Does the thought of investing make your head spin? Samantha Laurie meets the duo helping women navigate the money maze...
Fifteen years ago, Lise Thorne and her husband James invested £30k each of their savings. Lise put hers in a cash ISA paying a decent interest rate. Every year, she moved it to a different ISA to chase the top rates and regularly topped it up.
James put his in a stocks and shares ISA and didn’t look at it again. When the time came to cash in these investments in order to buy a property, Lise’s were worth £124,000, James’s £207,000.
“I felt like an idiot,” admits Lise. “By ‘playing safe’ with cash, I’d lost tens of thousands of pounds. It was the push I needed to learn more about my finances.”
Around the same time, Lise took responsibility for her parents’ investment portfolio, managed by a well-known fund manager for over 10 years.
“Suddenly, I became aware that as well as paying a 1% yearly management fee, my parents were being charged 1.5% every time their stock was bought or sold – 3% for every trade. Their holding had barely increased in 10 years because so much had gone on fees and fancy brochures.”
As someone pretty confident in other matters – Lise co-founded a £10m turnover IT recruitment business and set up The Welcome Home Project, a Twickenham-based charity in support of single mothers – she was surprised at how ill-informed she was about her own financial affairs.
“And it wasn’t just me – my peer group is full of women over 40 who feel like they’ve missed the finance boat through confusing jargon and a lack of clear guidance on how to get started.”
Her answer was to set up a financial education platform with a friend and fellow East Sheen businesswoman, Adrienne D’Souza, to give women the confidence to start investing for themselves rather than handing it over to costly financial advisors.
The Money Conversation
The Money Conversation (Instagram @the.moneyconversation) is a hub of free practical tips, videos and live Q&As.
Beyond that, it offers online courses (£24.99 for 10 video modules of 3-5 mins) and one-day in-person workshops: “money retreats with coffee and a nice lunch for overwhelmed, underconfident women” (Sept 6, £495 with a 20% discount for Sheengate readers). This autumn sees the launch of young adults courses (online £29.99, from Sept), pension-specific workshops and bespoke financial coaching sessions.
Not surprisingly, Lise can barely get past the school gates these days without people asking her for advice. She tells them to enrol on the video course for a basic grounding – “you need to know which questions to ask” – and to check her Instagram live sessions where she addresses common concerns, such as these…
Making mistakes
Most people are so frightened of making a mistake that they hand things to the professionals.
But that is just paying someone else to make the mistakes on your behalf. The Trump tariff crash hit the ‘experts’ just as much as private investors.
Here’s the thing: only 5% of fund managers beat the market. You can lose a lot of wealth by paying someone to try.
Too risky?
The truth is that if you don’t invest, inflation means you are losing purchasing power even if you’re not actually losing money.
Let’s say you have £1 now and that buys you a loaf of bread (humour me!). Put it in a savings account and in one year’s time, at 3% interest, you have £1.03. Your money has grown. But a loaf of bread has gone up by 6% – it now costs £1.06. You are, in fact, poorer.
So, which is the greater risk? Something that will definitely leave you with less bread or something which, on historical evidence, will outperform price rises?
What if the market goes down instead of up?
This is not a question of ‘if’, but of ‘when’. The market is like a yo-yo – every 8-12 years it has a crash of more than 25%.
Since 2000, we have had the dot-com crash and the credit crunch, as well as a couple of mini-crashes during COVID, and now there is a new one triggered by Trump’s trade tariffs.
But crashes only turn into real losses if you sell out at the bottom. Hold on, and the market has always bounced back. In fact, just after a crash is the best time to buy.
If you look back at historical data, the S&P 500 (a leading US stock market index) has grown at 10% on average since 1957.
The Money Conversation
How can I diversify my risk?
If you are advanced enough to invest in individual companies, to diversify risk, you need 10+ stocks across different sectors and countries (ie don’t just buy banks, or just UK companies).
If you go for index tracker funds, you can choose one that tracks indexes from several parts of the world or an all-world index, which is total diversification off the shelf (but be warned, it will be 60-70% US).
Should I pay for either a financial advisor or an actively managed fund?
Only one in 20 fund managers beats the market, and it’s not worth paying fees for underperformance.
Moreover, these people write the rules – they get paid very well even when they underperform.
Warren Buffett, who knows a thing or two about investing, has said that when he dies, his family's money will mostly go into (passively managed) index tracker funds.
What is a tracker fund?
A passive – or index tracker – fund buys everything in the index (eg the shares of the 100 companies that make up the FTSE 100 in the UK) without trying to sort the good from the bad.
Annual costs can be 0.05% or lower (for Asian and all-world indexes, they may be up to 0.25%). These funds are much cheaper than the 1-2% per year typical for those that try to pick the stocks that will ‘overperform’, known as actively managed funds.
Which trackers are best?
We don’t give advice, but remember, Google is your friend. Get started by investing a small amount on a platform such as Trading 212, which is completely free.
We tell people: put in £10, and if it doubles in a week, put in another £10; if it halves, do precisely the same – it’s either cheap stock or you’re growing.
When looking for a fund, it is worth searching for low-fee passive trackers that will help you diversify your risk in one purchase. For example, the SPDR S&P 500 tracker priced in sterling charges 0.03% in fees and 0.12% on its world tracker.
Have an emergency fund
If you can leave your money in, crises will come and go. At the start of COVID, markets dropped globally by 30% – by the end of the pandemic, they were higher than at the start. To ensure that you can ride out the crashes, keep 3-6 months’ worth of living costs in a high-yield savings account.
