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!
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.
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! https://anchor.fm/charles-kelly
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
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:
If you must buy a leasehold flat, make sure you:
- fully understand the lease terms and
- try to buy flats where you have a share of the freehold and
- 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 charles@charleskelly.net.
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 charles@charleskelly.net.
Check out my Podcast episode "Leasehold Property Is A Legal
Landmine, Read This Before You Buy" on Anchor! https://anchor.fm/charles-kelly/episodes/Leasehold-Property-Is-A-Legal-Landmine-So-Be-Wary-e16oof
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?
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!
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.
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! https://anchor.fm/charles-kelly/episodes/Your-Health-Is-Your-Real-Wealth-So-Look-After-It-e16jia
Previous:
Tuesday, March 13, 2018
Home Based Business Ideas UK: How To Get Cashback When You Switch Bank Accounts
Home Based Business Ideas UK: How To Get Cashback When You Switch Bank Accounts: Welcome to Money Tips Daily this is Money Kelly bringing you money tips to help you save and make more money! Get A Cashback When You...
How To Get Cashback When You Switch Bank Accounts
Welcome to Money Tips Daily this is Money Kelly bringing you
money tips to help you save and make more money!
Get A Cashback When You Switch Bank Accounts.
Better interest rates on your savings and a cashback are not
the only the reasons to switch your bank account.
Thanks to competition regulations, switching a current
account isn't as difficult as it used to be. Your new bank will take care of transferring
Direct Debits and regular payments for you, usually within seven working days.
However, if anything go wrong, your new bank will take care of any costs or
penalty charges.
Here are just some of the offers available right now:
HSBC Advance Current Account offers a “Switch, stay and earn
up to £200 cashback”
First Direct 1st Account offers up to £125 subject to you
paying in at least £1,000 in the first 3 months when you apply via
moneysupermarket.com.
TSB Classic Plus Account offers an interest rate of 3% AER
on balances of up to £1,500 monthly
provided you pay in a minimum of £500 each month, register for internet
banking, paperless statements & correspondence.
Additional benefits
Some premier accounts will also offer you annual travel insurance and other benefits, such as competitive credit cards, but may charge a monthly account fee.
These are just a few of the banking deals out there and most
of the high street banks will offer you something to entice you to switch
accounts. I'm not giving you financial advice, just information so you can decide which account is right for you.
You can check out all the deals on one of the many online
comparison sites.
Of course, there are usually conditions attached to offers, and
some are exclusive to their affiliate partner comparison websites, but they are
still worthwhile if you're stuck in an old account paying low rates.
Higher savings rates
Don’t forget, there are also better rates to be had by
switching your savings and tax free ISA accounts. Even if you go from receiving 1% pa to 2% pa that means you’ve doubled the return on your money.
Banks have a habit of making old savings accounts obsolete
by dropping the interest rates, so loyalty does not always pay.
I found this out on an ISA account a few years ago. When I
opened the account the rate was one of the best on the market, but three years
later it was one of the worst!
A word of warning
One
of the questions you’ll find on many loan application forms is, “how long have
you been with your bank?”
Length of time with your bank, as well as current address or employer, does seem to affect
your credit score as is points to your stability.
Also, every time you switch to new bank they will probably
carry out a credit search which also leaves a footprint on your credit file.
By all means switch banks, but I wouldn’t be switching every
few months just to get a cashback!
You can also ask your own bank for a more competitive
account. Just tell them you’re thinking about moving!
I also look for the convenience factor of having a branch
near my work or home. Whilst we do most things through Internet banking
nowadays, there are still times when I need to visit the branch, for instance
banking cash or sorting things out when the internet banking or my phone app goes
wrong!
Keeping shopping around. Loyalty may not always pay, financial education always does!
Check out my Podcast episode "Get A Cashback When You Switch
Banks" on Anchor! https://anchor.fm/charles-kelly/episodes/Get-A-Cashback-When-You-Switch-Banks-e16fk6
Previous:
Monday, March 12, 2018
Home Based Business Ideas UK: How To Avoid Unnecessary Mobile Internet Data Roam...
Home Based Business Ideas UK: How To Avoid Unnecessary Mobile Internet Data Roam...: Welcome to Money Tips Daily this is Money Kelly bringing you money tips to help you save and make more money! Read this if you w...
How To Avoid Unnecessary Mobile Internet Data Roaming Charges And A Shock On Your Next Iphone Bill Due To A Little Known Feature Called Wifi Assist
Welcome to Money Tips Daily this is Money Kelly bringing you money tips to help you
save and make more money!
Apple offers advice to how to save data, so check out their website.
When you're travelling internationally, you can turn off data roaming to avoid roaming charges. If you have an international data plan, you may need to keep it on.
Read this if you want to avoid unnecessary mobile internet data
roaming usage and a nasty surprise on your next bill due to 'Wifi Assist'.
Do you ever find yourself running out or
running low on your mobile internet data halfway through your monthly billing
period?
Perhaps you’re wondering why you keep using
up your allowance when you are nearly always within a wifi coverage area?
The Metro reports that people using the new
iPhone or iOS9 could be in for a shock when they receive their next bill. This
is due to a little known new feature called ‘WiFi Assist’ that could be eating into
your data allowance while you are totally unaware that your money is being
spent.
The setting is designed to switch your
phone to 4G if your WiFi connection is weak. For instance, if you move away from your
house or office while on the web or Facebook, but you still have a weak
connection to your home wireless, Wifi Assist will automatically switch to your
data to strengthen the connection.
Whilst this is a helpful way to avoid a
loss of connection or buffering, fine if you have plenty of data in your plan, it could cost you a lot money.
Here’s how to solve the problem and switch
it off:
1. Go into ‘Settings’ from your home screen
2. Click on ‘Mobile Data’ (Or ‘Cellular’ if you’re in the US)
2. Click on ‘Mobile Data’ (Or ‘Cellular’ if you’re in the US)
3. Scroll right down to the bottom, and
underneath your apps you’ll find the ‘WiFi Assist’ setting. Switch it off using
the toggle.
Apple offers advice to how to save data, so check out their website.
When cellular data is on, apps and services
use your cellular connection when Wi-Fi isn't available. As a result, you might
be charged for using certain features and services with cellular data.
To turn cellular data on or off, go to
Settings, then tap Cellular or Mobile Data. If you're using an iPad, you
might see Settings > Cellular Data.
Turn Data Roaming on or off:
Turn Data Roaming on or off:
When you're travelling internationally, you can turn off data roaming to avoid roaming charges. If you have an international data plan, you may need to keep it on.
Depending on your carrier, data roaming
might be used if you travel domestically. Contact your carrier for more
information about your data roaming policy or other cellular data settings.
Even if you’re not using an iphone, you
should check with your mobile provider if your phone has similar features and
ask for their advice on how to keep your bill to a minimum.
Before I upgraded my phone and plan recently, I was going
through my data two weeks into the month and then having to ‘buy more data’. This only happened in the last few months and I couldn't figure out why.
When I go abroad outside the EU, I switch
off data roaming and use wifi, but then purchase some data in case I was out of
wifi coverage or I need to book an Uber.
Although I use it sparingly, the data seems to run out faster than box of Jaffa Cakes! We all need to keep on top of things and this is one way of saving a lot of money.
Although I use it sparingly, the data seems to run out faster than box of Jaffa Cakes! We all need to keep on top of things and this is one way of saving a lot of money.
Becoming financially aware and astute is not
just about making money, it is also watching your back for potential threats to
your bank balance and financial well-being.
The wealthy don’t only concentrate on making
money, they focus on keeping it.
Check out my Podcast episode "How To Avoid Unnecessary Data
Roaming Charges " on Anchor! https://anchor.fm/charles-kelly/episodes/How-To-Avoid-Unnecessary-Data-Roaming-Charges-e16ajj
Previous:
Sunday, March 11, 2018
Home Based Business Ideas UK: The Rich Don't Need You To Be Poor For Them To Be ...
Home Based Business Ideas UK: The Rich Don't Need You To Be Poor For Them To Be ...: Welcome to Money Tips Daily this is Money Kelly bringing you money tips to help you save and make more money! The rich don't need...
The Rich Don't Need You To Be Poor For Them To Be Rich
Welcome to Money Tips Daily this is Money
Kelly bringing you money tips to help you save and make more money!
The
rich don't need you to be poor for them to be rich. There is not a finite
amount of money to go round because wealth and economies expand. Henry Ford
understood this 100 years ago when he mass-produced (using assembly lines and
division of labour methods) the famous low-priced model T Ford – the car for
ordinary people.
People from all over America and Europe flocked to Detroit to work for Ford because he paid his factory workers very high wages, thus creating a
middle class of people that could afford to buy his cars.
Ford, who left school
at 14, famously said that his customers could have the car in any colour they
wanted, as long as it’s black!
Entrepreneurs
like Ford helped make the U.S. the world’s largest economy, and it still is
today, closely followed by China!
We
are now living in a technological, rather than an industrial revolution and
entering a new digital age. Twenty five years ago, did we all have mobile
phones and laptops? No, as these were expensive luxury items.
Today
almost everybody has a mobile phone, or smart phone, a tablet and laptop. Our
monthly mobile phone bill is more than we used to pay every quarter for a
landline.
Where did all this extra money come from to pay for all this stuff?
The answer is the economy has expanded and people today have higher living
standards and more things then we have ever had.
The
availability of credit and innovative leasing schemes plays its part of course,
but mass production brings down the cost of luxury items making them available
to everyone, just like it did in Henry Ford’s day when only the rich could
afford a car.
Bill Gates, Mark Zuckerberg, and Steve Jobs didn't need us to
become poor in order for them to get rich. In fact, they enriched our lives,
created wealth, employment and thousands of millionaires.
The wealthy are often referred to as "greedy" or "fat cat businessmen" who should pay "their fair share", when the top earners and companies actually pay most of the taxes the government receives.
I'm telling you this because there is an abundance of money in the world and for those that provide value and service to the marketplace. The rich are not taking your slice of the cake, they are creating their own bigger cake, and you can do the same.
The wealthy are often referred to as "greedy" or "fat cat businessmen" who should pay "their fair share", when the top earners and companies actually pay most of the taxes the government receives.
I'm telling you this because there is an abundance of money in the world and for those that provide value and service to the marketplace. The rich are not taking your slice of the cake, they are creating their own bigger cake, and you can do the same.
The store with no name
Talking
about the late Steve Jobs, I was in a London shopping mall today and visited an
Apple store. It was packed with fans, and especial families and young kids on
mini iPads having fun and joining tutorials.
It reminded me of how MacDonald's took over inexpensive kids birthday parties and created a generation of people who had a warm fuzzy feeling whenever the passed by one of their restaurants.
Apple
are so confident of their brand they don’t even put a sign on the front of the
store, just a discreet logo on the side.
Nowadays,
iPhones and other smart phones are even used in third world countries, where
they don't even have a full network coverage of landlines.
We
can literally run our lives and businesses from our smart phones, access the
web, write a book and we have more songs at our finger tips then we ever did in
a record and CD collection!
I’ll
be giving you some tips on how to save data usage and money, so keep tuning
into Money Tips Daily.
If
you want to join and contribute to our 58,000 strong Facebook group, visit Money
Tips Daily Community.
Previous:
Check out my Podcast episode "The Rich Don’t Need You To Be
Poor For Them To Be Rich" on Anchor! https://anchor.fm/charles-kelly/episodes/The-Rich-Dont-Need-You-To-Be-Poor-For-Them-To-Be-Rich-e1660s
Saturday, March 10, 2018
Home Based Business Ideas UK: Avoid Litigation Be A Mediator Not A Litigator
Home Based Business Ideas UK: Avoid Litigation Be A Mediator Not A Litigator: Welcome to Money Tips Daily this is Money Kelly bringing you money tips to help you save and make more money! Avoid litigation. The wel...
Litigation Can Bankrupt You So Be A Mediator Not A Litigator
Welcome to Money Tips Daily this is Money Kelly bringing you
money tips to help you save and make more money!
Avoid litigation. The well-known phrase "I'll see you
in court" often ends in the bankruptcy court or losing your house to pay
legal costs, which can run into millions.
Not only is litigation costly in terms of legal fees, but it can also
take up an awful lot of time and energy, and literally drain you emotionally.
I once got involved in a dispute over a £500 unfair charge
by a freeholder on a leasehold flat I owned. To cut a long story short, they
kept escalating to so-called ‘costs’, like a game of poker, and we ended up
going to court, but by this time they were claiming £14,000!
The case took two
years of my life fighting this small dispute. In the end, with the help of a great
city barrister, who charged me £2000 upfront, I won the case and got my legal
costs back. However, in reality I had lost hundreds of hours of my time, energy
and sleepless nights.
At all costs, avoid going to court and use arbitration
services, ombudsman or just common sense to settle disputes. Sometimes you just need to talk!
Courts and Judges are notoriously fickle and you can never
guarantee which way a case will go. Barristers know that if you upset a Judge, for instance by arguing or not submitting papers on time, the case could go against you.
In the case of smaller disputes over charges you think you are incorrect, it is sometimes better to pay the
charge and dispute it after (obviously not in the case of a dodgy builder who has just messed up your kitchen) . This especially applies to utility companies,
banks and credit card companies, who have an unfair advantage over us in that
they can register a late payment or default against us which will damage or
credit rating, without even going to court.
Bonus tip. Add legal expenses insurance to your household
and motor insurance. It is usually very inexpensive and could save you a lot of
money.
Action...Be a mediator not a litigator.
Check out my Podcast episode "Avoid Litigation Be A Mediator
Not A Litigator " on Anchor! https://anchor.fm/charles-kelly/episodes/Avoid-Litigation-Be-A-Mediator-Not-A-Litigator-e1632k
The Reason Why Property Is The Best Investment
Over the last couple of days, we have talked about property
and why falling prices can have an adverse effect on the whole economy.
Inflation reduces the real value of your mortgage but increases the value of you house
Over the past few centuries, inflation has increased the value of assets like property, but decreased and eroded the buying power of the money in your pocket.
Think about it. If the Duke of Westminster's great, great, great grandfather had stuck his money in a bank instead of buying and developing most of the freehold land in London's Belgravia (Harrods, Knightsbridge, etc) would they be as wealthy today? Of course not! The family would have nowhere near the £10 billion or so the current Duke has inherited from his late father.
Despite the recent fall in prices, I still think property is one of the best long term investments an ordinary investor can put his or her money into. Bricks and mortar, as my mum used to say!
Let me tell you why.
Let me tell you why.
Firstly, you can enjoy an income from your residential buy-to-let
or commercial property.
Secondly, you can also benefit from capital growth in the
value of the property over the longer term, as it has done in the past, although this is by no means guaranteed. You do not capital appreciation in a bank deposit account, other than reinvesting your interest, which means you no longer receive income.
Lastly, there is another reason why property has proved so popular and why I think it has the edge over the vast majority of
investment schemes that a financial advisor or bank will try and sell you.
Leverage
Leverage
Leverage, or the ability to borrow money not only to help
purchase the asset, but also secured against the asset you are buying with no other security required.
Investors often take it for granted that you can buy a
property with a mortgage or loan and repay it over 20 or 30 years.
In the case of investment properties (as opposed to a residential mortgage), the tenant pays the mortgage for you and in most cases there will be a residual income
over and above the mortgage repayments.
You can also rent out a room in your own home, tax free, which could also pay your mortgage for you.
You can also rent out a room in your own home, tax free, which could also pay your mortgage for you.
Okay, you need a deposit, which can range from 25 to 35% of
the property value depending on where you are and market conditions.
You can’t blame the banks for wanting you to put some skin
in the game. The deposit, or equity in the property, protects the bank’s
interests in case you should default on the loan or market conditions take a
turn for the worst.
Buy a £100,000 for £25,000
Buy a £100,000 for £25,000
Even if you have to find a deposit of 25%, it is still an
amazing deal. As one investor put it to me in simple terms:
“I can buy a £100,000 house for £25,000 and the tenants will pay the rest”.
She and her builder husband bought a string of houses in the 1990's, when you could buy a house for £60,000 in East London, and made a fortune.
“I can buy a £100,000 house for £25,000 and the tenants will pay the rest”.
She and her builder husband bought a string of houses in the 1990's, when you could buy a house for £60,000 in East London, and made a fortune.
Compare property with other forms of investments, such as stocks and shares, unit trusts or mutual funds, which the average financial adviser will usually
recommend as "sound investments".
Just for fun, ask the advisor if you can obtain a loan from the bank in order to purchase these sound investments. Of course they will tell you that this is not possible and if you dig a bit further you discover that these investments are not considered as suitable security (or too risky) for a bank loan or mortgage. The bank would probably consider this to be speculation and would not give you a loan to buy them.
Just for fun, ask the advisor if you can obtain a loan from the bank in order to purchase these sound investments. Of course they will tell you that this is not possible and if you dig a bit further you discover that these investments are not considered as suitable security (or too risky) for a bank loan or mortgage. The bank would probably consider this to be speculation and would not give you a loan to buy them.
On the other hand, banks are
happy sell you these products, many of them
managed by their own fund managers, as a medium risk investment to help secure your future. They are happy for you to risk your money, but they would not risk their own money.
Most pension schemes invest in similar funds, the value of which can go up or down depending on the markets. An increasing number of younger people are placing their retirement in the hands of a fund manager and the whim of the markets when they retire.
Most pension schemes invest in similar funds, the value of which can go up or down depending on the markets. An increasing number of younger people are placing their retirement in the hands of a fund manager and the whim of the markets when they retire.
Unlike property, you have little or no control over these investments, which
will also be depleted by management charges and some upfront commissions.
Inflation reduces the real value of your mortgage but increases the value of you house
I have purchased most of my investment properties on
interest only loans where I do not pay any capital back on a month-to-month
basis.
I allow inflation in property values to take care of the
loan, which will be much smaller in real terms by the time I get to the end of
the mortgage.
In other words, if you borrow £500,000 today, the value and
purchasing power of that amount of money will be much smaller in 25 years time.
You may even be able to pay it from your savings or pension.
Over the past few centuries, inflation has increased the value of assets like property, but decreased and eroded the buying power of the money in your pocket.
Think about it. If the Duke of Westminster's great, great, great grandfather had stuck his money in a bank instead of buying and developing most of the freehold land in London's Belgravia (Harrods, Knightsbridge, etc) would they be as wealthy today? Of course not! The family would have nowhere near the £10 billion or so the current Duke has inherited from his late father.
I also have the options of making lump-sum repayments or
even selling the property further down the line. If you bought two similar houses bought with same sized interest only mortgages and sold one 10 years later, the chances are you would now one of them outright. In the meantime, you have enjoyed two lots of income and had 'double bubble' in growth.
This is just my preference and you may wish to pay down
your loan more quickly by taking a repayment mortgage, which also has advantages. As always, take advice
from an independent financial advisor and a solicitor.
Build wealth from nothing
Build wealth from nothing
Getting back to leverage, the ability to use other people’s
money allows you to build a portfolio or buy far more than you would otherwise
be able to do.
When I bought my first residential flat in Ilford, East London many years ago, I could barely scrap together a 10% deposit, or just under £2000 with fees etc, let alone save the entire amount to buy the property outright. The loan from the Nationwide Building Society helped me get my foot on the ladder and out of rented accommodation at the age of 20.
In the six months it took from offer to completion, interest rates jumped from 12.25% to 15.25%, almost doubling my repayments! It was killing me! I had just got married and we had a baby girl, so went down to one income.
When I bought my first residential flat in Ilford, East London many years ago, I could barely scrap together a 10% deposit, or just under £2000 with fees etc, let alone save the entire amount to buy the property outright. The loan from the Nationwide Building Society helped me get my foot on the ladder and out of rented accommodation at the age of 20.
In the six months it took from offer to completion, interest rates jumped from 12.25% to 15.25%, almost doubling my repayments! It was killing me! I had just got married and we had a baby girl, so went down to one income.
When I sold the property two or three years later during a tough recession we made a tax free gain of £10,000.
I used the money to put down a deposit on a 3 bed terraced house, which also went up in value over the following four or five years.
Later, I released some equity from my property and used the money to buy a second property which was rented out.
I used the money to put down a deposit on a 3 bed terraced house, which also went up in value over the following four or five years.
Later, I released some equity from my property and used the money to buy a second property which was rented out.
To cut a long story short, I have repeated this process
throughout my investment journey and by using other people’s money (OPM) I was able
to create substantial equity and wealth from none of my own money. Remember, I started with just £2000 used to buy a tiny 2 bed residential flat.
Many other investors I know have done this far more
aggressively and built up portfolios of hundreds of properties after starting
with almost nothing.
I can hear some of you saying, well that’s alright in rising
market, but there are many other strategies you can learn which do not require
the property to go up in value so quickly.
Contrary to popular belief, you don't need 'money to make money'. You do need education and a little imagination - if you haven't got imagination, just copy other successful investors!
Contrary to popular belief, you don't need 'money to make money'. You do need education and a little imagination - if you haven't got imagination, just copy other successful investors!
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 charles@charleskelly.net.
Check out my Podcast episode, "The Reason Why Property Is The
Best Investment" on Anchor! https://anchor.fm/charles-kelly/episodes/The-Reason-Why-Property-Is-The-Best-Investment-e15ubk
Friday, March 9, 2018
Home Based Business Ideas UK: The Reason Why Property Is The Best Investment
Home Based Business Ideas UK: The Reason Why Property Is The Best Investment: Over the last couple of days, we have talked about property and why falling prices can have an adverse affect on the whole economy. ...
Home Based Business Ideas UK: Does It Matter If Property Prices Fall? Find Out W...
Home Based Business Ideas UK: Does It Matter If Property Prices Fall? Find Out W...: Welcome to Money Tips Daily this is Money Kelly bringing you money tips to help you save and make more money! Yesterday, I talked about...
Thursday, March 8, 2018
Does It Matter If Property Prices Fall? Find Out Why You Should Care
Welcome to Money Tips Daily this is Money Kelly bringing you
money tips to help you save and make more money!
Yesterday, I talked about falling house prices in the
UK, and some of you asked why this matters.
There are a number of aspects to consider. The recent price drop might be good news for buyers but bad
news for sellers. For people who already own property the news of small
fluctuations in values might not be good or bad, as they will still be sitting
on an asset whether the value is increasing or decreasing.
If you own a buy to let property let to a tenant, the rent
is not going to change month on month even if the value increases or decreases.
But if prices continued to fall and or there was a crash,
the banks might start getting nervous and could ‘call in’ (ask for their money
back) loans for borrowers who are highly geared – mortgaged up to a high
loan-to-value (LTV), e.g. you owe £90,000 on a property valued at £100,000 or
90% LTV.
This happened during the last property crash in 2008 when
some banks decided to ask the borrowers to repay the loan because it was too close
to the value of the property based on their reassessment in light of the
downturn.
In most cases, the borrower (like many I knew personally) were still making the monthly payments
without any problems, but the lender had to reduce their exposure and demanded
the money back.
Quite a few investors lost everything, because they could not find
another lender to give the money to repay the first bank in time. Banks want to give you an umbrella when the sun is shining and trying to arrange a remortgage in 30 days during a financial crisis in not easy!
You may not be aware that mortgages can be ‘called in’,
so take time to read mortgage conditions and take legal advice. Also, look for fees and early repayment charges. As always, take legal and financial advice, as this article is not designed to give you financial advice.
Some of you may be wondering what all the fuss is about on property prices or saying, “who the hell cares, what’s it got to do with me?”.
The reason is that property and house building are very
important to the UK economy. The building industry employs millions of people (directly and indirectly) and the property market is a reflection of the health of the economy,
especially in terms of consumer confidence.
When property prices are increasing, consumers are confident
and will spend their money on stuff, which further boosts output (GDP) and creates
more jobs and employment in other sectors of the economy.
Consumer confidence tends to be higher when people think, “Hey
my property value has gone up by hundred thousand pounds this year, I feel
great so I’m going to spend money on a new car or an extension, especially when
I can borrow against my property at low interest rates”.
This consumer confidence keeps the economy moving, but too much spending can
lead to overheating and higher inflation, which makes central banks nervous.
The Bank of England and the government do not like to see
some new people having a good time, as later down the road the country could
wake up with a bad hangover!
Another aspect to consider is that when property prices are
falling builders will be less wiling to build more houses, even if the Prime Ministers tells them to do so, as they
might not be able to sell them when they are completed.
Builders and developers
have to do look ahead sometimes three or five years time and project whether or
not the market conditions will be right to sell those properties. The government wants builders to put up houses as fast as possible or
within a couple of years of obtaining planning permission, however the builder
must carefully consider the financial aspects in order to make a profit and survive in the
industry.
In previous property crashes in the 1980s and 1990s many
developers got caught with their pants down and were stuck with thousands of
properties they could not sell. This also happened in Ireland and United
States. Developers went bust, banks could not their money back and some even failed.
The UK government had to bail out banks like Northern Rock
and RBS during the financial crash to steady the markets.
If everyone today went to the bank and asked to withdraw
their money, known as a run on the banks, they would quickly run out of cash and would close their doors. Bank lend your money out and do not not have it sitting in the vaults.
As
you can see, economy is often balanced on a knife edge and everybody has to
keep their nerve, especially during crisis, or it can all come crashing down like a deck of
cards as happened in 2008.
During crashes, some of my friends everything, but others make a
killing, snapping up bargain shares, assets and houses from motivated sellers at
pennies on the pound.
We are not in that situation today. I think we all know that over the long term property rises
in value and has been a great investment for centuries.
Many of the wealthiest people on the Sunday Times Rich list
have either made their money in property or invest in property to shelter their
capital. There are many more property investors who keep a low profile and
prefer not to appear in these rich list!
Staying on the property theme, tomorrow, I’ll give you my
number one reason why I believe property is a superior investment compared to
almost every other form of investment.
Finally, commenting on women in business on international
women’s day, Dr Liam Fox, Secretary of State for International Trade and
President of the Board of Trade since 2016, told an audience on BBC Question
Time that women in developing nations need more help to set up e-commerce
businesses.
He added, “four out of five off-line physical businesses are
owned by men, whereas four out of five online
e-commerce businesses are owned by women”.
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