FOOL'S EYE VIEW
Ten Things To Do Before You Die

By Cliff D'Arcy
April 15, 2004

One of the most glorious episodes of my entire life happened back in late 1996, when my girlfriend and I booked a long adventure holiday in New Zealand, followed by a week in the glorious Cook Islands in the Pacific. We were very naughty while we were there, because we returned home as man and wife - having married without telling anyone in advance!

During this epic trip, we did things we'd always dreamed of, including swimming with hundreds of wild dolphins at dawn, bungee jumping from a bridge into a canyon, jet boating, whale-watching by air and so on. We came back with magical memories - and an eye-popping credit-card bill!!!

Of course, a trip of a lifetime costs money, which means 'putting all your financial ducks in a row'. Without further ado, here are ten crucial financial steps to take before you croak!

1. Plan your retirement

Yawn, dull, boring - I know - but you may live fifteen years or more beyond the end of your working life, and it's largely up to you to fund this stage of your life!

As with all investing, the earlier you start saving for retirement, the better off you should be. On the first day of your working life, you should be looking to start investing in a pension. If you're one of the lucky few who can join a final-salary scheme, do so without delay. These plans are so attractive that around eight in ten of the UK's biggest companies now exclude new joiners.

If you can join a company pension, then it's up to you to save for your greying years. However, the government will also contribute to your retirement fund, through tax relief of 22% for basic-rate taxpayers or 40% for higher-rate taxpayers. This short article explains more about pensions.

Visit our Pension centre.

2. Buy a house

We Brits seem to have a fanatical desire to own our homes: seven out of ten homes in the UK are owner-occupied, which is one of the highest ownership rates in Europe. As this article shows, buying rather than renting almost always makes more financial sense in the long run. The smaller your home, the more you should save by buying.

However, with the current house-price bubble - described by one academic as 'the most dangerous time to buy a home for a generation' - you'll need to play a long game. One important knack to homeownership is learning how to pay as little interest as possible on your home loan (see step 6).

3. Get married

Marriage has many benefits: financial, spiritual and physical. Research shows that, compared to the unmarried, married people are happier, healthier (including lower rates of mental illness), live longer, and earn and save more. This is often attributed to the long-term nature of commitment, plus greater financial and social support from having two extended families.

What's more, there are financial benefits to getting married - beyond the obvious one of marrying a higher earner. Married people pay less for life, health and other types of insurance, largely because their habits are less risky. Here's an article on the financial benefits of living together and another that mentions several of the tax savings that marriage brings.

Thanks to the new Civil Partnerships Bill, same-sex couples will soon acquire some of the benefits that married couples enjoy. Learn more at Gay.com.

4. Protect your family

If you have a partner and/or children - even adult children - someone relies on your income. If you're no longer around, these people will suffer financially. It's not good enough to leave their fate in the hands of fortune - it's up to you to keep the wolf from the door. You and your partner need to buy life insurance. Here's an article about my search for cheaper life cover, plus one about getting twice as much cover for a few quid more.

It's also a good idea to fork out for income protection insurance (protection against long-term sickness), critical illness cover and private medical insurance. The fundamental rule is to shop around and make sure that you're getting decent cover at a low price.

Visit our Insurance centre.

5. Avoid paying tax

Legally, of course! The lawful avoidance of tax is one of the most satisfying - and profitable - financial activities. With hardly any effort, you can pay less tax on your income, savings and capital gains. Learn more here and here.

6. Leave your mortgage lender

This is a lot more rewarding - and a lot less painful - than leaving your lover!

One of the worst mistakes homeowners make is to practice 'mortgage monogamy', sticking with one lender forever. While this misplaced loyalty may be admirable, it's a big financial mistake. Finding a better home loan every few years will save you tens of thousands over the life of your mortgage. What's more, you don't even have to leave your lender: I've been with mine for eleven years, but I'm on my fourth different deal!

Visit our Mortgage centre.

7. Borrow money for nothing

Thanks to their financial strength, the UK's biggest companies can borrow money from British banks at just a small margin over the Bank of England's base rate, which means they pay a little over 4% for the privilege.

However, even though you are a lowly consumer, you can borrow money from credit-card issuers for up to nine months without paying a penny in interest. You can use this money to pay off interest-bearing debts, or even put it on deposit and earn interest on someone else's money. Strange but true - over sixty credit-card issuers are queuing up to do you this favour! Learn more here - and be sure to pay off what you owe before the interest kicks in.

Visit our Credit Card centre.

8. Visit a casino

Back in 1995, I accompanied some friends to a London casino - the first time I'd been in one of these gambling dens. Unfortunately, being young, greedy, senseless and mathematically minded, I got the Blackjack bug in a big way. After about four years of fierce addiction, I quit my dirty habit and have been 'clean' for the last five years.

However, it's worth going along to a casino (or your local bookmaker) to see how easy it is to lose money - and how irrational people can be, usually confusing skill with luck! Gambling is a mug's game, so stick to watching others lose their stakes.

9. Be prepared!

Even if your name is Lazarus, you're going to snuff it one day - and dying is the one certain event for which you can plan ahead!

You need to make a Will, plan ahead for inheritance tax (IHT) and put some money aside for funeral expenses. Making a Will and taking steps to reduce your IHT bill should stop you - or rather, your estate - being hit with the biggest tax bill of your life (or should that be death?).

10. Don't forget to spend some!

Remember than money is largely meaningless until you spend it, so make sure that you use it to benefit someone along the way. I'm hopeless at spending money on myself and I have few expensive tastes, however, I get a big kick out of treating my family and friends. (Don't believe anyone at Fool Towers who claims that I never stand my round or steal anyone's ciggies! They're just crazy.)

Please make sure that you turn some money into a treat once in a while - whatever turns you on. Money's there for living, not dying.

More: A Grave Investment.