RAW financial pain is set to come
“More pain is yet to come” was the damning prediction given by Dragons’ Den star Theo Paphitis who gave a rousing speech at the RAW2010 event which I attended last week.
The exclusive event hosted at the Lowry Arts Centre in Salford was for the region’s top 350 entrepreneurs so I felt very honoured to be included on the invite list.
There was a fantastic line up of speakers and I was able to meet and talk with some of the most enterprising and inspirational business figures in the north west. Though it was really Theo’s speech which struck a chord with me.
He gave a no holds barred delivery on the pitiful state of the UK’s national debt. £1 billion of debt is generated every 14 hours with the interest on this sum alone equating to every penny spent on education. A sobering statistic. The base rate is currently set at 0.5% which will inevitably rise - the drain on the nation will be insurmountable.
He also commented that for over 50% of the UK work force who are employed within the public sector they have until now been shielded from the pain of the recession, as job security within this sector remains consistent and pay rises are fixed within graded structures. For many who have remained in employment, regardless of sector, they have enjoyed more disposable income through benefiting from low interest rates and variable rate mortgages.
Though he predicted this sense of security will be short lived regardless of which party get into power. Quantitative easing will have to end and costs will have to be cut. Stealth taxes will affect us all and capital gains tax is likely to rise significantly.
His words really hammered home the message that we should all prepare for even bleaker financial times ahead. It’s now more important than ever to seek truly independent financial advice. Becoming tax aware and efficient should be a priority now.
It wasn’t all doom and gloom. He heartened the room with prospects of fantastic opportunities ahead reminding us how fortunes can be made in a recession. Business valuations are likely to become more attractive over the next couple of years and provided you’re able to look at the whole marketplace then the opportunities could be immense. He made it clear how important it is to understand what you are investing in, the risk you are taking and to make sure you have a good team of professionals around you.
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