Financial & Travel Musings

When you’ve a sequence of events such as we’ve had over the last couple of years I’m sure that the thoughts of many people will have turned towards thoughts of preparations in case even more goes wrong.

That’s why the price of gold has been sailing rather high of course. However, just as these days you wouldn’t want to have all your money in one bank so too you shouldn’t have it all in one class of assets either. Thus people consider things like silver but that’s really not all that different in qualities to gold itself.

Much better to look at a store of value that’s quite different and that’s where diamonds come in. They’re radically different in that they’ve not got the industrial value that gold has in the sense that they’re not used as components in quite so many products. Rather they’re generally seen in limited industrial markets (low quality gems go there naturally) though in practical terms it’s the precious stones market that’s most significant.

One wonders what next can happen? We’ve had the economy tanking, the bankrupt banks, swine flu and a volcano. Perhaps it’s time for a major solar flare to really mess us up?

Popularity: 1% [?]

Insurance is one of the limited number of products that need to be sold to us rather than being a product that we’d go out and buy for ourselves.

That has the effect that insurance marketing is a little different than normal marketing. Historically it’s been very much hard-sell though successive laws and advertising restrictions have eliminated most of the more obnoxious methods that have been used in the past. Even so, it’s still quite often one of those hard-sell products.

But why is that? After all, in principle, insurance is a good idea. It’s there for those times when the unexpected happens and aims to provide you with resources that you just couldn’t rally together by yourself. Unfortunately, the hard-sell required has reduced many of those advantages and, in some cases, can even totally neglect them. Perhaps the worst example are the savings type “insurance” policies that almost everyone has bought at one time or another. Buy them after you’re around 60 or so and you’ll find that they will be quite consistent in paying you back less than you paid them, yet 60+ year olds continue to buy them.

The best example should be house insurance yet the insurance companies have introduced so many loop holes that it hardly seems worthwhile to pay it. Right now we’re finding out the hard way that the insurance company decided to radically downgrade our own house insurance policy without telling us so we’ve almost ten times the excess to pay and things that we thought were covered (and should have been covered) aren’t.

Popularity: 1% [?]

The problem with life insurance policies is that they generally run for a very long time indeed.

Consider my Dad who died a couple of years ago. He had policies dating back to the 1930s that we know of and probably a number of others that we don’t know of.

Although life insurance is one of those “good things” that you know you should have, the snag is that having such policies means a commitment to pay them for a rather long time and to keep the original policy documents just as long. I’m sure there are loads of people out there who have a number of long since forgotten about policies as over such a long time you’ve moved house a few times and the insurance company itself has probably been taken over a few times as well.

Is it worthwhile spending time on tracking them down? Well, it depends. Most of the 1930s era policies were written in the days when one assumed that one’s children would die and moreover in a time when money was worth more. Typically, “penny policies” are commonly found and even after such a long time they’re not worth more than a couple of hundred pounds. Not money you’d want to throw away obviously but not worth losing sleep over either.

Popularity: 1% [?]