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[-viii-]

ERRATUM.

Page 72, line 16, read - to that dividend.

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MANY widows and single ladies, and all young people, on first possessing money of their own, are in want of advice when they have commonplace business matters to transact. It is not always easy for them to find a friend, who will listen patiently to their difficulties, and express no surprise at their ignorance: this has made me see how much a little Manual of this kind has been wanted. Numerous excellent works are published (see Useful Books); but the mistake their authors generally make, is in supposing the reader to know something of business. I write for those who know nothing. My aim throughout is to avoid all technicalities; to give plain and practical directions, not only [-x-] as to what ought to be done, but how to do it.
    Ladies rarely have any business to attend to before they attain the age of twenty-one. They are usually older, when, through their father's or their husband's death, they find themselves possessed of money of their own, and are then first called upon to act. They naturally feel shy and awkward, at that time of life, in asking such a simple question as, How am I to draw a Cheque? How should I write to my Banker to send me some money? I want to sell out of the Stocks; what must I do? How am I to get a Power of Attorney? When once known, a person soon finds that all these things are very simple, and as soon forgets how difficult and strange they once appeared to her. I trust this little book will prove useful to many of those who have yet to learn.
    I shall be much obliged to any of my readers who will send me any good suggestions., likely to be useful, under cover to me, "Care of Messrs. [-xi-] Macmillan and Co., 29 and 30 Bedford Street, Covent Garden, London, W.C."
    I cannot better conclude the Preface to my  Fourth Edition, than by an extract from. the Journal of Miss Berry, edited by Lady Theresa Lewis:-
    "A woman who is proud of being what is generally called 'A woman of business,' is proud of endowments that would not distinguish a Banker's Clerk. They are what every woman should be ashamed of not having, because every woman must have sufficient leisure to acquire them, but of the possession of which an intelligent mind can no more be flattered, than with the knowledge of the pence table."

E.S.G.

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GUIDE TO THE UNPROTECTED.

CHAPTER 1.

INTRODUCTORY

INVESTMENTS.

WHEN an inexperienced person comes into possession of her fortune, and especially if it be a small one, her first inquiry is, "How can I invest my money so as to get the highest possible income?" Let her rather seek to place it where her Capital will be safest. The Duke of Wellington used to say, "High interest is another name for bad security." In this country 4½ per cent. is generally the highest safe Interest you can [-14-] receive: 4 per cent, more usually so. When 6, 7, 8, or more per cent, is offered by Banks, Mortgages, Loans, or Mines, beware of accepting it, as the probability is that you will lose both your Principal and Interest, as so many have done. Such an Interest can seldom be given consistently with safety.
    Good Mortgages, and the Debenture Bonds of the leading Railway and Canal Companies, are very convenient investments for persons of small means, because the investors will at the end receive back the same amount that they originally invested, and in the meantime receive an unvarying amount of Interest paid regularly; also, in the case of a Railway or other like Company not being wholly successful, the Interest of its Bonds, &c. is paid before the Dividends of the Shareholders. Before deciding on your investment, consult your Solicitor, or some respectable Share or Stock Broker.

Joint-Stock Banks. - A lady should not on any [-15-] account take Shares in a Joint-Stock Bank, Mine Partnership, or any other joint trading concern, unless it be established under the new "Limited Liability " Act, as otherwise she is liable to lose her last penny if the Bank or speculation should fail. Even if "Limited," they should not be invested in without the greatest possible caution, nor until after very careful inquiries have been satisfactorily answered.

Shares in Railways, Canals, Gas and Water Works, may often prove good investments, but some risk necessarily attends them, as maybe seen by the constant variations in the price of the Shares. The Interest or Dividend they pay is also frequently changing, according to the state of trade, demand, &c.
    These sorts of investments pay from 3 to 9 per cent. — sometimes even more, and sometimes much less  — to original Shareholders (that is, to those who took Shares at the beginning of the concern), and from 3 to 5 per cent. to those [-16-]  who purchase Shares. Where the Company is equally successful year after year, their Interest is steady and safe, as it arises from the regular demand for gas and water, or the traffic on the railway or canal.

Guaranteed and Preference Shares are far safer investments than Ordinary Shares. By the former are meant Shares which, if a certain fixed Dividend cannot be paid by their own Company, must be paid by the Company which guarantees them. They therefore cannot be paid less, but if the property be thriving they may in some cases be paid more. For Preference Shares, see Chap. IV.

Do not put all your money into one concern. Put it into several. Then if one falls in value another probably rises, and so your income will keep more equal: if one of your investments unfortunately turns out a failure, you lose only a part and not the whole of your fortune. When [-17-]  you think you have placed your money in the safest way you can, do not alter its investment without some good reason. Every change costs money, and is attended with trouble and anxiety.

In investing Capital, attend to the following suggestions: —
    1st. Bank. —  Select a safe and respectable Bank for the deposit of your money.
    2nd. Asking advice.  —   Seek a sensible and upright Friend, who is a good man of business, to consult as to what concerns are safe or unsafe for investments. Many worthy men are bad men of business, and recommend investments because they think or hear they are good, without knowing anything of the matter: and for that reason seldom consult ladies, as usually they know little or nothing of business, and when that is the case it is much like the blind leading the blind. Men who are in business are in the habit of looking out for investments for their  [-18-]  own money, and of hearing competent opinions upon them; and if they are upright in their dealings and are doing well in the world, it is fair to presume that their judgment is good. Having found one, be guided by him, and do not ask everybody's opinion, which only un-settles you.

Imposition. — To show the attempts to impose on an inexperienced man, I may mention an anecdote I heard from a person who had been almost persuaded by a friend, who knew nothing of business, to take some Shares in a Company which promised extremely good interest. He went to the office, which was in the City, to make inquiries. The Manager tried much to persuade him to invest, assuring him of the safety of the concern. While C— was hesitating, a man rushed in, and said in an eager tone, "Pray, Sir, have you any more Shares on sale ? I have an order for fifty more; they are in such great request that I am afraid of their being all [-19-]  sold before I can get enough." His manner and words opened C— 's eyes, who suspected that this was a plan to entrap him to invest, and he quietly walked off. The Company failed in a very short time afterwards.

DOCUMENTS TO PRESERVE

Set up a neat tin box, or, what is better, a good fire-proof box, to hold your Deeds, Scrip, Bonds, Receipts, and Papers of all kinds connected with business. Keep this locked up in a safe place, or it may be deposited with your Bankers for safe custody during absences from home, or for longer periods if necessary. Keep all papers, letters, &c. relating to money and business transactions. Never burn any letter or paper on business; much trouble and loss are often occasioned by inexperienced persons doing this. In the course of three or four years, and not till then, you will learn what is necessary to keep and what is not.

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Arrange your Papers under a few heads. Fold them up neatly of one size, and "docket" them; that is, write outside what they are, and the date of receiving them, thus —

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Keep all receipted Bills six years; and then, if you find them an incumbrance, you may destroy them, because an unclaimed simple contract debt of more than six years' standing is not recoverable at law. Fold them up lengthways, and "docket" them as I have just described. Suppose you make a purchase of furniture from Mr. Richard Jones, for £1 2s. 6d. on Jan. 5th, 1863; then his receipted Bill should be folded lengthways and docketed as follows:

[-22-]  At the end of the year, or oftener, the Bills that have accumulated are quickly arranged alphabetically and tied up. There is thence- forward no trouble in referring to a Bill. All this seems irksome at first, but it is wonderful how natural it becomes to fold them of one size and docket them, before putting them away in your drawer. When unscrupulous tradespeople are aware you are methodical they seldom send in a Bill twice.

Pay your debts regularly, though they be ever so small. Many tradespeople arc ruined by the thoughtlessness of their employers, and have to borrow money at a very high rate of interest, till it suits the convenience of their customers to pay their Christmas or Midsummer Bills!
    Time is money to the poor.

The difference of being rich or poor. — A man is rich who lives upon what he has. A man is poor who lives upon what is coming A prudent man [-23-] lives within his income, and saves against " a rainy day." Keep your expenses within your income, and you avoid the temptation of doing many shabby actions. " You cannot burn the candle at both ends."

Ready Reckoners. — Every one should possess "A Ready Reckoner." It is of use in many ways, and contains Tables of Interest, Wages, Percentage, Weights and Measures, &c.

Bank-notes. — When you receive Bank-notes, either those of the Bank of England or of Country Bankers, write your initials on the back of each note, and insert a memorandum in your Pocket-book, or some other book, of the amount, number, place of issue, and date of each note. Should all or any of these notes be stolen, lost, or mislaid, immediately write to or call upon your Banker, supplying the above information, and measures will at once be taken to "stop" or refuse pay ment of them. For another reason  [-24-] it is an excellent plan to write your name or your initials, with the date of receiving it, at the back of each note, inasmuch as it enables you to identify it among others, in case of any misunderstanding after it has been received or paid away; thus —

F.M.S. May 3, 1863.

SIGNING DOCUMENTS

Inexperienced persons should pause before they consent to sign their name to any Document, and particularly before signing and putting their finger on the seal and saying the cabalistic words, "I deliver this as my Act and Deed." Such a document is called "a Deed," and you should understand well what it is you are undertaking the responsibility of; and that by signing you may imperil your last shilling. As a rule you should never sign a Deed, or a Bill of Exchange, or a Promissory Note, or any other [-25-] important document, without first consulting your legal adviser. But you need feel no anxiety in witnessing a person's signature to a Deed. The act is one that cannot compromise you, and it is a social duty to perform, for you are sure at some time to have need of the same assistance in your own behalf. Considerable inconvenience is sometimes caused in country places, by a friend declining to do this simple act of kindness.

Signature. — Sign your name always in the same way in Cheques and business papers, that it may he recognised, and make it as distinct as possible. Many whose writing is in other respects clear and legible, sign their names in such a manner that it is almost impossible to recognise them.

Address in Letters of Business. — It is always usual to write at the bottom or top of the letter the name of the person to whom it is addressed, as, since envelopes have been used, it is seldom mentioned otherwise in the letter.

[-26-] Keep copies of all letters you write on business matters it is often necessary to refer to them.
    In writing letters of business, they should be short, clear, and to the point. No superfluous words — no repetition. Each subject should be in a separate paragraph, and written on the full size sheet of note-paper. It is a great mistake to suppose that a long letter gets more attention it is quite the contrary.

RESIDENCE AND ADDRESS.

When you place any money in an investment, be particular to send your full address, legibly written, to the Secretary of the Company, and inform him to what Banker he is to pay your Dividends. If you change your residence, immediately write to inform him of the fact. It is best to do this a little time before the money is [-27-] due. Some people make their address still clearer by putting a line round it, thus-

To the Secretary of — Company.

Sir,- I request you to take notice that my address in future will he A. B. at — P/ace, — (Town), and to enter it accordingly in your books. I beg you will acknowledge receipt of this letter.

Yours obediently,

(Here add your signature, address and date.)

BUSINESS TRANSACTIONS WITH FRIENDS.

In transacting business, such as buying or selling Stocks, Railway Shares, and especially Land,  [-28-] or in any money affairs, even with the nearest relation, make it a rule that everything be transacted in the same formal business-like manner that would be adopted if he were a stranger. Were this rule attended to, frequent annoyances, much expense, and many family quarrels would be avoided. In disputed cases, resulting from the absence of a business-like understanding, friends and relations may become satisfied by mutual concessions and confidence in one another's integrity; but when they die, their Executors are bound to act by the strict judgment of the law.

Saleable Title. — W hen Shares or Land are given or sold to you by a relation or others, ask your legal adviser to see that all necessary steps are taken for making your Title a saleable one, so that you can sell the property whenever you may desire to do so, without trouble or extra expense.

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Security. — If you lend money as an investment, always take every precaution to obtain a safe security for it from the Borrower —  viz, a Mortgage of Land or other property, worth at least, in the case of Land, one- third more, and in most other cases, half as much again as the sum you lend. Your own legal adviser ought always to prepare your Security. His costs are usually paid by the Borrower.

Receipts from Friends. —  Always take a Receipt or Acknowledgment from a relation, as from a stranger, for borrowed money. Should your relation die, his Executors would not be legally justified in paying you unless you had a Receipt or some other proof of debt to show, or he had named it in his Will. Executors must act only on legal evidence or pursuant to (i.e. in accordance with) the directions of the Will: they cannot use their own discretion.
    If you have lent a person money, when he [-30-] pays it back you will have to return the Receipt or Security he gave you.
    Do not lend or show a Deed or Map of your property to any person, without the advice of your Attorney, and in any event desire the person who borrows it to give you a Receipt for it. An old Map of Land is often a most important document to determine boundaries.

BROKERS AND BANKERS.

When you want to buy or sell Government Stocks, or Shares or Stock in any Railway, Canal, Gas, Water Works, or other Company, it is necessary to employ a Broker, who charges a per-centage — or, in other words, a Brokerage or Commission — upon the amount of the Sale or Purchase. It is of course important that the Broker so employed should be of high standing and respectability. Bankers also undertake to transact all business of this description, [-31-]  and they hold themselves responsible for the proper completion of the Sale or Purchase, and, generally speaking, no extra expense is incurred by the buyer or seller; an understanding or arrangement subsisting between the Banker and Broker as to a division of the Commission.
    The Broker's charge rarely, if ever, exceeds ^1/8 per cent., or 2s. 6d. for every £100 of Government Stocks. It varies considerably in Railway and other Shares, but is always in accordance with the regulations of the Stock Exchange.
    Always give your instructions in writing; it prevents many opportunities of mistake.

Money on Deposit — When you sell any Shares, &c., place the money in a Bank till you have found a new investment. If it is to lie in the Bank for any length of time (two or three months, or longer), it is better to lodge it on a Deposit Account, as the Banker will generally pay interest at a rate agreed upon, at the time of making the deposit. If it is a very large amount, you [-32-] can put it into the Funds or buy Exchequer Bills.

DIRECTORSHIPS

The Individuals for whose guidance this book is written, ought not, under any circumstances to be Directors. At all events never consent to be a Director of a concern, unless you are prepared to attend personally to it. You may not only be liable, by the acts of others, to lose the whole of your property but you are misleading, by making the public fancy you attend to the concern.