As part of this , Delano is asking financial professionals about their first investment, how that has impacted their personal investing down the road and any advice they would have for younger investors. , CEO of HSBC in Luxembourg, sat down with Delano to share more details on this topic.
Vignoli, who has worked in the financial sector for over 25 years–at HSBC, ABN AMRO and Citibank–started his career in London. That’s where he bought his first flat, making his first investment a property investment. “You never forget your first house,” he tells me during our interview. “It was an old Victorian property, converted into flats,” and it was this traditional, Victorian style that really attracted Vignoli.
The reason he made this investment? His boss. “First job, first employment–I was clearly renting a place. And my boss at the time suggested, ‘Why don’t you buy something?’ At the time, the price of a rental was very similar to how much you would pay for a mortgage. So whilst it was quite scary at the time–you know, first time in a foreign country, first job–I kind of listened to him and the relationship manager of the bank that I was banking at the time, who was also kind of advising me on some of the mortgage options, and then I moved ahead.”
“Really, it was the best thing that I could have done, because that really helped me to move into the property ladder.”
Continued interest in property market
And since that first purchase, “property has always interested me,” says Vignoli, and “I kind of developed more of an interest in terms of investing in property, both for personal needs and also for rental purposes.”
He adds with a laugh that he was “lucky enough” to find someone willing to marry him, and together with his wife, they purchased a second property. “Clearly, the first purchase helped me to get something bigger.” As the family grew, “we were able to buy larger properties on the back of the first investment,” using the equities from the previous properties to grow the portfolio. “The property market is something that has always interested me.”
Maximise returns without taking too much risk
“I’ve also been interested in how to maximise the returns without taking too much of a big risk,” continues Vignoli. A person’s risk appetite can change as years go by and their personal situation evolves, “but generally, I’ve never been a high risk taker.”
“The way I went about investment, I really looked to a diverse portfolio with different risk levels,” he says. “I kind of looked at–throughout my life–I would say, four different areas, on top of the properties that I just mentioned.”
The first area is shares. “Around shares, my approach has always been quite conservative” and involves personal research and analysis. “I’ve always allocated a small capital, and I’ve never exceeded that,” he explains. “Whenever I sold shares, I always reinvested the initial capital, never put more money than I could afford. I always kind of use this strategy: ‘Assume that you could lose all your money. Can you afford to lose all that money?’ So, I’ve always been quite prudent with shares.”
Area two is investment funds, meaning professionally managed funds with a low- to medium-risk profile. These are normally offered through an asset manager or a bank, who manage a portfolio of funds on a client’s behalf, and whose return comes more in the medium to long-term.
Tailor your investment according to your personal situation
The third area is term deposits. There’s less flexibility in terms of accessing your money, but there is a potential for larger returns from an interest rate perspective. “This is quite attractive when you don’t need the cash. And if you’re at a stage of your life where you’re quite settled and you don’t want to take many risks, then it’s a good way of making some savings.”
“The final one is obviously the pension, which is something that I have with my employer, but I also top it up with other ways and other investments. So that’s something that will complement and help me to have a healthy retirement.”
Three points to keep in mind
When it comes to younger investors getting started, Vignoli had three points of advice to offer.
“The first one is really analyse your personal situation and stage of your life,” he says. It’s important to understand your priorities when you decide where and how to invest. “Based on that, you can make a decision on either shares, or if it’s education for your kids,” for instance. “Tailor your investment according to your personal situation.”
“The second one–which I always live by–is never take risks that you can’t afford,” he adds. “Never push the boundaries, never risk too much.”
And the final point is, “don’t be afraid about asking advice from trusted friends or colleagues; they may have more experience. But the important thing is that you own your own decision. You are the one in the end who decides and takes responsibility for your investment. So ask around, ask for advice. But in the end, you are the one who’s making the decision.”
An alternate version of this article first appeared in the .
