How the Bank of Mum and Dad could have bought you a house for less than the cost of a deposit today
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The Queen will celebrate her 93rd birthday later this month. Sixteen days prior to that, my own grandmother will turn 93 – albeit probably with a more intimate gathering.
As I’m living in the UK and my grandmother is in the US, I won’t be able to join her unfortunately, but thanks to modern-day technology, I will be able to Skype or FaceTime and be part of the celebrations.
In 1926, when Elizabeth II and Dot were born, technology was still in its infancy. We’d just had the first public demonstration of ‘radiovision’: a synchronised transmission of pictures and sound in the form of a 10 minute film of a miniature windmill in motion, which was sent across 5 miles from Anacostia to Washington DC.
Almost 100 years later and technology surrounds us. I don’t even give a thought to the technology involved in getting an instant live connection across the 3,557 miles between myself and my grandmother. In the same way, I think nothing of using an app on my phone to send my sister some money for my niece’s birthday.
But in a world of high-tech, modern alternatives, sometimes it’s nice to go back to basics and do things the old-fashioned way, like Dot.
So here’s five old school saving tips to use when spring cleaning your budget.
“It’s not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for.”
— Robert Kiyosaki, inspirational speaker
Don’t use a challenger bank or want another app on your phone? Pick one category and manually total up your change weekly. For example, every Sunday evening go through the week’s food shopping, coffees and maybe the odd takeaway, round up each transaction and pop that into your savings account. It’s not much, but it’ll add up and can be a nice boost to your emergency fund or ISA and it will keep you on top of your budget and spending habits.
Shopping with a list will keep you focused on exactly what you need and keep you on budget. If you can’t be trusted, try online shopping for your groceries so you’re not tempted. This means you can see exactly how much it’s going to cost and if you order in advance or off-peak, delivery charges can be cheap or even free.
If you are wondering what to save that money into, then you could also consider some investment trusts that have stood the test of time. Launched before the Queen or my grandmother were even a sparkle in their parents’ eyes, four Elite Rated trusts have origins dating back as far as 1889, but have adapted and evolved to still be very relevant today.
BMO Global Smaller Companies started life as the Alliance Investment Company in 1889. Originally the trust invested mainly in overseas government bonds, like many of the early investment trusts, but in 1975 the board of the day decided to focus on smaller company equities. Today it is one of the largest specialist global smaller companies investment trusts and its dividend has risen in each of the last 48 years.
City of London can trace its roots back to 1891 and is a fine example of how longevity can be beneficial: it is a ‘dividend hero’ having increased its dividend each and every year for the past 52 years and has also enjoyed consistency of management: incumbent manager Job Curtis has been in charge since 1991.
This trust has a history dating all the way back to 1904, although it became a real estate specialist vehicle in 1982. Today it invests in the shares of property companies of all sizes, typically within Europe and the UK. It will also have a small amount invested in physical property in the UK.
Launched in 1909, Scottish Mortgage was launched in 1909 in the wake of the credit crisis and panic that followed. In 1913, its remit was widened allowing it to invest in bonds and equities around the world and today it has grown into what is considered to be Baillie Gifford’s flagship investment trust.
Making money can be hard. Personal finance takes work and it’s easy to spend, but if you save wisely and budget accordingly, you will be fine and, if you’re living to 93, you better make sure your retirement fund lasts as long as you do!