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Spend & Save

How to be a wizard with your wealth

Harry Potter heroine Emma Watson came into her fortune this week – so will a millionaires' course help her handle it?

Few parents know what to give an 18-year-old on her birthday. But access to £10.5m is likely to get a warm welcome from even the sulkiest teenager. Actress Emma Watson – better known as Harry Potter's fresh-faced companion Hermione – turned 18 this week, and was promptly handed the keys to her fortune.

Well, almost. Watson's parents, who have been safeguarding their daughter's growing riches for the past five years, reportedly insisted that she enrol on a "millionaires' course", in the hope that it would stop her squandering her cash.

Run by Coutts – bankers to the Queen, no less – the "Assets and Responsibilities" course is designed to teach super-rich 17 to 23-year-olds just how to handle their wealth.

While I may be a little older – and significantly poorer – than Watson, right, my frivolous spending suggests I could do with learning a thing or two about the value of money. I decided to give it a go, and enlisted the help of Oliver Woolley, one of the "academics and experts" who spent last summer tutoring 20 monied youngsters on Coutts' first course of its kind.

His "pupils" spent three days learning about spending and budgeting, investing, the history of the City, how to read the financial press and how to set up an enterprise. While I know lots about spending, I'm drawing a blank on the other components.

Mr Woolley, a partner with Envestors, an investment firm, didn't seem to think this would be a problem. "You don't need to know it all, you just need to know some things, have good advisers, and to ask them the right questions," he said cheerfully. After assuring me that the financial awareness of the kids on last year's course was "varied", Mr Woolley handed me a pile of printouts and we got started.

"The main thing is to have a broad portfolio – put some in property, some in safe stocks, and some in a high-risk early-stage investment," he said.

I have the attention span of a gnat when it comes to numbers, but luckily the course is designed for restless teenagers. Cash flow, patents, marketing and business plans are simplified using bullet points, big print and bright colours. One topic was illustrated with random pictures of citrus fruit, another with a quote from Mark Twain, encouraging me to "Throw off the bowlines". We played games from last year's course, including: "Design a venture for Heathrow's new Terminal 5". I suggested a baggage reclaim business.

"The kids last year glazed over when it came to tax, but they liked the investment and entrepreneurial stuff," said Mr Woolley. I don't blame them. VAT, PAYE, income tax, inheritance tax, corporation tax... the list is endless and uninspiring. The only moment of light relief came when Mr Woolley assured me "there is a difference between tax avoidance and tax evasion".

Thankfully, we eventually moved on to investments, which are much more exciting. I'm especially keen on early ventures – companies that are just starting up and haven't yet floated on the stock market – which are high risk but offer phenomenal returns. Apparently, so are the Tarquins and Arabellas who attend these courses, but they should be wary – four out of 10 of these ventures fail, and the minimum investment is usually £20,000.

"The massive returns are very tempting to young people who have just come into money. They are much less risk-averse than someone who is 40 and has built up their wealth gradually," warned Mr Woolley.

Apparently, if I'm to make the most of my money I need to start reading The Financial Times, and make sure I understand profit-and-loss margins, corporate structures, director equity, tax breaks and shareholder structures. Surely a rising star like Watson doesn't have time for all this? I asked my financial tutor to sum up his advice in a nutshell, and his answer was reassuringly simple: "Don't put all your money in one pot."