Andrew is the author of the best-selling personal finance and investing book 'How to Own the World: A Plain English Guide to Thinking Globally and Investing Wisely' and the founder of the VT PEF Global Multi-Asset Fund. We are absolutely delighted that he will be speaking at Smart Money Live. Below are some nuggets from his wildly success book (now in its third edition and regularly topping the personal finance book charts).
'Owning the world'
I don't want to give away all of Andrews talk or the book but there are two key themes of How to Own The World
The economy of the world keeps on growing. You need to own the world in order to make superior returns on your money.
There is significant real inflation in the world because of quantitative easing (QE) i.e the government pumping more free money into the system.
You are best placed to generate a return on your investment
Early on in the book Andrew talks about some of the fundamental truths of the book and these include 'You have significant and inherent advantages over many finance professionals.' He gives six reasons why you can do better than the professionals which include conflict of interest, he echoes what Paul Overy has said in the past that many advisors are paid a commission on what they are sold and only sell two variations of products and in fact don't really know about any other products.
What wealthy people have done all through history
He also says
'it is realistic for you to target making more money from your money than from your job. This is the money secret understood by virtually every rich person in history.'
He believes that the above is possible no matter how much you earn. I really like this quote from the book in terms of making your money work for you.
“Things” have been getting more and more expensive in terms of most of the paper currencies on the planet, which means that unless your salary is going up by at least as much or you’re making money from investing, in reality, you are getting poorer every day. Your savings in the bank are losing real value every day. Craig’s advice with your main bank is simply to keep as little money with them as possible.
As summarised by Samuel Davies, 'If you are to have any chance of making a real return on your money, you need to invest in things that have a chance of outperforming inflation.'
There are several main categories of financial product, otherwise known as “asset classes” or “investment vehicles”, with which you can store (and hopefully build) wealth.
The main types of individual investment vehicle we are interested in are:
Property (or real estate)
Shares (otherwise known as stocks or equities)
Diversify, diversify, diversify
As Peter Brown says again and again when he delivers the investing fundamentals course. You must sufficiently diversify to ensure you give yourself the best chance of consistent success.
In the above interview Andrew discusses the phenomenal return of compound interest based on the example of say a grand parent investing 5k at the birth of their grandchild and leaving it in at an annual return of 10% until the child becomes a 55 year old, it will compound to 945k.
One of the most useful ways of trying to work out if a property is cheap or expensive is the return it would generate for you if you were to rent it out.
He discusses using rental yield calculations to evaluate a property investment.
This is what you get if you divide the assumed annual rental income from a property by the assumed value of that property. It is a number that you can then use to compare the returns on property to any other asset you might be thinking about, such as equities, bonds and commodities.
Net Rental Yield + Capital Gain = Inflation
He discusses how property generates a great deal more work than nearly all other investments.
A sizeable proportion of people in the UK, US and Ireland have all their assets in property which he believes to be inadvisable and suggests diversifying.
Efficient Market Hypothesis, ain't so efficient:
He doesn't believe the much trumpeted theory of efficient market hypothesis to be true. He believes it doesn't work because of whats entitled ''asymmetric information'. The point being that people involved in markets don't have perfect information about things they're investing in and some have more info than others, they have asymmetric.
Craig also gives a top down analysis of what is going on in the world right now, areas he sees opportunities, how he evaluates companies, what he would invest in and lots more in his book. He will be covering some of the above in his talk in April and also taking your questions. Register for a super early bird discount here.
You can buy 'How to own the World' on Amazon here.