A formula to preserve the value of our money . . .

Running a household is going to be much more expensive . . . and those wee ones have big appetites

WHILE we love and support the people of Ukraine in their current plight, the situation has caused mayhem in global financial markets, and thrown out a challenge for us all,

Here is the formula for us to preserve the value of our money.

Financially speaking, we are living in challenging times.

Inflation, which has bobbed happily along under 2 per cent for most of the last ten years, shot up to over 5 per cent this year so far, and is expected to hit 7.5 per cent shortly.

Last week we worried that the price of oil was going to go over $100 a barrel. At the end of the week is was more than $110 a barrel. Heat or eat? Eat.

In order to preserve the value of your money, you need to put it somewhere that is more likely to protect it from inflation, by growing it as quickly as possible. This place is called the stock market.

Money invested in funds will, over time, grow much faster than money kept in cash, i.e. in a bank current account, or under your mattress.

In recent months we have, in this esteemed column, advised that, if you have a few bob to spare, investing is a far better plan than saving.

However, you have to be careful where you put your money. As George Orwell would have nearly said, if he was at this keyboard now: all funds are equal, but some are more equal than others.

To put your money safely into a fund that will provide a maximum return, you need to ask your financial adviser to use a fund (or funds) that are performing well.

There are hundreds of funds available, but latest reports show that 86 of them are under-performing and have been doing for some years.

These include some of the biggest funds in the country, with a total of £45.4 billion in assets. That's a lot of money. More than I get paid in a year.

It also includes some of the biggest household names in the fund management business, names you would think are doing a good job.

The news on the TV is telling us that things in eastern Europe could drag on for years. That has implications for our money.

On a micro level, running a household is going to be much dearer. Those wee ones have big appetites, and they like oil out there in the back burner.

On a macro level, supplies of the essentials are going to become more complicated and we will see that in our local supermarket.

We are going to feel poorer in the coming years. We need to become smarter with our money.

Investing in funds, rather than holding our money in cash, is a good move - and we have to make good moves this year. If you snooze, you lose.

:: Michael Kennedy, an independent financial adviser and pensions specialist, can be contacted on 028 71886005. Further information on Facebook at Kennedy Independent Financial Advice or at

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