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Fame & Fortune: Stuart Wheeler

The spread betting tycoon is spending twice his income to maintain his historic home

Stuart Wheeler is best known for founding IG Index, the spread betting firm, in 1974. It was floated in London in 2000 and Wheeler retired as chairman in 2003.

He donated £5m to the Tory election campaign in 2001 but was famously expelled from the party this year after he gave £100,000 to the UK Independence party (Ukip).

Adopted at the age of two, he was educated at Eton College and Oxford before becoming a barrister and later working as a merchant banker.

A keen gambler, Wheeler, 74, played bridge with Lord Lucan two days before his disappearance in 1974. He also competes on the international poker circuit.

He is married to Tessa Codrington, the photographer, and they have three daughters - Sarah, 29, Jacquetta, 28, the model, and Charlotte, 24. He divides his time between Mayfair and Chilham Castle, near Canterbury.

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How much money do you have in your wallet?

About £500. I think it's boring to go to the cash machine too often, so I get a lot of money out at a time. I keep it deep in my pocket and I've never had any stolen, thankfully.

What credit cards do you use?

My main one is a Mastercard from HSBC Private Bank. I think I get some kind of travel insurance with it but its main advantage is convenience as I bank with HSBC.

Are you a saver or a spender?

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Even though I watch my money very carefully, I'm spending about twice my income at present. I have to pay the salaries of the eight or so people that work for us at Chilham Castle, for example. I have a private pension scheme that was originally from IG Index but at my age it's no longer a question of putting money into it.

How much did you earn last year?

Nothing - I live off the interest on the money I made from IG Index. Selling my stake was the biggest mistake of my life. Even though I made lots of money out of it, I could have made an enormous amount more. [He sold a 24% stake in 2003 when IG Index was worth £143m, netting him £34m. Had he waited until 2008 when it was worth £1.4 billion, he could have got about £330m.] When I donated £5m to the Conservatives in 2001 I was worth £90m - that's dropped to about £20m now, discounting the value of my properties.

Have you ever been really hard up?

Before I really got going with IG Index, I spent about six months looking for a job. I lived off whatever money I could make playing bridge.

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Do you own a property?

I own two. The first is Chilham Castle, which I bought in 2002. It has 13 bedrooms and I think I've spent more on its upkeep than the £7m it cost to buy. An estate agent has asked if they can value it and they're very welcome to - not that we're going to sell.

The second is a flat in Mayfair, which is probably worth more than the castle. I bought it about five years ago, also for £7m, and it's probably worth £10m or £12m now. I live in it during the week with my youngest daughter, Charlotte.

What was your first job?

I'm old enough to have done National Service, so my first job was as a recruit in the Welsh Guards. My first weekly pay packet was 11 shillings.

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What is the most lucrative work you have ever done?

Starting, managing and then selling off IG Index. However, I did win £1.75m on a huge spread bet that the Dow Jones index would drop in the summer of 2001. Although no sane person could possibly have wanted September 11 to happen, it happened at an incredibly lucky moment for me. I decided that I'd leave the bet open until it closed automatically and, by a stroke of luck, it ended at the precise moment when the Dow Jones hit its lowest point. The money helped me to buy Chilham.

Are you better off than your parents?

Yes. I was adopted by a wealthy couple and I don't think my [adoptive] father ever did a stroke of work in his life, apart from fighting in the first world war. He hunted and shot and fished, and therefore considered himself to be extremely busy. I recently discovered that my birth mother was a schoolteacher from Kilmarnock in Scotland but I never met her.

Do you invest in shares?

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I haven't done any spread betting for a long time but I've got open accounts with IG Index and one or two of its competitors that I could use.

Virtually all my money is in shares now but I find it very hard to pick individual stocks so most of it is in exchange traded funds from iShares, now owned by Black Rock. [ETFs follow an index, like trackers, but are traded on the stock exchange like shares]. About half of them simply follow the FTSE 100 index and the others follow the highest-yielding shares in the FTSE 350, which provides a reasonable income.

My individual shares are in BP, Shell, Tesco, Glaxo Smith Kline and Vodafone and I may never change them.

I got those shares about a year ago when the market had come crashing down to about 4,400. It's just over 5,000 now but I'm fairly nervous because I am so exposed to stock markets. I think that the markets will right themselves eventually, although I fear there will be a sharp drop in between. My strategy is to ride that out until things come right again.

What's better - property or pension?

A pension, probably. Despite various changes Gordon Brown has made to pensions, they still have very significant tax advantages.

What's been your best investment?

IG Index, without a doubt.

What about worst?

I invested in some individual shares fairly recently which did very badly but I'm not going to mention names. I didn't lose a spectacular amount, though.

Do you manage your own financial affairs?

I have an accountant and a tax adviser. I don't agree with rich people who say they will leave the UK to escape 50% tax - if you have a fair amount of money and definitely prefer living in England, it's pretty mad to move away.

Even though I'm spending more than my income, I am going to be affected by 50% tax and have made sure that I've adjusted things with my wife (who is not currently earning a great deal) so that we don't find ourselves having to pay more than we need to.

What's the most extravagant thing you have ever bought?

Both Chilham and the Mayfair flat are very extravagant. I don't want lots of expensive objects, though - I just like living a comfortable life and being able to entertain friends.

What aspect of the tax system would you change?

I think the real thing is to make it financially undesirable to live on benefits.

What are your financial priorities?

To enable my family and me to carry on living the kind of life we lead. Another is the ability to give to what I think are good causes, such as anti-torture charities and Ukip.

Do you play the lottery?

No. The odds are appalling and almost any other form of gambling gives you a better chance. I play poker at a tournament in Las Vegas once a year. You pay $10,000 (£6,050) to enter. Four or five years ago, I came 33rd out of 800 players, winning about $35,000. I play internet poker but only for very low stakes.

What's the most important lesson you have learnt about money?

You can't have complete safety however you deal with your money. You have to accept a bit of risk to make any decent returns and the most obvious way to do that is to buy shares.