HEY YOU!
Do you have too much money?
Are you feeling guilty about rising inequality – and are you brave enough to personally do something about it?
Perhaps you’re fed up with your friends entertaining each other with stories about how they lost the lot on their stock picks or were ripped-off by a pension provider – and now you see that your sensible investing mindset is good for your wallet but bad for your pub cred?
Or maybe you just watched Brewster’s Millions too many times as a kid?
Well fear not!
A brand new year is almost upon us, and with it the chance to turn over a new leaf to ensure you don’t make a single bright penny when you could be chucking one away instead!
If you want to lose money as an investor, then this is the guide for you.
These Seven Top Tips to Self-Destructing Your Wealth in 2016 will have you turned away by the bouncers at the 1% Club faster than you can say: “World’s Worst Investment Strategy.”
Get ready to lose the lot!
1. Sign up to some bearish investing websites
Good investing starts with a long-term businesslike mindset, so to really invest badly, it’s vital you start rotting your thinking without delay.
Where better to begin than by overdosing on some of the doom and gloom newsletters that have been predicting Financial Armageddon since, well, the start of the last bull market?
They’ll have you swapping your carefully chosen funds and shares for baked beans and survival kits in no time.
Ideally find one that offers occasional tips on Russian gold miners, Panamanian oil explorers and the like.
That way you’ll get twice the bang for your buck.
2. Buy shares tipped by crazy-sounding people on social media
Once you’ve got an appropriately short-term trader-orientated pseudo-investing mentality going on, you’re ready to start pumping away your money on duffers.
Sure, you could swap your cheap and effective trackers for expensive actively-managed funds.
But now upfront commission has been done away with, high cost active funds are more for gentle folk who only want to do relatively badly when investing.
We’re trying to really crash and burn here!
Most fund managers are smart, not stupid. That’s why they find it so hard to beat each other and their index – and it’s why very few proper funds actually blow-up.
If you’re lucky you might have access to some sort of hard-charging 2/20% style hedge fund pursuing an esoteric investing strategy that’s ripe for a fall – perhaps emerging market or energy related high yield debt in today’s climate – but most of us would-be losers aren’t so fortunate.
No, for us the old way remains the best way to lose money – churning an ever-changing concentrated portfolio of loss-making story stocks that are kept alive by little more than a hope and a prayer.
A great way to begin is to buy shares tipped by a stranger you’ve never heard of called something like UltraBu11ish!Penguin443.
You don’t know anyone named like that?
Don’t worry – these people are a doddle to find on Twitter or on other social media platforms or discussion boards.
If you’re really lucky, he or she will claim inside information, or possibly reveal the existence of a ‘big seller’ who is about to stop dumping the shares, clearing the ‘overhang’ and enabling a rally.
(Fear not – the rally will never materialize and you’ll see your shares comfortably dwindle away towards nothing as you wait).
Alternatively, the tipster’s long experience of investing in the stock market whenever the High Street betting shops have closed might give them insights into the wily ways of market makers, enabling them to spot when these dastardly City folk are ‘shaking trees’.
Note: You don’t have to know what on earth ‘shaking trees’ is all about.
To lose money you just need to slavishly buy whatever they tip, sit back, and watch your portfolio plummet in a matter of days.
Easy!
3. Trade as much as possible
Studies have shown that those who trade the least tend to have the best performing portfolios.
So to lose money as quickly as possible, it makes sense to constantly churn your shares like it’s illegal to actually own the things.
Mobile phones have made this easier than ever. Perhaps you could do a bit of surreptitious trading at work, whenever you visit the bathroom or during particularly boring presentations?
Also, try to sell low and buy high.
This will maximise the speed at which you lose money.
4. Ignore trading costs
One reason turning over your portfolio is expensive is because trading costs money.
Sure, you can trade frustratingly cheaply with online brokers nowadays, but if you can wrack up 5-10 trades a day then you will soon offset their stupidly low charges.
Remember, it’s not just the multiple dealing fees that will be losing you money.
You’ll also pay the spread between the buying and selling price on the shares, and Stamp Duty is usually payable at 0.5% a pop when you buy a share in the UK, too.
A truly madcap day-trading approach is ideal, as it brings together the power of short-term myopic emotional investing, your compounded trading costs, and all that awful advice you’re now getting from your new friends on Twitter.
5. Borrow money to invest
It’s possible that even after following these tips you’re still not losing money at a rate that makes you comfortable shopping exclusively for yellow-stickered Best Before bargains at a grocer that’s being closed down for health and safety reasons.
So if you’re still suffering from excessive wealth – or you just want to get poorer faster – know that borrowing to invest is an ideal way to accelerate your plans.
Normally when you buy a share – even the sort of awful pump-and-dump penny stocks you’ll be specializing in – the most you can lose is all the money you put in.
Sounds a lot, sure. But losing it all can take months or even years.
However if you borrow and then buy with the proceeds, you can actually lose more money than you have and end up in debt!
This will help you lose all your money far faster than you might have thought possible before.
What’s more, punting on penny stocks with borrowed money raises the chances that you’ll make terrible short-term decisions in a panic, adding fuel to the self-immolating fire.
And if you’re really lucky you could end up trying to dig yourself out of the red with a series of ludicrous long shots that all go wrong!
Now the bad news – your bank manager is unlikely to actually give you any money to fritter away on the stock market.
Instead you might have to get creative with credit cards and other forms of misappropriated and hugely expensive debt.
Making ginormous spreadbets you don’t understand is another easy way to magnify how much you can lose with your ill-informed wagers.
Finally, do explore so-called ‘leveraged ETFs’, which multiply the daily ups and downs of the index that they track.
Best of all are leveraged ‘short’ ETFs, where the idea is you make money if the market which they follow goes down.
The way short ETFs are structured, you can lose money if you hold them for a few days or weeks – even if the underlying market actually does fall!
Genius.
If you don’t understand why this is the case (and very few people do) then they should be an ideal addition to your arsenal of money losing hand grenades.
6. Avoid ISAs and pension wrappers
If you follow all these tips, the chances of you making any money from investing in 2016 are very slim indeed.
However even a loser can get lucky once.
Perhaps somebody nefariously ramps one of your penny stocks while you’re spreadbetting in the men’s room – and now you’re faced with a massive winner on your hands!
Well, one way to ensure you keep as little of your capital gains as possible is to always invest outside of tax efficient ISAs and pensions.
This way you could be liable for capital gains tax when you sell – and if you receive any dividend income then you may well have to pay tax on that, too.
By shunning ISAs and pensions you stand the best chance of giving up a chunk of any profits that you should accidentally happen to make.
7. For professionals only: Fraudsters and boiler rooms
If you’re a mature professional who has enjoyed a lot of success in life, you probably feel that you’ve earned the right to avoid all this rigmarole when you want something done fast.
Well, the good news is you won’t necessarily have to get your hands dirty to be relieved of all your hard-earned wealth.
No, there’s an entire subterranean industry of hucksters, con men, scam artists and other criminals who just can’t wait to tell you about an investment that’s right for you.
An investment that will earn you at least 22% a year, and that is extremely timely (in fact, you might only have until next Tuesday to instruct your bank to wire them £39,232).
At this point though you and I must part ways.
You see, being a humble sort I’ve never been fortunate enough to be called by somebody who only has my best intentions at heart, and who for some reason wants me to get the guaranteed rock solid gains that they could otherwise enjoy for themselves.
However I do know from numerous consumer watchdog programs, regulatory warnings, biographies of gangsters and so forth that these things invariably end in tears.
So go ahead and ‘invest’ in that once in a lifetime opportunity – in the sure and certain knowledge that you’ll in no way derail your plans to end up far poorer at the end of 2016 than you began.
As they never said on Hill Street Blues…
Let’s not be careful out there!
Note: If you’re a boring old traditionalist who wants to grow their wealth over the long-term rather than blow up in a blaze of glory, simply do the opposite of everything in this article to hugely improve your returns. But really, where’s the fun in that? You must be a hoot at parties!
– is to see whether you can lose at the activity on purpose.