‘Young Cypriots must balance short-term gains and future financial security’

Private wealth manager Christopher Zachariou recently spoke to the Cyprus Mail about the need to make informed financial decisions, the importance of long-term thinking, the value of professional advice, and what young people can learn from previous generations.

CM: How do you approach guiding young Cypriots towards financial success, and what specific financial strategies do you recommend for different stages of life?

Zachariou: In my approach to guiding young Cypriots towards financial success, I stress the importance of selecting the right investment vehicles tailored to individual circumstances. Whether it’s stocks, bonds, mutual funds, or real estate, the key is to choose investments that align with long-term goals.

I advocate for the establishment of personal pension plans to supplement retirement income, rather than solely relying on the state pension provided by the Cyprus government. Diversifying sources of income ensures greater financial security in the long run.

The importance of insurance and contingency planning, especially for individuals who own property or have dependents, is what I emphasise in my approach. Creating a comprehensive plan for unforeseen circumstances ensures financial stability and peace of mind for both oneself and loved ones.

Furthermore, I encourage early financial planning for children, emphasising the importance of setting aside funds for their future needs. Whether it’s for education, travel, or starting their own family, creating savings or investment accounts for children at a young age provides them with a solid financial platform to pursue their aspirations as adults.

Lastly, understanding and harnessing the power of compound interest is essential for maximising investment growth over time. As Albert Einstein famously said, “Compound interest is the eighth wonder of the world. He who understands it, earns it… he who doesn’t… pays it!” Integrating this concept into financial planning strategies ensures long-term financial success and stability.

CM: What advice do you have for young Cypriots regarding balancing short-term and long-term financial investments, particularly in the context of retirement planning, homeownership, and the allure of high-risk investments like cryptocurrency and forex trading?

Zachariou: When advising young Cypriots on long-term financial planning, it is important to consider factors like retirement, homeownership, and investment. While short-term investment options like cryptocurrency and forex trading may seem enticing, it’s crucial to balance these with long-term financial goals.

For short-term investments such as cryptocurrency and forex trading, the allure of quick gains can be tempting. However, it’s vital to caution young Cypriots about the inherent risks associated with these volatile markets. The example of Bitcoin serves as a cautionary tale, highlighting the importance of understanding market dynamics and avoiding impulsive investment decisions. While short-term gains are possible, they often come with high levels of risk and uncertainty.

In contrast, long-term financial planning involves strategic decisions aimed at securing a stable financial future. This includes considerations such as retirement savings and homeownership. Investing in retirement accounts and real estate can provide young Cypriots with a solid foundation for long-term financial security.

Seeking guidance from a financial professional can be invaluable in navigating the complexities of long-term financial planning.

A professional advisor can help young Cypriots assess their financial goals, develop a customised investment strategy, and ensure that short-term investments align with their long-term objectives.

By leveraging the expertise of a financial advisor, young Cypriots can make informed decisions that support their financial well-being over the long term.

It’s essential for young Cypriots to strike a balance between pursuing short-term gains and planning for their future financial security.

CM: What about short-term investments?

Zachariou: Short-term investments can complement a well-rounded investment portfolio but should not overshadow the importance of long-term financial goals.

By diversifying their investments across various asset classes, including stocks, bonds, real estate, and retirement accounts, young Cypriots can mitigate risk and enhance their overall financial resilience.

When advising young Cypriots on long-term financial planning, it’s crucial to emphasise the importance of balancing short-term investment opportunities like cryptocurrency and forex trading with long-term financial goals such as retirement savings and homeownership.

Seeking guidance from a financial professional can help young Cypriots navigate this balance effectively and make informed decisions that support their financial well-being over the long term.

CM: What can young Cypriots learn from previous generations?

Zachariou: Reflecting on my parents’ journey from Aradippou, Cyprus to England, where they worked tirelessly in fish and chip shops for over 40 years, I’ve gleaned invaluable lessons about financial planning. This narrative is emblematic of countless Cypriots who migrate abroad, facing similar challenges and sacrifices.

Moreover, it resonates with many Cypriots who, like my parents, focus on day-to-day work without adequately planning for the future.

Despite their hard work and determination to provide for our family, their lack of a long-term financial plan has left them approaching retirement age without sufficient savings or investments. Witnessing their dedication and sacrifices has underscored the importance of learning from past mistakes.

If they had prioritised long-term planning earlier, investing in opportunities for retirement income, they could have avoided the need to work long hours every day in their later years.

CM: What would be your concluding remarks about financial planning?

Zachariou: When it comes to securing your financial future, seeking guidance from a professional advisor is beneficial.

Having a personalised financial plan tailored to your goals and circumstances can make a significant difference.