Self-Building Your House In the UK

by Adam on May 17, 2016

Have you ever dreamed of building your own house?

My Dad is a trained architect so growing up I used to watch him drawing up plans of buildings with a pencil and ruler on huge pieces of what looked like tracing paper. He was always dreaming up plans for new buildings and sketching out floor plans. So when I heard it about Self-Build Week last month I was immediately taken back to memories of my Dad and the rolled up building plans he used to bring home in giant tubes – long before computer-aided design changed the profession of architecture forever.

The Right to Build Act and the implications

As well as the change in how house plans are drawn up, there have been changes in regulation, most notably what has been dubbed the Right to Build Act which means that from 1 April 2016, all local authorities have to keep a register of those with a dream like my Dad, who are interested in finding land for a self-build project, so that they can be matched up with suitable plots. It is hoped that at a time when much of the UK is experiencing a housing shortage, this legislation will raise awareness and encourage those looking for a new home to consider undertaking self and custom build projects.

IBS Self Build

Building Awareness of the Register

 Maybe you have a dream, like my Dad, to build your own home. If so, you should get in touch with your local council to get on the new register of those looking to buy land in the local area to carry out self or custom build projects. The registers will work alongside measures due to come into force in the upcoming Housing and Planning Bill, which will require authorities to ensure they have sufficient permissioned plots to match the local demand on their register.

But this will only work if there is awareness of the register. The National Custom and Self Build Association (NaCSBA), supported by Ipswich Building society recently commissioned research that found more than three quarters (77%) of people in the UK are unaware councils are now required to keep a register of those looking to buy land in the local area to carry out self or custom build projects.

The research, conducted by the research company Ipsos MORI on behalf of NaCSBA and Ipswich Building Society in March 2016, amongst 1954 UK adults, also found that 1 in 8 people (12%) expect to show an interest in self build property within the next year.  This figure has remained about the same since 2013 according to the annual research. However, just 1 in 50 (2%) people stated their intention to take specific actions to progress their self-build projects, such as purchasing land, submitting a planning application or starting construction, within the next 12 months.

This gap between those interested in self-build and those who intend to take specific action to progress self-build projects is not surprising, but the register should make it easier to find a suitable plot of land so the route to building your very own custom-designed new built house is getting more streamlined.

Make Your Dream a Reality

Building your own home is amazing but make sure everything is planned out to the letter before you start. Building a dream home could quickly turn into a nightmare if you allow your imagination to run ahead of your budget. Make sure you have costed how much it will cost and keep in communication with your builder on timescales and costing. There are also specific self-build mortgage products to research and consider with providers such as Ipswich Building Society.

Good luck!

{ 0 comments }

money making ideasWhenever various stock and financial markets around the world are in a state of flux, investors look towards gold to provide stability, security and peace of mind.

While the price of gold may change, it remains a fact that gold itself always has intrinsic value and can easily be resold when the time and price is right. Prudent investors seeking to protect their portfolio understand the importance of diversification, or in simpler terms, of not keeping all of one’s financial eggs in the same basket.

As was seen during the recent global financial crisis, stocks, bonds, investment funds and even currencies can experience massive downturns and hard earned assets are all too easily lost. In troubled times, gold is rightly seen as a safe harbour in which to weather the storms of uncertainty.

Buying bullion has become an increasingly popular way of protecting one’s assets and there are various means and methods of purchasing this precious metal.

This straight forward guide will explain some of the most common strategies available for buying gold bullion.

Bars or Coins

Gold is available in many forms but the most valued and reliable are those that have been minted by a reputable source to exacting purity standards. Many governments around the world produce ingots and coins for sale in various weight configurations that give buyers a wide range of options to choose from.

With gold coins, one has the flexibility to buy and sell smaller amounts more easily, whereas gold bars have the advantage of incurring less premium fees as they are purchased in one transaction instead of being spread over multiple trades. Both strategies are ideal for fast and efficient gold bullion investment.

Collectible Coins

Collectible coins or numismatics can vary in price depending on their age and rarity and it takes specialised knowledge to understand their true value. Such coins generally sell above the gold spot price and probably should be avoided by investors seeking asset protection and uncomplicated returns.

Dedicated Bullion Dealers

The best place to purchase bullion is from an expert dealer with a business dedicated to buying and selling gold bullion. A reputable store will have an excellent track record, knowledgeable staff, plenty of repeat customers, numerous public testimonials and transparent business practices. A gold bullion specialist in Adelaide and other major cities will also be able to offer sound advice and will be genuinely interested in your investment needs. They will happily provide a number of solutions tailored to your budget and circumstances.

Online Auction Sites

Gold bullion can be found for sale on popular auction sites such as eBay and others and many bargain hunters believe there are good deals to be found there. This method of purchase is fraught with risk as there are too many variables that can go wrong. The gold may not be as pure as stated, may be over priced, counterfeit or could even have been stolen and sold illegally.

Advertising the fact that you collect or invest in gold and sharing your address with random strangers is highly dangerous should that information be disclosed to someone devious and criminally inclined. In short, there are too few checks and balances to risk buying gold from online auction sites.

Buying gold bullion needn’t be a complicated matter if these basic principles are understood and followed. Taking charge of your financial future through investing in gold bullion can be a great way to find increased security and greater peace of mind.

{ 0 comments }

Crowdfunding has exploded in popularity in recent years as technology has made it easier than ever to work together for a common goal. From funding innovative new products on Kickstarter to helping your friends reach their fundraising targets on JustGiving, crowdfunding allows anyone to contribute to a project much bigger than themselves.

the house crowdBut crowdfunding is not limited to Kickstarter-style projects or charity pages. There’s many other applications, particularly in the financial and investing arena.

One of the most interesting recent innovations I’ve come across is The House Crowd, which combines the power of crowdfunding with something dear to many British investor’s hearts: property.

UK Investors have long found comfort and investment returns through owning bricks and mortar. For many, investing inproperty is attractive because it is much less abstract than owning stocks and shares –you can often-times see what you are investing in. However the price of most properties are far beyond the reach of many beginner investors, many of whom have seen house prices rise in recent years, but have not been able to benefit from the growth as it can take years to save up a sufficient deposit to make a purchase.

But property crowdfunding is changing this.

Investors don’t need thousands of pounds to benefit from property price growth. Instead, a group of investors each contribute smaller amounts into a collective investment in property.

To be frank,  until very recently my experience with investing has been limited to unit trusts which invest in the companies in the major stock-market of the world. But I have a friend, Sam, who is actively investing in crowdfunding property with The House Crowd and it’s made me take a closer look at this new type of investment.

*Sam has agreed to share some of his experiences in a later blog post. Join the Magical Penny email list to receive an update when this interview is posted online*

the house crowdThere are 3 different types of investment available on The House Crowd platform

Buy to Let Investments

Investors who wish to add some buy to let investments into their portfolio without the hassle of dealing with renters and maintenance, can buy shares in a limited company that owns a buy-to-let property. This company is created specifically for this purpose and is called a SPV which stands for Special Purpose Vehicle. The shares then entitle you to receive a share of profits from both the rent and the eventual sale of the property. This type of investment is much less flexible than a publicly traded company or unit trust so before you invest you must appreciate the minimum term is typically two years.

Development Opportunities

The second type of investment is in a new build or re-development projects. Typically the investment is for between 6 and 18 months and the funding is used to finance the development. This type of project appeals to investors because there is a clear time-line for the exit and return of capital. The House Crowd pays investors a fixed return typically of 10% p.a. Depending on how the particular investment is structured, this comes in the form of interest if the investment is structured as a loan to the development project, or as a preference share which pays a premium upon redemption of the shares, which allows investors to take advantage of their capital gains tax allowance.

 Secured Loans

The final type of investment is a secured loan secured by charge over a property. The return depends on the loan to value ratio of the property in question and is paid with the return of capital upon the redemption of the loan, typically 6-12 months.

How The House Crowd digs Out Investment Opportunities

the house crowdOne of the main appeals is the crowdfunding platform allows you to share in the potential growth of property in the UK. And it’s reassuring to know that all the properties featured on the site are vetted by experts with over 20 years of property investment experience. I don’t know about you, but it’s unlikely I would be able to seek out good investment property deals myself.

When I’m investing in unit trusts, I can search ‘fund supermarkets’ with different criteria such as geographic location, expense ratio and performance. There are always lots of potential places for your money so having a good selection to choose from is important. Thankfully for property investing, The House Crowd is always adding new property projects to the platform that you can then look into a bit further. You can select a property project that’s close to home, or you might find one with more attractive growth prospects somewhere else that you might not have otherwise come across.

Of course, the vetting process that projects go through to be featured on the site and made accessible to investors is reassuring but it’s important to know that you can’t simply rely on it 100%. As with all investing, there is always a degree of risk and you should conduct your own due diligence so you can make the decision to invest in a project. Would-be investors should also understand the time horizon involved. Depending on the project, you may not be able to get your money out of a project for a number of months.

Crowdfunding allows investors to get involved in projects that they might otherwise not be able to afford on their own. Together with other investors, profitable projects can become funded much quicker and easier, from a wider range of backers than ever before. For more information visit The House Crowd.

This is part 1 of a series of posts about crowdfunding with The House Crowd. In the next post I will share my experiences of signing up and the range of investment projects on the platform.

 

 

{ 0 comments }

houseGet the best terms and rates for your new home with a mortgage broker. But before you hire the services of one, here are the things you need to know.

If you are considering buying a home at a certain location, a mortgage broker is one of the best persons to help you out. They are knowledgeable about mortgage loan terms and can help you shop around for the best terms and rates. After all, a mortgage is a lifetime commitment. It’s a house that you will be paying for the rest of your life. So it only makes sense to take some time to think about what your mortgage broker can do for you and who you’re going to hire to take care of your mortgage.

So what other things do you need to consider before getting help from a mortgage broker? Here are just some of the things that we can think of.

Customer service

Your broker may be scary good at what he does but if he doesn’t have the heart, then every encounter with him will be a pain in the neck. It’s just not worth your money.

While looking around for mortgage brokers, you should not only consider competence but also customer service. Ask for referral from friends or better yet, look for reviews online. The internet can illuminate you on a lot of things about a product or a service.

remortgage house loanRisk tolerance

Mortgage is a long-term commitment so you need to consider how risky you want to get. In this case, you don’t want to get too risky. A mortgage broker will be able to help you mitigate any risk by getting you the best deal possible. They have access to a network of lenders which means that, from experience, they know which ones are good and which ones are not. Having a mortgage broker around also keeps you away from lenders with terms that could get you back years after you’ve already committed to the mortgage.

References

Mortgage brokers get a bad rap due to some who don’t act on their customer’s best interest. While snakes can’t be avoided in the industry, there are still a good number of professional mortgage brokers who are highly knowledgeable and have a genuine interest in helping clients get the best deal their money can afford.

It’s not always easy to judge a person’s character based on reviews but you can always look for references. Ask for references from your broker. Interview the people he has worked with before. If you like what you hear, go ahead and hire them but if not, you can always look around for another one.

What they can do for you

Before hiring a mortgage broker, you need to know what they can do for you first. A good mortgage broker in Central Coast, for example, will act in your name as your representative. They will handle all the paperwork and show you complete documents and reports needed for you to make a decision. Should anything happen to the prospective properties, they should inform you right away. They should be able to do follow ups regarding the current offerings from your potential lenders and once you have settled for a deal, they should also be able to explain to you the breakdown of the actual mortgage.

It sounds like a lot of work but it will pay off in the long run. Every monthly mortgage payment from then on will be a good reminder of the time you made a sound decision of hiring a professional to help you choose the best mortgage deal.

Did you have other thoughts about what one needs to consider when getting help from a mortgage broker? Let us know in the comments.

 

{ 0 comments }

wholesale clothingDo you feel your household income needs supplementing with another income stream? Have you always enjoyed fashion and wondered if selling from a range of wholesale clothing is a viable business to run?

Starting your own business can seem daunting, especially if you assume that you have to give up your job and run the gauntlet of not knowing how you will pay the mortgage or rent this month. Selling clothes online, either via your own website or online auction sites is a possibility that could reap financial reward.

Many people enjoy a substantial additional income stream by selling clothes online but like all businesses, you get out what you put in. With a lucrative market a few clicks away, just how do you go about setting up a home retail empire?

#1 Know your product

First and foremost is understanding your product. We all wear clothes thus we assume that we know clothing. But then there is fashion, on-trend items, colours and patterns, cuts of fabric, fabric types, as well as certain styles worn by some customers but not others, age, gender and budgets to consider.

Knowing your market niche is essential and how the wholesale clothing you select fits with this niche.

#2 Know your customer

The first point is tied closely to the second point and that is knowing your customer.

Who are you aiming your home fashion business at? Is it easy to wear, fashionable items for women aged 30 or are you appealing to the student population? Where are your customers? How do you reach them? These are questions that you need to be able to confidently answer.

The basis of any successful business whether it pays the mortgage or you are just dabbling is knowing that you have a market and how to sell to your customers.

For example, busy mums looking for smart casual wear will want a website that is quick and easy to use. The photos are clear, the descriptions good, the price reasonable and no hidden extra costs or extortionate postage and packaging charges.

#3 Branding

This all sounds like it is getting a little serious for a home business that just wants to sell the off cardigan or two to add an extra stream of income to the household. But small gestures and changes can rocket your business from ‘dabbling’ to a successful business.

Branding is when you make something look extra brilliant. Big names do it all the time. Look at the well-known soft drink, Coca Cola. Using the same colour palette throughout its product in the range, the same style of writing etc. When you buy their drink, you know you are getting a great product.

And when people buy from you, you want them to have a great product and a great experience. Giving your home business a name is a start, and choose colours that appeal to your customers. Make sure the photos you take of your clothing shows them off to the best of their ability – a crumpled shirt will not sell as well as one that is ironed and displayed nicely.

Think carefully too about how you package your items. There is something appealing about receiving a parcel but imagine your customer’s delight when they open the package to fine their £10 cardigan wrapped in tissue paper and matching ribbon.

#4 The bottom line

The whole point of running any business is to make a profit. When you have bought wholesale clothing, photographed it, sold it online, paid fees for website, auction sites, payment processing, postage and packaging, you need to come out with a clear profit.

Clearly, the more cash you can keep in your pocket, the better but over pricing is not the way to go as this moves your product from one market niche to a different ball game altogether. Work out how much items are to buy at cost, and price out all the other costs you pay to be confident you are not making a loss.

#5 Marketing & promotion

With great excitement you have ordered wholesale clothing, opened an auction site and possibly created your own ecommerce site too. Now what?

Unfortunately, customers don’t automatically come tripping to your door. You need to let them know you are there and then you need to entice them. There are all kinds of marketing ways to do this and social media is one way of attracting attention.

Offline marketing can prove fruitful too but with a consistent effort, your home business selling wholesale clothing can be a gold mine.

Eles Clothing is an online wholesale clothing company who supply sole traders and larger businesses too. Supporting smaller retail and fashion businesses is key which is why they have a no minimum order value. With end of season items from many high street retailers, Eles Clothing have a vast range of items. 

{ 0 comments }

Opportunity fundWith the price of gold sitting so high, the time has never been better for turning unwanted jewellery into well-needed cash. There are a few tips to bear in mind to getting the very best price possible. Knowing the golden rules of selling gold will help to ensure you get every cent of your items worth.

TIP 1: UNDERSTAND HOW GOLD BUYERS OPERATE

Individuals rarely sell gold and give little thought to the actual value of the gold they are selling. Basic research about how gold buying and selling works makes a world of difference in regards to finding an honest dealer, spotting scams and getting the best price.

SPOT PRICE

 Gold is a precious commodity that is traded globally every day and the finance segment of the nightly news always mentions the price of gold in dollar amounts per ounce. This price is known as the ‘spot price’.

GOLD PURITY

In order to make an accurate valuation of your gold the buyer must determine its purity and weight. The terms 24 ct, 18 ct, 9 ct relate to gold’s carats and the higher the number, the more pure and valuable the gold. 1 gram of 9 ct gold is worth roughly half the price of 1 gram of 24 ct gold.

There are various ways gold buyers test the purity of gold, mostly with acid or with a special x-ray machine. Jewellery marks or impressions are often inaccurate and many items are just gold plated and not pure gold. Not all that glitters is actually gold!

WEIGHED BY THE GRAM

Once the purity is determined, the item is weighed in grams and checked against the gold spot price of the day. No gold buyer can ever match the exact spot price because they need to run a profitable business and cover all their expenses such as employee, refinery, transportation, insurance and other costs that a one-time seller never considers.

WHAT IS A FAIR PRICE?

When looking to get cash for gold in Melbourne you will find wide ranging offers but most buyers will never tell you how they calculate the price in relation to the spot price of gold. Some unscrupulous buyers only offer 20%-30% of the spot price while others offer between 60%-80% percent per gram or even higher. This is why it is crucial to shop around for the best price when selling your gold.

 

TIP 2: ALWAYS SHOP AROUND FOR THE BEST PRICE

 The best gold buyers are those who advertise their price up front without anything to hide. Many gold buyers who advertise ‘highest prices paid’ use high pressure sales tactics, have no intention of paying fair prices and can never match the ethics and reputation of a trustworthy pawn shop in Melbourne that operates with transparency.

 

TIP 3: CHECK THE REPUTATION AND HISTORY OF THE SELLER  

An established business depends on word of mouth, repeat customers and maintaining a great reputation. Look for positive feedback on their store website and speak to the owner on the phone if possible. Are they helpful, friendly and professional? Trust your instincts.

Fly-by-night operators only care about short-term profits. They never offer the best prices or service and should be avoided at all costs. Only sell your gold to a business that has stood the test of time and has a solid reputation.

Using these simple tips will help you get the best price possible and ensure your gold selling experience is a positive, pleasant and profitable one.

{ 0 comments }

 lightbulb momentFrom the use of energy-efficient compressor head pumps to changing employee practices, there are many ways in which the average business can go about saving energy. Doing so is good for the environment and also a great way to keep overheads to a minimum.

Some of the most effective ways to reduce your business’s energy usage, cutting both your bills and the size of your carbon footprint, include:

Energy-efficient compressor head pumps and similar solutions

Your business premises are likely to make use of at least one pump, whether it’s a compressor head, single head pump or an other type. It is quite likely that there will be more than one pump. The most common examples are circulator pumps in central heating systems and pumps of various types that are used to boost water pressure.

These pumps serve important purposes; however, by their nature, they can be relatively energy-intensive. Switching to the most energy-efficient models and ensuring that you do not use pumps that provide more power than you reasonably need for the application in question can potentially save your business significant amounts of energy.

Change your energy practices

Some of the major business energy suppliers have recently been stressing the value of changing employee energy practices in saving businesses money on their energy bills. Changing practices is often overlooked when compared with changing to more energy-efficient equipment and appliances, but both can be extremely valuable in reducing energy usage.

light bulb momentEnsuring lights, computers, monitors and other items of electrical equipment are turned off when the office is not in use can save an organisation significant amounts of energy and noticeably cut bills. For computers and similar appliances, this means turning them off fully and not just putting them on standby.

Turning the heating down by just a single degree can see savings of up to 10% in associated energy usage. On the subject of heating, double glazing and improved building insulation can also significantly cut wasted energy and reduce the portion of your bill associated with keeping the office warm.

Water usage

Water usage is another factor that is often underappreciated in terms of the role it can play in inflating your bills. Water wastage is often significant in both businesses and households, which is reflected in the resulting water bills. Furthermore, when the water in question is hot water, this also pushes up your gas bill as a result of the energy taken to heat the water.

Being wise in water usage and encouraging employees not to be wasteful, such as always ensuring that taps are turned off fully, can go a long way. Urinals can also be a particular culprit when it comes to wasting water. You should ensure they are not flushing themselves overnight when they are not actually in use, with devices that prevent unnecessary urinal flushing paying for themselves within months.

Maintenance

Keeping your building in good condition can be a very useful way to save energy. Draughty windows and doors, or ones that do not properly keep out the cold, can cause significant heat loss and require more energy to be expended on heating to maintain comfortable temperatures.

Leaking pipes and dripping taps can waste significant amounts of water over time and, if these form part of the hot water system, can also lead to energy wastage. Keeping on top of such repairs can help to reduce your bills noticeably, with the repair costs often cheaper than they would be if the problem is left and allowed to worsen.

 

{ 0 comments }

MISYS3-MOBILEPAYMENTEarlier this April, electronics giant Samsung announced a new partnership with leading POS (Point of Service) manufacturers in an effort to “accelerate mobile payment adoption” among consumers in the US and across the world.

Teaming up with the likes of Verifone, PAX Technology, Equinox, USA ePay and others, the company’s renewed focus on mobile payments looks likely to further secure their status as leaders in the field, with Samsung Pay already being used by over ninety percent of leading retailers in the US, as well as the majority of small, local businesses that accept mobile payments.

Yet even without Samsung’s commitment to accelerating adoption, mobile payments have already catapulted their way from a niche audience to one of the most widely used payment methods, with many experts predicting that in the next few years, platforms like Samsung Pay will outrank chip and pin technology, and even good old fashioned cash, as the default way most of us pay for goods and services.

The next evolution in mobile financial management

Along with Apple expanding their own Apple Pay into international markets, and several other major tech firms breaking into the market, the move to a mobile payment society is expected to come within the next decade, something some see as the next evolution in using smartphones to manage our finances.

Again, growing from a relatively small audience to the most prominent method of managing core banking services, mobile banking software was used to move £2.9 billion a week in 2015, a figure which has grown steadily over the past several years, including a .9 increase alone from 2014.

Challenges ahead

Not that the industry didn’t have its challenges. Much like in the mobile payments market, those responsible for creating mobile banking systems had a steep hill to climb in order for digital banking to overtake traditional core banking methods, much of it relating to mass adoption of smartphones themselves. Starting off with just a handful of apps, mobile banking was only able to really take off once more and more consumers were equipped with the technology to use it.

Back in the world of mobile payments, brands like Samsung and Apple are facing similar challenges. As with banking, payments’ biggest growth period will come when users upgrade from older smartphone model and move towards those capable of supporting the latest technology required to make digital payment a success.

Getting merchants on board

Unlike the typical mobile banking solution however, payments have another challenge ahead if they’re to finally succeed in becoming the default method of financial transactions. That challenge is simple: convince more merchants -particularly small business- to come on board.

In 2015, finance provider CAN Capital conducted a survey which revealed that as many as 87% of small business owners questioned were not currently accepting mobile payments.

Whilst that figure is likely to have decreased somewhat in the last year, it still provides a hurdle for Apple, Samsung and their contemporaries that they’re aiming to overcome by espousing the tangible benefits of accepting mobile payments over traditional debit and credit cards.

For one thing, there’s the cost. Whilst accepting mobile does require some initial investment, the overall costs are typically much lower than the often expensive handling fees charged by credit companies, making them a viable alternative to chip and pin for small business owners who need to keep overheads low whilst still keeping up with modern tech.

The advantages for business owners don’t end there either. One of the driving factors in mobile’s increasing popularity over the recent years has been the ability of big name brands like Starbucks using the technology involved to offer discounts and reward loyalty, something the company reports has led to mobile payments accounting for 30% of their business in North America.

Quicker, simpler, more secure

Meanwhile, Apple, Samsung et al have already taken their cues from mobile banking software providers in making much of mobile’s biggest -and perhaps most important- benefit to customers and merchants alike, namely that using a smartphone is often quicker, simpler, and certainly more secure than using a card, or in most cases even cash.

It’s these benefits that have already helped mobile payments make huge strides in taking over traditional payment methods, and -if the experts are correct- will ultimately see Samsung’s dreams of ‘accelerated mobile payment adoption’ become a reality sooner, rather than later.

 

Have you used Apple-Pay or other mobile payment technology?

{ 0 comments }

Many people are critical of debt, but taking out a loan can actually be a financially positive thing in the right circumstances. A loan can be a great tool to get back on track on your journey towards wealth. Keep reading to learn how to use a loan for your ultimate financial benefit.

 

Using credit cardsConsolidation Existing Debt

If you have a lot of debt it’s likely you are struggling to keep up with all the repayments, even paying the minimum payments. This can be very stressful and can have knock-on effects in all areas of your life. If you are financially stressed, you may struggle to concentrate at work or the stress could result in your body getting run down and ill. Taking out a consolidation loan can help bring some control back because your monthly payments are reduced. This is possible because the new loan will likely have a longer pay-off period. This is not the ultimate solution to the debt, but it buys more time to turn things around. The interest rate could be lower too, especially if the loan is replacing credit card debts. A consolation loan is like a rubber ring for someone in the sea. It doesn’t bring them safely to shore but it buys valuable time and stops them panicking quite so much, providing some perspective and temporary relief. When you’re not panicking and stressing you can work out a plan, and you can keep the lights on at home and food on the table. You can get loans from banks like Secure Trust Bank, Credit unions (in the US) or Building Societies (in the UK).

 

CarGetting out of Underwater Cars

Buying expensive vehicles on credit is an easy way to get into financial difficulty. A car payment can fool someone into thinking they can afford more car than they actually can. If a car loan is taking a huge bite of your monthly salary, it is also easier to get into debt with other things too. If you are struggling financially, selling that expensive car you have in your drive-way could be a great way to kickstart your new and improved financial plan. However it may be impossible to sell if you owe more than the car is currently worth. This is known as being ‘underwater’.  If you wanted to sell a car that is ‘under water’, you would need to get a loan for the difference between what you owe and what the car can be sold for. It might not sound like a very attractive prospect – being left with debt and without a car – but it’s actually a good thing because once the sale has gone through you no longer have an expensive car-payment, nor a car that is only going to go further down in value. At this point, you should buy the cheapest car possible as a temporary measure until you’re more financially secure and you can gradually move up to a better car over time, paid for with cash rather than debt.

 

cautionPaying for an emergency

In an ideal world everyone should have a rainy-day fund for financial emergencies. But sometimes, that emergency fund is not there and you need an alternative. A loan is simply renting money. Yes, it can be expensive over time, but everyone pays for things they need and want if they value them – and paying for money with money is the same thing! If you really need the money for something, then a loan has a purpose. The key thing is to be conscious of the choice, rather than ‘falling into debt’. You need to formulate a plan to pay off the debt with intention and speed. You also have the right under section 94 of the Consumer Credit Act 1974 in the UK to repay early in full or in part although you may need to pay 1 or 2 more months’ worth of interest, as stipulated in the loan agreement.

{ 0 comments }

Trading in the markets with Binary Options

by Adam on April 18, 2016

If you’ve done any investing, or even if you haven’t, you will know that the price of investments go up and down. This fluctuation is due to the willingness of investors to buy and sell at any given price.

fluctuating marketFor example, imagine you are buying oil and the current price is £100 for whatever unit you’re buying in. If you predict demand in oil to grow, then you expect the price to go up in the future to meet that demand. If others also believe this to be the case they might be willing to buy the same amount of oil for a bit more, say, £110. Over a short amount of time, the price has now already gone up. What people think collectively about a certain investment is called ‘market sentiment’. If investors hear some news that suggests the demand for oil is going to go down, or supply is going up, then they may believe the value is going to go down and therefore they may sell their investment. If lots of people start wanting to sell, then they would be willing to accept less in order to make the sale, fuelling the fall in prices. 

This is example is about one commodity, oil, but the same mechanics are in place for every investment, from the biggest companies, to the smallest little grain of wheat.

Over the long term, investors tend to make money as the value of most investments go up, but some people make money in the short term by trading – taking advantage of the volatile up and downs of the market over short time periods.

Trading in the markets with Binary Options

You don’t need a huge amount of money to trade on the fluctuations of the markets. One simple way is to use Binary options to trade price fluctuations in multiple global markets. The great thing about binary options is you know what you can win and lose – it’s not open-ended like traditional options.

Binary options are different from traditional options because they may have different payouts, fees and risks. One of the most common binary option is a “high-low” option also known as fixed-return option due to having an expiry time and date and a strike price. If a trader predicts correctly on the market’s direction and the price at the time of expiry is on the correct side of the strike price, the trader is paid a fixed return regardless of how much the market moved. Get it wrong and the investment is lost. The benefit is you always know how much you can gain or lose with each trade.

Depending on where the trader thinks the market is going, they can buy a call (predicting the market is rising), or a put (predicting the market is falling). For most high-low binary options the strike price is the current price or rate of the underlying investment, for example the FTSE 100 index or a currency pair (GDP Vs the USD for example).

bitcoinYou can take advantage of the fluctuations in the markets by using a broker like Binary Uno. Brokers make their money from the percentage discrepancy between what they pay out on winning trades and what they collect from losing trades. One of the interesting features of Binary Uno is that as well as using cash to fund your trading, you can use Bitcoin. This of course adds another dimension to your trading and investing because the price of BitCoin fluctuates.

You can read about my Bitcoin investing journey here

For long-term investors, the fluctuations in the markets can be a source of stress and it’s advisable to ignore the ups and downs as much as possible. But short term-looking investors and traders can take advantage of the ups and downs and make money, so if you want to have a go, then good luck!

 

{ 0 comments }