A consumer (Mr. J) came to consult me. He had bad experience with the two private bankers. One was a local person and the other was an expatriate. Over the years, they had advised him to invest in certain stocks. The results had been disastrous. He made losses on these investments. 

He asked for my advice on how he should invest his money. I gave him the following tips:

1. Always invest with your own wealth. Never invest with borrowed money. 
2. Invest the major portion of your wealth over the long term in an index fund. 
3. You can trade (buy low and sell high) but you should treat it as gambling and not investing.  It is all right to gamble with spare money that you can afford to lose, if you prefer to spend it in this way, rather than go on a holiday.

Mr. J agreed with my advice on avoiding borrowed money. The private banker had asked him to borrow some money from the bank to invest in the shares. He had to pay interest on the borrowings, although he had spare cash for investment. 

Mr J: Is it safe to invest in the index fund at the current time?
TKL: There are two risks. One risk is that shares are generally over-priced. The other risk is that large scale war may break out. To reduce this risk, you can spread your investments , e.g. 50% in shares, 25% in property and 25% in cash.

Mr J made a donation of $250 to the Financial Services Consumer Association for the time that he spent with me.