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The Top 10 Investments for the Next 10 Years

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Subtitled Planning Your Path to Prosperity, in this book Jim Mellon and Al Chalabi provide us with a timely, practical reminder that it's never too late to start investing for tomorrow. They demystify the process of investment and along the way let us in on a few of their "BigIdeas". Given a bit of strategic thinking and proper planning of your own these "BigIdeas" can turn into "MoneyFountains". To go with the book Mellon and Chalabi have created a DiagnosticGrid, a downloadable spreadsheet, to help you create your own plan to achieve financial security.

Neither of the authors is writing this book for the money - all the royalties are going to charity. So why? Well, according to Jim Mellon, "It focuses our minds," while Chalabi adds, "It helps us in our own investments, keeps us sharp."

Why should we take them seriously? Well Mellon and Chalabi don't just talk the talk, they walk the walk too. Jim Mellon is an investor with interests in several industries. He and Al Chalabi met in Hong Kong. Al Chalabi is a business consultant, entrepreneur and author who has been based in Asia for eleven years and has extensive experience of developing economies. He assists corporations establish and grow their operations in Asia, particularly in emerging economies like China.

Mellon's been running his own business through a listed fund management company - Charlemagne Capital - and an Asian mining group, Regent Metals as well as being controlling shareholder and a director of Conister Trust, an Isle of Man based bank, Speymill Group, a property business, and Betinternet,. He is a co-founder of Uramin and Red Dragon Resources, both listed mining groups. Burnbrae, his private company, is a substantial landlord in Germany and in the Isle of Man, and also owns outright the hotel chain Sleepwell Hotels.

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Mellon's track record with UraMin is particularly impressive. His initial investment of £60,000 turned into £50 million in barely two years when the company was sold in September 2007 to Areva, the French state-controlled nuclear group. Mellon, who is worth an estimated £620 million, now tips solar energy as one of the top 10 investments for the future. In fact it's one he described in interview as a "banker".

So here's something to keep an eye on: Emerging Metals, back by Jim Mellon, is looking to raise around £25.5 million on the Alternative Investment Market in spring 2008. The company specialises in the metals used to make next-generation solar panels, such as germanium and selenium.

Among the topics discussed in the book are:

  • Real Estate - can the hot housing markets really continue to generate 20% annual increases?
  • Stocks & Mutual Funds - the hardest of all investment classes to operate in, so where are the opportunities?
  • Bonds & Cash - not as boring as you may think, and with the capacity to make you a lot of money!
  • The 'BRIC' Economies - how do the emerging economies of Brazil, Russia, India and China stack up against the four key determinates of growth?
  • Commodities & Collectables - the five reasons why commodities are an investment vehicle set to grow and grow
  • 'Green' Investments - turning the challenges of green and eco-needs into monetary returns on investment.

But will Mellon and Chalabi's top 10 all pay off? Some, say the pair, are riskier than others; says Mellon, the riskiest sector is the BRICs while the Japanese Yen is the safest. He also rates German property as low risk. Chalabi admits that not all of the top ten may pay big time but he reckons that enough of them will to more than make up for any disappointments elsewhere.

The fact that we're all living longer is an undeniable trend. The massive shortfalls in state pension schemes have largely been ignored by governments. The prospect of living off our own savings for 20-30 years without a salary or a state pension of any real worth is a daunting one. The authors highlight the downside of existing structured retirement schemes so that readers may be better informed before deciding whether or not to consider these as an investment option.

Mellon and Chalabi use stories from their own business lives to provide colour to what, let's be honest, is for many people a dull subject: financial self-preservation. They also include six case studies of individuals who they have interviewed in respect of their own investment plans and practices for retirement.

The Top 10 Investments for the Next 10 Years, by Jim Mellon and Al Chalabi, is published by Capstone, price £14.99 in hardback. It is available from the Moneyextra Book Club at a 15% discount.

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13 February 2008 © Moneyextra.com

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