The demographic collapse combined with the lengthening of the average life puts the pensions of today's young people at risk. Also because in the meantime, with interest rates at zero, financial income has plummeted. All this while the labor market, characterized by a strong precariousness, makes income extremely uncertain and discontinuous. How to save yourself from this deadly combination? Samhita Investments, the new creation of Paolo Basilico, proposes in this video the “7 golden rules to learn how to manage your savings”. The guide is taken from the book "Men and money”, published in April 2019 by Basilico himself, number one of the new investment company.
RULE 1: STUDY 15 MINUTES A DAY
You need to know behavioral finance, i.e. how we all relate to money. But you also need to master the basics of economics and finance. It takes less than you think to do it: 15 minutes of commitment a day is enough. Of course, you don't become an expert, but you can certainly learn enough to turn a problem into an opportunity.
RULE 2: SELECT A MANAGER TO LET YOU HELP YOU
Do-it-yourself investments can turn out to be a mistake. It is therefore a good rule to rely on professionals who are experts in money management, but select a manager who shares risks and results with you ("skin in the game").
RULE 3: DIVERSIFY, DIVERSIFY, DIVERSIFY
Real estate still makes up two thirds of the financial wealth of Italians, while the remainder is mainly divided between bonds and deposits. Only a small percentage of savings are invested in venture capital, but inflation and costs work, eroding the value of our investments. A golden rule is therefore to diversify investments outside real estate and also outside the Italian borders. In this way, it is possible to reduce the risks while increasing the returns.
RULE 4: PREFER STRATEGY TO TACTICS
It is advisable to keep part of your assets invested in financial instruments that help your income for long periods. At the end of your working life, it will be the strategic allocation, and not this or that action or obligation that has made the real difference in your life. So it's better to focus on strategy, rather than tactics.
RULE 5: OBTAIN THE LONG TERM
In Italy, the preference for investments that can be liquidated in the short term is very strong. In this way, however, the higher returns guaranteed by investments with longer durations are forgone. The simplest and most efficient solution for long-term investing are accumulation plans (PAC). These are solutions that allow you to invest periodically (even every 3-6 months) for example in a stock index of world stock exchanges.
RULE 6: LEARN THE LANGUAGE OF MONEY
Often finance is deliberately incomprehensible, but we must not be discouraged by its obscure language. To master it, you just need to know a few key terms. Sure, it takes some effort, but it's worth it.
RULE 7: DO LIKE ULYSSES
Investing, rather than a high IQ, requires a strong inner discipline. Like modern Ulysses, we must resist the sirens of easy money.
