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MONEY COMMENT
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TMF: Hello, and welcome to this year's edition of A Fool and Your Money. Our guest today is Father Christmas, otherwise known as Santa Claus, Saint Nicholas and so on. Father Christmas: Hello, fellow Fools. Ho ho ho! TMF: You've got a busy night coming up this week, Father Christmas. How are you and your little helpers getting on? FC: We're nearly there, no need to worry! We're just putting the final touches to the gift wrapping and checking the list of naughty children for any last-minute additions. TMF: That's wonderful news. You seem to be in a very good mood, Father Christmas. Will this be a bumper year for good children? FC: Yes, it will, despite retail sales growth looking a little shaky. It's hard work being the planet's leading deliveryman in an increasingly commercial world, I can tell you! TMF: Indeed. We're all very grateful to you for your amazing efforts. Now, Santa, what financial advice would you give to our readers? FC: I've taught all my elves three important lessons about money. The first is to spend less than you earn, which is the foundation of good financial management. For example, Mrs Claus and I have to be extremely careful with our personal cash flow, as we have to live for a year on the money that we earn in just one night! TMF: I've heard of seasonal occupations, but yours is the most extreme example that I've come across. So, you make - and spend - billions of pounds in a single night. Does money ever get tight? FC: No, not these days - although I did learn a few painful lessons about borrowing money when I was younger. I must admit, I stopped Mrs Claus having credit cards when I realised how expensive they were. TMF: So you're not keen on personal debts, Santa? FC: No. It's okay to use a mortgage to buy your home, but borrowing money for other reasons is usually a bad idea. In fact, the second lesson I teach my helpers is to keep out of the red and stay in the black. Elves love to let their hair down and have a good time, so I keep a close eye on them to make sure they don't become reckless borrowers. TMF: Do you have any personal anecdotes about borrowing that you'd like to share with us? FC: One in particular springs to mind. Way back, I borrowed a tenner from a passing fairy godmother at 18% a year. When I came to settle her bill sixty years later, I owed her £205,551. I won't forget that bill in a hurry, no 'ho ho ho' way! TMF: Yikes! What's your third lesson? FC: Invest for the long term. I've had hundreds of years to save and I'm happy with my current approach to investment. TMF: What's your investment style? FC: Well, I've never been terribly attracted to property, because prices in the North Pole have been pretty depressed as far back as I can remember. There's just not the demand up there, you see. TMF: But property's been a decent long-term investment in the UK, hasn't it? FC: That's true, but the stock market's done me proud. Since 1869, annual returns from the UK stock market have averaged 9.2%. The hundred quid I invested that year was worth almost £12½ million at the end of last year. I need a lot of money to keep my business running smoothly - flying reindeer don't come cheap, you know! TMF: So, you're a big fan of the stock market. Aren't you worried about volatility and bear markets? For example, the FTSE 100 index fell from 6,930 at the end of 1999 to 3,287 on 12 March this year. Don't performances like that frighten you at all? FC: No, not at all. Being immortal, I take a very long-term view of my portfolio! Anyway, to ride out the market's ups and downs, I invest more into shares every month, with the aim of producing excellent long-term results. TMF: Do you use a particular fund manager, or are you a big fan of stock picking? FC: I'm drawn to funds with very low charges, if only because I run an ultra-efficient business myself. That's why I'm a big fan of index trackers: their low charges give me a significant advantage over expensive actively managed funds. TMF: What about holding shares directly: is this something that you do? FC: Oh yes, I have my favourites, as do other private investors. For example, just like mega-billionaire investor Warren Buffett, I've always been a big fan of Coca Cola (NYSE: KO). And that's not only because one of its cartoonists gave me the red fur-trimmed suit, long white beard and black boots that I wear to this day! TMF: Are you a fan of the 'Sage of Omaha', Father Christmas? FC: Who wouldn't be, with his track record? However, I'm not sure about his stake in Gillette (NYSE: G). To be honest, I can't ever see myself being one of the company's customers! TMF: No, not with such a magnificent beard. Do you have any final piece of advice for our Foolish readers? FC: My elves, Mrs Claus and I are all immortal - you're not. If you have a partner or children, make sure you have a Will and some life insurance. Don't rely on Lady Fortune: I know her well, and she can be a nasty piece of work at times! TMF: Father Christmas, thank you very much. FC: It was a real pleasure. Merry Christmas and a happy New Year to all your readers! More: Living Below Your Means discussion board | Get Out Of Debt | Index Trackers | Insurance centre.