Money Matters: 29-31 August

This is the time of the year, when the football world goes a little mad.

On the last day of August, the transfer window closes until next January.

This means that all those top sides which have started the season badly need to rush in the next couple of days around trying to bring in players to paper over the cracks.

The lemming-like rush to buy puts sellers in a very strong position. Prices that are already crazily-high in some peoples eyes go stratospheric. "Value" is a word with no real meaning in such circumstances.

As an example, the most needy club in the English Premier League currently is Arsenal. They have started their league campaign poorly BUT they have £80M to spend.

Sadly for Arsenal, they built up their £80M treasure-chest selling "good to great" players, yet at this stage of the buying season can only use it to "average to good players" at the same or higher prices that they received for their "stars".

So Arsenals £80M will be spent but all the will buy is another season of struggle. Greatness-and trophies-will elude them.

Therein lies the lessons for life we can all take from the relatively crazy "planet football.

Firstly, never leave any decision in life so late that there is only one option left.
If you don't have several options available, whether related to career development, financial matters or even something as simple as a holiday selection, the "cost" will be high.

Cost can often be measured quite easily in terms of financial price paid but there are other more subtle costs, such as a failure to achieve self-fulfilment that can be even harder to bear in the long-term.

Secondly, looking specifically at the financial services sector, every one of us needs to give our custom to more than one bank. In fact, I would suggest a good "model" of behaviour is to have at least two bank accounts and two building society accounts.

Having four accounts clearly spreads the risks created by any one bank or building society getting into difficulties. It also ensures you can move your custom should one of your service providers try to impose unreasonable terms of business. In other words, it keeps your options open.

Don't be like Arsenal. They may be cash rich now, but in three days time they will probably be poor again. Not many of us have the wherewithall to waste £80M, but our £8000 or even £80 may be just as important to each and every one of us as individuals - and once it is gone, it is often gone for good.
 

Monday, 29th August 2011

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