There are sensible investing strategies for any age, as Peter Freeman reports.


The Twenties
These are the early years when many people are relatively new to the workforce and are still renters. While some have formed a permanent relationship, many don't have children. Home ownership and family are still in the future.


For this group the main financial focus is usually on saving a deposit for a home, an investment that has particular appeal due to its lifestyle benefits and capital gains tax-free status.


The first step for many will be to get their credit card debt under control and then eliminate it. Only then will they be in a position to start building wealth rather than simply paying for past consumption.


With interest rates having stabilised at relatively low levels and property prices still slipping, this age group stands to gain by saving for a deposit for a home so as to be able to buy when the market is weak.


Their main challenge will be to decide whether or not to try to supercharge their savings growth by diverting funds into a regular savings plan that invests in equity funds.


Callinan says building a deposit through investing in equity funds is a good strategy, but only if you can accept the risk that there could be a few years of flat returns.


"You also have to have a time horizon of at least five years, to give the investments time to perform," she adds.


The Thirties
By their 30s, most people are in a permanent relationship, many have children and most have bought a home. The focus is usually on reducing their mortgage, possibly renovating and, where possible, attempting to upgrade to a better property.


Nash of Tynan Mackenzie says people in this situation should consider taking out income insurance, especially given the increased tendency of companies to respond to setbacks by downsizing.


At the very least they should be careful not to over-extend themselves financially, instead keeping money available for emergencies.


This may well involve delaying renovations. Alternatively, they should ensure their mortgage facility allows them to draw down more money quickly if they need funds in a hurry.


Of course, some people in their 30s will still be both mortgage and family free. This group may decide to try to catch up for lost time by aggressive investing, such as using geared share funds or by taking out a margin loan to finance a portfolio of direct share investments.


A small group will go so far as to use even more aggressive investments such as futures contracts, trading warrants and contracts for difference.


Nash stresses, however, that these should be approached with a great deal of care since, if handled badly, they can generate heavy losses.


The Forties
Your financial comfort in your 40s largely depends on how much spending restraint you showed during the previous decade. If you were reasonably disciplined, there is a good chance you will be able to upgrade to a bigger home or, alternatively, carry out the renovations you deferred in order to finance investments.


However, the 40s is sometimes a financially difficult time for people who have children since they are now costing more than ever, especially if they are at private schools. This group needs to budget carefully. In contrast, those with relatively high incomes, or with few or no family responsibilities, should have the capacity to continue to use gearing to expand their investment portfolio.


The alternative will be to divert more money into superannuation. Unfortunately, while very tax-effective, money invested in super is locked up until you satisfy the various preservation rules.


These mean you can't get your super before you are at least 55 and also retired. Super savings really only equate to financial freedom for people who are already in their early 50s.


The Fifties
This is a time for more sustained wealth creation due to higher salaries and fewer family costs (many children by now will be financially independent). Nash argues that the tax breaks offered by superannuation, plus the fact super savings will be more accessible, make this the preferred investment vehicle.


The other opportunity that often arises in your 50s is the chance to take more control over your life by establishing your own business, perhaps by getting a significant redundancy payment.


Even if the redundancy wasn't voluntary, it can provide a valuable chance to build a new, financially viable life outside the 9 to 5 standard working day. But Nash warns it is particularly important to think very carefully before you use your family home as security for a business loan. "A debt-free home is usually crucial for any sort of financial freedom and should not be put at risk without a lot of thought," he says.


The Sixties and later
For many people in their 60s the main financial challenge is to invest their savings to generate a retirement income, and maximise their age pension. In most cases investments are built around some form of allocated or complying pension, in the process maximising tax and social security efficiency.


James of Investec says that, while there is a tendency for older investors to be extremely conservative, especially when the economic outlook is uncertain, higher life expectancy means a very defensive approach probably will result in your money running out.


This means investors should usually opt for an allocated pension that includes a reasonable exposure to both local and offshore shares, rather than a pension with a very high level of capital security.


While a conservative allocated pension carries less risk of suffering a sudden setback, it can also result in a low annual income and so increasing dependence on the aged pension.


Rules for us all
But whether you are in this, the fifth age of investing, or any of the other ages, all of us have to deal with the same economic and investment climate. We have to make the same range of crucial financial decisions, based on our assessment of the risks and opportunities that exist.


James says all investors need to guard against assuming the next five years will generate the same sort of returns as the last. "Expecting the second half of the decade to be just as good as the first half would be naive," she says. "It may be, but there are plenty of reasons to think overall returns won't be as strong."


Among these facts are:

• Returns over the previous five years or so from Australian shares have been so strong that, as has already happened with real estate, some correction at some stage is virtually inevitable.
• There is no guarantee that one of the main drivers of local sharemarket confidence — the strong Chinese economy — won't hit some adjustment problems, in the process dragging down local stocks.
• The surge in oil prices could continue, squeezing consumers and slowing economic growth.
• The $A could well remain at around current levels, rather than the much lower exchange rate that applied at the start of the decade, in the process maintaining the pressure on exporters.

As noted, the main implications of the shift to an era of lower investment returns is the way that making quick gains from the sharemarket or property is likely to be more difficult than in the previous five years.


One thing that won't change, however, is the need for most people to adopt a suitable investment strategy and then resist the temptation to chop and change when a particular investment sector generates disappointing returns.


As already stressed, it is also crucial to avoid thinking you will be able to make big gains quickly. "Everyone wants to be rich tomorrow, but the risks aren't worth it," says Thornhill of Motivated Money. Impatience is our biggest barrier to serous and sustainable wealth creation."


Stick with a strategy
Callinan of Tandem stresses that, while a few investors make a lot of money by timing markets, they are the exception. She points out that even the professional managers who handle the investments for Australia's huge superannuation funds often struggle to add value through timing.


Instead, they develop strict investment strategies and stick with them. "If you give yourself plenty of time and patiently stick with a well-designed investment strategy, you will almost certainly be a lot better off in 10 years time than those who don't," she says.

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1. Change your attitude to your mortgage
The most expensive item you are ever likely to buy is your home. If you're not in the privileged position to pay cash, make sure the loan you use to finance it is the best available. For example, if you are paying your lender's full standard variable rate (SVR) you are probably paying hundreds of pounds a year more than you need to.

There are thousands of deals to choose from and while it is vital to check the small print for hidden catches, this is a relatively easy way to save a lot of money. Remember: loyalty to your bank benefits your bank, not you. Even better, if you can afford to make overpayments on your mortgage, you'll clear your debt several years early and make massive savings. For example, if you borrow £100,000 at 6% over 25 years, you'll pay it back at £643 a month. The total charge for credit will be £93,000. But if you can overpay by £100 a month you'll clear the loan in less than 19 years, giving you 6 years of mortgage-free living and saving a staggering £25,000 in interest.
Saving: £1,000s
Links: This is Money mortgage finder; mortgage calculators; mortgage guides

2. Clear your credit card debt
One of the golden rules of financial planning is to clear your most expensive debts first, in other words your credit cards. OK, credit cards offer a convenient way to pay for goods and services but if you can't clear the balance every month, consider a low-cost loan as an alternative. Do the sums: a credit card debt (APR 15%) of £2,200 over three years will cost £545 in interest. A loan at 6% will cost £209. A saving of £336.
Saving: £100s
Link: This is Money credit card finder

3. Cut the cost of your fuel bills
As the global demand for power threatens to outstrip supply, prices are rising. But that doesn't mean you need to be ripped off. The domestic market for fuel is a competitive one and you can change supplier with a few clicks of the mouse. Your new supplier will take care of the formalities - you just pay less every month.
Saving: £100
Link: Slash your fuel bills with This is Money

4. Consider installing a water meter
We take our tap water for granted. And why not? The companies behind the supply exist to make a profit, we pay them to supply water and have every right to expect it to flow from our taps. But if it doesn't rain, supply runs dry and the price goes up. So you may want to consider the possibility of installing a meter. If you have a big home with few occupants you may be surprised to learn you could halve your annual bill.
Saving: £100s
Link: water calculator

5. Cut your home phone bills
BT may seem to behave like a monopoly but it most definitely is not one. If you must use your phone there are scores of cheaper alternatives from cable companies that package your telephone, television and even broadband internet access to low-cost dial-up services that give you access to cheaper calls using your existing BT line.
Saving: £100
Link: Cut your phone bills with This is Money

6. Consider a pay-as-you go mobile
Ask yourself this: is your mobile phone absolutely necessary? If the answer is yes, then ask yourself whether you really need all those minutes and texts that come as part of your package. If you hand over £50 a month to your mobile phone company, that's £600 a year – or around £1,000 of your gross salary. But you can buy a pay-as-you-go phone for as little as £30 and only pay for the odd call as and when you need to.
Saving: £100s
Links: mobile phone deal finder

7. Make a shopping list
Food shopping forms a significant part of our monthly outgoings and the supermarket is where the bulk of the money is spent. Tesco takes £1 in every £8 spent by UK shoppers. But be warned, stores spend a small fortune studying ways of making us part with more of our money than we would otherwise intend to. Have you ever wondered why your favourite song is playing in the background as you navigate the aisles? Have you even noticed the background music? Possibly not, but you will have noticed at the checkout that the bill is often more than expected. To circumvent this, simply make a shopping list. Dig out the cookery books, plan a few meals and only buy what you need.
Saving: £10 a week = £520 a year
Link: Mysupermarket for price comparisons

8. When was the last time you went to the market?
One way to beat the supermarkets - that is, to eat healthily for less - is to use your local market stall. Lower overheads should mean lower prices. At the time of writing, cherries were on sale in Asda for £2.99 for 400g, the equivalent at the local market was going for just over £1.
Saving: £100+

9. Consider own-brand goods
You can buy a tin of Asda own-brand baked beans for 14p and a loaf bread at Asda, Tesco or Sainsbury's for 19p. Enough said.
Saving: £100
Link: Tesco, Asda, Sainsbury's

10. Don't buy designer labels
Celebrities are given expensive clothes to wear. You're not. At the end of the day, and let's face it you may only wear the outfit once, can you justify paying hundreds of pounds over the odds because a top designer has had his or her name sewn on the label? And can you honestly say you can tell the difference at a distance between a £600 designer bag and a £9.99 one from the market? Think about it.
Saving: £100s
Link: Prada - note the total lack of prices
ASOS.com offers discounted brands

11. Sell your clutter on eBay
Take this quick test: You're at home. Open a cupboard. Look inside. If it's full of clothes you haven't worn, or 'good ideas a the time' you haven't used, for, let's say, three years - you don't need them. So why not sell them to someone else who does? Ebay, the online auction house, has opened individual sellers to a world of buyers. And you can flog anything for the cost of a small commission. Tip: you may want to buy a few items first to build up your rating as a respectable eBayer before you start selling.
Income: Will depend on what's in your cupboard
Links: www.ebay.co.uk; 'I'm making money from eBay'

12. Use your talent to earn extra cash
Let's face it, if you're not a pop star by the time you reach your 20s you're never going to be. But you may be able to use your talent as a guitarist to teach other wannabes the rudiments of the 12-bar blues.
Income: It's not unreasonable to charge £20 an hour

13. Do DIY
We're a nation of obsessive DIYers and for around £100 you can take a course at your local adult education college to improve the skills needed to tackle most household repairs. If the college runs plumbing courses you could soon be on track to wiping out costly call-out charges and extra insurance policies once and for all.
Saving: £100+

14. Shop around for the cheapest household insurance
Unless you drive – car insurance is mandatory - you don't need insurance. But it's strongly advisable. Can you afford to foot the bill if your house burns down? Probably not. Similarly, can you afford to pay over the odds for the same policy available elsewhere because you can't be bothered to shop around? Possibly, but it's not advisable. The internet has made finding cheaper insurance easy and you can compare hundreds of policies in minutes.
Saving: £100s
Link: This is Money's insurance finder

15. Don't automatically renew annual travel insurance
If your annual holiday insurance policy is about to expire and you don't have a holiday booked, DON'T renew the policy. You're handing your money over to cover an eventuality that won't happen. You wouldn't have car insurance if you didn't own a car. Simply restart the cover again the next time you book a trip.
Saving: £50
Link: This is Money's travel insurance finder

16. Choose cheaper breakdown insurance
The breakdown sector is dominated by big names such as the AA and RAC. But being towed home if your car breaks down is just another form of insurance like any other and there are scores of cheaper alternatives.
Saving: Up to £100 a year
Link: This is Money's breakdown insurance finder

17. Are you paying too much for your life insurance?
We're living longer. As a result the cost of insuring the unthinkable is getting cheaper all the time. If you were sold a policy when you took out or mortgage you may have been under too much stress to shop around. You could be missing a trick.
Saving: £100
Link: This is Money's life insurance finder

18. Book early
Low-cost airlines have created a market in holidays for people prepared to fly to any destination provided it's cheap. You can benefit from this too. Just remember, only a few seats on each flight are sold at bargain-basement prices and once they're sold, the prices rise. So book early.
Saving: £100
Link: Skyscanner - the air fares comparison site

19. Book your own 'package' holiday online
The popularity of High Street travel agents is waning as more and more people warm to the benefits of researching and putting together their own holidays on the internet. If your holiday consists of flights, accommodation, transfers and possibly car hire, then take this test. Order a brochure from a leading holiday company and work out the price of your holiday including all the complicated supplements. Now go online and, starting with the flights, try to put the same package together.
Saving: £100+
Links: This is flights, HotelClub.co.uk, Shuttle Direct, Holiday Autos

20. Learn to say 'no'
It's easy to capitulate to the demands of a screaming child in a packed Woolworths on a Saturday afternoon. But don't do it. Similarly, how often does a 'swift half' after work turn into a £40 drinking session? Saying 'no' a few times a year will do wonders for your bank account.
Saving: £100

23. Don't pay full price for theatre or theme park tickets
If you are prepared to tolerate the unwieldy website and hit-and-miss customer service, lastminute.com regularly boasts some amazing deals for London's theatres and the nation's theme parks. At the time of writing you can see top West End show The Producers plus a two-course meal for less than £20 a head, a saving of £60 per person, and tickets for Chessington World of Adventures cost from £12, a saving of nearly £50 for a day out for a family of four.
Saving: £100s
Link: www.lastminute.com

24. Beat the ticket touts
Ticket touts earn their living by getting hold of tickets that are 'otherwise unavailable'. Well, here's the news: they are available to everyone when they first go on sale. You just need to know when they go on sale. Simply sign up to for the free ticket alert newsletters from the main agents to ensure that you're first in the queue.
Saving: £100s
Links: Ticketline; Ticketmaster

25. Stop trying to keep up with the Joneses
Trying to keep up appearances is little more than a costly illness. Remember, you cannot judge someone by what they have because you don't know how they got it. Chances are they're in more debt than you are.
Saving: £1,000s
Link: This is Money's guide to getting out of debt

26. Trade down your car
So, you bought an American sports utility vehicle (SUV) that nets 15 miles to the gallon on a whim. Obviously we're all very impressed – especially by the personalised number plate. But can you honestly justify the ongoing expense? If not, get rid of it. Then visit a car supermarket, where you can choose from thousands of cars at knock-down prices. If you're a true money saver, consider an ex-rental model which you can pick up for a fraction of the cost of a new one.
Saving: £1,000s
Links: Daily Mail find a car service; Cargiant

27. Ask yourself: do I really need this?
Imagine the scenario. It's lunchtime and you've got an hour to kill. You find yourself in a department store and there's a sale on. You pick up a beautifully packaged selection of barbecue tools and associated garden paraphernalia. And it's half price. Now, stop! Ask yourself: Do I really need this? Exactly. Now, put it down and walk away.
Saving: £100
Link: This is Money's money savers' guides

28. Walk/cycle to the station/work
It maybe a bit of hippie notion to many people but it's free.
Saving: £100
Link: Cycle Campaign Network

29. Get off the station before your usual stop and walk
We may be creatures of habit but isn't it worth tinkering with the routine if it's costing more than £50 a month in unnecessary fares?
Saving: £100
Link: Living Streets

30. Cut down your drinking
A few beers after work a few nights a week is a financially debilitating state of affairs. Set limits and stick to them.
Saving: £100s
Link: Calculator: Pleasures v treasures

31. Pack up smoking
Never mind the health implications, the guilt and the smell, your 20-a-day habit is costing you nearly £2,000 a year. Pack it in.
Saving: Nearly £2,000
Link: Givingupsmoking.co.uk

32. Cancel your gym membership
If you pay your £40 a month by direct debit and you use the gym three times a week, great. If not, cancel your membership immediately. You'll soon save enough to buy your own bike and, if you're so inclined, a rowing machine. Consider running home from work three times a week. It's free.
Saving: £100s
Link: Compare prices for rowing machines on Kelkoo

33. Use your library
The local library is a mecca for the money saver. You'll never need to buy another cookbook, guidebook or lifestyle manual again and if you can bear to wait a few weeks in the queue for the latest blockbuster, you never need to buy books again. CDs and videos are great value too.
Saving: £100
Link: www.whichbook.net - find a book and check if it's available at your local library

34. The three-for-two trick
Now, there's a lot to be said for buy-one-get-one-free deals, especially if they pass the 'Do I really need this?' test. Then there's three-for-twos; a particularly cynical way of stores to entice shoppers to buy an extra item they would not otherwise buy. The 'offer' is always priced into the deal so do your sums and shop around.
Saving: It's a principle at stake here
Link: Discuss deals and scams with other readers

35. Buy clothes and presents in the sales
So you need a new suit and the one you like comes in at a cool £300. Wait! The chances are that you can pick it up in the sale – and there's always a sale just around the corner – for £150. The same applies for birthday and Christmas presents. Buy in bulk in the sales and you not only save money, but you enjoy stress-free pre-Christmases and no last-minute birthday worries.
Saving: £100s

37. The Christmas lottery
Instead of trying to buy a present for every relative in your family, consider getting together beforehand and picking one name from the hat. You then buy one thoughtful gift for that one person rather than attempting to please everyone at considerable cost. Everyone gets a present, everyone saves money.
Saving: £100

38. The National Lottery – it won't be you!
The odds of winning the Lotto jackpot are stacked 14m to 1 against each ticket. Some highly organised syndicates buy 14,000 tickets a week, which reduces the odds to 1,000 to 1 - but that's no guarantee of a win. For the rest of us, the difference to the odds between buying, say, 10 tickets and one is so insignificant that you should limit yourself to the one and save the extra money in a Cash mini Isa.
Saving: £100
Link: Are you sitting on a winning ticket?

39. Use your Isa allowances
If you're not already aware, you can save up to £3,000 a year in a tax-free savings account called an Isa (for the more financially savvy there's also a stocks and shares Isa). It means you don't pay any tax on the interest accrued so, if you have spare cash in your current account, this is the difference between earning next to no interest and up to £150 a year.
Saving: £100+
Link: Best Isa rates

40. Claim your benefits and tax credits
There was once a certain stigma in Britain attached to claiming benefits. Well, not any more. The Government has put benefits at the heart of the family budget and it's your money so make sure you're claiming it. That includes Child Benefit, Working Tax Credit, Child Tax Credit and other employee-related tax benefits.
Saving: £100s
Link: Confused? Ask a This is Money Expert

41. How saving £50 a month now can save you £120 next year
Do you pay your insurance premiums by monthly instalments? If you do, then consider this: you are probably being charged a premium of between 15% and 20% for the privilege. In other words, if your home and car insurance bill for the year is £600, you're paying up to £120 a year in interest by paying monthly. If you are in a position this year to save up for next year's premiums in advance, you can save money by paying the whole lot in one go.
Saving: £100+
Link: This is Money's best savings rates

42. Do you need all those TV channels?
Britain is switching to digital-only television and time is running out for you to choose your new digital TV provider. The choice is already bewildering and with telephone-based services now being launched it's going to get more complicated. Packages range from full the monty, including every sports and movie channel costing around £50 a month, down to Freeview, which is free. Choose wisely.
Saving: £100+

43. Bin the ready meals
If TV chefs such as Ainsley Harriott can knock up a meal from a bag of random groceries including an aubergine and a packet of sultanas – so can you. Ready meals may be convenient, but preparing your own food saves money. A visit to your library will reveal scores of books dedicated to cooking proper meals in minutes.
Saving: £100+

44. Take up a money-saving hobby
Hobbies not only open your mind to new experiences but they also take up your time – important if you would otherwise spend it in the pub drinking away your hard-earned money. If a painting takes 20 hours to complete, and you normally get through a pint an hour. That's a saving of a least 40 quid a picture. Think about it. Get painting. Go fishing.
Saving: £100+

45. Avoid the payment protection racket
Banks and other lenders are selling expensive insurance policies to cover loan repayments to people who don't need it. Don't be a victim of the hard-sell.
Saving: £100

46. Avoid extended warranties
Electrical goods are more reliable than ever. If your new radio won't last three years perhaps it's not worth buying in the first place. Think about it: how many times has your fridge broken down in the last five years? And do you really need the hassle of claiming for repairs to a £15 toaster?
Saving: £100
Link: Read our guide to extended warranties

47. Shop online
The internet is gradually taking over. Online grocery shopping is getting better all the time and there are plenty of comparison websites to help find the best prices for bigger items. Give it a try, unless of course you like fighting your way through supermarket crowds.
Saving: Your sanity
Links: Online grocery service rated; PriceRunner - price comparison site

48. The Citizen's Advice Bureau is your friend
If your debts are out of control please seek help immediately from your local CAB – their advisers can help you work out a sensible strategy to get you back on your feet.
Saving: It could save your life
Link: Find your local CAB

49. Have I missed any money-saving ideas?
You can now add your comments to the Money Saving Overflow
Link: Find out more at 50 more ways to save money

50. Save this article or send it to a friend
Use the links at the bottom of the page to send these money-saving tips to a friend or save it for yourself for later.

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