Recession investing, identity protection - and retirement
Retirement is front of mind, with a discussion happening in our WhatsApp group, and a retirement planning-centric Money Brunch yesterday!
The UK was in a recession for the second half of last year, it was announced this week.
Ummm… was anyone surprised?!
I don’t know about you, but it felt like we were in a recession. People were definitely spending less, being more thoughtful about their spending on and (definitely in the tech sector in which I work) there were real fears about job losses and rising unemployment, stemming from venture capital (VC) not being available to fund these businesses.
The good news is that it was a ‘mild’ recession; growth was negative, but not too negative. But still!
I had a coffee with a VC investor this week who was feeling more optimistic about the market, and wider economic landscape, this year.
His company invests in fintech companies, at a Series A stage - meaning when companies have proved that their target market wants their product and is willing to buy (proved by having good customers on board, and clear pipeline of companies who want to buy their product). This is what’s known as product-market fit.
But they also see companies from the stage before then, known as Seed stage. This is when you’re trying to prove that you have this product-market fit, but the chance of you succeeding as a business is just a lot lower than Series A. Series A investors want to keep talking to Seed companies, as this builds their pipeline of deals when those companies are ready to raise their Series A.
Last year, the Seed pipeline dried up, which was a definite worry. But this year, things have picked back up, which is a really encouraging economic signal!
‘Cautiously optimistic’ is how I’d describe where we are - both consumers and businesses. Let’s see what unfolds next.
1. Investing in a recession: 5 moves investors should make now
Diversify your portfolio - “You never know precisely where the cracks are going to appear, so you shouldn’t have too much in any one stock, fund, industry or region.”
Don’t over-trade - With more volatility, it could be tempting to act on impulse and sell something when it’s dropping in value. It’s best not to do this.
Make the most of your ISA and pension allowances - These ‘slow and steady’ opportunities to take advantage of compound interest are really worth investing in.
Don’t ignore dividends yields - While growth is low, you might be able to have companies in your portfolio that pay out dividends. This is actually something I want to look into myself…
Think ahead - recessions happen and it’s normal to have ups and downs, but regularly investing can help smooth out returns.
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2. Get rid of the paper clutter: how to deal with your household documents
Spring’s on the way, so why not spring clean your life admin?
Know what you need - and whether you can keep it in hard copy or digitally
Go digital - when you can. And make sure digital copies are downloaded and saved regularly
Store safely – online and offline. Don’t keep everything in one place. Make sure your digital life is secure and protected (i.e. use the cloud, rather than saving on to devices, and know your passwords!)
Destroy old documents - this is SUCH a faff but worth doing. Shred documents or at least tear up your personal information. Don’t throw parcel packaging away without making sure you’ve covered up your name and address!
Look out for warning signs of identity theft - this could be missing post, unusual transactions or weird phone calls. It’s worth checking your free credit report with all three credit reference agencies Experian, Equifax and TransUnion at least once a year too.
3. Single people need almost £200,000 more in their pension than couples for 'comfortable' retirement
Why? It’s all about how much things cost:
Costs that are marginally higher for two people vs one (think energy bills, consumer goods, even holidays)
Costs that are the same for two people vs one (having a car, keeping a pet
The article does caution those in relationships from being complacent about their individual pensions. You never know what the future holds. Worst case scenario, you’ve covered your own bases. Best case scenario, you’re in a situation where both you and your partner have well-funded pension pots!
We spoke about retirement at yesterday’s Money Brunch, which was SO great, and bolstered some people’s1 confidence. I’ll share some of the insights later in the week!
Bonus: Maker of Tinder, Hinge sued over 'addictive' dating apps that put profits over love
Shoutout to creator, Shani Silver, for sharing this on her TikTok.
She’s been saying this for years; these apps don’t want to find you love, they want to make money!
There’s a lawsuit now holding them to account for this. It says the apps ‘hook users with the promise of seemingly endless romantic matches in order to push people to pay money to continue their compulsive behavior.’ This bit is particularly outrageous:
Tinder co-founder Jonathan Badeen told Jo Sales that the dating app's swiping feature was partially inspired by a famous experiment by behavioral psychologist B. F. Skinner. In it, Skinner "turned pigeons into gamblers" by giving them food delivered at random intervals. But the pigeons believed their pecking prompted the food to appear, causing the birds to ceaselessly hammer away at their trays.
All of this ‘significantly increases the likelihood of experiencing less satisfaction with life and having more feelings of loneliness and helplessness, the suit claims.’
Interesting times…
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Namely mine 😂