Friday, March 16, 2018

Home Based Business Ideas UK: 10 Money Tips That Could Save You From Financial R...

Home Based Business Ideas UK: 10 Money Tips That Could Save You From Financial R...: Welcome to Money Tips Daily this is Money Kelly bringing you money tips to help you save and make more money! A few days ago, I said th...

10 Money Tips That Could Save You From Financial Ruin

Welcome to Money Tips Daily this is Money Kelly bringing you money tips to help you save and make more money!

A few days ago, I said that becoming financially aware and astute is not just about making money, it is also about watching your back for potential threats to your bank balance and financial well being.

Tony Robbins used to run a ‘wealth protection’ service for people with large sums of money, and Jim Rohn advised us to build a financial wall around our family so strong that nobody could knock it down.

The wealthy don’t only concentrate on making money, they also focus on keeping it (probably the two most important basic components of being wealthy) and protecting themselves against liabilities and threats, but you don’t have to be rich to protect yourself too. After all, the less money you have, the more a loss will hurt you.

Businesses do regular S.W. O.T. (Strengths, Weaknesses, Opportunities and Threats) analysis exercises and risk assessments as a matter of policy, and so should you.

You are your greatest asset, so look after you! Act as if you are the CEO of your own corporation and start thinking of yourself as if you are a business.
More than at any time in history, we are surrounded by potential threats to our wealth and liabilities which could bankrupt us or worse still, send us to prison.

I’m not scaremongering or exaggerating the threats to your wealth so do not ignore this message – ignorance of the rules of the game will not offer you any defence.

Some threats are relatively small, like the increased likelihood of receiving a fine for speeding, parking or unwittingly drifting into a bus lane whenever you drive into a major city.

Others are far more serious, for instance:

  • keeping all your money in one bank (this would particularly apply to those holding more than £85,000/£170,000 for joint accounts amount protected by the government Deposit Guarantee Scheme) 
  • having your money devalued by a government (Greece, Cyprus, Latin America) 
  • currency swings or economic downturns
  • changes in legislation, which could hit your business or that of your employer
  • changes in the business environment or technology 
  • changes to your agreements by financial or utility providers
  • an unscrupulous freeholder landlord gaining control of the freehold and management of your leasehold property
  • For some, Brexit is a threat, although for others it may be an opportunity.

If you have assets and investments you should carry out regular reviews with an independent financial adviser who is not dependent on the commission from selling you insurance-linked products.

Forgetting to pay any small bill these days can quickly lead to a CCJ (County Court Judgement), bailiffs banging on your door at enormous cost or a default, which will completely ruin your credit history for up to six years.

I have discussed this earlier in relation to credit cards, as people often pay their bills a few days later than the due date (which is not the date you think) and find that the trigger happy banks have been reporting you as a late payer or in arrears.

This equally applies to utility bills, mortgage payments and especially parking fines, which can quickly escalate into thousands of pounds once courts and bailiffs can their sticky hands on you.

Liabilities include being sued by an increasingly litigious society and ‘no win no fee’ ambulance chasing lawyers. In a recent case, a mother is being sued by the mother of a boy who was accidentally hit in the eye when standing behind another child swinging golf club at a mini-golf kids party.

10 Tips that could save you from financial ruin

1. Pay recurring bills by Direct Debit, or standing order, so you do not overlook the due date.

2. Pay bills on time, especially tax, or inform your creditors that you need more time. 

3. Never ignore a legal letter, especially one concerning a debt or tax liability, and don’t bury your head in the sand hoping it will all go away like a bad dream.

4. Pay and keep your taxes up-to-date and fully compliant! In my book, Yes, Money Can Buy You Happiness, I have written about “The Stars Who Lost It All”, and one of the biggest reasons big stars who have earned millions went bankrupt was their failure to pay their taxes.

5. Check your credit rating and file at least once a year for errors registered against you. This is really easy to do online and I have written about tips to improve your credit rating in an earlier episode.

6. Never sign Personal Guarantees or be a guarantor for a friend or relative without taking legal advice, and never sign anything you have not read and understood – even those boring terms we all agree to online.

7. Avoid litigation and suing people, which are still the preserve of the rich and famous. Wherever possible, try to mediate and sort things out without going to court and use legal action as a last resort. Be a mediator, not a litigator!

8. Insure yourself against liabilities, for instance by adding public liability to your home insurance. You can also take out very inexpensive liability insurance to cover yourself when you run an event or children’s party. In my experience as a financial adviser, smart people insure themselves, their property and cover themselves against potential public or employer liability claims.

9. Take legal advice and be very wary of leasehold properties and signing any leases for business premises or shops. Leasehold properties are a legal minefield and are covered in more detail in an earlier episode. In business, I use a limited liability company, rather than acting as a 'sole trader'.

10. Review your financial circumstances regularly with an adviser or with your family, partner or spouse. The importance of this tip cannot be overstated. You must review at least once a year.  

Finally, watch your back! Keep your eyes and ears open and be alert to any potential threats. Carry out a regular S.W.O.T. and annual risk assessment as part of your financial review - this risk isn't always external, it could come from something you are doing.

Check out my Podcast, Money Tips Daily by Charles Kelly, former IFA and author of Yes, Money Can Buy You Happiness., on Anchor!

See also:

Thursday, March 15, 2018

Home Based Business Ideas UK: Leasehold Flats Are A Legal Minefield, Read This B...

Home Based Business Ideas UK: Leasehold Flats Are A Legal Minefield, Read This B...: Are Leasehold Flats A Ripoff Or A Good Investment? Welcome to Money Tips Daily this is Money Kelly bringing you money tips to help yo...

Leasehold Flats Are A Legal Minefield, Read This Before You Buy

Are Leasehold Flats A Ripoff Or A Good Investment?

Welcome to Money Tips Daily this is Money Kelly bringing you money tips to help you save and make more money!

Leaseholds properties are a legal landmine for the hundreds of thousands of uninitiated buyers purchasing leasehold flats every year.

Leasehold flats can be a legal minefield for the unwary buyer

Like me, the majority of first time buyers, as well as buy-to-let landlords, will buy a leasehold flat under rules which exist in very few countries outside the UK.

When you buy most flats in the UK, you are a tenant under a long lease which usually runs for more than 99 years, but diminishes in value as the lease gets shorter.

You pay ‘rent’, known as ground rent, to the ‘landlord’ or freeholder, which used to be a peppercorn rent but on new developments is increasingly running into several hundred pounds with sharp increases in the future.

You will also pay a service charge for insurance and upkeep of common areas. In blocks which have lifts, pools and concierge desks, expect to pay from £2,000 pa upwards.

In my experience of smaller blocks, the charge starts at a minimum of £100 per month for doing almost nothing apart from maybe a bit of cleaning or grass cutting, with larger maintenance being charged on top.

Management companies choose their own contractors to carry out works, which always cost about 5 times what you could get the job done for! 

Have you actually read your lease and if so, do you understand it?

The answer to both questions is invariably “no” because most of us give up after the first few pages because the ancient legal language is virtually impossible to understand unless you’re in the legal profession.

Who writes the laws? Lawyers of course! Of course we need Solicitors when buying a property, but ask them to explain everything and don’t be embarrassed to ask ‘silly’ questions!

Following the Grenfell fire, thousands of leaseholders are facing huge costs to remove unsafe cladding from their blocks of flats following a recent court judgement in Croydon.

Tenants will have to pay thousands of pounds to replace cladding on a recently built Barratt Homes development, despite buying their properties in good faith and presumably being reassured by a survey and NHBC 10 year guarantee against defects.

The London Mayor said the ‘government’ should pay, in other words, taxpayers who don’t even own a leasehold flat!

Did you know that forgetting to pay ground rent or service charges, or complying with maintenance orders could result in your lease being forfeited? That’s right, the freeholder can take your property back like some feudal landlord.

Leases are written in favour of the freeholder granting the lease, not the leaseholder paying hundreds of thousands of pounds.

Charity spends £114,000 to defeat a leaseholder over £6,000 disputed charge

Don’t take my word for it, just Google ‘leasehold problems’ and read some of the cases where leaseholders have tried to take on landlords.

In a recent case, a well known charity spent £114,000 to defeat a leaseholder in Onslow Square in Kensington over a £6,000 dispute – which came down from £8,247 originally demanded. The huge legal cost bill means that the woman leaseholder will have to sell her home.

I had a similar problem with a landlord, who I later discovered owned 12,000 freeholds, which I fortunately won thanks to a brilliant barrister and an understanding judge. Had I lost this David vs Goliath case, I would have had to pay out £20,000 in so-called legal costs over a £500 dispute!

I now prefer to buy freehold for obvious reasons, but realise that it is not always possible.

3 Tips when buying a leasehold property

If you must buy a leasehold flat, make sure you:

  1. fully understand the lease terms and
  2. try to buy flats where you have a share of the freehold and
  3. the tenants/leaseholders have control of the management.

Leasehold tenants can take back control of management subject to the ‘right to manage’ rules, but the law still doesn’t go far enough in protecting vulnerable leaseholders and a proper leasehold reform Act is long overdue.

As always, take legal and financial advice before entering into an agreement, and make sure you READ and UNDERSTAND that lease.

Education is key to investment success

If you would like to learn more about property investment and attend a seminar, I have a limited supply of complimentary tickets for an event with a leading training provider - email me

Check out my Podcast episode "Leasehold Property Is A Legal Landmine, Read This Before You Buy" on Anchor!

Previous articles:

Wednesday, March 14, 2018

Home Based Business Ideas UK: Your Health Is Your Real Wealth, So If You Want To...

Home Based Business Ideas UK: Your Health Is Your Real Wealth, So If You Want To...: We know that we need good health to enjoy happy and fulfilled life, but do we need to be fit and healthy in order to become successful or...

Your Health Is Your Real Wealth, So If You Want To Be Truly Rich, Keep Fit

Welcome to Money Tips Daily this is Money Kelly bringing you money tips to help you save and make more money!

We know that we need good health to enjoy happy and fulfilled life, but do we need to be fit and healthy in order to become successful or wealthy?

Whilst there are always exceptions to the rule, 95% of successful people I have met and observed over the last 30 years in business have all kept fit and looked after their health.

The other 5% are invariably either burned-out, had a heart attack or are sadly no longer with us.

If you think of the wealthy and successful people you know, you generally find that they do something to keep themselves fit. It could be golf, going to the gym, swimming, hiking or playing a sport.

They are active physically and mentally, and often do something for their community.

I personally know several multi-millionaires who volunteer, give their time and donate their money to charitable causes and service clubs like Rotary.

Unfortunately, people at the lower end of the pay scale are more likely to be obese and suffer from more health problems, even though it costs nothing to take a 30 minute walk and less money to give up smoking and drinking. We know this from studies done in poorer parts of the country.

You might say, “well it’s alright for the rich, they have the time and money to go to the gym, hire personal trainers and pamper themselves”. But I would say the opposite is true. 

Wealthy people who run businesses have less time. They have hectic schedules and work longer hours than the average person, just like I did when I did when I was in business. They have the same problems as the rest of us, but the difference is they manage their time and life.

Saying that you have no time to take part in physical activity is just as illogical as saying you have no time to eat or sleep. In other words, it’s a false economy and you will end up paying the ultimate price. In all of the above cases you will eventually get sick, burn out or die.

Make the time to do at least 30 minutes a day of some physical activity which increases your heart rate or makes you sweat. If you make the time to do this you will find that you have more time and energy to do the other things in your life.

You have to move to groove! 

It takes a lot of energy and focus to be successful in any endeavour, so build up your store of energy by eating the right foods, getting a good night's sleep and exercising.

I was guilty of neglecting my health when I was running a business. I stopped exercising and eating properly and justified my behaviour by convincing myself that I was so busy with important work. But what’s more important than your health?

  I now MAKE time to go to the gym or exercise

Eating late at night with a glass of wine, or two, didn’t help either. Over time, I started to put on weight and my clothes mysteriously started to shrink! I became less fit and had less energy to cope with the trials of the day.

How can you be motivated when your body feels tired or unhealthy? You can look in the mirror and try and convince yourself with affirmations like "I feel terrific", but if your body is answering you back with "I feel like crap", you're not fooling anyone!

Eventually, I saw that what I was doing was foolish and changed my habits. It takes at least 4 - 6 weeks to change a habit by daily actions, but after that it becomes easier.

I now MAKE time to go to the gym and whenever possible I walk and climb stairs rather than taking the lift. I have also cut back on drinking and try to eat a balanced diet.

As a result, I’ve lost around 5 kilos; I feel a lot more energetic and can even get back into my old Levis again!

And when I feel better, guess what? I have more motivation to do the things I want to do and finish those ‘projects’ we all have, like my forthcoming book, Yes, Money Can Buy You Happiness, which will be published soon after many years as a 'work in progress'.  

Your health is your real wealth, don’t neglect it, because when it’s gone you seldom get it back.

Check out my Podcast episode "Your Health Is Your Real Wealth So Look After It!" on Anchor!