Legal Recruitment from Ten-Percent Legal

Monday, September 15, 2008

If you had a million, how would you spend or invest it?

This question was asked by a City firm recently and I have heard of it before on numerous occasions. It requires you to think carefully from a financial side and also to have a good grasp of financial terminology and an understanding of more general concepts that are effecting the financial markets at the time of the interview.

If somebody asked me that question, I would have an answer in my head because I think about where to invest £1 million if I ever had it all the time. I think my answer would be as follows:

If I suddenly received £1 million, I would immediately put it all in a savings account whilst I considered what to do with the money. I would be looking for at least 4.5 percent and I would start consulting financial advisors as to where would be the best places to invest. My interest would be particularly in looking to invest or purchase companies to expand my businesses rather than simply to invest in products or savings vehicles. I would be particularly interested in investing in something diverse from my current business interests. They include the purchase of a couple of companies with their own freeholds and existing operations all intact.

Whilst this may not sound the most interesting of answers, this is the genuine answer I would give if anyone asked me this in a discussion. I am very interested in investing money in other companies and enterprises, if I ever had any to invest, as you can sit back and watch your money grow with a more minimal input than if you were running your own company. You also have a say and/or control over what happens to your money. So for example, if you purchased a café, you would be in a position to change the menu or increase that advertising if your revenue dropped. This would not be the case if you invested in a pension or bonds or unit trusts.

Obviously for the purposes of the question, you need to understand what the terminology is and to have a think about how you would invest the money before you went to interview or you do run the risk of umming and erring a lot instead of just giving a straight response. Again this is a question without a right or wrong answer. It is simply a response that you have to give to the firm for them to consider.

Jonathan Fagan is Managing Director of Ten Percent Legal Recruitment. You can contact him at cv@ten-percent.co.uk or visit the website at www.ten-percent.co.uk.

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