How to be a Fund Manager
If you're compiling some new year resolutions, maybe it's time you resolved to become your own fund manager!
Why let someone else run your pension when you could have a stab at it yourself?
I'm talking about a SIPP - Self Invested Personal Pension to be precise.
I started mine a few years ago when the fund I had with my then employer just kept on going down. Could I do any worse myself?
I loved being master of my own destiny with my very own fund and managed to treble it within four years.
These days it's pretty easy to set one up - all the main brokers do one. You can transfer a company pension in, or a frozen pension.
And everytime you contribute some cash, the Government adds cash in for you too.
Drawbacks? The main one is you can take 25% tax free when you're 55, but the rest has to become an annuity at age 75.
Advantages? You can nip in and out of shares, unlike most fund managers and even go short using covered warrants if you want.
Costs are low. You'll get charged for every trade but with most brokers these days it'll only be around a tenner. And there's roughly a charge of around £150 per year on top. And for the first time you can even put protected rights into a SIPP.
There's no capital gains tax to to worry about either. Dividends are tax free too. With a SIPP too you can do what you like - trade short-term or be a longer-term investor, or even a bit of both.
Unlike in ISAs AIM stock is allowed, and with warrants it's even possible to play the FTSE or Dow up and down if you wanted to.
Which means if you think markets will continue to tank in 2009 you can still make some money.
The thing I've liked about my SIPP most is being in control of my pension and knowing exactly what's in it rather than getting a depressing statement every year.
And even better - knowing that a percentage of my pot is not going into someone else's pocket in charges!
It's best to shop around to see who might be best to set up a SIPP with but any of the major brokers will give a similar service.
Make sure you ask exactly what all the charges are - ie, what each trade will cost and what the yearly charge is so you can make the right choice for you. Look for a max £12.50 for trades and £200 for yearly fee.
And if you go for it.. have fun, Mr Fund Manager!