The Long and the Short of It is John Kay’s attempt to defog the world of professional investment for people who might as well manage their money themselves. Because BGV is an ‘alternative investment fund’ I work in the finance industry (I’m regulated by the lovely FCA) but there are many things about other parts of the money business that I don’t know about. The technicalities of government bonds or ETFs are a long way from what we do at BGV.
It’s a fantastic book. John tries to dispel as much jargon as possible (high net worth individuals = rich people) and helps you to understand the motivations of many of the money managers in the system. He also helps you understand what risk really means in terms of losing your money. There are also some useful rules of thumb for your personal finances and retirement. I don’t really ever imagine retiring in the way that the baby boomers have but I still know that I need to plan for the future.
It’s been interesting to watch the current pension reforms working their way through the system in the UK. Overall I agree with the change that means people now opt out rather than opting in. In a few years time it will make a huge difference to the fund management business because there will be so much more money that needs to find a home. The UK already has the second highest amount of pension assets and that’s expected to grow further.
If all goes to plan, many people will have some security about the future that they’ve never had before. I wonder whether it will make working for an organisation rather than being self-employed much more appealing and have a big effect on the gig economy. From a public policy perspective it makes sense to build more support for people from companies as long as it’s really well regulated and fits with the way that small companies work.
That’s where my worry comes in. We’ve just gone through ‘auto-enrolment’ at BGV and some of the processes just don’t make sense. The standard of the information that’s being offered both by the Government and the pension companies is awful — full of jargon and bureaucracy rather than making it clear what the risks and benefits are. Really they should get people to read John Kay’s book.