Who do you believe? When someone says an investment is low risk should we take what is said at face value? Members of the public can, but advisers are expected to check. Putting money on deposit ought to be as safe as any investment – as long as the bank is still there tomorrow – quite likely, as a huge chunk of the UK banking system is now nationalised. Putting it under the mattress isn’t 100% safe either, as you might get burgled, kidnapped or your home might burn down. And putting it into a fund managed by a large or respected institution ought to be considered safe too – especially if that fund is stated to be low risk. Seems our competitive human nature encourages stupidity regularly among a few fund managers, and here are some examples:

Few years ago, zero-coupon bonds and funds were sold like this and were ideal for investors who did not like risk and did not need income during the term of the investment. They were basically very simple.  If you bought one at say, 75p with a maturity in 5 years time of 100p, then you knew exactly what your total and annual returns would be – in this case, 25% total return or about 5.9% p.a. compound.

Trouble was, the fund managers decided to be clever and gear up, meaning they borrowed (using the investments as security) and then used this money to buy more contracts, rather like betting heavily on your own race horse. If your horse wins, you get the prize money and the profit you have made on your bets. If it doesn’t win or things do not go as planned, you end up out of pocket which is what happened. Clients lost money on an investment which was very simple and if left alone, low-risk.

Last month, Standard Life earned themselves a £2.45 million fine when it misled investors on what was supposed to be a simple cash fund for pension money http://www.whatinvestment.co.uk/making-money/investment-funds/investment-funds-in-depth/1110918/standard-life-says-sorry-to-98000-investors.thtml

And proving the old saying that hubris is followed by nemesis (pride comes before a fall) this video talking about a “low-risk” Arch Cru fund that invested a huge chunk of its money in a shipping venture using shell companies in the Channel Islands, really takes the biscuit.  http://www.citywire.co.uk/adviser/-/video/other/content.aspx?ID=379032&re=8278&ea=234851 Financial Advisers have their own grapevine and while there was plenty of warning that this particular fund was not what it said on the tin, some decided to ignore it.

Wednesday finds me at a seminar hosted by www.consultationinstitute.org for local Government officers that deal with elderly people. Since this is relevant to long-term care, seems worth a visit. Main event is an interesting talk given by Michael Foster MP for Hastings & Rye. Without any effort on my part, his answer to someone else’s question includes the three blindingly obvious remedies to someone who has not got a big enough pension – contribute more, manage on a lower income than you planned, or work longer. His comment that Pension Credit will help those still short of pension didn’t mention its complexity which puts a lot of people off applying. Interesting comment too that in 1908 when the first (means-tested) State Pension was introduced, the average length of time people received it for was 2 years. Someone at State Pension Age now can expect to receive it for between 10 and 20 years and longevity has recently been increasing 2 years every decade.

Main subject of his talk is the Equality Bill http://www.equalities.gov.uk/equality_bill.aspx currently going through Parliament and there is still time to put your point of view.  Alas, didn’t get a chance to ask a cheeky question – with an election coming, will this Bill actually reach the Statute Book? as some of the questions were ramblings rather than actually asking anything. At the end of any Parliamentary session, there will inevitably be legislation at varies stages of progress. Negotiation or if you like, horse-trading between the various political parties will mean that some will be allowed to go through while others get chopped. Will have to see if this bill makes it.

Another situation I would have liked to ask about occurred in one of my pension surgeries recently. Lady wants to take her pension benefits from her employer’s scheme and my advice is mainly about the type of annuity she should take – level or escalating? However, being fit and healthy and with no dependents to worry about, she wants to carry on working. As one or two other employees have done this, she asks me if she can do this? Only HR can answer but her situation raises some interesting issues. Working after the Scheme Retirement Age will provide useful extra income but she will not have the same benefits as someone younger than the Scheme Retirement Age, like Death-in-Service Benefit, Private Medical Insurance and so on. She will be at an obvious disadvantage compared to her colleagues – just the sort of issue you would expect the Equalities Bill to address? Looks like another wait & see.

Following speaker is from National Audit Commission showing the huge regional disparities in proportions of elderly people – almost 2/3rds in Dorset while cities & conurbations have a much lower proportion. Some authorities are very well prepared for this while about 30 per cent haven’t got any plans or policy in place. Interesting to see what works with different local authorities. An electric scooter or shopping buggy scheme in one authority where a fleet of 20 is available for people, has very positive feedback – with one user saying, that they feel they have a life again. Something that might have helped people here  http://www.georgeemsden.co.uk/2009/12/james-bond-is-in-a-wheelchair/

Another scheme designed to prevent elderly people falling costs £158,000 a year and is managed by a Falls Prevention Officer (sic). Have heard of Teenage Pregnancy Advisers in some local authorities, but not this latest one. Savings are huge apparently as hip replacements cost £20,000 a pop and if 15 falls are prevented each year (their figure) then the savings to the nation (but not the local authority) are £3 million. Wonder if these will survive the election?

Haiti’s latest tragedy makes many people think that more foreign aid will help in the long term, but Jo Figden’s report on BBC Radio 4’s From our own correspondent http://news.bbc.co.uk/1/hi/programmes/from_our_own_correspondent/default.stm makes me doubt this. Her programme dealing with Non-government Organisations (NGOs) in Zambia (formerly Northern Rhodesia) suggests that too much foreign aid is self-serving and little more than political vanity. Only 500,000 out of 12 million people have jobs in Zambia, the size of UK and France combined and there are few decent roads. My father-in-law told me many years ago that the structural weakness in Zambia is that the fertile food producing regions are a long way from the markets. Previous BBC Radio From our own correspondent programmes have mentioned that Zambia’s agriculture when managed properly, could feed the whole of Africa.

But instead of roads or investing in Zambia’s crumbling railway system that would solve this problem, we have workshops hosted by NGOs in new hotels all over Zambia where delegates are entitled to a generous daily allowance. They are well attended in the morning but only the jackets remain in the afternoon and the fluent jargon is not about implementation. The path to hell really is paved with good intentions. Well-meant advice from America nearly kills a successful business feeding 6,000 families selling high quality food to Europe. Mosquito nets prove to be more profitably employed in fishing which nearly wipes out the previously plentiful fish stocks in lakes nearby. The old saying “If you can’t beat them, join them” is proved when a local nurse decides to concentrate on setting up his own NGO, rather than use his training improving the health of his countrymen. He is not paid his meagre wages very often in a hospital which has only half the staff it needs, and justifies his actions perfectly logically “How else am I going to get a car?”

Farmers get compensation if crops fail, leading some farmers to neglect their crops and has a curious echo from the days of Communism in Europe “They pretend to pay me, so I pretend to work”.

Back in more developed Blighty, someone gives me a brochure for Sure Investment www.sureinvestment.net as they are thinking of investing? Always glad to help or listen, but free financial advice? sets some alarm bells ringing. Have not looked at the website, but the brochure is very well produced with pictures of yachts, diamonds, race horses and other wealth clichés while text is minimal. Based in Bournemouth, Sure are not “Authorised & Regulated by the Financial Services Authority” so are not covered by the Financial Services Compensation Scheme see http://www.georgeemsden.co.uk/2009/11/interesting-times-how-to-spend-14bn-in-a-weekend/

Nothing wrong there as long as the client (and adviser) understand this. Text mentions modestly that it is towards the high risk end of a balanced investment. Part of the return is generated by short selling, a strategy used by hedge funds for example which can be very high risk. Most people understand that if you buy a fund/commodity/share and sell it at higher price, then you can make a profit. This can be done in the same trading day or a longer period if you have the patience and the resources. Have met a few people who do this as a job and set themselves a profit target of say, next month’s living expenses and when they have made enough, switch off their laptop and go down the pub. They don’t make a profit every month, but seem to know what they are doing and are usually honest enough to admit that there is a learning curve here.

But a profit can also be made the other way round – SELL now at a high price and BUY back later at a lower price. This is sometimes called a bear transaction. However, there is a crucial difference here. If you buy shares and the value plummets, the most you can lose is your purchase cost and expenses. If you have sold shares and have to buy them back, the potential losses are infinite as the price could go up to any level. Most traders with more than a couple of brain cells would limit any potential losses by setting a maximum price movement, but it is not for amateurs.

The potential investor in this case has no savings, is unemployed and no knowledge of investments. It would be common with this type of investment for the investor to meet the definition of a Sophisticated Investor http://www.meteorical.co.uk/glossary_sophisticated_investor.php Business Angels for example, who invest in a start ups or other fledgling business, would have to sign such a declaration, see last week’s http://www.georgeemsden.co.uk/2010/01/fat-angels-or-too-much-of-a-good-thing/ This puts everyone on notice that this is not an everyday investment and outside any investor compensation scheme.

But minimum investment here is £10,000 for a minimum of 6 months so would this have to be borrowed? A key issue in recommending any investment is Suitability, so is this investment right for this client?  In this case, hard to imagine a more unsuitable one.

Another year and it is time for my favourite networking group www.3Cscommunity.com meeting this time at UCL Advances, the entrepreneur arm of the huge University College London http://www.ucl.ac.uk/advances/ The Dragons’ Den format allows 3 or 4 presentations in 2 and half hours with time for questions. After this, networking carries on at a pub nearby where some of the most useful contacts are often made.

First presentation is by Hugh Stewart Managing Partner of Shackleton Ventures www.shackletonventures.com who has been in the venture capital (VC) business for 26 years and has lost count of how many £millions he has raised. Best ever investment returned 37x his investment while the worst lost everything after 4 rounds of funding. The USA seems much more switched onto VC than Europe. Google and Amazon had a 5 year time span from launch to floating the shares – something that would have taken at least twice as long in Europe. Business failure in the USA is not viewed as a personal failure with a lingering stigma. In Europe, people are shy about mentioning business failures although this is slowly changing. Failure is often an essential part of success – not my words, rather those of author J K Rowling  http://www.youtube.com/watch?v=pucdJHjZaqs

Cultural differences show up in business plans, where a Russian one had two pages of introduction and 78 pages of equations – German & Swiss plans also do this sometimes.

Curiously, uniqueness in a product or service is rare, and may not not make things easier as there is nothing to compare against. Classic exception here is Edwin Land and his Polaroid camera, where his 3 year year old daughter wanted to see the pictures immediately after he had taken them   http://edhelper.com/ReadingComprehension_54_1182.html Legend has it he worked out the solution in an hour after this incident, but getting it to the commercial stage took a bit longer.

Investors don’t like surprises – openness works better. Again, something that is very much part of American culture – we like to keep things to ourselves in Europe.  Main time when Americans seem to keep things quiet, is when playing poker, but I digress. Small business adapt, move and do things more quickly than a big business and can often grow more quickly. Something this Government doesn’t realise, where the quickest way to create growth and have real green shoots of recovery would be to stimulate or deregulate the small business sector, but I am not holding my breath.

Best time to start a new business is in a recession like now, as if you can survive and grow in current conditions, then you ought to be able to survive in better times. Most important thing in any business is management. Next most important thing is still management. Third most important thing in a business is – don’t be surprised – management. Investing in a Class A management team in a Class B business will generally make money, while the opposite will generally lose it.

Commitment or “skin in the game” matters and reminds me of a VC story from a few years ago. A £2 million VC deal was ready to be completed with a bankers draft ready on the table. VC guy asked the entrepreneur if he would put a token amount into the venture? His polite but negative reply killed the deal.

Being able to establish rapport in the first minute is essential as most people make up there minds in that time, even if on a subconscious level. Bit like the estate agents’ saying that people decide whether they are going to buy your property or not, within 15/20 seconds of walking in your front door. Hence all the advice about having the smell of freshly-baked bread or coffee in your home when people come to view.

Investors work on IRR or Internal Rates of Return rather than Annual Rates of Return like Financial Advisers, for example. To get the mindset here, think of the old Indian legend about the invention of chess where the inventor asked to be paid in grains of wheat  http://en.wikipedia.org/wiki/Wheat_and_chessboard_problem with on the first square, two grains on the second square and so on. The number of grains that would be on the 64th square would be 1.84 to the power 19, or a very, very big number – ask your kids if you have forgotten your maths.

Shackleton do not invest in everything (no one does) but they still get approaches from people who have not looked at their website. This clearly states what they are and are not interested in. Same situation with www.angelsden.co.uk featured in  http://www.georgeemsden.co.uk/2009/07/im-an-investor-get-me-out-of-here/ where people who don’t pay the £500 registration fee, don’t get any help no matter how brilliant their idea supposedly is.

Some businesses can actually manage without VC funding and get going on lumps of cash from family and friends. This can be a bit of a pain when a business is finally sold, as in one case, 38 signatures from family and friends had to be got within two days. The entrepreneur here took a year off and is now looking at his next idea, but using his own money this time. Do Without is a simple and cheap option, although not appropriate for every business. Guests on the BBC Dragon’s Den are regularly asked why they need the money? Some don’t really need it, and probably have their eye on the publicity from appearing on the show at peak viewing time. Entrepreneurs nearly always underestimate the amount of time taken to get funding. If the owner has started a business and is spending half his time making fundraising phone calls, the business will suffer. Better to employ someone to do this.

Most surprising danger is having too much cash. Loadsamoney can lead to precious funds and time being wasted on fancy furniture and planning, meaning the time when you actually get on the phone to try and get business is delayed, and delayed. All successful small businesses have to be sales driven – they don’t last otherwise.

For a weekly view on entrepreneurship see Mike Southon’s FT column http://www.ft.com/comment/columnists/mikesouthon and next 3Cs meeting is 23rd March.

Referrals from professional introducers are always interesting and latest one is basically “Can you raise some money for my client?” We meet at Institute of Directors in Pall Mall which is busy as usual and the client tells me his story. A modern languages degree from Oxford and continued study, now allow him to work in 26 languages in his translation and international business consulting work. Know people with translating agencies who handle this number of tongues, but never met one person who can handle so many. Story unfolds and alas, credit history scuppers the chance of raising additional funds but there is plenty to be positive about. He knows how to write feasibility studies etc for the next stage of his business growth, but needs other professional advice too which my contacts can provide. Not least is the requirement for his own website to get him a profile in cyberspace.  Just to remind me of my own limitations, he already receives his State Pension and runs marathons.

Study time needed to be able to use a new language is 100 – 200 hours so anyone intending to do that evening class to acquire a language for their Summer holiday needs to get started.

Trawling through a library catalogue leads me to a classic guys’ read – the memoirs of test pilot Eric “Winkle” Brown – Wings on my Sleeve http://www.amazon.co.uk/Wings-My-Sleeve-Worlds-Greatest/dp/0297845659 Part of my continuing fascination with some military/war matters is the sheer insanity that occurs. End of WW2 and he test flies various captured German aircraft including the exotic Messerschmidt 163 and weird Dornier Do-335 http://www.squadron13.com/do335/DO335.htm Former is deadly (to the pilot) with its volatile fuel mixture while the latter has an engine at the front and the back.

Bail-out instructions for the Dornier are the most complicated ever: i) press this button – BANG goes the rear propellor (don’t want to end up as mincemeat, do we?)  ii) press next button – BANG gets rid of the tailfin (don’t want to get sliced in half either)  iii) PULL hard on these two red handles to jettison the canopy, but the exit of the canopy is so swift that a crashed example found the (dead) pilot in the cockpit with both his arms missing! Another theme that comes out from reading any books about the history of the UK aircraft industry is that Government interference and mismanagement, is not new. If you want to read a real rant on this subject, see Plane Speaking by Bill Gunston ISBN 10: 1852601663 who makes me look quite tame really.

Record gold prices prompt a rash of TV adverts but it still pays to shop around http://www.bitterwallet.com/have-you-said-bye-bye-lovely-gold-hello-tiny-little-cheque/19640?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+bitterwallet+(BitterWallet) If you still have some and want to talk to the buyer face to face, contact Lewis Malka of Hatton Garden http://www.joseph-sterling.com/about_us.html

Recent long-term care enquiries include one where the client is in good health but over the age of 75 so unable to purchase a pre-funded plan. As they are not receiving any care currently, they are not able to purchase an Immediate Needs Annuity either, which would cap the cost of future care. So if care in their home is needed or if they need to move into a care home, they will have to self-fund.

One of the exceptions where the NHS will pay for care is if continuing care is needed. Care in hospital is paid for by the NHS. Care outside is subject to a means test. But if treatment still needs to be provided by the hospital, then the NHS can pay for this although they are not an in-patient. This avoids the means test etc and surprise, surprise, expenditure on continuing care has shown a sharp increase which the Government is now looking at closely.

Final meeting of the week is with www.carehomeselection.co.uk Started 10 years ago by a GP, it helps families find a care home by telling them what questions to ask, for example. Coordination between the care home and the hospital can mean more efficient use of hospital beds, while knowing what to ask and look for when a relative or client is going into a home, can make the process less stressful.

Seem to have had a record number of appearances on BBC Radio London 94.9 FM this month where an Estate Agent and I spoke on Jonathan Lampon’s programme last Saturday evening. Subject was “Are mortgages or is the house market getting any easier?” to which the answer is a definite  No!

Main point that I was picked up on, was that your credit file can pick up how quickly you pay your bills. This is used in Credit Scoring and decides IF you get a mortgage and how much. Thinking of applying for credit in the next 12 months? Pay your bills on time. Doesn’t matter so much if you pay the minimum on your credit card, but pay it in good time.

Signs that a business is in trouble often show themselves in corporate vanity – expensive new offices, rising executive expense claims, new departments and rebranding. Personal Accounts, the Government’s complusory pension scheme http://www.georgeemsden.co.uk/2009/11/do-you-know-what-day-it-is/ has had a £360,000 rebrand to NEST http://www.padeliveryauthority.org.uk/documents/press-release-nest-07-01-2010.pdf as people find the P-word or Pensions, boring. There is even a video for people whose reading attention span is a bit short and a rare piece of honesty http://www.padeliveryauthority.org.uk/nest-video.asp as it starts off “Workplace pensions are changing”. Trouble is, there has been non-stop pension change since 1997 which has compounded the confusion the new measures claim to solve. It’s about as honest as someone who mugged you offering you a cheap loan.

Not mentioned of course, who will provide the back-up system to run the scheme for it’s 3 – 6 million members? There is only one bidder left now  http://www.ifaonline.co.uk/ifaonline/news/1566067/gwrs-withdrawal-leaves-bidder-personal-accounts One also wonders what sort of pension the staff at NEST will have? Defined contribution/money purchase - where the employee carries the investment risk? Or will it be final salary like most of the the public sector (and of course MPs) where the employer takes the investment risk – supported by the taxpayer? Don’t be surprised if the admin is all done overseas to save money – call centres could be busy.

To be fair, there is some good news here. The idea of the members’ pensions being run as a not-for-profit corporation is a good one so you will have your Personal Account after all. But unless people save enough for retirement it will be pointless, and the average amount you need to save to get a decent fund for your pension is about 15 per cent of earnings. If you don’t believe me, come and see me for a pensions chat.

But there is more dishonesty and contradiction here.

a) Taxes are rising so how are people supposed to save more when real incomes are falling? OK you get the tax back with pension contributions, but a huge turn off for many would-be pension investors is having to buy an annuity. Haven’t had a request from a hard up 30 or 40 year old to “cash in my pension” lately, but all IFAs get them.

b) We are all living longer thanks to the NHS but the maximum annuity purchase age of 75 has been unchanged for decades. Government has really dug its heels in here. The Association of British Insurers is now suggesting  http://www.trustnet.com/News/DisplayStory.aspx?id=53251 that it should be raised to 80. Logic behind refusing to raise the maximum annuity purchase age is that pension or annuity income is taxed as earned income and the Government starts getting its tax relief back.

c) At the same time, the State Pension Age  is being raised to 67 in 2024 and then 68 in 2046 - again because we are living and working longer. And some think it should be raised to 70 http://www.pensionsadvisoryservice.org.uk/news/2009/july/lord-turner-pension-age-should-be-70

d) Saving 15 per cent of earnings may solve someone’s own pension problem but would have dire consequnces for the rest of the economy. The current recesssion is caused by a lack of spending and people are saving more now. Anglo-Saxon countries do not generally save much – the savings ratio in the USA was negative not so long ago – in contrast to Europe and Asia where the propensity to save is much stronger. In fact, these people have often expressed puzzlement when they have moved here and been amazed how little people save in the UK – and this was when times were better. A huge jump in savings would cripple the leisure industry for example, not to mention the restaurant business.

Some leadership from MPs might help? How about if they had money-purchase pensions and took the same risk as the millions of NEST members? Would the next Government be so daring? Waiting for hell to freeze over is not usually a worthwhile exercise, so don’t expect much here – except maybe another rebranding.

Exciting end to the year when I am in the studio on Eddie Nestor’s Drivetime show on BBC Radio London 94.9 FM to talk about pensions. Most talk is about drug smuggler Akmal Shaikh’s execution in China so my contribution is reduced, but for an enlightening counter to the “how awful!” chorus, see   http://www.dailymail.co.uk/debate/article-1239051/LEO-McKINSTRY-Sorry-join-liberal-wailing-heroin-traffickers-deserve-die.html

If you’re surprised by the Chinese reaction, go to Google and search with “opium wars”. My favourite book here is the classic Foreign Mud by Maurice Collis  http://books.google.com/books?id=DK78eANlr-AC&dq=foreign+mud+collis&printsec=frontcover&source=bl&ots=vBNcl-5RI_&sig=GecSuwuzNtGh7KhlT3JWFQhkZxw&hl=en&ei=TsZBS-GZBI6i0gTJ-tGSBQ&sa=X&oi=book_result&ct=result&resnum=1&ved=0CAgQ6AEwAA#v=onepage&q=&f=false

Another highlight is a relaxing day spent with friends in the beautiful village of Ickwell, home of clockmaker Thomas Tompion. Two surprises there. Firstly, after-dinner whisky is Welsh http://www.welsh-whisky.co.uk/ and very drinkable too while the village is one of few in England with a permanent May pole http://www.bedfordshire.gov.uk/CommunityAndLiving/ArchivesAndRecordOffice/CommunityArchives/Ickwell/ThomasTompion.aspx 

Christmas Day itself finds me at church after some years. A daughter’s parents-in-law are over from Italy and Dad wants to go to church. Choice is between the Italian Church in Clerkenwell Road   http://www.italianchurch.org.uk/  and St George’s, Hanover Square  http://www.stgeorgeshanoversquare.org/  As friend www.georgemetcalfe.com is reading the epistle at the latter, it is St George’s where apart from being a beautiful church, the choir is stunning and worthy of another visit. Three daughters and their two grandsons make the family gathering everything such an event should be. Eldest grandson is now a toddler who finds the sofa, grandad’s paunch and other seated members a useful climbing frame. In true child tradition and for part of the time, the clear packaging that fits nicely over his and grandad’s head, is more appealing than the contents. Youngest grandson now three months old, smiles when you talk to him and has a look of bewilderment when strange sounds come out of his mouth. Hunger is indicated when he slobbers over and sucks hard on the end of my nose – time to hand him back to mum.

But let’s get serious. Final business meeting of 2009 is with Partnership Assurance attending a workshop on how to develop long-term care business – something which is now more topical after the monumental indifference I found in the 1990s. Being twelve years older and the credit crunch have sharpened people’s minds, it seems.

Most readers will be able-bodied and capable of washing, dressing, feeding themselves etc. When you start to need help with these, start to forget what day it is or dare I say it? can’t recognise members of your own family, you need what is commonly called long-term care. We all like our independence and no likes to be a burden, but this can change overnight perhaps with a fall, hence the title. A lively debate always follows when this subject comes up with “Someone else should pay!” at one end and people who can afford to take a better off view at the other. If care has to be paid for and you haven’t got insurance, you have six choices:

i)    Cash – use your own money. Nice if you have it, but even if you do, do you wish to burn it all up living in a home?

ii)   Get the Local Authority to pay for it (What everyone wants) There are also Deferred arrangements with a few councils (live now, pay later). Here they pay for care now but take a charge on an elderly person’s home and only get repaid when the person concerned has died or their home has been sold. Councils cannot charge interest in this situation so few allow this option, and you can’t blame them.

iii)  Rearrange your portfolio to produce income. Needs to be a big portfolio if the yield is say, 5 per cent p.a.

iv)   Equity Release to get a lump-sum or income. Realistic BUT being based on annuity rates (which in turn are based on life expectancy and interest rates) these are low currently. Even five years ago when interest rates were much higher, the rates were not great, even at age 70. Falling house prices has led to an exodus of providers here.

v)     Buy an Annuity. Often the only option but many people leave it for too long and there is not enough cash or equity left when they finally do get round to looking at it. The cost of care can be capped. The insurance company that provides the annuity income takes on the risk of the person concerned living a long time. The risk of someone dying say 2 months after buying one can be insured separately.

vi)    Renting out your own property. Fine in theory but do you really want this? Beneficiaries might not be happy either. Rent you get from renting out your own home is unlikely to be enough to pay for care in a residential home.

Seventh option might be to give one’s career to care for a parent for example, but this can be the most expensive.

People with no money will probably get their care paid for by the local council while few have enough to pay for everything. Most common situation is a shortfall in the cost of care which planning for now will make it easier to cope with, and perhaps safeguarding someone’s inheritance.

There are other issues too and equity release for example, will involve a solicitor. The following might be worth a visit as well  http://www.georgeemsden.co.uk/2009/10/your-worst-nightmare/ 

Plenty of time for pensions next year, so back to my fascination with life across La Manche.

Why do so many young men volunteer for an organisation that is by its own admission, brutal? see 5.  http://www.legion-recrute.com/en/faq.php?SM=0 Different writers have their own reasons. For the many eastern European volunteers these appear to be economic – even though the majority appear to have done military service already. Jaime Salazar’s book (see heading – ISBN 978-0-425-21015-4) is the latest and only one I have read written by an American, though there are earlier accounts. It is an enjoyable read with plenty of historical anecdotes and a welcome break from the planning for 2010.

The Preface describes his desertion, done partly to get his own back on sadistic officers whose records will be blemished as a result. In 1999 at the age of 25, he gives up a cushy graduate career with Siemens to go Europe and enlist. Nationalities tend to stick together in the Legion with a mafia Anglaise, mafia Russe and so on. New recruits include a blue-eyed Berber from Morocco whose forebears were implacable enemies of La Legion where their women carried small curved knives for castrating prisoners – seem to have heard similar stories about the North West Frontier, ironically where we are fighting now, but I digress.

First day corveé (cleaning duty) includes smartening up an old Renault hatchback with a FREE BEER sign next to the barrack’s phone number, driven around town to entice recruitment! First deserter is a young Corsican boxer who had left his wife and children where the chorus of a marching song “Who are you? Don’t I know you?” proves too much. Jaime turns out to be a good marksman and if you fancy yourself as one, there are several tips dealing with finger pressure, breathing and so on.

First months of training over, all the members of the mafia Anglaise end up or as he put it, are dumped in the 2ème Régiment Étranger de Génie (2REG) in Saint-Cristol d’Albion in Haute Provence -  the middle of nowhere, as he puts it. The isolation leads to drug taking, boredom and violence. None of them has requested this posting and only one makes it to the elite 2ème REP parachute regiment, generally considered to be the best part of the Legion. The 2ème REP is France’s Force d’Action Rapide and included a pathfinder unit Commandos de Recherche et d’Action dans la Profundeur but with the unfortunate initials CRAP, has since been renamed Groupement de Commandos Parachutists GCP.

The Legion’s performance in the first Gulf War led to a special mention by General Schwartzkopf and an invitation to march through Times Square in the victory parade, the only foreign unit to be allowed to do this since WW2. In return the General is made an Honorary Legionnaire. Jaime mentions that this is an honour not even extended to President Charles de Gaulle but then with his withdrawal from Algeria in 1962 and his abandonment of the pieds noirs, perhaps that is not surprising. Day of the Jackal by Frederick Forsyth springs to mind here.

Some recruits are given driving duties but one who managed to nearly kill his examiner on his driving test, is later posted to a heavy vehicle unit.

One thing life in the Legion does not improve is chatting up the ladies. In his former life, he had no trouble in attracting female company but months in a brutal macho environment do not improve conversational skills. Some ladies find the young Legionnaires attractive but many ladies he previously got on with, find him less so. All is not lost, and when he finds two attractive blondes, asks his best pal to join them to make up a foursome. Biggest worry is that his pal will spoil things by resorting to his favourite topic of conversation, how quickly he can dismantle and clean his rifle!

Perhaps my fascination with La Legion is how different cultures handle the violence and the rigour. This is shown in a conversation with a Japanese legionnaire who has a particularly hard time due to his problems with the French language and is mentioned in previous books about the Legion. European languages being mostly of the Indo-Aryan family, can be picked up relatively easily by people who have grown up in Europe, but Japanese has nothing in common with any European language. In a heavy vehicle driving test, he is unable to understand which way his instructor wants him to turn – à gauche (left) or à droite (right) so he drives over the roundabout instead, resulting a severe beating. In a conversation about desertion, his answer is “Don’t worry. I have made my choice.”

After arriving back in the USA, Jaime’s parents are glad to see him but are shocked by his drinking habits which are still as if he were in the Legion. Eventually, he decides to go back and face the music as he does not wish to spend the whole of his life as a deserter or fugitive. Presenting himself nervously at Aubagne (where life begins and ends in the Legion) a brown envelope is produced with his passport and few other personal effects. This is opened and he is informed that he is now an ancien or former Legionnaire and he is free to go.

The Afterward tells how his friends fared. The Japanese apparently deserted after being made to stand outside all night holding a snowball on his head resulting in several weeks in hospital. An American who nearly killed his military driving instructor on his basic test finally got his American driving licence and the author is now in the oil and gas industry. None of the Russians deserted and most reenlisted at the end of their 5 year contract. Some legionnaires can’t hack civvy street and in the UK  for example at one time about 25 per cent of the people sleeping rough in London were ex-Armed Forces, although support for people leaving is now much better.

For those of you who missed it, a summary. For those of you who saw it, an update.

Thursday morning and a colleague calls me at home in London ”Have you checked your e-mails?” He and several hundred other people have received a spoof message from my personal Yahoo address asking them to send money, as I have apparently been robbed at gunpoint (in the USA) and need US$ 2,550 to get home. Three messages in the Inbox are from Yahoo asking me to confirm changes including an unknown e-mail address which has been added ixfame@yahoo.com  Logging in and answering the questions, ends with a message that my e-mail account is locked until further notice.

With my Yahoo list inaccessible, I quickly send an e-mail to my blog list followed second one quoting a copy of the reply a client received when she responded to the original message. Sunday comes and I can finally get in to my Yahoo Mail and it looks like a professional contact has been corresponding with my virtual self during the time I have been unable to access Yahoo. The messages are sordid to say the least, alleging that this guy’s wife has left him (for me in New York!) that he is threatening suicide, why don’t you call? etc. Monday morning I open up Yahoo Mail and there is a message from the guy’s office:

“We regret to advise that Mr NNN has taken his own life over the weekend and was found in his office this morning.The police have been called.”

With thoughts of my probably having to attend an Inquest, my instinct is to forward the e-mail to a family member who knows the person concerned but perhaps I should check with his office? A receptionist answers and after asking my name again, asks me to wait. “How are you, George?” he asks and is obviously alive and well. He sees about 12 of these horrors a year so was not fooled. As far as the mystery e-mail address is concerned, a search via www.emailfinder.com shows nothing listed other than a location in Sunnyvale CA. Not sure if this person is anything to do with the goings on but question now is, do I spend US$100 getting a name?

On the positive side, forty phone calls and a similar number of e-mails shows me how many people care so in some respects it has certainly proved to be a Season of Goodwill. Thanks again to everyone for the concern and good wishes. Four people that I know about were about to send money and one tore up his cheque after my first message.

Advice for future protection includes changing passwords and having a dummy e-mail address as the first name in my address book.

Now it’s time to get back to Earth including preparing for my appearance next Tuesday 29th December 5 – 7pm on BBC London 94.9 FM Eddie Nestor Drive Time Show where I will be talking about pensions http://www.bbc.co.uk/london/content/articles/2005/05/04/eddie_nestor_person_profile.shtml

Have a good Christmas/Festive Season in the meantime.

The PBR unravels as detail shows gaps in the government’s figures http://uk.reuters.com/article/idUKTRE5B944P20091210 the 2.5% state pension rise doesn’t apply as said and projections show that by 2017 our standard of living will be back where it was in 2001. People buying annuities might benefit as Government bond prices drop after the markets look at the small print and don’t like the maths or the conjuring tricks  http://www.moneymarketing.co.uk/pensions/annuity-rates-should-surge-after-gilt-price-plunges/1003863.article But perhaps I am contradicting myself here as there is already plenty of analysis and comment on the Pre-Budget Report, so let me concentrate on the very enjoyable public speaking masterclass from Saturday.

For some people (including one high profile IFA) public speaking is the most terrifying activity on the list of things that they would rather not do. In some surveys, it even tops stressful things like divorce and moving house. Phillip Khan-Panni’s masterclass lives up to its name as the main attraction at a Professional Speakers’ Association workshop. Saturday morning, 10 of us meet at RIBA in Portland place opposite the Chinese Embassy and its today, solitary protestor from Falun Gong. Founder of the Professional Speakers Association of Europe, Phillip has won more public speaking contests than anyone in Europe, including seven times, the UK Public Speaking Championship not to mention the World Silver Medal, a record so far unequalled in Britain.

Exploration of oratorical devices like metaphor (most of us know that one) hyperbole, tricolon, anaphora, epistrophe (Martin Luther-King’s “I have a dream” perhaps being the best known example) alliteration, rhythm, rhyme and symploce is included. But the most obvious and important point might be to try and think from the audience’s point of view “What’s in it for Me?” followed by the heading. In other words, it’s about them rather than you and is the most common mistake made by speakers around the world.

Using anecdote as well, most interesting story is about Demosthenes and Aeschines. http://www.answers.com/topic/demosthenes Former was the son of an arms manufacturer who died when he was 7 so his estate was managed by his two bothers and a friend. These trustees stole or mismanaged his father’s money and as soon as he reached his majority at 17 and against advice, he famously sued them and won with the power of his oratory. More remarkable was the fact that Demosthenes was a sickly child with a spastic shoulder and a stutter. To stop the shoulder twitching, he hung a spear over it so it hurt him if it jerked and for his stutter, famously spoke against the roar of the waves on the shore with a mouthful of pebbles. Aeschines was his political opponent but while people applauded politely when he spoke, Demosthenes could rouse them to action. As Phillip put it, if your purpose in speaking isn’t to make change or create action, what’s the point?

As an exercise to strengthen your voice, avoid a trip to the seaside and the risk of swallowing a pebble plus keeping your carbon footprint small, try this. Hold a pencil in your mouth with your teeth as far back as it will go, and practise saying tongue twisters http://www.wisegeek.com/what-are-some-american-tongue-twisters.htm

Prior to being a professional speaker, Phillip worked in media sales and was given a job of managing an advertising space salesforce for the Daily Express. Brief was simple – double our sales or You’re fired! Five simple rules helped him achieve this and help plan for any business appointment:

* why am I here?

* why should he/she see me?

* what can he get from me which he can’t get from anyone else?

* what do I want at the end of my presentation?

* what is the least I will settle for?

Writing out your introduction before any speaking engagement will help your host/introducer and best to undersell yourself so the host can do that bit for you. Good also to send this to the host in advance, always keeping a spare copy as these do get mislaid.

Regarding your content, most of it will be basics, followed by differences that matter and crucially your USP. If you don’t what that is, progress will be hindered.

The 10 of us who attended include:

* a project manager who rationalised his networking as too much of it was NOTworking

* a retired policeman whose subject is police history – popular with WIs

* a former speech writer for David Cameron – services might be needed soon

* a former advertising man just returned from a speaking event in Iran where the people in Teheran are wonderful hosts. Seems President Ahmadinejad is very unpopular, the ladies hate having to wear headscarves in public and the speaker is told not to shake hands with any of them. Most ironic are security people in the audience taking notes of any political transgressions, just like in the days of the Shah.

For Phillip’s next book From Blank Page to Draft in 15 Minutes and his others see www.pkpcommunicators.com

If you’re brave enough to see the second Dementia BBC programme by Gerry Robinson referred to last week in http://www.georgeemsden.co.uk/2009/12/was-our-chancellor-ever-in-the-foreign-legion/ then the link is here  http://www.bbc.co.uk/iplayer/episode/b00phjk0/Can_Gerry_Robinson_Fix_Dementia_Care_Homes_Episode_2/

Ask and it shall be given unto you. Seek and ye shall find……but for marketing nous, hats off to the Co-op who are going to prison for new customers. Their initiative started in a private prison in Manchester in 2006, with the result that prisoners who have a bank account are much less likely to reoffend than those without a bank account. Not having one can make it difficult to get a job plus having one open already makes the guys concerned feel more integrated and less excluded from the rest of us  http://www.guardian.co.uk/commentisfree/2009/dec/03/bank-accounts-prisoners-co-operative

Gerry Robinson’s BBC programme on long-term care and dementia showed two sides of the care issue. http://www.bbc.co.uk/iplayer/search/?q=gerry%20robinson Many homes pay their staff not much above the minimum daily wage and very few allow any time in their duties to have a daily chat with their charges. In some cases, conversation with another resident or carer is about 6 minutes a day (usually at mealtime) and they are left washed, fed and dressed staring into space all day. In contrast, in the more expensive £750 per week home where there was interaction and conversation going on, the residents looked happy and healthy. Reminded me of visiting a relative in what was considered to be a good care home a few years ago. Walking into the lounge, some faces would light up when they saw me, only to drop again when I carried on to the room where my uncle was.

Ever wondered about a lingering smell in some care homes? Simple explanation from an owner of 10 care homes who diplomatically described the cause as anti-social behaviour. Seems a few of the residents would rather use the carpet than the toilet and even with steam cleaning, a trace lingers on. Care can be at home of course, see  http://www.caringandsharing.info/ and look forward to episode two of Gerry Robinson’s mini-series.

But on the day of PBR and all the changes with it, a strange thought occurs to me – was our Chancellor of the Exchequer ever in the Foreign Legion? Have now read four books about Brits in the Légion étrangère (don’t ask) so while not an expert, have at least done some homework. Extra inspections, drill, marches are done for the sake of doing them or done in the most complicated way are the most annoying memory. OK all armies have this  to some extent, but the Légion étrangère deems to have more than its share and so does this government. A never ending series of pension & tax changes makes you wonder if the Chancellor sees us as raw recruits to be knocked into shape or perhaps he is following Salvation Army founder General Booth’s philosophy “The Devil finds work for idle hands”.

According to my most recent read Dairy of a Legionnaire by Gareth Carins (spoiled by poor proof reading with howlers like kepi blanche) there are usually plenty of people wanting to join. In his intake, there were so many it took 3 weeks rather than the usual 1 or 2 weeks to process them. Most of the rejects were from eastern Europe apparently and their awful teeth was their downfall with less than 5 per cent of the original group chosen for basic training.

But back to Pension Simplification which started in 2002 and has become an oxymoron. Recent changes announced in the PBR of 9th December reduce from £150,000 to £130,000 the level where previous changes take effect. Plus the way in which this relevant income is calculated has now been changed, meaning pension advice for people making chunky pension contributions, has to be revisited – in other words, more fees for advice. The way recent ISA allowance changes were introduced for example, with different allowances for people over the age of 50 are another.

And please don’t get me started on HIPs (Home Information Packs). A significant part of the previous few years of house market activity was from people who put their house on the market to see the level of interest generated. If the interest was good, then a sale might happen which benefitted everybody including the government. Now with a £300 cost of a HIPS before you can show your property, few are inclined to do so. Just the sort of hindrance you need in a weak property market when people can’t get mortgages because bank and building societies are not really in the mood for lending. Conversations I hear sometimes from colleagues trying to get their client’s mortgage arranged border on the surreal, making me wonder if I should start a website with a title something like www.stupidmortgageconversations.com Perhaps naming and shaming would loosen things up a bit, not to mention providing some entertainment and enough ideas to start a new Monty Python or Little Britain series? The domain is available at time of writing…

But on the point of regulation, let me leave the final word to Miles Templeman, Director General of the Institute of Directors “As a nation we face some difficult choices. We either squeeze public spending, taxation and regulation, or all three will squeeze the life out of the UK economy.”