Economics 101 .
Pension companies buy shares in other companies . Lots of shares across lots of companies, worldwide.
looks more like finance 101.
To understand economics 101 in this context, and to help you understand the role of your investments, you need to understand the role of capital and growth.
Capitalist economies (arguably) rely on growth to keep functioning. Growth comes from two places - labour and productivity increases. However neither of those things work without capital.
By investing, you’re supplying capital to projects which may or may not leverage growth factors to increase the value of the capital applied. Some focus on population growth (housing for example) and some productivity (a new factory using automation). Some could benefit from both, such as agriculture.
Your financial decision in this very basic economic context is how and where to apply that capital, whether to self manage or not etc.
Cash under the bed is not economically active. In the bank it is mildly so. Invested in a startup or new house build, very active.
All options carry risk and reward potential (including the bed option), and over different timeframes. Unfortunately we are in a world where is you have capital this is universal and mandatory decision to make, although it’s a privileged problem to face.
this is not aimed at the OP. but i am so ****ing glad i took a very early meagre retirement. posts like this only concrete my decision.
I don't think whatisname was joking...
Op I'm quite a lot like you I think when it comes to risk and thinking all this is smoke and mirrors. I don't even have a pension but I do do the basics of moving my savings about to get the best interest rate so my money isn't reducing in value as much. That's not hard. Go on Money supermarket and pick the savings accounts or ISAs with the best rate. Have you really left your money in the same isa for 15 years? Basically after the 1st year the rates turn to shit don't they? I have some in premium bonds as a no risk but added frisson of excitement of becoming a millionaire. Other than that I'm investing money in my property so that it will not need much doing when I'm retired (if I retire) I'm self employed and enjoy my work though will have to gradually reduce as I age because it's a physical job. I have no intention of going into a care home and will make plans before I'm too old to make sure that doesn't happen. I know this isn't fool proof but that's the plan and the house could pay for it if necessary as no children to leave it to like yourself. I'm also not worried about needing lot's of money in retirement as I know I can live frugally as long as my house is paid for, which it is.
No one has a crystal ball.
Peter Lynch: How To Invest For Beginners | The Ultimate Guide To The Stock Market - YouTube
Peter Lynch: Everything You Need to Know About Investing in One Video - YouTube
"Outperform 99% Of Investors With This Simple Strategy..." - Peter Lynch - YouTube
Warren Buffett: How To Turn $10,000 Into Millions (Simple Investment Strategy) - YouTube
Pensions and investments advice for a young person? - Singletrack World Magazine
Money is really simple:
What you put into account Vs what you get out at the end of however many years. That is the only thing to understand.
But everyone deliberately tries to confuse it but using random words (see 95% of the posts above). They do this to make money off people who don't understand the basics. We call these people banks.
Pretty much anything should be considered as a savings account. You put in some money at the beginning, you get some out at the end. In some cases that will be more than you put in. In some cases it will less. This applies to anything from savings, stocks, shares, ISAs, pensions, property, watches, whiskey you name it.
If you're a total beginner then don't get your financial advice off a mountain bike forum.
The book "The richest man in Babylon" is a very easy read (or listen on Spotify etc.) To get the basics.
Then educate yourself on the basics - UK YouTube videos can be a good place to start.
Another great book is
How To Own The World by Andrew Craig, I send copies to all my nieces and nephews , need to reread it again myself
1. pay off debts - already achieved
2........
I wrote a load of guff about 2. Pension (SIPP) and 3. Stocks and Shares ISAs, but it's all been said before,
so,
Don't keep doing the same thing and expect different results.
Just going to leave this here.
The worry you have now will be massively less than the worry you will have in 10 years time if you do nothing.
