OK, I know banking is an easy target but – as anyone who has read this blog over the years will know – I am more than happy to throw darts at them.
Recently I came across this gem from Nutmeg … one of those financial institutions who give themselves a cool name so they can pretend they’re ‘down with the people’ when everything they say and do demonstrates the opposite.
Have a look at this …
Apart from the fact that they say nothing about what they do or how they do it – because, let’s face it, compound interest is hardly a unique offering – I’m just surprised they are saying that if you leave £20,000 for 40 years you’ll get over £140,000 at the end of it.
First of all, £20,000 is a lot of money.
Secondly, putting £20,000 away that you’ll never touch is an amazingly big ask.
Thirdly – and I don’t want to sound a dick – but I don’t know if £140,000+ sounds that much after a wait of 40 years.
Sure, I wouldn’t say no to it and I appreciate it represents a huge growth on your initial investment, but after removing the £20,000 you put in at the beginning, that works out to be a return of £3,000 a year.
OK, that’s not bad, but it’s certainly not enough to live off and certainly not the ‘most powerful force in the Universe’ that Einstein supposedly said.
And let’s not forget that little bit of copy at the top of the ad that say’s ‘Capital at risk. Forecasts are not a reliable indicator of future performance’.
Yes, they really are saying that everything they’ve just said could be a load of bollocks.
Imagine what else you could do with that strategy …
“Eat chips 10 times a day and could be beating admirers off with a shitty stick*”
[* Your health is at risk. Forecasts are not a reliable indicator of future performance]
Or what about this …
“Buy this skin care and you will look 30 years younger*”
[* Your self esteem is at risk. Forecasts are not a reliable indicator of future performance]
Why hasn’t someone thought of using this cross-category before???
But getting back to Nutmeg … my question is who is this ad aimed for?
Is it for people who are worried about their future and will put all their life savings away to get £140,000 in forty years time – ignoring the fact, that in 40 years time, £140,000 will be worth around £2.77 in todays money?
Or is it aimed at the wealthy … who can afford the investment, but probably expect even higher returns?
Honestly I’m not sure, but one thing I am certain of is that a financial organisation who doesn’t tell me why I should choose them over every other financial institution that also claims if I give them my money for 40 years, they’ll [hopefully] give me more back – but no guarantees – doesn’t stand much chance of getting any of my money.