Looking to Sell Your House?

by Adam on September 18, 2014

If you’re in the UK and either buying or selling a house, you’ll definitely find this info-graphic very interesting. London House prices have doubled compared to the rest of the UK. This is the widest gap since the history books began.

 

UK-housing-Infographic

 

We Buy Any House is a professional UK based house buying service.  Check out the latest news section for housing views, news and opinions on the current state of the UK property market, learn more about them at www.webuyanyhouse.co.uk

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business IPOThere’s a internet company that soon will be worth more than Amazon.com

It’s often described as a cross between Amazon, Ebay, and Paypal.

It’s huge in China, and although not well known in the west, already owns stakes in companies you may have heard of like Uber, Lyft and the search engine app Quixey.

And you have an opportunity to get a piece of the action before its shares are publicly traded in a huge Initial Public Offering (IPO) when it starts trading on the New York Stock Exchange in the next few days.

Intrigued?

The Chinese company is called Alibaba and the huge internet e-commerce business is predicting its IPO will value itself at $167 billion if it prices at the high end of its range. As a comparison, Amazon has a $160 billion market cap. And for context, that little internet auction site eBay’s only has a $67 billion market valuation.

On a price per share basis, Alibaba’s new target IPO price range is between $66 and $68 a share (It was set initially between $60 and $66 a share.) and all this new money from the IPO (potentially $25 billion) will mean the site will have plenty of cash to put into research and possibly acquisitions of more Technology companies, so the future looks bright.
If you’re interested in investing in Alibaba, the self proclaimed ‘largest online and mobile commerce company in the world’, you cannot buy shares directly until the IPO, but there is a way to capitalise on the opportunity at this stage, through what’s known as the ‘Grey Market’.

A grey market is a parallel market which allows for the trade of a commodity, legally but unofficially.

IG allows you to trade on the Grey market for many pre-IPO companies including Alibaba: IG offers a Alibaba marketplace to invest in Alibaba before the IPO, and after.

At IG you can trade on their grey market before shares are released and do other things such as Spread bet, trade CFDs or use the stockbroking service to trade Alibaba shares after the IPO.

There’s a lot of demand for owning a piece of the internet giant because, quite simply, it sells so much stuff.

Using gross merchandise volume as a metric, the value of all the merchandise changing hands on a platform over a given time, Alibaba generated $248 billion of gross merchandise volume in 2013. Compare this to Amazon’s figure of $116 billion, according to estimates by IDC, and you can see what all the fuss is about.
In fact, if you add up the value of goods being exchanged on Alibaba, it’s greater than that of Amazon, eBay, JD.com (JD) and Japanese e-commerce giant Rakuten — combined.

Alibaba’s dominance may grow even further as China’s middle class continues to expand. So if you already have sensible diversified investments and want to speculate with what looks to be an investment with a lot of potential, then investing in Alibaba pre or post IPO could be what you’re looking for.

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Energy shopping One of the easiest ways to save extra money every month is to review your monthly bills.

  • Do you know how much is being taken out of bank account every month?
  • Are you using what you’re paying for?
  • Can you get a cheaper deal elsewhere?

You may find a few payments that you don’t need any more, perhaps a magazine subscription that you don’t read any more. Doing an audit of your direct debits and standing orders is a good place to start, but there’s always going to be payments that are unavoidable, like paying for energy.

A recent study by OFGEM revealed that almost half (43%) of those surveyed in Britain admit they don’t prioritise ‘energy shopping’ to find the best deal, despite the fact that it could save them precious pennies (and in many cases, a lot of pounds!).

You may not have checked your energy prices recently because you thought it was complicated, hard to compare, or you of the opinion that all energy companies are as bad as each other.

Thankfully, new reforms have now resulted in a simpler, clearer and fairer energy market for the UK, and there’s a new website launched to help you get the best deal: Go Energy Shopping.

 

What is Go Energy Shopping?

The Go Energy Shopping site has been set up by OFGEM, which stands for the Office of Gas and Electricity Markets. It’s a non-ministerial British government department and an independent National Regulatory Authority, recognised by EU Directives.

The purpose of OFGEM is to promote value for money, and make sure the energy market is being competitive and is keeping to government regulation and schemes. This means the Go Energy site has your best interests at heart.

 

Why Now?

It’s now easier than ever before to compare energy providers. There’s now only 4 core tariffs for gas from any energy supplier, just one pricing structure (standing charge, + unit rate), and just 2 cash discounts allowed – for dual fuel and for managing your account online.  These changes have been brought it to make energy pricing less confusing and easier to compare.

But how can you take advantage of it?

 

The 3 steps to Energy Shopping

1. Take Stock

The first step is getting all your papers together including recent bills and any letters you’ve been sent from your current provider. Look out of your annual consumption figures on the letters you should have been sent. You should also look for the name of the tariff you are on, and if there are any restrictions or ‘exit’ fees that may make switching energy suppliers less worthwhile at the moment.

Tackle Jargon

Don’t worry if you’re getting overwhelmed by the terminology and confusing words used on some bills and letters. The Go Energy Shopping has a helpful glossary  so you can tell the difference between ‘evergreen’ and ‘core’ tariffs and another  words.

 

2. Shop Around

Once you have all your information in one place, it’s time to go comparison shopping!  Helpfully OFGEM have compiled a list of sites that are OFGEM accredited.

These are sites that have been vetted to ensure they are independent, and include option and prices that are displayed fairly meaning you can be more confident about the results.

3. Take control and start saving on your energy

Once you’ve found a good deal you have two options: you can let the comparison site do all the work for you, getting your switched over, or you can contact your new preferred supplier yourself. Just make sure you pay any outstanding debts to your current provider to ensure the switch over goes without any delays.

 

For a more detailed full step-by-step downloadable guide to help choose and change your energy supplier, check it out here:

The guide shows how the recent changes to the energy market can help you to compare tariffs and get a better deal on your gas and electricity bills.

Once you’ve been through the above steps, there’s just one thing else to do: Remember to pat yourself of the back for going through the process. It can seem a bit of a hassle if you haven’t done it before but it really can be worth it, with savings of £200 possible in some cases!

For best results, take those magical penny energy savings and funnel them into your savings account or ISA to get a warm feeling inside as well as a warm feeling inside your home :)

 

 

 

This post is sponsored by OFGEM, a non-ministerial government department of the UK, who look out for the consumer’s best interests when it comes to energy.

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Have you noticed your household bills escalating?

Magical Penny has readers across the world but there’s a sizeable readership in the UK. Naturally I’m not surprised, as I’m British myself.

If you’re living in Britain I’m sure you’ll find this infographic of interest. It details how the cost of living has changed in the UK over the last decade.

The good news is that a Big Mac is only 2p more than a decade ago.

 

rising costs

Source: Vouchercloud

Those take-home points again:

 

  • Taking your date to the cinema in 2004 was £1.38 cheaper than it is today.
  • A Big Mac today costs only 2p more than it did in 2003.
  • Assuming you drink the average 144 pints of milk per year, you spend £7.20 less now than you did in 2003.
  • The recommended limit of three units of alcohol per day equates to £1524 a year, in current pub prices.
  • Going to University today costs over 6 times more than it did in 2003.
  • The journey between Leicester Square and Covent Garden takes only 20 seconds but costs £4.30 today.
  • Those who bought their house in 2007 could have saved nearly £50k in they had waited 2 years to buy.
  • Those earning minimum wage were £665 better off in 2009 than they were two years later in 2011.
  • 2011 saw the second lowest average salary over the last decade.
  • A 35 mile commute to work today, over the course of a year, is £411 more than you paid in 2003.
  • Keeping your lights on and your devices powered costs over £200 more today, than in 2003.
  • The price you pay today would pay the gas bill for two houses back in 2003.

 

Inflation-adjusted figures are super-insightful aren’t they?

 

What do you think? Are there any other costs that have escalated for you?

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Warning, this post contains a reference to Justin Bieber…read on if you dare…

Crypto-currencies have long since moved on from being the official payment method of internet dwellers. Despite their rather geeky creation methods; a series of mathematical algorithms must first be solved to unlock the currency, crypto-currencies are now worth billions of dollars, and are used even within the mainstream markets.

Famous entrepreneur Richard Branson recently confirmed Bitcoins will now get you a ride into space. Virgin Galactic tours will be accepting the coins as payment for a ride to infinity and beyond. Or at least to the edge of our O-zone layer.

bieber bitcoin Bitcoins are so new that Bieber’s ‘Baby’ song came first!

 
Given that Justin Bieber’s hit song, Baby, was recorded before crypto-currencies such as Bitcoin were even a ‘thing’, their rise to popularity in such a skeptical industry, has been remarkable.


Although Bitcoin is the first type of virtual currency people think of when hearing the words crypto-currency, there are some others also gaining ahead of steam. Reddit users will probably be familiar with Dogecoin. Dogecoin is a new type of currency that’s already been making waves in it’s short time in existence. Back in 2013, before the start of the Sochi winter Olympics, the Jamaican bobsleigh team were struggling to fund their trip to Russia after an unexpected qualification to the event.


Needing $40,000, and feeling slightly hopeless, a Dogecoin  campaign run by internet users managed to raise the whole fair and send the team to the tournament. While the currency still needed to be converted into fiat currency to purchase plane tickets and equipment, the fact that such a ‘minor’ currency had made such a big impact at such a big event was a turning point for crypto-currencies.

In many big cities such as London and New York, many restaurants now accept Bitcoin and other crypto-currencies as a form of payment. A trip along London’s South Bank, and New York’s Times Square will reveal a handful of food chains as well as mini food stalls that accept the peer-to-peer form of currency as a payment. Perhaps no food outlet is bigger than Subway. In 2013, the sandwich giants released a list of sandwich outlets which now accepted Bitcoin as payment for food. The move is a far cry from the days when the underground currency was only good for buying hosting or use as a gaming currency.

Bitcoin looks set to grow even more in 2014 and into 2015. London have announced Bitcoin cash machines are to open around the city, allowing owners of them to withdraw fiat currency or exchange into local currency. The idea looks set to be copied by other cities world wide, firmly cementing Bitcoins place among the larger global paper currencies.

 

What do you think? Are you investing in Bitcoin?

 

Also on Magical Penny, the story of how I more than doubled my magical pennies through Bitcoin:

http://magicalpenny.com/what-on-earth-is-bitcoin/

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Should You Get A New or Used Car?

by Adam on July 4, 2014

Living without a car can be a great way to save money. Cars can be costly to run and can lead to expensive surprise bills when something goes wrong.

But for many people  having a car is a necessity: from commuting long distances for that dream job;  meeting family commitments, or simply getting sick of waiting in the rain for public transport!

Owning a car should be a conscious choice of prioritisation: you decide to spend money on a car to allow you to live the life you want to live. But once you’ve made that decision to buy a car it’s worth considering your options:

Old Vs New

Buying a new car does have its advantages. You can choose the specification like colour, features like air-con and i-pod audio inputs; they come with no-worry warranty packages so you if anything does go wrong you will not be out-of-pocket getting it fixed; and there are often  ‘sweetener’ deals on offer at the time of purchase to tempt you if the dealer is desperate to hit their sales quota for the month.

Some dealers really do almost give cars away some months because the bonuses they can achieve from hitting sales quotas can mean the difference between profit and loss for the dealership.

Another benefit not to forget is that there is no unknown history to worry about so if you treat your car right it can last you a long time.

My girlfriend’s car was bought brand new by her Dad more than 15 years ago. After all these years of careful ownership, the car is still going strong and drives like a dream. Over the long term it’s been a very economical purchase

 

So how much is a brand new car going to cost? This number of course is going to vary widely depending on make and model but as a guide, a best selling Ford Fiesta  with 1 litre engine costs between £12,000-£15,000, depending on your negotiation skills.

If you don’t have money in the bank you can take out a car loan and work out the total cost from there. To save you the trouble, as an example, if you got the car for £13,000, and  a car loan at 8%, paid for 5 years, would cost you £15,815.59, with a monthly payment of £263.59.

Some dealerships offer 0% loans reducing the cost further

For more calculations on the cost of car loans, have a play around with the  IMB car loan calculator

 

Other benefits for new cars are more advanced technology such as better fuel efficiency (where huge advances have been made comparatively recently) and safety features like stability control. Take note: If the emissions are low enough, you don’t have to pay road tax!

Buying Used

Despite the advantages of a new car, it can’t be argued that new cars are cheaper. Buying Used is a very sensible choice for many, notably because of the money saved by avoiding the depreciation of a new car. It is rare for a new car to still be worth more than half it’s purchase price after three years, and many will have lost up to two-thirds of their value.

Look out for used cars that still have a factory warranty for extra piece of mind.

Private purchases will give you better prices than going to dealer, but it takes more work and you have fewer options is something goes wrong down the line. Similarly,  buying at auction will generally be the cheapest but bargains are hard to come by and you may be at a disadvantage if you don’t know enough about cars to know their worth.

Car history is the biggest risk when buying used. Ideally, a car will have a complete service history: if not, you can buy some reassurance in the form of a history check.

Just a couple of days ago I bought my first ever car. Thankfully I didn’t have any of the history worries as the car was formerly owned by my parents and had meticulous records of everything that had been done to it. I’m not a car expert myself so this was reassuring for me.

 

my new car

A Third Way

Besides new or used, there’s a third way into car ownership – buying a nearly new car, either from a dealer’s demonstration fleet, or from ‘pre-registered’ stock (cars that have been notionally bought by the dealer in order to meet sales targets).  You could also try looking for cars that are only 1 or 2 years old. Buying nearly-new can be the best of both worlds. You end up with a modern, fuel-efficient and safe car, but buy it after it has already depreciated significantly from new. The extra name on the registration document  will lower the car’s resale value and you don’t get as much as choice as when buying new, but for many it’s worth the trade.

In Summary

The key thing to remember when buying any car is make sure it’s a conscious choice: work how much you are willing to spend, and if you require a car loan, make sure you understand the costs.

Newer cars may seem more expensive, and they are, initially, but if you consider other factors like fuel economy and warranties , the difference might not be as huge as you may think. The re-sale value of newer cars is also higher.

 

Happy Driving!

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How Much Is Your Dad Worth?

by Adam on June 15, 2014

It’s Fathers Day, a day honouring the role our Dads have played in shaping our lives.

Breadwinners, providers, protectors – these are just some of the words that may spring to mind when we conjure up the image of dads – past and present.  But can you put a number on how much are they worth?

Someone has tried…

 

 

Men earn more on average, but women are catching up!

While full-time earnings for men continue to surpass those for women by an average of 15%, women’s salaries are slowly edging up to close the gender pay gap and women aged between 20 and 29 are actually earning more (+0.3%) than their male counterparts.

 

Parent’s personal finances – protecting the present in order to secure the future

When it comes to modern families who are striking the right balance between the respective incomes of mum and dad, it seems that a modified breadwinner – where the mother works part-time and the father works-full time – could help lay the foundations for a financially secure future.

More than a third (38%) of Brits outlined this as the ideal way for a family with child under school age to organise their family and work life. And with the cost of raising a traditional 2.4 family totting up to £32,934 a year – including mortgage payments, the cost of bringing up baby, food shopping and more – mum’s income plus dad’s income has emerged as a good solution to a family finance equation.

Happy Father’s Day, Dad.

Source: Smart Insurance

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Getting a Mortgage as a Mortgage Misfit

by Adam on May 13, 2014

Getting on the housing ladder is a major achievement for many young people.
mortgage
Owning your own home is a major commitment and it can be very rewarding to have a place to call your own, without the worries of landlords increasing the rent.

It can also be fun painting the walls any colour you want!
If you want to eventually buy a house, your first step should be saving up for a deposit (check out the *Magical Penny* archives for saving ideas). Once you’ve made progress with saving for a deposit the next step, if you don’t have very deep pockets, is to explore your options for securing a mortgage.
Getting a mortgage can be a complicated process as lenders need to understand what you can afford; this can vary depending on many factors including your income and the interest rates available. The affordability of the mortgage is an important consideration for the lender and, in the UK as of April 2014, new affordability processes were put in place that must be adhered to as part of the Mortgage Market Review.
These new processes require lenders to now take into account a number of factors including your outgoings as well as your income. These numbers are often fed into a computer model that tells lenders what they are willing to offer to you.

However, what if the computer says no?

Depending on your circumstances you may find getting a mortgage hard, making you a mortgage misfit.

This could happen if you’re self-employed, have a low income below £25k or you haven’t used much debt in the past (so your credit score is not well established).

If you think you might be a mortgage misfit, you still have options and you may be able to increase your chances of getting a mortgage by doing the following things:

 

  • Reduce your debts and reduce general spending habits. Not only does this make you look less ‘risky’ to lenders, but it should also lead to having more money available to build up your deposit.

 

  • Check your credit files to make sure there are no mistakes, nothing is coming up as unpaid, and that you’re not the victim of credit fraud. It also helps that all bank accounts and credit lines are registered to the same, current address and you have a landline as it demonstrates stability)

 

  • Lastly, it’s a great idea to work with a lender that does manual underwriting: this is where they look at your unique circumstances, income and expenses rather than just relying on computer algorithms alone.

One such lender, Ipswich Building Society, has always taken a careful approach to its underwriting of mortgages, carefully assessing each customer’s ability to afford a mortgage using their own data of expenditure.

They have also created an affordability calculator which is really useful to use as a guide to make sure you’re not over-stretching yourself in your quest to become a homeowner, regardless if you’re a mortgage misfit or not!

Can You Spot A Mortgage Misfit

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Whether you are insuring your vehicle, home, or investing in a life insurance policy for you or a family member, there are a lot of factors, from the details of your policy to which provider you work with. One of the most important is whether you purchase through an agent or an insurance broker.

Here is what you need to know to decide which is right for you:

The Differences

A professional who provides insurance to an individual is referred to as a “producer.” Within that category there are two main types: agents and brokers. Though the terms are used almost interchangeably, there are three very important distinctions.

Who They Work For

There are two main types of insurance agents: captive and independent.

Captive agents are employed by a single insurance agency. They are experts in their own company’s policies and, therefore, are better equipped to offer in-depth advice on which policy is right for you. These agents are under contract to only offer and sell you products from their company.

Independent agents represent multiple insurance providers and can offer you a wider variety of policies. However, like captive agents, they are restricted to what is provided by the companies they serve as an agent for.

Some insurers only employ captive agents, though many rely on a mix of agents and brokers to represent them.

Brokers are a kind of agents, but agents are not brokers.

Insurance brokers are much like an “even-more-independent” independent agent. Your broker works for you, their client, not for a specific insurance company.

Brokers are licensed to sell for many different insurers, but not every insurer on the market. Usually a broker or brokerage represents a variety of well-established, mainstream insurance providers and can sell policies from any one of those companies. Your broker can provide you with a full list of companies that they are sanctioned to represent.

Many brokerages, such as TSG Insurance, work to offer a broad view of the marketplace to help decide which plan most benefits you.

How They are Paid

Brokers are entitled to charge a fee for their services. This fee varies by brokerage and by your relationship with the broker. Brokers work to create long lasting partnerships with their clients. Forming a partnership with a broker you trust can ensure that you are working with a producer who is familiar with your needs and preferences and can provide you with your best options.

Your broker will inform you of their fee. Brokers must disclose this fee and cannot misrepresent it as being part of the insurance premium itself.

On the other hand, agents are paid directly by the company, or companies, they represent. They also receive a commission, according to the cost of your policy.

Agents also cannot increase or misrepresent the cost of your policy. The cost of policies is highly regulated—identical insurance plans will cost the same, regardless of which agent you go through.

Where Their Interests Lie

Because agents are paid a commission by a company, or companies, their best interest is served when you purchase a more expensive policy.

This does not mean an agent will only offer you policies which cost more, only that they have an incentive to encourage you to spend more on your policy. Be sure when purchasing through an agent that you buy according to how well the plan works for you, not according to how much the policy costs.

Brokers may make a commission from an insurance company. However, they are compensated by the insurer to answer your questions and introduce you to the providers’ policies, no matter the price of the policy they recommend for you.

This means they have the means and motivation to guide you to the policy that best suits your needs.

Insurance producers are not one size fits all. It is easy to lean one way or the other based on generic policies, but keep your personal situation, financial means, and relationship with your current insurance provider in mind when making your choice between an agent and insurance broker. There are lots of insurance companies and brokerages to choose from.

If you have an agent or broker in mind, but are not confident that they can provide you with your best insurance options, ask them about it! You are entitled to know all of your options before making your decision.

Candice Harding enjoys writing about a variety of topics including business, technology, and insurance. When she’s away from the computer, she loves riding her bike and exploring the outdoors.

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Weird Habits of Americans: Smartphone Addiction, Barbecue Love and Strange Economy Indexes

Prepared by business comparisons | Author: David Adelman | See our Vimeo

In a land tucked away from the Old World lives a tribe with odd habits. In this infographic we take a look at the weird habits of Americans, topped by, among others, mobile phones are more important than sex! Is it because they are developing a relationship with our mobile phone?

Around 26% of Americans admitted that they can’t live without cellphone, while only 20% said the same for sex. Moreover, 44% of Americans said they sleep with their phone, while 67% check their phone even if it’s not ringing or vibrating.

Maybe because they are enjoying life by themselves today more than ever, when only 17% said so in 1970 compared to 27% by 2012. Likewise, they no longer know what a date is today. 69% of single Americans said they are unsure whether an outing someone they liked was a date or not.

However, many of still prefer a sleeping companion because 58% of Americans revealed they sleep with their cat or dog. And when they have real people living with them, they mark their territory. Americans who have assigned seating in the living room: 43%.

Americans are also eco-friendly in their own way… or just plain paranoid? 28% of Americans said they take fewer or shorter shower to save the environment, and 67% of us even have wondered if our food or beverage were produced in a sustainable way.

Sometimes, we don’t know if Americans are patriotic or just unhealthy. 52% of Americans said doing taxes is easier than eating healthy. Speaking of eating, they know their kind of food: 56% of Americans consider barbecue a must-try food for tourists.

The odd habits continue. We even have some weird ways to measure the economy. Take this—

Consumer indicators of an economic downturn in the U.S.

  • Higher lipstick sales
  • Higher nail polish sales
  • Higher sales of cheap spirits
  • Lower underwear sales
  • Lower hemlines

Consumer indicators of an economic upturn in the U.S.

  • Higher cemetery plot sales
  • Higher sales of cardboard boxes
  • Higher sales of champagne
  • Higher hemlines

Americans also have one weird way to measure a storm’s severity: The Waffle House index. FEMA once said they get a fairly good measure how bad the situation is after a storm by checking the local Waffle House. The chain is famous for keeping the business open during calamities. FEMA has even alert levels for this:

Green = the chain is serving full menu
Yellow = the chain is serving limited menu
Red = the chain is closed

“If you get there and the Waffle House is closed? That’s really bad,” FEMA Administrator Craig Fugate once remarked.

By the way, Americans love giving greeting cards. Americans spend $7.5 billion yearly on greeting cards including “just because” for lack of any occasion. But they are awful at using gift cards. They wasted $41 billion, that’s the worth of gift cards that they didn’t use from 2005 to 2011.

If there’s a silver lining in their weird habits, maybe it’s the fact that Americans are starting to be modest. More Americans today see their country as less respected. In 2004, only 20% believe so; by 2009 the figure jumped to 41%, before shooting up to 53% in 2013. It begs the question: is the loud American stereotype gone?

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