ever since. This is why gold is up by over 500 per cent in the last ten years.

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Jeremy Bosk

Jan 12, 2013 at 14:19


Inflation has not been of Weimar proportions and - for all the reasons I outlined - is not likely to become so. Panic and paranoia can just as easily go into reverse. If you go back a little longer than ten years, you will see that it has in the past.

But of course, past performance is no guide to the future :-)

If I was afraid of inflation, I might buy inflation linked bonds - if I could find any trading below par - or suppliers of things we have to buy at any price.

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Anthony O' Grady

Jan 12, 2013 at 14:46


The bull run in gold isn't being caused by inflation but rather the anticipation of the same via money printing. Inflation has been benign over the last decade, but look at the performance of gold compared to stocks.

Western Govts/central banks know that their countries are bankrupt. So the only way out is to default Icelandic style (probably best for the economy even if the short term fallout would be ghastly) or print money. They are choosing the latter option. They keep hinting that QE will come to an end, but this is deception because they know that the easy way out is to keep printing, and maintain negative real interest rates. This is by the way, a callous disregard of those people who have behaved prudently over the last 10 years by saving and borrowing at sensible levels.

In this environment precious metals, volatility notwithstanding, will flourish. I'm not saying put all of your money into precious metals, but over the next few years gold and silver will be an excellent hedge. If you don't fancy them fine, it's a free country.

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Anthony O' Grady

Jan 12, 2013 at 14:58


Another important component of this debate is how the Govt actually measures inflation. Are the figures trustworthy. If you listen to Jim Rogers he says not.

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Jeremy Bosk

Jan 12, 2013 at 15:10


Yes, anticipation. People have been expecting extreme inflation for a long, long time. I suspect that it is like "Waiting for Godot", the man who never comes.

Except when saving for a specific near term purpose, I would question whether saving large quantities of cash over the last ten years, or ever, was or is prudent. Money should be put to work.

As you say, opinions differ and it is a (relatively) free country.

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Jeremy Bosk

Jan 12, 2013 at 15:25


To your post at 14:58.

No, but RPI exaggerates inflation and that is the measure used in calculating the inflation on inflation linked Gilts.

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TA via mobile

Jan 13, 2013 at 08:58

Amazing how some good financial planning tips from Scott became so polluted with side issues!

@Dislexic Landlord

You're right here...don't use an IFA if you want to make money. If you want a better financial future then speak to one. Slight difference there.

As for the gold, inflation, Keyes debate...great reason why doctors sometimes sit in amusement when their patients come and discuss facts and viewpoints after researching wikipedia. Nowt wrong with that, but amusing nevertheless!

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Anthony O' Grady

Jan 13, 2013 at 11:42

I've been buying physical gold ETF's for 7 years (having listened to Peter Schiff forecast the collapse of the banking system back in 2005) -you'll find the video on You Tube. For me more satisfying than amusing.

By the way JB I have nothing at all against linkers, in fact I own a fair chunk of them via my holdings in the Troy Trojan fund and the Personal Assets Trust.

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