The UK is now
paying almost £9 billion per month to service its debt of £2 trillion – close to
100% of GDP.
In America, the
situation is even worse with an acknowledged debt of $30 trillion costing $600
billion per annum.
The real American
liability amounts to over $150 trillion if you take into account pensions and
social security liabilities. The UK has a similar problem with unfunded
pensions, state benefits, elderly care and the NHS.
With record low
interest rates the debts I’ve just about manageable, but what would happen if
interest rates went up to a normal five or 6%?
The ONS said that
by December 2020 9 million people had to borrow more money.
Where will
this all end?
The answer is
that nobody knows because we’ve never been in this situation before where every
country in the world is printing money like there’s no tomorrow.
Inflation looks
set to rise which will force up interest rates plunging millions and some
government into bankruptcy.
You need to
educate yourself about money, so that you know how to build and preserve your
wealth when disaster strikes.
Would
you like to learn how to become financially free without working any harder and
spending your life exchanging your time for money watch this free on demand training now to learn how to become financially
free without working any harder.
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a thank you, I will give a special free gift which can help transform your
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Is the welfare state system is broken, and if so, what are you
going to do to fund your retirement and elderly care?
When I was growing up in London there were different waves
of migrants coming into the country. Many members of my extended family were
coming over on the boat from Ireland, where there was little opportunity and
widespread poverty. I also went to school with many first generation migrants
from Cyprus, India, East Africa and the Caribbean.
Later on, I saw other waves of immigration from places like
Uganda, after Idi Amin literally kicked out all of the Asian population, and
the Philippines.
I noticed that many of them bought their own houses rather
than relying on council housing, perhaps because this was not so readily
available to them as it was to the indigenous population.
Like some of my own family, they rented out part of their
house or took in a lodger to help make ends meet. Sometimes, the rent they
would and would often cover their mortgage and enable them to save money for
another house. It was inconvenient in some ways and not as comfortable as
having your own space to yourself, but they did what it took to get on.
They also had a higher tendency to start their own
businesses, based on my anecdotal observations. Perhaps because they could not
find a job which utilise their education and skills from their own country.
I also noticed that they worked harder than the average
person and often had two or three jobs.
Most British people still believed in and depended on the so-called
“cradle-to-grave” welfare state brought in after the war. They were told by the
government that they will be looked after from the time they were born until
they were buried.
Everything was meant to be free from healthcare, education
up to university level to elderly care. People pay taxes and national insurance
contributions which was supposed to provide for their pension in old age. They
also had the safety net of the benefit system which meant that they were paid
if they were unemployed or could not work.
During my early years in financial services, people would
often say things like, “the government will look after me if I don’t have enough
pension savings”, or “the state will look after my wife and children if I die
with no insurance”. In many ways, they were correct. The state does provide
benefits for people who retire without any pension, which seems on fair to all
of those people who have sacrificed and saved for retirement.
Mature Times Recently quoted a report by Canada life that
almost 2 in five pensioners or 38% of claimants receive less than £150 a week.
Can you live on £150 per week? You can probably survive on
it but you can’t live comfortably on the state pension or benefits, which is
why are you here of pensioners freezing to death in the winter or having to
make the choice between food or heat. Most people blame the government but the
fact is we all have the opportunity to work and say during our lifetime.
Furthermore,, The amount most people pay in taxes during their lifetime hardly
covers what the government needs to spend to keep everybody safe, healthy and
happy let alone provide income and benefits for another 20 or 30 years in
retirement. In other words, if someone on a low income was refunded all the
taxes they’d paid during their lifetime it would not be enough to live on for
almost as many years in retirement as they had spent in work.
The welfare system is broken and unsustainable. This is why
successive governments have had to change the rules and move the goalposts.
Retirement ages have increased, people have to sell their homes to pay for
elderly care in nursing homes and university education is no longer free in
England.
Most governments have had to borrow money to make ends meet
based on the current expenditure, which means that the country is not paying
its way as it has in the past. When we talk about the government, we are really
talking about the money we all and businesses pay in taxes. That’s it.
There is no magic fund sitting there and there are no oil wells to subsidise
us. The money through taxes come in and goes out.
When the welfare state was devised just after the war in the
1940’s, it was estimated that in average people would live for less than 5 years
in retirement – a large proportion of males died before they were 50 and a 70
year old seemed ancient! I know people in their 70’s now who look and act like
someone in their 50’s. The actuaries then also calculated that the number of
people in work would be able to support the number of people in retirement in
the tax payer funded pay-as-you-go old aged pension system. There is no old state
pension ‘fund’ put aside for you.
The above seventy-year-old assumptions are long out of date.
People are now living far longer on average and there are now more people in
retirement and ever before. More worrying, the ratio of working people to
retired has changed dramatically.
As in other developed countries, advances in medicine and
diets have contributed to UK citizens living longer, a trend set to continue.
By 2050, the proportion of the UK population aged 65 and over is projected to
reach nearly a quarter at 24 per cent, up from 17 per cent in 2012, according
to the ONS.
The fastest increases will be among the “oldest old”, with
the proportion aged 85 and over forecast to treble from 2 per cent to 6 per
cent.
Academics say these rapidly evolving demographic changes
will affect everyone in society, not just the elderly.
An even bigger problem is that as the proportion reaching
retirement age grows, the number of working age people will shrink as birth
rates decline.
This is a concern because UK state pension payments are
funded through taxation and national insurance contributions from those of
working age. It could be described as some similar to a legalised ‘Ponzi’
scheme.
Tax revenue from those in work may fail to keep up with
demand for social security — and governments will have to make tough choices, according
to David Sinclair, International Longevity Centre UK in an article in the FT.
The number of working age people to every pensioner, or the
“old age support ratio”, is forecast to fall to 2.9 by 2050, from 3.3 in the
mid-1970s to 2006, or a 10% drop. That’s less than 3 people working to support
one person in retirement and all of the other benefits as well as healthcare, social
care, education, security and defence. I’m not an economist, but to me the
figures just don’t add up!
“Tax revenue from those in work may fail to keep up with
demand for social security and healthcare from an increasingly large proportion
of people aged over 65 and out of work and who have poor health,” said Mr
Sinclair. “This will force governments to make tough choices.”
This is already happening. Not unaware of the looming
problem, the government has pushed back the qualification age for the state
pension to 67 by 2028. The state pension age will equalise at
65 for women and men by 2018.
The government has also taken steps to address big
shortfalls in private pension savings, through the automatic enrolment of
eligible staff into workplace pensions.
Under this policy, 2 per cent of a worker’s qualifying
earnings is saved into a pension, comprising a contribution from employer, employee
and tax relief, rising to 8 per cent by 2018. However, the pension scheme is a
defined contribution, rather than benefit, and returns and not guaranteed and will depend on fund
growth, much of which will be stock market based.
Like Universal Credit, these policies are not vote winners. When
the state owned BBC recently announced that it would be removing free TV licenses
(which costs about £13 per month) for the over 75's, there was public outrage
and a campaign has already started to reverse the decision. I expect the BBC
will cave in under pressure and have to make cuts elsewhere.
Since the new pensions policy was introduced, 5m have been
automatically enrolled. But there is a concern new “Freedom and Choice” reforms
giving pension savers full flexibility to spend pension savings as they wish,
such as on cars or holidays and not on a secure pension income, could undermine
auto-enrolment.
“Before the age of 65, workers are actively nudged into
pension saving through auto-enrolment,” says James Lloyd, director of the
Strategic Society Centre, a think-tank.
If you would like to find out more about your pension entitlement
go online or contact the Department of Work and Pensions (DWP) for a forecast.
You can top up your state pension or fund your own
private pension scheme or employers’ scheme. In reality, most people are not
saving nearly enough into their pension plan, as I explained in my earlier
podcasts.
As always, take professional independent financial advice
because I am not your financial adviser.
So, is the welfare system broken? It may not be completely
broken but it's certainly in need of a major refit or overhaul. Unfortunately,
it is being patched up here and there like an old house because it is difficult
for any government to tell it like it is and make those tough decisions.
I expect what will happen is that we will all muddle along
for another decade until the government decides to take more radical action to
deal with the pensions timebomb and elderly care problem. I haven't even
started on elderly and social care, or dementia, which is another Pandora's
box! In the meantime, you better start rowing your own boat and not
relying on the state or your employer to look after you.
On a more philosophical note, maybe the centuries old party is
over for the west as the east grows stronger and takes more of our lunch? As
the 16 year old Swedish climate campaigner, Greta Thunberg wisely put it,
why should the rest of the world suffer so we can live in luxury?
Does all this make you worried? If so, good. We all need to wake
up!
What can you do? Follow these three steps.
Step one, wake up.
Step two, start educating yourself on money and investing.
Step three, keep on learning about money and investing.
When I talked about migrants coming here years ago and
buying houses and renting out the rooms, you might say that that was alright
then but you can’t do it now, but you’ll be wrong.
The same opportunities to invest in property are available
to you today and in fact it is much easier to get into property than it was
years ago.
Mortgages are easier to obtain and money is everywhere
Interest rates are lower
There are buy-to-let mortgages available in abundance
You can rent out a room tax-free up to £7500 per annum
The last point is the most important. When my family migrated to the UK there were no training courses and nobody tell you how to
get a mortgage or buy a property. They had to learn by trial and error and
mortgages were not so freely available.
Since I started attending courses a few years ago the
information I received literally open my eyes to the world of opportunity.
If you would like more information on a beginner’s
property taster course, I
have a limited number of complimentary tickets to attend an excellent course
run by experts, which will give you a clear overview into the market. Click
the link below or email me at Charles@charleskelly.net.
I’ve just been listening to transgender rights campaigner,
Paris Lees, on the Jeremy Vine radio show talking on their special feature, What Makes Us Human. I would definitely recommend you catch this facinating
episode on BBC iPlayer or their podcast.
She did not talk about gender rights. Her theme was
forgiveness and recounted how she forgave her father and how liberating this was. Listen to the how here.
Paris grew up on a council estate in Nottingham, had an
abusive childhood, some rebellious, wild teenage years culminating in a spell
in prison. This woke her up when she realised that she had really “messed up”.
Despite a difficult start, Paris has gone on to have great
success. She has been featured in Vogue magazine, founded her own magazine, writes for the newspapers like the Independent and the Guardian and I
guess is now a celebrity.
How did she turn her life around?
Leaders are readers
In a word, reading. Well, she actually did a degree in
English literature, but said that she became obsessed with reading and still
spends time reading and thinking, the two things we probably don’t do enough of.
This is significant, as many other people have professed
that they turned their lines around through reading, perhaps the famous being
Oprah Winfrey who went from dirt poor abused child to billionaire superstardom.
Paris Lees
Leaders are readers, as the old saying goes and Paris Lees doesn’t
have a TV in the house.
This is also significant, as TV, along with social media,
it’s probably one of the biggest thief of our time. Don’t get me wrong, I am
also guilty of wasting some time in front of the box, especially during the
World Cup!
It’s so easy to get sucked in to watching one show, then the
next program and the next program, and then find yourself channel surfing in
the middle of the night looking for the next “fix”. It’s funny, the more
channels we have the harder it is to find anything decent to watch!
Zig Ziglar had a good technique help us spend less time in
front of the television. He said you should get out one of those TV guide you
get with the Sunday newspapers and mark out specific shows you want to watch
during the week (you can now do this digitally and even record the shows you
want to watch or watch them on catch up). Watch those shows, and then switch
the TV off.
Another significant fact is that successful people tend to
watch less television than unsuccessful people. Sorry to be brutal, but that’s
the way it is and logically how could it be any other way?
How do I know this? In my days in financial services, I
visited hundreds, if not thousands, of homes form multi-millionaires to the
roughest council estates in London. With few exceptions, I found that the
people with the least amount of money and the most financial problems (e.g. debts) had the
biggest televisions, which dominated their living rooms and space. In fact, they
dominated the whole house. Some of them even had big surround sound speakers
that shook the room like an earthquake!
On the other hand, financially successful people, as well as
people who had control of their finances, either had no television in the
living room, or a very old model stuck away in the corner. I’m not talking
about flat screens!
I also observed more books in the house and noticed that
parents who had academically “bright” children encouraged them to study rather
than waste time slouching around watching television.
What could you do with an "extra" 30 hours a week?
This is my money tip today. I’m going to give you back 20 to
30 hours per week – the average time we spend sitting on the couch watching
crap. In that time, you can spend time with the family, learn a new language, complete
a degree or make hundreds of thousands of pounds starting an online business,
even in your spare time.
London estate agents are seeing a glut of properties on the market priced at over £1 million plus. The market is even slower at the £3-5 million level following higher stamp duty and less foreign buyers.
Oliver Reed's old house was once on the market for £12 million in 2009
In
some cases properties have been on the market for several years and the price of the
late actor Oliver Reed’s Surrey mansion has been slashed by £10 million!
The 12-acre estate set in the beautiful Surrey Hills was once up for sale for £12 million in
2009, but the price-tag has been gradually reduced since. In 2016, the six
bedroom, five bathroom house was marketed it for £4.95m and is now for sale by
auction at a guide price £2.6 million via Allsop.
Brexit uncertainty is being blamed for the slowdown in the UK property market and this month has seen the first annual fall since 2009. Buy-to-let landlords have bee deterred from investing in property by recent tax hikes and tighter mortgage rules.
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.
You’ve
heard the saying, the grass is always greener on the other side, why is this?
Why does it always appear that things are better somewhere else?
It's partly human nature of course, but there’s more to it. We look at somebody
else in another business and think they’re doing well. It looks like easy
money, so we give that a try and jump into it. When
the going gets a bit tough but we realise that there’s more to it than we first
thought and it takes hard work, we lose interest, And then we see some other
shiny new thing to try.
In
reality, most businesses take several years to get off the ground and become profitable.
I didn’t start making any money in a recruitment business I had for the first 4
or 5 years and the serious money came in floods after 8 or 9 years. At this point, we became an "overnight success" and everyone would say how lucky we were!
When
you see people doing well and making loads of money I have probably been
working at it for several years and invested hundreds of hours into learning
and development. They built the business through hard work, marketing and
follow-up service.
You
could be in the business specialising in a certain niche, but then see somebody
else making money in another niche and think I’ll get into that. And when that
doesn’t work, you try something else and so it goes on.
Look how focused a Cat becomes before jumping or hunting
Because
you never focus on any one thing you fail at everything!
For instance,
in my recruitment business we specialised in healthcare recruitment. Clients would often ask us to try and recruit other workers, such as pharmacists, PT's or
doctors. Whenever we tried this, we found that it was a distraction from the
main business, and also realised that it would take a long time to build up on
you niche. Fortunately, we always returned to our core business and focused on
what we were good at thanks mainly to my partner who was a bit more level headed than me!
Are you juggling too many things at once?
I
see people at seminars who jump from one business to another regular basis.
First they try MLM for a few months, then they try affiliate marketing or Amazon, and
they try online trading before jumping into property. They sign up for every course and mastermind programme spending tens of thousands of pounds. The problem is, they never
stick at one thing long enough to become an expert at it or for the seeds
they’ve planted grow into a money tree.
It’s
not Niche or sector it’s the person that matters. It’s what you put into it
that counts. There are people doing well in every business and there are people
doing not so well in every sector, right. If you go to any sales convention in
any sector, you will always see top peformers who are usually the top 10 or even 1%. The
top performers don’t jump from company to company or industry to industry, they
focus on one business and become experts and great that one business.
Top
athletes do not try to become the best at five different sports, they focus on
one and work hard on that for years until they reach the top in their chosen field. Then they get their "lucky" break, right!
So
why does the grass look greener on the other side? Something I learned from top consultant Sam Ovens is that the grass is greener where you water it!
Just
like business or niche that you develop, work on and water will be greener for
you, and look greener to the person on the other side of the fence.
Since
the launch of the book, the one thing, everyone is talking about focusing on
the one thing in a business or process that makes the most difference that you
should focus on.
It’s
like Pareto’s 80/20 law. That 80% of your results come from 20% of your
efforts.
In
the way, it’s common sense that you should focus on the things that matter
most, yet we easily get distracted by a multitude of other things that did not
get us results.
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.
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! https://anchor.fm/charles-kelly
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.
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.
Welcome to Money Tips Daily this is Money Kelly bringing you
money tips to help you save and make more money!
When the snow started falling in the UK this week, people I
know started panic buying food and supplies in case the shops ran out or they
became stranded in their homes. I’m not talking about people living in remote
areas. These are people who live in London!
It made me think about the amount of food we buy and how
much gets wasted.
Stop wasting food!
On average, people in the west throw away
around a third of the food they buy. Considering that food is one of our major
areas of expenditure, apart from anything else, that’s a lot of money we are
throwing away.
Let’s say a family spends £100 per week on food and throws away
a third of it. Over a year, that’s £1,716 going straight into the dustbin.
There is also a moral aspect to this. We all know that there
are millions of people who go hungry every day, even on our own doorstep, while
many of us overindulge and then throw millions of tons of food in the bin –
much of which ends up in landfill, which is unsustainable and bad for the planet.
The government is even trying to change food labelling,
which accounts for a huge amount of edible food being tossed into dumpster bins
by supermarkets unable to legally sell it.
We have the modern phenomenon of
“dumpster divers”, raiding bins for food which would otherwise go to waste, and
evening shoppers crowding around a trolley waiting for the supermarket to reduce
prices on food which will be out of date by the end of the day.
So how can we reduce our waste?
Here are my 5 C’s to Stop Food Waste:
Cook it – cooked food will last longer and will not go off
so quickly. You can store or freeze cooked dishes it to last even longer.
Chill or refrigerate most food and fruit to avoid going bad
in a hot kitchen. In the days before fridges were common, kitchens had larders
which faced an outside wall and stayed cool. Houses were also much cooler
before central heating.
Consume or eat it! This is the most obvious method of
avoiding waste and you can’t do this if you buy 12 muffins in Costco or
constantly go for ‘3 for 1’ offers (which are nearly always approaching their
sell by date!
Check it for signs of mould, decay or deterioration using
your eyes and nose. Don’t just follow the date on the packaging. I’ve thrown
away milk before it reached the sell by date and used milk a week after it.
Labels can be wrong, as we don’t know how a consignment may have been handles
or stored, so use your common sense. I’m not advising you to eat “out of date”
food, however, I ate a pack of Asian style vegetables yesterday on which the
best before date was 3 days ago. I’m still here to tell the tale.
Cold store or freeze food if you cannot consume it within a
day or so. Freeze on the day of purchase and always read the label and follow
safe guidance.
Bonus Tip: Try living on whatever food is stored in your
cupboard and freezer for a few days without shopping until you have used it all
up. Pull out those cans of beans and soup from the back of your cupboards.
Oh, and by the way, the supermarkets did not run out of food
and the snow only lasted a few chaotic days before life went back to normal.
Welcome to Money Tips Daily this is Money Kelly bringing you money tips to help you save and make more money!The UK government recently
announced tough new minimum space requirements for private lettings in a bid to
reduce overcrowding and other problems in the HMO rental sector.
The widely expected new rules for
HMOs (Houses in Multiple Occupation) will bring the national mandatory
licensing, currently only applying if properties are three or more storeys, to
all flats and one and two-storey properties.
The new rules will allow local
councils to force more landlords to register their HMO properties, which should
raise standards. My own local authority has around ten times as many unlicensed
houses in some form of multiple occupation as those licensed as HMO’s.
The majority of buy-to-let landlords
in the UK are law abiding and should have no problems complying with new
regulations. However, based on the previous experience of other local
authorities, which have brought in blanket licensing for all rental properties,
many landlords will be probably fall short of the minimum safety requirements
for a rental property.
A housing officer in the London Borough
of Brent told me that when they brought in licensing in selected postcodes of
the borough, they discovered that hundreds of landlords did not even meet basic
minimum standards and many didn’t even have a smoke alarm installed or in
working order.
In addition to tightening the HMO
rules, the Department of Communities and Local Government has also specified
minimum room sizes for HMOs properties.
Single bedrooms will have to be a
minimum size of 6.51 square metres, and doubles, or those occupied by two
adults, 10.22 square metres.
Children’s rooms, for aged 10 and
below will have to be at least 4.64 square metres in size.
The new HMO licence will have to
specify the maximum number of persons occupying any room and the total number
across the different rooms must be the same as the number of tenants that the
property is deemed suitable to live in.
The requirements are yet to be
made law, but are expected to be on the statute books this spring. Despite the
heavy snow, today is in fact the first day of spring!
In a statement, the DCLG said:
“The increased demand for HMOs
has been exploited by opportunist rogue landlords, who feel the business risks
for poorly managing their accommodation are outweighed by the financial
rewards.
“Typical poor practices include:
overcrowding, poor management of tenant behaviour, failure to meet the required
health and safety standards, housing of illegal migrants and intimidation of
tenants when legitimate complaints are made.
“Tenants are sometimes exploited
and local communities blighted through, for example, rubbish not being properly
stored, excessive noise or anti-social behaviour.
“Although only a minority of
landlords, the impact of their practices are disproportionate, putting safety
and welfare of tenants at risk and adversely affecting local communities.
“They cause much reputational
harm to the HMO market and it is often pot luck whether a vulnerable tenant
ends up renting from a rogue or a good landlord.”
Although many of the above concerns are justified, when the government ran a public consultation
they received just 395 responses, which is extremely low when you consider that
there are millions of tenants and over one million buy-to-let landlords in the
UK.
I spoke to several HMO landlords,
who did not wish to be named, about the new regime. The mood was mixed, with
some favouring tougher rules to drive out the “cowboy landlords”, leaving more
tenants chasing fewer rooms and higher rents for them!
Others were more negative and even
angry, accusing the government of burdening smaller landlords with more red
tape and bureaucracy, which would ultimately make the housing shortage worse as
landlords are driven out of the market.
There is no doubt that HMO
letting has boomed in the last few years, as the demand for rooms and studios
has mushroomed for a variety of reasons including, relationships breakdowns,
lack of affordable single let properties and immigration.
AIRBNB has also opened up a market
for short term holiday lets and the tax
free the rent-a-room scheme has encouraged people to let a room in their own
home to earn some extra cash.
We will have to see the exact
interpretation of the new rules, which currently varies from one council to
another, once they are in force.
Private landlords have already
been hit with punitive tax changes being phased in during the next tax year, as
well as higher stamp duty, which will reduce their net income and may drive up
rents.
Changes to the benefits system
(Universal Credit) are apparently making it more difficult for tenants claiming
housing benefit to find a landlord willing to rent a property to them.
Homelessness is on the rise according to the BBC and other commentators, although
the exact cause is not clear.
In terms of Money Tips, there are
still many investment opportunities in the UK housing market, seen by foreign
investors as a safe haven for their cash. As always, you should take legal and
financial advice and remember that financial education is key.
If you would like to learn more
about investing in UK property, I have a limited number of complimentary
tickets to a LIVE EVENT - Beginners Property Course (held in
the UK), which will give you the basic knowledge and techniques to get started.
If you are interested, email me your full name and telephone number to charles@charleskelly.net.
Want to diversify? If you would like to learn more about investing overseas in one of the fastest growing economies in Asia, email me at charles@charleskelly.net.
