Last week, I had the pleasure of co-presenting at the newly christened PLSA (formerly NAPF) conference about how we’ve got retirement savings all wrong as an industry.
This was linked with Redington’s stand at the conference, which incorporated the savings guru Pensions Panda (worth a follow) and our Built to Last strategy game.
The aim was to grow £50 as much as possible by building towers that had to reach a certain height to accumulate compound interest;
- 60 cm = 25%
- 80 cm = 50%
- 100 cm = 200 %
- 120 cm = 500%
You were given 3 attempts, each lasting 2 and a half minutes.
The rules of the game were stacked to favour particular strategies. Specifically ones which, if applied to your real world savings, happen to help you grow your long term wealth.
So what were the lessons that meant you could excel and climb the leader board?
- The sooner you start, the more your savings can begin to compound
Don’t spend too long thinking; Start building and keep banking! And come back!
- Properly spreading your risks is a good idea in the long run. Accept you will suffer occasional losses
Build more than one tower
- You have to be willing to risk a loss to grow your wealth
Don’t just build 60cm every time – occasionally going for higher risk reaps huge rewards
- You may well make mistakes and lose money. Right sizing your risks will keep you in the game.
Regardless of the rewards, don’t even try making it to 120cm!
- You need a strategy that carries the appropriate amount of risk that allows you to reach your goal.
A combination of 60cm, 80cm and 100cm will take you to the top
- A strategy is only successful if it meets your objectives. How others perform is irrelevant.
Easier said than done, but you’re not actually competing against the person across the table!
Those who combined a number of these strategies were always the most successful.
Built to Last showed the power of Gamification as an educational tool. It even had a track at the conference this year!
And it is just one of the tools at our disposal in the fight for a more secure financial future.
“Tell me and I forget, show me and I remember, involve me and I learn.”
– Benjamin Franklin
The winner banked a remarkable score of £67,131.32. Thankfully, she hasn’t asked to be paid out yet.