Friday, May 25, 2018

Home Based Business Ideas UK: My 3 golden rules of investment and Warren Buffett...

Home Based Business Ideas UK: My 3 golden rules of investment and Warren Buffett...: Check out my three golden rules of investments and find out what Warren Buffett thinks is your greatest asset and what you should invest ...

My 3 golden rules of investment and Warren Buffett's number 1 investment rule


Check out my three golden rules of investments and find out what Warren Buffett thinks is your greatest asset and what you should invest in.  
  
People often ask me whether or not they should be investing in property, shares, gold and silver or crypto currencies, such as Bitcoins.



My answer is always the same. Do you understand property, shares or crypto currencies? If not, why would you invest in something you don’t understand? Strange thing is, many people do invest their savings into things they don’t understand!

This brings me onto my first rule of investment.

1. Invest in things you understand.

I understand property, I understand stocks and shares as I do pensions and unit trust. I do not fully understand crypto currencies.




2. My second rule is to invest into real assets. 

Assets can be bricks and mortar physical assets, such as property or gold and silver. Assets can also be a share in a company or an online assets such as website or a database. I wouldn’t class a currency as an asset in the same way as a property, especially something like a bitcoin.




Many people do trade in currencies or buy them to hedge against currency movements. I have bought currencies, such as the dollar, when they are cheap against the pound because I know that I’ll need them at some stage for holidays.

Assets such as property and shares in traded companies usually offer an income or dividend as well as the opportunity of capital growth in the long term. Other assets, for instance gold or silver held in its natural state do not offer an income, although gold mining company shares do.

My personal favourite is property, as it is a tangible asset and I can see in touch! I can also borrow money, or use leverage, to buy an investment property.

Over the years, I have enjoyed rental income as well as capital growth, although there is no guarantee of either in the future.

The downside of property is that it is not a purely passive investment and is not as liquid as stocks and shares. It can take many months to sell a property, unlike a traded share which can be sold in minutes.

3. My third rule is to assess the risks and potential rewards involved in a particular investment and then make an informed decision.

Don't know the risks or potential rewards, upsides and downsides? Don't invest!

Warren Buffett said that you are your greatest asset and your greatest investment is the investment you make in yourself. This means investing in your education and personal development or in a business.

If you would like information on a free property investment taster course, email me at Charles@CharlesKelly.net


As always, money tips daily is not giving you financial advice and you should seek professional advice from an independent financial advisor.


Check out my Podcast episode "My 3 Golden Rules Of Investment" from Money Tips Daily by Charles Kelly, former IFA and author of Yes, Money Can Buy You Happiness. on Anchor.




Monday, April 30, 2018

Home Based Business Ideas UK: What Do Baby Boomers Fear Most? It’s Not Death Or ...

Home Based Business Ideas UK: What Do Baby Boomers Fear Most? It’s Not Death Or ...: A fate worse than death for most older Americans is not loneliness or ill-health. According to a number of reports, including Dan Ric...

What Do Baby Boomers Fear Most? It’s Not Death Or Sickness


A fate worse than death for most older Americans is not loneliness or ill-health.

According to a number of reports, including Dan Richards, the past president of the American Association of Geriatric Psychiatry, the number one fear of Americans’ in their 50s, 60s and 70s is running out of money. They fear being broke and not having enough money to afford retirement more than they fear death.

Older Americans’ number one fear about retirement is that they won’t have enough money to afford retirement, a number of recent surveys reveal.



Running out of money after a lifetime's work is biggest worry

Some 43% of baby boomers, born in the years following the second world war, said their greatest fear about retirement was outliving their savings and investments, making that their top fear — over loneliness, boredom and even failing health, according to a survey of 2,000 workers aged 50 and older released in 2015 by the Transamerica Center for Retirement Studies.

Almost 60% of financial planners said that running out of money was the top retirement concern for their clients, a survey released earlier that year by the American Institute of CPAs last year found.

Even though they have lived during the most prosperous time and in the wealthiest nation in history, outliving their money is even more frightening than dying for most Americans over 50. More than 6 in 10 baby boomers feared running out of money before they died more than death itself, a survey of more than 3,200 baby boomers by financial firm Allianz discovered.

The survey results back up my 25 years' experience in financial services and research when writing the book, Yes, Money Can Buy You Happiness. I’ve also been reading Tony Robbins book, Unshakable, which is mostly about how the American financial services industry is ripping off savers.

The book basically exposes the extortionate amount of fees levied by insurance companies and pension providers and how this adversely affects retirees.

The figures and examples are obviously based on the American market, but in my experience they will also apply to most pensions and insurance industries. Indeed, some of the large investment companies, like Fidelity, operate on a worldwide basis.

Travel to any major city centre in the world and look at the tallest shiniest buildings. Invariably, they will be owned by insurance companies, pension funds or banks – the very companies which control most of our money!

Charges and fees take a huge chunk out of people’s savings over the longer term, prompting the Obama administration to introduce a bill to regulate the estimated $17 billion swiped from savers in the US.

Tony Robbins gives one example of how a 1% reduction in fees saves a typical pension investor (who is saving 5% of a $30,000 salary until retirement based on an average 7% return pa) over $150,000.

Put another way, an extra 1% per annum in fees adds up to over $150,000. This is due to compound interest and the fact that the fees are levied on the growing fund every year. When you look at the fees on the illustration, you tend to think that 1% of a few hundred dollars per month is not going to make that much difference, but over time 1% of the fund growing each year adds up to a considerable sum of money.

Then go on to say that the effect of these fees in terms of a lower amount being invested can add up to close to half a million dollars and would mean that the money would run out 10 years earlier in retirement than someone paying 1% less in fees based on the same growth rate.



Baby boomers are now helping less well-off children and grandchildren

Considering baby boomers biggest worry is around money, this is a devastating revelation at a time when we are all living longer and also being asked to help our increasing less well-off children and grandchildren.

Overpaying for underperformance

Today’s money tip is to check the fees on your pension plan (assuming you even have one) or speak to your advisor. In the UK, fees should be clearly disclosed, but in my experience most investors will not understand the real effects of fees over the longer term.

The industry obviously needs to charge some fees in order to run the administration and investment advice. Fees of course are not the only factor to take into account when choosing a pension, but the problem is, too many people have been overpaying for underperformance.

When it comes to performance, the vast majority of fund managers fail to even match the average index growth of the stock market. Most of us would be better off in a low cost index tracking fund, because they don’t need a highly paid investment analyst to run the fund.

If you look at the evidence you will see that many index tracking funds do better than actively managed funds, which is astounding when you would think that a highly paid fund manager ought to be able to pick out a few stocks that would outperform the average, wouldn't you? Otherwise, what the hell do we need them for?

In reality, only a select few of elite fund managers really outperform the market over the longer term. These fund managers would not entertain the small investor, so what are we left with? Unfortunately, in the main we are left with poor or below average fund performance and above average fees eating into our savings.

How do we solve this problem?

Firstly, speak to a competent financial advisor who specialises in investment and pension planning. Financial advisors usually specialise in one or two areas and are not experts in every field, just like you would not expect your family doctor to perform a heart transplant. When I was a financial advisor, most of my business came from mortgages and finance. Whilst I understood pensions, I was not a specialist and would refer clients to other advisers who dealt with nothing but pensions.

Secondly, read your policy documentation and pay particular attention to the ‘fees and charges’ section usually buried in the print and written in immensely boring language. This is particularly important if you are a small investor and cannot afford a fee-based advisor.

Lastly, educate yourself. In an earlier podcast episode, I recommended that we should all take a financial advisor course because this would give you a good overview and you would probably know as much, if not more, than many professional advisors. At very least read a book on the subject. Find a book which relates to your particular country’s financial services industry and learn about the various types of plans and charges. I also recommend that you read weekend financial papers, such as the Sunday times in the UK, as well as online comparison sites, to keep up to date with changes.

The internet has totally changed the game for most consumer products, but financial services and pensions and more complex, which means most people need some form of advice. 

The cost of an advisor has traditionally been paid for by front end loaded charges applied to pensions and investments - deducted from the premium and fund. 

More recently, front end sales charges have been slashed to a minimum for basic pension plans, which means there is no financial incentive for advisors to offer them. Since most people will not pay for advice in the form of a fee, they are left fumbling around in the dark.

There is also the problem of people with multiple pension schemes from different employers during their career. The number of people who stay with one employer for the entire length of the career has fallen dramatically which means more and more people have a mixed bag of pension schemes and are not sure what to do with them.

In an earlier podcast episode, I warned of the pensions cold calling scandal and the outfits who persuade people to cash-in or "unlock" their company schemes.

In short, the pensions industry is in a mess and has not recovered from the Robert Maxwell scandal and the Gordon Brown tax raid on pension schemes many years ago. Furthermore, most large employers have stopped running defined benefits final salary pension schemes for their employees due to the high costs and open ended liabilities.

People are totally confused by the range of schemes available to them and as a result do nothing and sit there like a rabbit in the headlights.

I predict that millions of people will be unable to retire in the coming decade. We are going to see more 70-year-old men pushing trolleys around supermarket carparks, which is fine if you still have your health and energy.

We are already seeing pension poverty in the UK, where people have who have worked all their life are ending up broke and dependent on the state, which is also broke and in debt!

More and more people are seeking alternative methods of providing for their retirement, such as property investment. Like me, they prefer to take things into their own hands and trust their own judgment, rather than leaving it to so-called professional advisers in the pensions industry.

I frequently meet many people in their 50's, 60’s and 70s at property seminars looking to learn how to make money from investing in property because they realise they are going to be short of money in retirement.

If you would like information on a free property investment taster course, email me at Charles@CharlesKelly.net

As always, money tips daily is not giving you financial advice and you should seek professional advice from an independent financial advisor.

Check out the Podcast version of this article and my Money Tips Daily Facebook page - www.facebook.com/moneytipsdaily

Sunday, April 29, 2018

Home Based Business Ideas UK: Shopping Trends Change And Supermarkets Merge As U...

Home Based Business Ideas UK: Shopping Trends Change And Supermarkets Merge As U...: As we hear that Sainsbury’s is planning to merge with Asda, we know that shopping trends are changing. Two thirds of shoppers now v...

Shopping Trends Change And Supermarkets Merge As UK Economy Slows

As we hear that Sainsbury’s is planning to merge with Asda, we know that shopping trends are changing.

Two thirds of shoppers now visit the supermarket more than once a day. People are buying smaller amounts from discount stores rather than doing major shops at out of town superstores.

At one time it looked like the huge out-of-town superstores would take over the world. Now they have been hit by smaller supermarkets like Lidl and Aldi, as well as online providers like Amazon Prime with free deliveries of fresh food.

More mini supermarket are being opened by the large chains, which is squeezing the little guys with the corner shop that used to be the only shop open late at night – now many supermarkets open 24 hours a day. 

Online shopping is obviously accounting for much of what we do nowadays, which is why Sainsburies bought Argos.

Asda’s owner Walmart, still the largest retailer in the world, seems to have lost interest in the UK and has bigger fish to fry to protect its market from online retailers such as Amazon and Alibaba. Amazon’s owner Jeff Bezos and Alibaba’s Jack Ma are two of the richest men on earth, so shopping habits are definitely changing.

In other financial news, the UK economy’s growth rate has slowed in the last quarter to, however, your economy is run by you, not the government. Growth, GDP, inflation.

Focus on your own business and on your self development and career, not the world economy, which will always be fluctuating!

You can get in on the online revolution quicker and cheaper than ever before. You don't need a fancy website, you don't need your own product or a garage full of stock and you don't need a huge budget. What you DO need is some training and knowhow, focus and persistence!

One of my mentors Russell Branson has written a fantastic book about building a following and tribe called Expert Secrets. Russell has a special promo running for a limited time where he will give you the Expert Secrets book for free as long as you pay for the postage.

Grab a copy while stock lasts, it could change your life.

Check out my Money Tips Daily Facebook page - www.facebook.com/moneytipsdaily

See also:

Why The Grass Is Always Greener On The Other Side