News from the industry...

Churchill and the plastic fiver

Dr Mark Martin writes: So the new plastic fiver has entered circulation and like Charlie Bucket’s quest for the elusive Wonka ticket, members of the public anxiously grappled to get their hands on the notes with a low serial number. Within hours of the official release, lucky recipients had uploaded their polymer prize on eBay with the highest resale at around £1,700 for a single note.

The very lowest serial number notes are given to the Queen, who presumably doesn’t put them in the handbag that famously contains no cash at all.

The new design, which was updated to make counterfeiting more difficult, depicts Sir Winston Churchill who according to former Bank of England chairman Sir Mervyn King was chosen as a ‘great British leader, orator and writer…a hero of the entire free world’.

Notice he didn’t say economist. A few years back, a biographer of Churchill reported that in his personal finances at least, our most famous great Briton struggled to retain a disciplined approach. Former financial markets trader and author David Lough commented: “I have never encountered risk-taking on Churchill’s scale during my career… he gambled or traded shares and currencies with such intensity that he appeared to be on a ‘high’.”

Churchill apparently ‘ran up huge personal debts, gambled heavily, lost large amounts on the stock exchange, avoided tax with great success and paid his bills late’. It is suggested that in June 1940, when he was contending with the imminent German invasion, he was unable to pay his shirt-makers.

Despite his wife Clementine’s advice to ‘beware casino!’, Churchill had many unlucky nights in Monte Carlo, running up debts of more than the equivalent of £90,000 in 1922 alone. He said at the time: “It excited me so much to play – foolish moth.”

Churchill is by no means a rarity when it comes to finances. Study after study has shown that investing can be an emotional business. Media headlines in times of market turmoil scream that investors should make quick decisions to change their direction but this often causes more harm to a portfolio than the economy itself. Research tells us that attempts to outguess the market are futile – as are repeated efforts to beat the house at the gambling table.

The only way to achieve your long-term objectives is to develop a cohesive financial plan and to stick to it, ignoring the noise around you and your natural instinct to do ‘something’. The simple rule of ‘buy and hold’ in investing is more likely to realise your aims than ‘jump up and down with the markets’.

A former anaesthetist, Mark changed careers when he was unable to find a financial adviser who understood the intricacies of the NHS pension scheme. He has been working in finance for over 25 years and has a wealth of experience in helping doctors and health professionals plan their own finances.