Only time will tell however a small and steady rise won’t hurt funds but a steep increase may. Depending on your attitude to risk if looking at long term investments of 10 years or more, much will stay the same.
Long term we can see a benefit for the saver. Savers should enjoy some relief if the Bank of England’s Monetary Policy Committee does increase base rates by 0.25 per cent to 0.50 per cent tomorrow, in what will be the first hike in a decade.
This is likely to trigger a savings war, as banks and building societies respond by increasing their own rates in return.
However, Anna Bowes, director of independent savings advice website Savings Champion, said “with the consumer price index now at 3 per cent savers still cannot secure an inflation-beating return.”
Those with mortgages have had it good for 10 years or so. Can they really complain now?
The answer lies in our evolutionary past. Our ancestors may have enjoyed occasions when food was in abundance, but periods without enough to eat were potentially fatal. These primal forces still have a powerful influence on our decisions today.
Economists have identified loss aversion as a major factor in financial decision-making, in that most people would rather avoid losing money than acquire more. The psychological impact of losing is thought to be twice as powerful as the pleasure of gaining.
Many people think of wealth as the value of their savings, investments and assets. However, the ability to keep earning an income is equally important.
Ensuring that you have adequate financial protection for you, your family and any dependants is an important element of financial planning. As a healthy working person with a good income, you may feel reasonably confident that you are able to provide for your family. However, your finances could be more precarious than you think.
Mindful wealth! What a fascinating concept and phrase.
We believe establishing the right “mindset” and “habits” are crucial to kids, families and their futures.
Did you know adult money habits are formed by age 7 – University of Cambridge
Important concepts that underpin many money skills, such as: waiting whilst saving to afford something they want; understanding the concept of ‘future’; dealing with delayed gratification; avoiding impulsive, irreversible decisions. Basic approaches and skills can be modelled, discussed and demonstrated by parents with young children, such as the basic benefits and tools of sharing, saving, and purchasing that will instil efficient habits and practices.
A key point here is that situations need to be constructed so that the childexperiencesthe processor idearather than just being told about it.