Alvin Hall Interview
Alvin Hall, the celebrity financial expert, author and presenter of BBC television programme ‘Your Money or Your Life’ talks to asrecommended:
How did you develop an interest in finance?
Two things happened. I got a job working in at a Wall Street training firm, which was the first time I had been around people with enormous wealth, and I was interested in how they made their money grow.
And I had credit card debt at the time. I pulled myself out of debt, but I noticed that some of my friends who were in debt were making mistakes about how they handled it, and I could see what the problems were, and how I had addressed my debt successfully. I could see why their debt was getting worse and how they didn’t see the mistakes they were making.
So it was a combination of seeing how people grew money, having debt myself, and the issues surrounding getting in and out of trouble.
What has been your most interesting investment?
What’s interesting about investment is that you have to be a specialist if you’re on your own. For example I have never owned retail because I am not a shopper. My first purchases were Microsoft, Intel and Dell. And I bought into them for the simple reason that I had a computer, and I really liked it. I thought that if someone like me was getting so much out of it – the really smart people were going to be able to do amazing things with them. And I tend to be in it for the long-term - I am not a trader I am an investor. So I kept all those for 8-10 years before selling. And I did that because it was at the end of the tech bubble and I could see the market was getting frothy.
There’s a great saying – “bulls make money, bears make money, but pigs get slaughtered” – and there is no formula to investing – if there was we’d all be getting it right all the time. It’s about knowing companies and understanding what they’re about.
Have you made any poor investments?
If someone tells you they’ve never made a poor investment, they’re lying. My first investment came as a result of a friend giving me some advice, and I made a mistake and I lost out on it badly. But I don’t look back with bitterness; I don’t think you ever should do that. You learn the lesson and then move on. Let former experiences inform future decisions rather than be cynical.
Where did your love of art come from?
I started to get interested in art when I was at college. I grew up on a subsistence farm, with no exposure to art. And my parents and siblings aren’t into it at all. But I realized that I loved looking at art. Whenever I go on holiday I always go where there are museums to visit, and galleries.
But art takes my mind off the quantitive way I think about money, it changes the way my brain works for a while.
Do you see art as an investment opportunity?
People assume that my interest is related to money, because I am involved in money. But it’s not true – there are lots of things that I am involved in that don’t involve money.
Art is one of the things that I spend money on for myself. I have looked at art so much that I have gained a sense of what’s unique; I’ve learnt to spot a comer. I buy things that I like though, it’s not as straightforward as calling it an investment.
What has been your most difficult financial problem that you have had to solve for a consumer?
Several stick out in my mind, all because of the people involved. Many of them involve emotionally difficult situations. Money problems are compounded by the emotional relationship to money.
One of the most memorable was a lady from Weston-Super-Mare. She had a drinking problem, and her spending was out of control. But this self-abusive financial behaviour was linked back to when her parents got divorced, and the blame she put on them for the situation. She was abusing money and herself.
Another lady had £56,000 of credit card debt – she would fly to New York with empty suitcases and shop till they were full. Her job was actually looking after finances for a big company, and she did so very successfully. But she managed to shut down the thoughts about her own money issues.
Five years later she has paid it off, and I got an invitation through the mail this week for a party she is having. I have never bought a present for anyone else I speak to as a financial advisor, but I bought her a pair of earrings. When I gave them to her I said that if she ever got stuck she was to look at them and know that I cared. She has great discipline and fantastic skills, and has paid off her mortgage now too. That’s an example of someone turning the financial aspect of their life around.
How did you move from your financial and marketing posts into the media?
Luck. I was teaching in London and had taken a day off and was hanging around with a friend. We ran into Jonathan Drewery from the BBC. After chatting to him for a while he said he thought I would be great on television, but I wasn’t particularly enthusiastic about it because my business was going really well already. I didn’t need it. And he asked me to come in to do a test but the BBC wouldn’t pay for it. So I paid for the test myself, and then didn’t hear back for nine months. But I wasn’t dwelling on it, and TV has never been something I felt like I needed to do, which is probably why it’s worked out, I never had this desire to be on it.
What’s the biggest mistake consumer’s make in terms of their personal finance?
People still want money to be magical, and they want debt to go away magically too. There’s a bad trend of people thinking they can spend like Posh Spice and not have to deal with the consequences. But you can have a better life – all you have to do is prioritise what you want and how to control your money. I’ve benefited from doing my shows as much as the audience has.
In your history of passing advice on personal finance what has been the biggest change?
There’s been a lot. One interesting thing is that people have to pay for university now, and also people don’t like paying for taxes. But if you go to university you need to recognize that you won’t get on the property ladder so quickly or get rich quicker. That should not be why you go to university – you should go to get an education and to make yourself more employable. It opens up doors but it doesn’t fast track you, it’s the opposite.
And people strive to own a house, but when you own a house you have massive expenses in comparison to renting. I didn’t own my first property till my late 30’s, and that’s fine.
Should the government do more to educate children about personal finance and business at an earlier age?
Whenever the government gets involved it becomes bureaucracy. The emphasis in school should be teaching maths in relation to finance – everyone separates maths from money. But learning money will be difficult if you haven’t learned basic maths.
The Bank of Mum and Dad needs to close too; parents need to help their kids control their desires – too many people use their kids as a way to make up for their own past slights. The government should do basic courses on credit, teaching kids to understand interest rates, how to get a mortgage, things like that. But the bottom line is with the parents, they can’t abdicate responsibility.
The UK consumer debt is over £1 trillion. Who is responsible for such a dangerous figure?
Does that figure include mortgages? It’s down to a confluence of easy money and the average person not taking responsibility for their lives. Banks are wrong for making getting credit so easy, but in order to get into trouble you need to know how to manipulate the system. People with bad debt are smart, but they’re also very good at shutting down any thoughts about the debt, they can chase more credit while ignoring the fact that they are in trouble.
What luxuries do you allow yourself to splash out on?
I have learnt to treat myself only to the things that are going to satisfy me the longest. For example I wanted to give myself something a treat after having a really bad day recently. And I bought a Hermes watch in London, which I had wanted for a very long time. When I bought it I realized it was actually much more reasonable than I thought. But it’s an example of thinking carefully about what you want and need and if it’s really worth it. And art – that’s my other extravagance.
What hobbies do you enjoy?
I read a massive amount, lots of biographies, lots of fiction and short stories. I really like biographies when they are about a complex family system. I am reading about Evelyn Waugh. But I am also reading the Diana Chronicles so I like light reading too!
The opinions expressed are those of the author only. The material is for general information only and does not constitute legal, financial or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation by an FSA authorised company where the market is FSA regulated.