After learning salsa for a while, I naturally thought I could carry over much of what I had learned to tango but that was not the case. If dancing regularly, tango can be just another routine to learn but it really is different. For example:

* In a salsa club night, you and your partner pick a place on the dance floor and dance there. In tango you have a line of dance where you go round the dance floor in an anti-clockwise direction.
The man is leading and navigating while the lady is going backwards for much of the time. She has to have trust in the guy and on a crowded floor, navigating can make one forget the nice steps just learned in the previous lesson.
* There is an air of melancholy in tango which is definitely not there in salsa. The words of some of the old songs are desperately sad, for example “my love for you was at its height when you dumped me,……and now I am a man in the gutter…” To enjoy the evening, some change of music is required. In one London venue where the DJ does not bother with this somtimes, one lady told me that she has sometime felt like slashing her wrists when she gets home!!
* It is quite OK to have one dance with a lady in salsa, but the etiquette in tango is to have 3 dances with a new partner. You can always have more if you are getting on well….
* Dress is mostly informal in salsa – especially for the guys. In tango, more ladies dress up – again most guys just go casual.
* The average age of people in tango seems to be slightly older than for salsa.
* Tango is more romantic & subtle than salsa but it can be very sexy too. There is of course, nothing to stop you doing both!

Having done both for a while, I seem to be doing more tango these days but would definitely recommend starting with salsa as it is easier than tango and technique does not seem to be so critical. It is quite common for people to have private tango lessons but much less so for salsa. Whichever dance you start in, a new universe seems to open up. After starting salsa, I discovered cumbia, bachata, boogaloo and merengue. And when I started tango, I discovered the tango waltz and a more cheerful dance called the milonga.

N.B. Just to confuse you, milonga can also mean an event (the milonga starts at 3-o-clock for example) so you need to be aware of the context.

Another interesting week as a financial GP

* A will-writer referred a couple to me who wanted advice on paying for care. The wife is 78 and her husband who is 83 has just gone into a home after a stroke. They are selling their house and moving to a smaller one which will give them about £100,000 cash. She did not want to invest any money as they might need access to it quickly. It turned out that telephone banking would probably give them the best return and give them the control they wanted. Internet banking was not appropriate as they did not have a computer.

* A client wishes to raise £3 million to buy another business. Sent him an e-mail showing him what information required.
He also needs £80,000 development finance to build 2 flats onto property he owns. When flats built, the (expensive) development finance will be replaced by cheaper long-term Buy-to-Let finance.

* A referral wanted to remortgage 3 investment properties increasing loans to total £400,000 as I could save him £1,500 a year on interest payments. He phoned to say he is now selling two of them. Asked me to check if the lender I had previously recommended would lend on a 2 bed flat which was: in a 10 story block, ex local authority, of concrete construction and Grade II listed! Yes they will – subject to valuer’s comments.

* One friend wants £1.4 million to buy and merge two entertainment companies. Again sent him an e-mail showing the information required.

* Another friend referred 3 new solicitors to me for divorce or family-based work.

* Had a second pension meeting with an Architect. He wants to invest £450 per month into a pension and do some family protection as he has one child with another one due.

* A client wants to increase his mortgage as he is separating from his wife. Sent a mortgage illustration to him. He also needs family protection as there are 3 children.

* Arranged for pension payment forms to be sent for a client who has had a brain tumour removed and who has a 50 per cent of being dead within 12 months. No point in his buying an annuity with such a short life span. I want to get his pensions paid out in cash.

Much of my life as an IFA is rather like that of a GP – I am a financial general practitioner and when I do not know the answer to a problem, my job is to find a specialist who will solve it – this is often an accountant or a solicitor. Asking awkward questions is part of the process and the answers or lack of answers can be revealing. A standard question on any financial adviser’s fact find is “Have you made a will?” The most common answer is negative and people often squirm and get fidgety when this rather sensitive subject is raised.

Another fact of life these days is that many more people live together without being married. The phrase “common law wife/husband” is a well known figure of speech but actually has no legal basis – it is just something that people do.

Since most people do not make wills, there are rules about what happens to someone’s estate when they die. If there were no rules, there would be chaos and a lot of arguments. The rules for people who are married can be fairly straight forward and largely common sense. However, the rules are definitely not the same for people who live together as common law husband and wife.

Here is a nightmare example.

Couple lived together for many years and “husband” was older than the “wife”. One day, the wife asked her other half about what would happen if he died. His answer was “Don’t worry, I have made a will and provided for you”. Wife felt happy with this. Later on, her husband died but where was the will? The house was turned upside down and after many months no will was found so the rules of “intestacy” (no valid will) applied. His wife got nothing.
Fourteen years later, the builders were in and when a ceiling was pulled down, out fell an old paper document with a ribbon round it. The husband had made a will as he had said, but the estate had been distributed to his family and his common-law wife got nothing. This would not have applied had they been married.

Wills can be changed. Making one is not expensive. There are will-writers who will visit you, if you cannot face a visit to your solicitor.

You may be wondering what Bismarck has to do with pensions. If you do not know who Bismarck was, he was known as the Iron Duke who basically banged a few heads together and knocked 21 bickering little states into the world power that became Germany. Another of his ideas was the world’s first state pension in 1889. When choosing the original retirement age, he apparently he asked his civil servants “By what age are most of them dead?” and was told 65. Most countries have followed this example ever since. At that time, the average life expectancy in Germany was 66 so the government only had to pay the State Pension for an average of a year.

We all live much longer now and more than one hundred years later, this government has only now had the courage to change it.

The new retirement age of 68 age is probably too low – 70 would be more realistic. The sad thing about making the retirement age higher is that an increasing number of people will die before taking benefits. If the retirement age were 70 for example, 27% of men and 17% of women would die without receiving any pension.

But some of the government measures on pensions are ludicrous and inimical to having a decent pension. There are now 700,000 more public servants than 1997 who all have risk-free pensions which are basically paid for by the private sector.

If the government wants us all to save for a pension why did Gordon Brown remove the dividend credit back in 1997? That measure gives the government £5 billion a year or as a rule of thumb, people now have to increase their pension contributions by TEN PER CENT to achieve the same pension fund at retirement.

Similarly, the recent National Insurance increases give the government an extra £11 billion a year. These are huge extra costs for employers and will only increase unemployment in the long run as more jobs are exported. This means a smaller and smaller working population supporting an increasing number of unemployed. The benefits system positively encourages cheating as claimants face effective marginal rates of tax of 100 per cent sometimes when they lose their benefits at a certain income level.

For the vast majority of people, we are going to be working till we drop. If you want to know how much a proper pension would really cost, look at some of my other pension blogs, for example: http://www.georgeemsden.co.uk/?p=17

For many years ordinary investors were very happy to invest in with-profits as it was perceived as low-risk and simple. From the investor point of view, you got an annual or reversionary bonus plus a terminal bonus when the policy – endowment or pension, matured. This always puzzled me but then maybe it should not because in my experience, investors have very short memories.

I was fortunate to be working in the investment department of a private bank back in 1973. That year when the oil price rocketed, was a real bloodbath. Having seen that, the October 1987 crash (remember the yuppies?) and the bursting of the dot.com bubble in March 2000 were not difficult to spot. In 1975 some companies gave no terminal bonuses at all – but the reversionary bonuses already added could not be taken away.

After 1973 life settled down again and by the time endowment polices were maturing in 1997/1998 some of them had achieved an annual rate of return of 17 per cent! No complaints about mis-selling endowment policies in those days.

Calculating bonuses is very complicated and is done by actuaries. For actuary read mathematician and they are very well paid – who said maths could be boring?? Senior actuaries can easily have salaries of £300,000 and more – all you have to do is 5 years of exams. I once asked an inspector from Standard Life what their method was for calculating bonuses and he mentioned that the formula was 6 pages long!

From 2001 to 2004 the stock market fell in three successive years. Added to this, the regulator the Financial Services Authority (FSA) insisted on a more standardised calculation of insurance company reserves. This meant that the insurance companies were suddenly short of reserves whereas previously their actuaries had said their reserves were adequate.
The people who paid for this were with-profits customers as terminal bonuses were waived and if you wanted to get your money out at any date other than the date you originally selected, you paid a penalty called a Market Value Adjuster (MVA) or Market Vale Reduction (MVR). Even when stock markets bounced back last year most companies declared zero or very low bonuses as insurance companies sought to rebuild their reserves.

The result is that the majority of with-profits funds are a poor investment at present and the question clients ask is, should they stay? or pay an MVR and bale out? Since we are not selling a product here, the answer has to be fee-based advice. The most recent case I had involved 10 hours of research.

I finally decided to go to a salsa class back in July 2003. A friend had recommended it and e-mailed me a list of places. I chose one called Salsa-Fusion in central London as it was good for beginners and there was no need to book. I duly turned up at 7 PM one Thursday evening and found myself in a class of about 25 people of all ages. This was in a church hall which had salsa on the ground floor and Greek dancing downstairs.
Salsa is a dance with 3 steps within 4 beats. This means one of the beats has to be longer – usually the last one. This also makes the dance very adaptable. For the first couple of classes, we learned one-two-three-tap to keep in time with the music, but gradually the tap was lost and we moved forward slowly.

There were some couples there but a lot of people were on their own like me. The first part of the class was in rows with all of us dancing individually, but later on we paired up. Where the numbers of men and women were unequal, some had to stand out for a turn or two. We then went through the same exercises in pairs and changed partners roughly every three minutes. I started going twice a week and then even three times a week, visiting another school too. All teachers have their own styles but you learn something from each of them and the more you practice, the quicker you learn – no magic recipe.

After about 4 months of this, I finally decided to go to one of the Club nights which started at 9 PM on a Saturday night and finished at 2 AM on the Sunday morning. This was a bit of a shock at first but typical for the Latin dance scene in London. Needless to say, I was a bit nervous as it was decades since I had gone to a dance on my own. My daughter came along with me as she had spent a year in Cuba as part of her Spanish degree and made a couple of interesting observations. First, she mentioned that there seemed to be a lot of “middle-aged men” dancing with young girls. Second, she said there were a lot of Cuban guys there too. These guys have been dancing since they were very young and can lead very well, so they can take a beginner and get them dancing very quickly.

The format of the Club nights is interesting. Early in the evening is a group master class in a small room attached, which might be salsa, cumbia, rumba, bachata or whatever. This is also a good warm-up for the main event in the big ball room. In a smaller venue, this will all take place on the main floor.

Taking all this in makes one think.
The dance floor is a very old fashioned place – men lead, ladies follow. This means that the guys have to learn their steps first then they have to learn how to lead. Ladies tell me that they feel they have it easy! Having grown up with equal opportunity etc this was quite a shock.

Dancing close to someone is actually very nice and it is interesting to note that you can tell whether someone likes you or not in a few seconds, when you hold them. In over two years, I can clearly recall two dances with ladies which were unpleasant, as they could not dance in the first place nor could they follow, and the dance felt more like a wrestling match. I am quite happy to “follow” a lady who is a better dancer than I am but interestingly, these ladies do not actually “lead” – they give a subtle hint so I know what to “lead” next which makes us both happy.

Having been a salsero for 3 years and a tanguero for one year, I find that learning how to lead is still the most difficult and subtle part of dancing.

Dancing also helped me get fit and helped me lose weight. It is just as energetic as the gym and for me, a lot more fun.

As I progressed, I moved from Beginners to Improvers and after about a year to the Intermediate class on Thursdays and Saturday afternoons. Two of my friends there had moved to tango as well and I thought I would give it go – I am talking about the real Argentinian tango – not the simplified ballroom version.

For those of you out there who are: still together, separated, divorced, single or whatever, give yourselves a break from the gym or dating agency and get some dancing lessons. Everyone seems to have two left feet when they start, but like anything else it will improve with practice. A final word for the guys (the ladies know this already) if you can dance, you are ahead of 90 per cent of the other males around and you can find yourself quite popular. At the end of the day, dancing is about communication. See you on the dance floor.

http://www.salsa-fusion.co.uk/
http://www.salsarhythm.co.uk/
Tango @ La Mariposa in Hammersmith on Sunday afternoons – contact Alan Wallace tel. 020 7652 3633 – 07946 609 047
Tango por Dos http://www.sadlerswells.com/peacock/2005_2006/tango.asp#