Getting rich Q and A

Fancy yourself as a super-rich money mogul? Money expert Jasmine Birtles from the Motley Fool website answers your questions.

Q: Is now the best time to think about pensions with the country the way it is? And what are the recommended pension structures?

A: When it comes to investment, as a general rule, when everyone around you is getting greedy you should be afraid, when everyone around you is afraid, you should pile in. So, in my opinion, as everyone is scared of pensions and the Stock Market (and pensions are mostly invested in the Stock Market) now is probably a good time to get a pension. Most company pensions are worth having because they usually involve your employers putting money in.

Personal pensions used to be rubbish because the pension companies charged high fees to manage them, but now that the Government has brought in Stakeholder pensions they are rather more worth having. With Stakeholder pensions, the companies are not allowed to charge you more than 1% each year to manage them, which means you make more money in the long-run.

No one has to have a pension as such but we all badly need a retirement fund which can include a pension and/or property, shares, cash, bonds, gilts, etc. A pension can be useful if you're not too disciplined with your money as you're not allowed to touch it until you retire. It's also useful if you are a higher rate tax payer because you get tax relief on the payments, although you have to pay tax when you actually come to draw your pension. It's swings and roundabouts really, but I wouldn't worry about the general hysteria about pensions in the press. Long-term the Stock Market does go up and, as pension funds are mostly invested there, they will make money.

Q: Do you agree with the suggestion that the safest, and perhaps wisest course of action is to sell a property now, and rent for three years while the market re-adjusts? If not, why not?

A: Not necessarily. No one has a crystal ball so although it seems as though we're about to go into a slow-down in the housing market, nothing is certain. Also, it depends where you live. Some areas are slowing down but others are continuing to rise.

Certainly rents in many areas, particularly London, are low at the moment because so many people have buy-to-let properties, but do remember that buying and selling property is expensive. You have estate agents' fees, legal fees, removal costs and all sorts of other costs like doing the place up to sell it etc. If you're finding things tough financially and you have a lot of equity in your house it might make sense to sell up and rent for a while before buying again, but if you're happy where you are then stay there. It's not worth the gamble unless you really want to move.

Q: Is the finance sector itself a steady market for employment?

A: No! Quite honestly I can't think of any steady market for employment in the private sector, and the finance sector is particularly dodgy at the moment. There are likely to be thousands of job cuts in the City this year and it will probably be the same in banking and financial advice. If you want job security I'd look to the public sector - education, health, Civil Service and so on. They may not be glamorous, but you're unlikely to be on the dole queue.

Q: Would an IFA (Independent Financial Adviser) be a better person to buy a pension, mortgage or any of type of investment from than say, the Halifax or Abbey National?

A: Absolutely! Of course you get good, bad and ugly IFA's and it's best to go by recommendation, but they're all better than going to a single provider and taking their 'advice'. It makes sense that an IFA who knows about products on the market from all sorts of companies will be able to find a good deal for you, whereas a single company will only sell you their products which could be the most expensive and useless in the country!

Q: And do you need to watch out for Tied agents when dealing with IFA's?

A: Very much so. I get very annoyed when I hear these agents calling themselves Financial Advisers. They're financial salespeople, not advisers. Going to one of these people is as bad as popping into your local bank and taking whatever pension or mortgage they offer you. However, even some apparently independent financial advisers aren't truly independent.

You can only know that they will be impartial if they charge you an hourly fee or an upfront fee. If they seem to be giving you advice for free, that means they get their money from commission payments. Being human, of course, they're more likely to try to steer you towards products that pay them the highest commission, which are not likely to be the best products for you.

Q: Who DO you trust with your money in this very corrupt age we live in?

A: Well let's see. Who is the person who cares most about your wealth and well-being? Your bank manager, your IFA, your mum, your best friend or you? It's you of course. "But I don't know anything about money!" you wail. Actually you'd be surprised how straightforward it is to learn. Spend a bit of time finding out about the basics. It really doesn't take long.

Have a look at the Motley Fool website which has lots of easy-to-understand advice about money and check out the money articles on www.bbc.co.uk; start reading some of the articles in the money pages of your favourite broadsheet; hey, read my book 'A Girl's Best Friend Is Her Money' (Boxtree) even if you're a boy.

Certainly talk to an IFA and even talk to friends and listen to experts on the radio and TV, but ultimately it's up to you to make sure you understand the basic facts about saving, investing, pensions, borrowing and so on. After all, in the end it's you who will suffer or benefit so it ought to be you who makes the final decisions.