In a previous article, I explained the power of compounding investment returns. The article highlighted the impressive synergies created by the combined effects of; starting early, maintaining regular contributions and reinvesting your returns.  It all sounds so simple. But I guess one of life’s truisms is; “that which is simple is not necessarily easy”. This disconnect between knowledge and action has caused some advisers and fund managers to rethink the way they provide advice to clients and construct investment portfolios.  It appears that for some clients the traditional diversified portfolio approach is a barrier to success as that portfolio can seem far removed from the client’s life. In the real world our financial goals are driven by the things that we want to achieve. They are fluid in nature and many in number. Accordingly they have different time frames and can even compete with one another.  A traditional diversified portfolio, which is constructed...

Apparently, it was George Bernard Shaw who quipped, “youth is wasted on the young”.  It is certainly true that life’s journey teaches us many things some of which could have been put to good use sooner, if only we had known.  Those of us lucky enough to have had mentors have been fortunate to have benefited from the wisdom of age without being old.  The concept I am referring to is compound returns. Albert Einstein described it as the eighth wonder of the world. He went on to say “he who understands it, earns it ... he who doesn't ... pays it. Compound interest  is the most powerful force in the universe.” This column is based on an article that a mentor gave to me almost 30 years ago. That experience taught me that a single concept, delivered at a “teachable moment”, can change a life - if not yours, then someone else’s. For many people the barrier to learning and applying this knowledge is that it is mathematically based and not at all i...