How to Make Money in Isas and Sipps Tax-Efficient Investing Made
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Foreword by RICHARD KOCH, author of The 80/20 Principle with over a million copies sold in 34 languages How to Make Money in ISAs and SIPPs Tax-Efficient Investing MadeREVIEW Easy COPY STEPHEN SUTHERLAND BESTSELLING AUTHOR OF Liquid Millionaire How to Make Money in ISAs and SIPPs Tax-Efficient Investing Made Easy Stephen Sutherland REVIEW COPY 4 How to Make Money in ISAs and SIPPs This book is dedicated to my parents, Brian and Marie Sutherland, the greatest mum and dad a son could wish for. I love you both so much and greatly appreciate all the help and support you’ve given to me. You are both amazing! REVIEW COPY How to Make Money in ISAs and SIPPs 5 How to Make Money in ISAs and SIPPs was compiled in aid of The Christie; a specialised cancer centre. 100% of the book royalties will be donated to the charity. The Christie played a big part in helping our mum fight and beat lung cancer. For their love, help and support, we are truly grateful. About The Christie The Christie (Registered Charity Number 1049751) is a specialised cancer centre with a long standing reputation (since 1901) for high quality diagnosis, treatment and care for cancer patients. Based in Manchester and covering a population of 3.2 million, we register around 12,500 new patients and treat about 40,000 patients every year. Approximately 15% of patients, often with complex or rare cancers are referred here from other hospitals around the UK. Not only is The Christie the largest single-site cancer hospital in Europe, it is also a world- leader in cancer research, from where groundbreaking research has led to the development of many new cancer treatments. Manchester was recently ranked as best in the UK for cancer research. The Christie charity raises funds for patient welfare, cancer research, new buildings and medical equipment. In recent years it has contributed to the new £35 million Patient treatment Centre – housing our comprehensive Chemotherapy Unit and the world’s largest Clinical trials Phase I Unit, together with a £7 million Critical Care Unit – enabling us to perform rare and complex surgery and subsequent isolation. Also we have, in the last 2 years, opened 2 satellite Radiotherapy Units at Oldham Royal and Salford Royal hospitals. In addition, the charity pays for all the extra special services, such as complementary therapies, the wig service, benefits advice and counselling, that help to make living with cancer a little easier. Thank you all again for your wonderful support, without which The Christie would not be the place it is today, our patients wouldn’t be living longer and being diagnosed and treated earlier with the most state-of-the-art equipment and medicines. REVIEW COPY 6 How to Make Money in ISAs and SIPPs Praise for How to Make Money in ISAs and SIPPs (Insert testimonials here) REVIEW COPY Acknowledgements 7 Acknowledgements I’d like to start by saying a huge thank you to my mum, dad and brother Paul – you are three very special people in my life and without your immense help, this book would not have become a reality. Thank you so much for believing in me. My sincere and heartfelt gratitude also goes to all of our clients, especially the ones who kindly agreed to review this book. Thank you, thank you, thank you! Staying on the subject of book reviews, I’d like to say a big thank you to Lee Clarke and Jeff Hall for helping with the book’s structure. I’d also like to say a big ‘cheers’ to all the journalists, authors and corporate executives who also very kindly agreed to review this book. I want to also thank Siobhan Curham, my extremely talented editor for her brilliant editing and proofing work. I’d surely like to thank Steve Todd, my friend and ISACO’s Global Market Strategist, who created many of the countless images that are featured in this book. I also want to thank George Foster for the amazing book cover design and say a big thank you to Helen McCusker for helping us promote the book. For helping my life run smoothly, I’d like to say thank you to my PA, Karen Harrop and housekeeper, Theresa O’Mara. My thanks also go to ISACO’s financial director Paul Cooper and ISACO’s business administrator Chris Elmes. Tim, Ileen, Sue and Jason from Easiprint, you’ve also been a huge help – thanks! I’d also like to say a big thank you to Steve Oakman from Concentric Marketing, Jeremy Thompson, Jennifer Liptrot and Rachel Gregory from Troubador Publishing, Angie at MarketSmith for helping me to obtain image and content permissions, and to Jon Sands for making sure all my facts were correct regarding ISAs and SIPPs. My gratitude also extends to two companies that we like to think of as partners of ours – Fidelity and Morningstar. I’d also like to say thanks to all my mentors, who include William O’Neil, Brian Tracy and Sir Richard Branson, plus the countless authors I’ve read and seminar leaders I’ve seen and listened to. I’d like to close with thanking you, the reader – deciding to take time out to read this book means the world to me and I do hope that one day we meet up. You never know, in the future we may even become friends. REVIEW COPY 8 How to Make Money in ISAs and SIPPs Contents Foreword 9 Introduction 11 Chapter 1: My Story 18 Chapter 2: ISAs – Aiming to become an ISA Millionaire 27 Chapter 3: SIPPs – the Smarter Way to Manage Your Pension 37 Chapter 4: Charges, Fees and Fund Supermarkets 50 Chapter 5: A Quick Guide to Investment Funds 63 Chapter 6: How to Pick a Good Fund 70 Chapter 7: Fund Timing – When to Buy and When to Exit 102 Chapter 8: Gauging Stock Market Direction 115 Chapter 9: Beyond Greed and Fear 138 Chapter 10: How to Manage Your Portfolio 147 Chapter 11: Creating an Income for Life 165 Chapter 12: A Golden Opportunity 175 Appendix 1: About ISACO 183 Appendix 2: About the Author 185 Appendix 3: The Value of Advice, Tips and Ideas 186 Appendix 4: Junior ISAs 190 Notes 195 Index 198 REVIEW COPY Foreword 9 Foreword You may well be scratching your head and asking yourself, ‘who is Richard Koch?’ Allow me to briefly present my credentials, before saying why I think this book and its author should be taken very seriously. At the age of 40, I ‘retired’ from a career in business. I’d been a specialist in business strategy, as a consultant with the Boston Consulting Group, a partner of Bain & Company, and co- founder of L.E.K. Consulting. I decided to stop working ridiculous hours, get a life, and in my spare time pursue two hobbies I enjoyed – writing books, and investing. I’ve been fortunate with both. I’m in the Sunday Times Rich List – they say I have net assets after tax of around £140m, which apparently makes me joint number 572 on the UK list, behind Mick Jagger (£200m) but ahead of David Bowie (£100m), who deserves the money far more than me – and may well need it much more too! I began with nothing, and nearly all my money has been made from investment, not starting seriously until 1990. Matthew Goodman of The Sunday Times of May 5th 2013 said that I “am regarded as a savvy and meticulous investor”. I’m the author of The 80/20 Principle which has sold more than a million copies worldwide, and also of The Financial Times Guide to Selecting Shares That Perform – which is now in its fourth edition and has nice reviews1. If you’d like to learn more about me and my views, eccentric or otherwise, please follow me on Twitter or visit www.richardkoch.net – I write a weekly blog which appears on Monday afternoons2. How did I come to be writing this Foreword? I first came across Stephen Sutherland at the end of 2008 when I reviewed his first book, Liquid Millionaire. I liked the book, but was taken aback by his unapologetically bullish views – he said the stock market was about to soar at a time when it seemed the world was coming to an end. I thought he was crazy to be so definite that the market was about to go up. 1 www.amazon.co.uk/Financial-Times-Selecting-Shares-Perform/dp/0273712675/ref=pd_sim_b_5 2 www.richardkoch.net/category/blog REVIEW COPY 10 How to Make Money in ISAs and SIPPs Well, to my surprise, he was right. Since then I have kept in close touch and I receive his Daily Market Updates, which have proved instructive and profitable for me. Reading the Update is a key part of my daily routine and one of the few emails I read extremely carefully, word for word. The same is true of his wonderfully insightful monthly summary, The Big Picture, which has great graphs that even I can understand. I have discovered that Stephen is a warm, sincere, and likeable person, someone I would willingly follow into dark and unlikely places. The guy is smart, decent, and honest – but that is not a good enough reason to follow him. Here are six reasons why I do: • His track record is excellent. • He knows how to find and invest in funds likely to beat the market. • He will help you time your market entry and exit. Timing is everything.