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Revealed: New Year’s resolution secrets of high net worth investors
January 9, 2014Article by Ray Withers
As we enter 2014 our thoughts turn to New Year’s resolutions. For many of us this usually involves being healthier, more focussed and determined and setting goals. Have you ever wondered, though, what consistently successful people set themselves as resolutions?
The results of a survey carried out by global financial giant, the deVere Group, reveal just that; and it all centres around investment.
The golden three
The international survey, conducted in Q4 2013 with 547 high net worth individuals between the ages of 25 and 75, reveals the top three financial resolutions for 2014 are to: save more for retirement; include more higher-risk investments in their portfolios; and provide greater levels of financial support for their families.
38 per cent said their ultimate objective for the coming year was to build their retirement funds; 20 per cent cited their number one priority was to diversify their investment portfolios to include riskier opportunities; 22 per cent hoped to be able to offer more financial assistance to loved ones; while just 11 per cent named a combination of other resolutions.
The respondents, who all have investable assets of more than £1 million GBP, included residents of the UK, USA, South Africa, Hong Kong, France, Spain, Germany, Switzerland and the UAE.
Strategies of the wealthy revealed
Nigel Green, founder and chief executive of the deVere Group, says: “The poll highlights that even society’s wealthier people are concerned about being able to fund the lifestyle they desire throughout retirement. Their worries are fuelled by soaring living costs, low interest rates and the possibility of high, long-term medical and/or care bills in the future. It is prudent that putting more aside to fund retirement is the number one resolution.”
He continues: “High net worth individuals’ appetite risk appears to be growing further as we move into the New Year. The generally-more-optimistic feeling about the global economy, combined with the low interest rate and creeping inflation, among other issues, are driving an increasing number of people to consider holding their own higher risk / higher return investments to maximise their wealth. It would seem these people know holding large amounts of cash will typically make them poorer.”
He concludes: “With many young families struggling to cope with high levels of debt and the burgeoning cost of living, financially supportive loved ones, particularly children and grandchildren with things like school and university fees is perhaps another key priority among those we surveyed.”
Property continues to shine and regional markets come out on top
Certainly, with all these factors in mind, combined with rising life expectancy, the money we accumulate will have to last longer than ever. Traditional pensions are failing and investment, no matter how large or small, seems more than ever to be the key to a secure financial future.
Property continues to be a mainstay in most portfolios; and 2014 definitely looks set to be an excellent year for the market. The only question is where and how to invest?
Throughout 2013 we saw a growing gulf between London’s soaring house prices and the rest of the UK, but regional hotspots have started to shine and even outdo the much sought after yields from prime London property. A recent report from Zoopla shows London’s 5.1 per cent yields being dwarfed by regional areas shooting up to 8.9 per cent.
Lawrence Hall of Zoopla comments: “The largest yields are found in areas with a high demand for rental accommodation but with relatively low property prices. This allows landlords to purchase investment properties at a reasonable price, while rents remain competitive due to the imbalance of supply and demand.”
While Lucian Cook, head of residential research at Savills, cites markets in the Midlands and north as having the highest yields and recommends “investing across a range of stock from flats to small family houses.”
The Zoopla poll shows Liverpool high on the list at 8.3 per cent gross yield and with an average monthly rent of £605; along with Bradford at 6.7 per cent gross and average asking rent of £484 per month.
Traditional or higher risk/reward investments – take your pick
Ray Withers, CEO of Property Frontiers, comments: “I looked at Liverpool and Bradford as cities to watch in my hotspots for 2014 where you can invest in a prestigious development guaranteeing yields of 8.5% (gross) for investments from £75,000; and luxury city centre apartments delivering returns of 9% on investments from just £50,000 and offering 50% developer finance.”
He continues: “We’ve also noticed an upsurge in alternative, higher risk investments among our clients. In particular, our agricultural opportunity, Feeding Senegal, which offers returns projected at 239% over five years for a fixed entry price of just £20,000.”
Get in touch on +44 1865 202 700 to find out more about our UK hotspot investments for 2014, our eco-friendly agricultural options and what else we have in the pipeline for the coming year.