Father's day advice for new investors

This article is the latest part of the FT’s campaign for financial education and inclusion

This Sunday is Father's Day and the rather poor choice of maps, fathers can usually do well, football, golf and fishing, not to mention drinking beer.

So far, so stereotype. But what about your father's investment skills?

Volunteers for Flic, the Financial Literacy and Inclusion Campaign of the FT, often tell us that their passion for personal finances comes from their fathers (the same applies to male and female volunteers).

It is not always the father-sometimes it is the mother, a grandparent or a loved math teacher-but fathers are mentioned so often that there are discussions in the FT offices.

Since many of our volunteers are over 40 years old, we wondered whether this simply reflected the sexual forms at the time when we grew up.

Take me, for example. As a child of the 1970s, my father was the sole breadwinner and my mother gave up the work to raise me and my brother.

she brought me everything about budgeting and clever spending, but that what I would call the "product knowledge".

When I went away from home, I often received articles in the post that he had cut out from the weekends of the weekend to personal finances and which stimulated me to save with premium bonds, ISA and pensions. I did not react to all of his wise and reasonable suggestions immediately, but they have settled in my brain.

I bought my first apartment at the age of 26 after I had a flood of newspaper clippings via mortgage shops for first -time buyers.

My parents always handled money carefully because they are not rich. 20 years ago, you didn't need a huge depot to buy a property, which was as good as there was no "Bank of Mama and Papa" for me that I could fall back on.

My father, however, left me two very valuable financial skills: the desire to make the best of my money and to learn again and again how to do it best.

I am very lucky, but what about people whose parents (or teachers) have not passed on these lessons?

"My parents taught me nothing about money, I just went online and did it myself," was the biting answer of the first millennial colleague I asked.

Social media website-especially Instagram, YouTube and Tiktok-are places where young eyeballs are looking for financial advice in video form.

I carried out a survey on Instagram this week and asked: "Who taught you the most about money - your father, your mother or the Internet?"

The best answer was the Internet (71 percent), with fathers with a second place and mothers with 9 percent behind. But is the Internet the best way to learn something about money?

Online investments exploded during the lockdown, with the combination of leisure and replacement money millions of young people around the world to start, inspired by observing people like them.

I am entirely for the democratization of the financial system, and some of the content produced by so -called “finfluencers” are both inspiring and instructive.

Three of my favorites that share the heights and depths of the money and investment routes of the people are @Gofundyourself of the British author Alice Tapper, @basicfinancialliteracy of the US Vloggers Patrick Di Cesare and @StocksandSavings, which was found on the millennial couple Andreea Ion and Jamie Galvin Money Clinic Podcast this week.

The problem? A large part of the free “advice” offered on social media should make the financial supervisory authorities cry.

Well-intentioned educational content, rubbing in addition to crypto brothers in Lamborghinis, youthful day traders who celebrate huge profits, and from prominent recommended paths to riches that turn out to be everything else. Not being able to recognize the difference, it will be expensive.

risks are hardly discussed. While Tech shares and crypto had a winning streak, this didn't matter. On most days, new investors have woken up, checked their trading apps and felt richer. So far.

The beginning of the "crypto winter" and a technology-driven Baisse in the USA is frightening for inexperienced investors, the dreams of which were wiped out of "financial freedom" together with their investments.

So where are the 71 percent of the people who told me that they contacted the Internet for financial advice? How many newcomers will invest the investment now?

Online influencers who are known to pump stocks or crypto have been suspiciously silent. Others ask the investors to "capture their lives" and to oppose the formation of their losses; The more Gung-Ho proclaim "Just Buy the Dip".

But not everything is bad. Investing can be a lonely matter, so it can be extremely positive for nervous investors of all ages to exchange experiences online via reddit threads or Facebook groups.

If you need fatherly advice, here are a few lessons that I want to pass on.

Everyone makes mistakes in investing and in fact in life. Don't worry about it. So we are learning from these mistakes that are important.

Most investors have lost money in recent months - yes, even me. But I don't hurry to sell my stocks. I stay with my strategy. To find yours, you have to ask the question: "What do I invest?"

Too many new investors were attracted by short -term profits. I am firmly geared towards long -term. I make the best of tax breaks (pensions and Isas for readers in Great Britain; 401 (K) plans and Roth Iras in the USA) that make paper losses a little easier to endure.

I automate my regular investments and check my portfolio twice a year. I don't have the app on my smartphone - the temptation is too big to play around!

My pension is closed into old age, but I do not intend to access ISA in my shares and parts before my sixties.

In the folder in which I keep my account details, I have a diagram that I created with an interest rate calculator and which shows the likely effects if you regularly invest a certain amount every month until the 2040s. This is very calming in times of market turbulence.

I automate my regular investments and check my portfolio twice a year. I don't have the app on my smartphone - the temptation is too big to play around!

Before I started investing, I built up a cash emergency fund. The interest rates for their savings will not beat inflation, but they are damn cheaper than the interest rates for borrowing money.

The frequent mistakes are to invest too much money in a single share, a fund or an investment class. Diversify and learn something about asset allocation (a controversial question at the moment). Invest time in your own research and find topics that interest you.

As a younger investor, we also have the time on our side. Volatile markets and increasing inflation are much more worrying for those who approach retirement. But if you send your father a Father's Day card, you may not mention that.

Claer Barrett is the consumer editor of the FT: claer.barrett@ft.com ; Twitter @Clearb ; Instagram @Clearb