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Monday, February 02, 2009
How to save a fortune by doing absolutely nothing (and ignoring your accountant)
Among all the economic doom-and-gloom talk, it was nice to hear of a good-news story, albeit somewhat accidental. During last year, a number of long-established book distribution businesses merged and were then sold on to a third party. The upshot was that the original owners of the businesses each received a substantial cheque once all the dust had settled. One of these book-trade veterans decided to take a well-earned, extended holiday, and simply deposited his cheque in the bank before jetting off. His accountant kept urging by email and text message for him to move his windfall from the ‘low-yielding’ bank account to the ‘lucrative’ stock market, but to no avail: the holiday was not to be interrupted; business matters could be dealt with later on. And just as well our chap stuck to his guns: by the time his holiday was over, the stock market had crashed and he saved himself a fortune by doing precisely nothing!
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No good accountant would urge someone to invest in the stockmarket, its not our job to offer financial advice, only explanations as to tax consequences (although tax on dividends is normally taken care of, and capital gains earnings have discounts applied, so is more effective than interest earnings, so there's that). But, are you sure it wasn't his finalcial adviser he was ignoring? (some folks do opperate as both- but its a seperate licence). Because it's nearly always best to avoid listening to those comminsion based earnings fellows.
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