Between 11 and 15 November 2024, adults and children alike celebrate World Nursery Rhyme Week.
While lullabies date back to ancient times and can be found across the globe, the modern nursery rhyme came to prominence in the early 1600s, with ‘Pat-a-cake’ and ‘Three Blind Mice’ among the first recorded.
Used to encourage sleep or simply as entertainment, nursery rhymes play a key role in childhood development, helping to strengthen vocabulary and boost literacy and numeracy skills.
They might also have some hidden financial lessons to teach adults. Keep reading to learn five of them.
1. ‘Humpty Dumpty’ and the importance of protection
Just like Humpty Dumpty, it’s easy to think we’re invincible, or at least actively avoid dwelling on our own mortality. So you might not spend too much time thinking about protection.
But the unexpected can strike at any time. Protection isn’t an afterthought or something only for later life. Rather, it should be the scaffolding that holds up the rest of your long-term financial plans.
Humpty Dumpty failed to take the necessary precautions. Sadly, despite his thin shell and precarious position, the famous nursery rhyme egg had no protection at all. Despite the best efforts of all the king’s horses, and all the king’s men, the damage had already been done.
Be less Humpty Dumpty and speak to us today about potential gaps in your financial protection.
2. ‘Little Miss Muffet’ and building financial resilience
Having taken the time to make a hearty snack of curds and whey, the titular hero of our second nursery rhyme had barely started eating when a spider “sat down beside her”, and “frightened Miss Muffet away!”.
You could face an equivalent financial shock at any time. While lost income from an accident, illness or redundancy might be covered by protection policies, you can build financial resilience into your long-term plan in other ways too.
Start by saving an emergency fund. Aim to put around six months of household expenditure aside in an easy-access account. That way, you’ll be able to get hold of your money in a hurry.
Keep an eye on your fund to ensure it doesn’t lose real-terms value (if inflation rises, for example) or grow too large. Then keep it safe via responsible budgeting. This means paying monthly “needs” and your future self first.
3. ‘The Grand Old Duke of York’ and focusing on your goals
When you sit down (on a tuffet, or elsewhere) with Jane Smith Financial Planning, we’ll help you to think about your long-term goals. That usually means picturing what your dream retirement will look like. We’ll then help you put a plan in place to make that dream a reality.
A lot can change throughout a long-term investment, so keeping your ultimate goal in mind at all times will be key. As with the Grand Old Duke of York, and his 10,000 men, when your investment fund’s up it will be up, when it’s down it will be down, and when it’s only halfway up it’ll be neither up nor down.
This is the nature of stock market investing and short-term volatility. But it’s also the reason your investment is long term. Remember, whether you’re marching up to the top of the hill or marching down again, your goal remains the same.
We’re always on hand to offer help and reassurance to keep you focused on the long march, so be sure to get in touch.
4. ‘Incy Wincy Spider’ and time in the market
Another nursery rhyme character who is surprisingly familiar with the concept of riding out short-term volatility is Incy Wincy Spider. This intrepid arachnid also provides a valuable lesson in unemotional decision-making.
Having initially opted to climb the water spout – and seen huge gains – down comes the rain and washes our poor spider out.
Rather than succumbing to a knee-jerk reaction and abandoning the spout entirely, though, Incy stays put. In time, the sun reappears. Once the warming rays have dried up all the rain, Incy is best placed to climb the spout again.
Emotional decision-making in investing can have huge ramifications. A panicked sell-off not only turns a paper loss into a real one, but it also means you won’t be invested when the markets recover. So stay calm and be patient.
Remember, it’s time in the water spout, not timing the water spout that counts.
5. ‘Baa Baa Black Sheep’ and legacy planning
You’ve spent your career working hard to amass the wealth you’ll need to live your desired lifestyle. So too has Baa Baa Black Sheep, working tirelessly to provide “three bags full” of precious wool.
And, just as the wool is intended for various recipients (the master, the dame, the little boy who lives down the lane), you too will have thought about the inheritance you intend to leave, and to who.
As with protection, estate planning isn’t something to leave until later in life. To be effective, and tax-efficient, it needs to be part of your long-term plans from the outset.
At Jane Smith Financial Planning, we can help you calculate the potential value of your estate and any Inheritance Tax liability, and then mitigate a charge. This might be through gifting, giving while living, or rethinking the sources of your retirement income.
Get in touch
Whether you’re a Grand Old Duke of York, looking for reassurance as you focus on your long-term goals, or a Little Miss Muffet, worried about the next financial shock, we can help.
If you’re looking for an independent financial adviser in Milton Keynes or Olney, look no further. At Jane Smith Financial Planning, we’ve been helping clients for 30 years, so contact us at info@janesmithfinancial.com or call 01234 713131 to see what we can do for you.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance. Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.
The Financial Conduct Authority does not regulate estate planning or tax planning.