money making ideasIn many ways, the forex market offers the type of investment opportunity that remains viable regardless of the wider economic climate. After all, it is possible for traders to profit even in a depreciating market, as they are able to tailor their trades and capitalise on fluctuations between individual currency pairs.

This creates a volatile and constantly changing market, however, which may not be suitable for new or inexperienced investors. In these instances, you will need to think carefully about your burgeoning investment portfolio and consider the impact that recent, socio-economic events have had on the forex market.

A Look at the Current Market: Why is it so Volatile?

So why is the forex market particularly volatile and unpredictable at present?

In short, there have been a series of events that have triggered seismic price shifts and movements, starting with the Brexit revolution in the UK. The proposed withdrawal of the UK from the European Union sent the pound plunging to its lowest value in 31 years, and while it has since rebounded it continues to perform poorly against the US Dollar and the Euro. With this trend unlikely to change while the uncertainty remains, it is hard to identify prosperous and reliable currencies at present.

There are other, localised events that are also impacting on the market. Take the decision of the Nigerian Federal Government to alter the interbank exchange rate of the naira for example, which shifted from N197 to N280 against the dollar. This has sent the cost of international airfares along Nigerian routes spiralling by an average of 54%, while also catching emerging market investors completely unaware. This type of sudden and unforeseen development is typical in the forex market, while it often leaves those who are heavily invested in a particular currency exposed.

Considering your Options as a Financial Market Trader

These events, along with the continued fluctuation of the Euro, have left the US Dollar as the only truly prosperous currency in the existing market. While this does offer an opportunity to invest and back the Dollar within a chosen currency pair, the American economy is itself far from stable and liable to fluctuate depending on key data releases.

Although it can be argued that the real-time analytical tools offered by platforms such as HantecFX equip investors with the tools to optimise their trades at any point in time, they can do little to affect the underlying rules that govern change in such a volatile marketplace.

In this respect, forex market investment may be something that is best left to knowledgeable and experienced traders in the current climate. While there is always an opportunity to profit from currency, the existing social and geopolitical climate makes it extremely difficult for novice traders to achieve their goals.

For other investing articles check out the Magical Penny archives for Investing.

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When thinking about debt, the solution that springs to mind is most often bankruptcy. Though this certainly serves its purpose as a last resort solution, there are other options open to you that are important to consider.

Debt management professionals will be able to help you make the final decision when it comes to resolving your debt problems. They have access to insolvency software that is used to assess your income, assets and expenditures to recommend the best way forward. They also have years of experience with insolvency and have been certified by a regulator to show that they are capable of dealing with your debt.

What options are open to me?

There are a number of debt management solutions out there, but the most popular and commonly used include Individual Voluntary Agreements (IVAs), Debt Management Plans (DMPs), and Bankruptcy. This infographic will demonstrate the pros and cons of each solution to best illustrate your options.

Debt Management Options – Logican Solutions Understanding Your Debt Management Options infographic was brought to you by the team at Logican Solutions

Is an Individual Voluntary Agreement (IVA) right for me?

An IVA might be suited to you if you are a resident of England, Wales, or Northern Ireland and you are technically insolvent. This basically means that you have the ability to repay some of your debts, but not the entire amount. In order to be considered for an IVA, you will need to be in debt to more than one creditor, and generally speaking you will be more than £15,000 in debt. For an IVA to be a realistic route for you, you’ll need to have a regular monthly disposable income.

If your IVA request is accepted, you will have to live on a very rigid budget, but you will not experience the same restrictions that you would should you opt for a bankruptcy. Once your IVA is complete, after approximately six years, your remaining debt will be written off and the IVA will be wiped from your credit report. To find out more about IVAs, get in touch with an Insolvency Practitioner, who are experts in this area.

Is a Debt Management Plan (DMP) right for me?

Whether or not a DMP is right for you will depend on a number of factors. Consider the extent of your debt. If the amount is in excess of £7,000 and comprises of unsecured debts including store cards, credit cards, and overdrafts, then this route might be right for you. You won’t have to release equitable interest over to your lenders, but as a DMP is an informal agreement, there is always a risk that your creditors might change the terms of the agreement or back out altogether.

Unlike an IVA, you will pay off all your debts with a DMP, which means they usually last longer than an IVA. If the amount you owe is far larger than £7,000, it is worth considering another option, as it will take a lot of time to repay this amount with a DMP.

Is bankruptcy right for me?

Most debt management professionals would recommend looking at bankruptcy only when you have exhausted all other options. Determine whether or not you can feasibly repay your debts in any other way. Do you have any assets you might be able to sell to repay your debt? Might your financial situation change in the near future? If not, then you can get in touch with an Official Receiver to arrange bankruptcy. All your possessions will be taken into account and potentially sold to cover your debts. When you consider the restrictions that will be placed upon you on top of this, then bankruptcy can appear a truly daunting option – unfortunately, for some, it is the only option available. There is no minimum amount required for you to go bankrupt, and like any other financial indiscretion, it will be wiped from your credit report after approximately six years.

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If you are one of the 1.6 million homeowners have bought home insurance from their mortgage lender, a new study has foundmany mistakenly believe they cannot switch for a better deal.

homeowners-insurance-resourcesThe survey by Go Compare found 30% (466,200 households) believe their home has to be insured with their mortgage lender as a condition of the loan; and that 6% were told by their lender that it was a mandatory purchase. Nearly a quarter (24%) think switching away from their lender’s insurance will invalidate their mortgage.

 Worryingly, 12% said they felt under pressure to buy their lender’s home insurance.

Protecting a property with adequate buildings insurance – typically against fire, flooding, subsidence and storm damage – is as a requirement made by all mortgage lenders.  Buildings insurance provides financial protection for the borrower (and ultimately the lender) from damage to the main structure of the home.  While most lenders offer home insurance, borrowers are not obliged to buy it for them.

The practice of compulsory home insurance tied-in mortgage deals was never formally outlawed despite promises to do so in the late 1990s.

Whether you are arranging your first mortgage, re-mortgaging your home, or a long-standing mortgage-holder, you can shop around for your home insurance to find the best deal.

 

 

home insurance in the UKWhy buying mortgage lenders’ home insurance might be the wrong policy

The survey also revealed that just over a third (34%) of homeowners who arranged cover through their lender didn’t check cover levels and excesses to make sure they were buying the right policy.  According to statistics published earlier this year by the Association of British Insurers, the main reasons for household insurance claims being rejected included the claim value being below the policy excess and the incident not being adequately covered by the policy.

 

If you have a mortgage on your home, then your lender will require you to protect your property with buildings insurance.  But it’s up to you where you buy that cover from.

As well as finding a good value policy, you also need to make sure it covers all the things that are important to you, plus any minimum cover levels your lender may require, and comes with excesses that you can afford

 

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warning explanationThere has been a small rise in certain parts of the world recently of forex scams appearing, attracting victims and leaving them in a worse financial position. Malaysia seems to be a hotbed of forex scams, with many young people in their 20s and 30s falling prey to them throughout 2016.

It’s easy to see why so many people get caught up in them, with promises of making huge profits through a get rich quick scheme. However, if you want to be a serious trader or investor and genuinely improve your finances, avoid them at all costs.

Recent Forex Scams

Unlicensed forex service companies have been signing people up to invest in offshore forex companies with promises of fast returns. Many operate on a multi-level marketing method, making money from registration, recruiting and forex investment fees. When the ‘company’ has enough money it then closes and disappears.

Being offshore means it is nearly impossible to legally prosecute any of them. This has led to calls for fresh measures to tackle forex scams, especially in Malaysia where many young people are borrowing from friends, families and loan sharks to sign up.

How to Spot One

A forex scam can easily be spotted by the terms that are offered seemingly too good to be true. Often this is because they are! While forex trading does involve a lot of risk and there is a chance of making large profits, it will not be done overnight.

Any supposed forex company promising a get rich quick scheme is probably lying and just after your sign-up fee. Even the most successful traders will have spent years building up their skills and wealth through the practice. There are no get rich quick schemes that actually work, especially in forex given the small margins between currency values.

Avoidance Tips

In order to avoid being roped in by a scam, the best advice is to trade through a regulated, professional platform such as AxiTrader. Other tips include:

  • Google the product/scheme – shows any problems others have experienced
  • Check the firm online – visit the website, LinkedIn profiles of staff to ensure it is legitimate
  • Talk to people – ask experts if they are aware of it and reputation
  • Try a demo account
  • Regulation – find the forex regulation body and see if it is listed

These should all help you avoid being scammed when starting out on what will hopefully be a successful forex trading career.   

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Saving moneyWith governments and political parties constantly in flux, dealing with foreign currency is a major risk for investors.

Despite the risks involved, dealing with foreign currency can be hugely profitable and financially beneficial if you know how to do it right. Here’s how to minimize the risks of dealing with foreign currency:

Economic risks

By far the most real threat to your foreign currency is economic change. Although you can’t always be prepared for everything that happens when it comes to the economy, one way to prevent significant risks is to keep up with current affairs. Things like the recent Brexit and government decisions across the globe impact hugely on the value of currency, meaning that by staying in tune with current affairs and global politics, you should be well informed of any drastic changes coming into effect and be able to plan a contingency strategy well in advance. Companies like Ebury, help companies to minimize the risk by offering a flexible credit facility.

Diversify across the globe

Spreading your assets across many different regions is a sensible way to mitigate risk. By no longer having all your eggs in one basket, or one currency so to speak, you’ll be able to be sure of a certain degree of financial security thanks to the variety of different currencies that are available across the globe. Currencies that are tied to the US Dollar always tend to be much stronger, with many foreign currencies fluctuating. The Brexit hugely impacted on the value of sterling in the first few hours, with in dropping to the lowest it had ever been in over 30 years however as the days went on it slowly has increased again. The unpredictable nature of the situation highlights just how important it is to spread your assets across different currencies.

Invest in currency hedged funds

Hedging involves taking one risk to offset another and can be one of the best ways to reduce risks. This is the best way to mitigate risk if you’re very active when it comes to investment. By hedging you’ll constantly be making the most money from your investments, that is if all your moves are the right decision.

Dealing with foreign currency is always risky due to the nature of the world and the unpredictability of governments. However, by following these tips you’ll be able to minimize the risks for a more profitable investment.

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Having loads of money can be a real burden, can’t it? While it’s sadly not a problem many of us experience, there will hopefully come a time when you start to develop savings that require more attention than just being left sitting in a current account, for you to dip in and out. If you’ve started to build up a decent amount of savings and are wondering what to do with them in order to help them grow, then be sure to consider the following options and weigh up which is best for your financial situation and needs.


Why Being Bad can be GoodSavings Accounts

Anyone serious about saving will likely start with a savings account. Many banks and lenders will have a range of different savings account options available.

Pros

Putting your money into a savings account is a safe and secure decision, as all respectable credit unions and banks will be insured. Therefore, even if there is another financial crash, it should be safe. You’ll also have access to the funds at any time and most accounts can be opened with a small initial deposit and no requirements to continue depositing certain amounts.

Cons

Compared to some other savings options, most savings accounts have relatively low interest rates. This means it will take longer to increase your savings. Depending on the lender, there may be a minimum balance amount that must be adhered to as well, with charges enforced if your savings fall below this.

ISAs

Since they were first introduced in 1999, ISAs have become a popular saving method for a lot of people, with many variations from help to buy to tracker ISAs available.

Pros

One of the main benefits of all ISAs is that they are completely tax-free. This includes all the interest gained on them, no matter what your income. Some fixed-rate CASH ISAs have higher interest rates than the instant access or easy-access kind as you must leave your savings in the account for a set amount of time, often at least one or two years. You can save up to £15,240  in an ISA.

Cons

For some, that figure may be a negative if you have plenty of spare cash to save, as it is the maximum that can be split across various ISAs too. If you do need to withdraw then expect to have the interest rate slashed or be charged. If you do withdraw from an ISA, you can now put that money back into the ISA without it affecting the annual allowance, as long as it is before the end of the tax year in which you made the withdrawal, which ends on the 5th April each year. For example, if you put in £15240 in May, you could take it out and put it in again, as long as it is before the 5th April of the next year.

Investments

ProfitThose who are willing to take a little risk to increase their savings should consider putting some of their savings into investments.

Pros

A much higher return on investment can be gained through investments. Depending on how much of your savings you decide to invest, and the success of where it is placed, it can be incredibly rewarding. It can be a more exciting way to use your savings, as you take full ownership for each investment.

Investments can go in a Stocks and Shares ISA – when an investment is in an ISA all the gains are tax free -you never have to pay any tax on the funds when you access the money.

Cons

There is a lot more risk involved and the chance that your investments value might have gone down at any time.  There is a risk you could end up with less than you started with, so only invest money in investments when you have many years before you might need the money, to give it time to grow and recover from any losses.

Consider all the pros and cons of such savings choices before investing your spare cash in any of these options.

If you’re new to investing, have a read of other investing articles on Magical Penny by clicking here

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investing for the futureIn the hours following the Brexit result being announced, the price of gold was one of the day’s main winners as it soared by over 20%. Precious metals as a whole all had a successful time as they increased in value, due to the UK voting to leave the EU.

The markets have calmed down a little since those crazy first few hours and days, but the price for many precious metals still remains relatively high, especially compared to pre-Brexit levels. There are a number of reasons as to why this price hike occurred, that can be used in predicting future price changes.

The Safe Choice

Buying gold is traditionally a safe haven option for many traders and investors when market risk is significantly ramped up. Once a sense of panic set in as the result was confirmed, many took their financial investments in stocks, shares, bonds and more and moved them over to precious metals.

For many the aim will have been to move it over for the short term until the markets have returned to normal and are more predictable. Uncertainty in the markets always leads to precious metal boosts, specifically in gold as it provides better returns on investment than any other risky options during such times.

An Unexpected Result

The Brexit result was also unexpected by most people, which led to fewer investors buying into precious metals as a safety option before the referendum. Instead, many were happy to keep their stocks and other investments where they were, until the relatively shock announcement that the UK had voted to leave the EU came through.

Due to many investors expecting the UK to remain, they were caught off guard and ended up buying into gold and other precious metals as soon as the result was announced. This is one reason the price jumped up by so much so quickly.


Silver’s Surprise

While gold was the precious metal most were focusing on, it was actually silver that experienced the biggest gains in reaction to the Brexit. Gold was always predicted to do well as a popular safe haven, but silver surpassed all expectations.

It was up 45% in dollar terms and 65% in sterling, reaching its highest level in two years. Safe haven demand, the US Federal Reserve not expected to raise rates and the Bank of England and European Central Bank stimuli, all worked together inadvertently to create the rally. Plus, lower interest rates reduced the opportunity cost of holding such precious metals, making it a more attractive prospect.

What Next?

Some investors may have just bought into precious metals as a short-term, safe haven choice, with the intention of selling sooner rather than later. However, other investors believe the rise in price has legs and will last into the future.

With the fallout from the Brexit yet to fully take place, a lot of uncertainty surrounding the markets remains. Gold and silver have both been on an upward trend this year too, with the Brexit representing a sharp rise that may well level off. Precious metals look set to soar in value again once Britain actually leaving the EU gets underway.

 

 

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5 money saving tips for your home

by Adam on July 6, 2016

As you were always told by your gran growing up, if you look after the pennies, the pounds look after themselves. And as always, gran knows best. Just a few little lifestyle changes and tweaks you can make to how you run your household can see your bank balance shoot up and leave you free to spend your hard earned cash on fun stuff.

From purchasing home appliances that will save money in the long run, to cutting your sponges in half, here are 5 tips and tricks to get the most out of your money and save around the house.

Food prep

Food prepping isn’t just for health and fitness fanatics who clog up your instagram feed with their love of gym selfies and avocados. Forward planning and careful choices when tackling your weekly food shop can ensure you can save hundreds of pounds over the year. If you’re prone to impulse buying as you go from aisle to aisle in the supermarkets, it may be worth changing to online shopping – the cost of delivery will be a far smaller dent in your bank balance than everything that sneaks in your basket by the time you make it to the till. Set aside a couple of hours to plan your meals for the week and be strict with yourself – order only the ingredients you need and avoid temptation.

rising costsIf you still prefer to shop in store, don’t restrict yourself to one store – literally shop around and take advantage of the different offers available at various supermarkets. You may discover one is best for cheap fruit and veg while another has the lowest prices for canned goods – playing the field can save you a fortune in the long run.

However you do your shop, the aim to spend less money on pricey coffee shop sandwiches and meals out by taking your lunch into work or school so, make sure you stick to your goal and you’ll soon notice a difference in your wallet.

Invest in your home appliances

While it may be tempting to ignore making purchases that don’t seem immediately necessary, investing in items like a Grundfos booster pump for your home will ensure you save in the long run.

It may not be the most glamorous or exciting shopping expenditure you’ll make for your house but it acts as a ‘one stop shop’ for all your boosting needs – ideal in homes where the existing mains water supply is insufficient to meet the demand requirements of pressurised hot and cold water systems.

Make your purchases last as long as possible

Get your future frugal self acquainted with sites like BuzzFeed and Pinterest and learn a few hacks to ensure you get every penny’s worth out of your purchases and stretch your cash out as far as possible. It can be a simple as cutting your sponges in half or storing your jars upside down in order to get every bit of produce possible. Simple, quick changes that prove to you that if you look after the pennies, the pounds look after themselves.

buying investments onlineDon’t be afraid to switch suppliers

If every month your bills come and every month you pay without questioning whether you could be getting a cheaper then this needs to change. Comparison websites exist to show you within seconds just how much you could be saving on utility bills if you simply switch suppliers – that’s extra money in your bank every month rather than in a gas company’s. You could save hundreds over a quarter from just a few researching and comparing competitors prices.

It’s not just household bills you can find cheaper deals for; life insurance, mobile phone contracts, current accounts, internet and TV subscriptions – all packages that can be negotiated. Many businesses will offer you a reduced payment at just the mere mention of you considering leaving, they’re that keen to keep custom, so it’s always worth a phone call to see what you can claim back.

Sell your junk on eBay

Your kid’s old bike that’s gathering dust in the shed? eBay it. Those dresses hanging at the back of the wardrobe that you haven’t worn in years? eBay them. That treadmill that is little more than a maiden for dirty laundry? You get the idea now – eBay! Get some additional income and rid your home of unwanted junk and clutter – win win.

And I’m tasting my own medicine at the moment by selling my girlfriend’s Radley bags right now on Ebay!

 

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financial newsThe financial markets are in a state of chaos at present, unhinged by widespread political uncertainty. While the consequences of global, geopolitical tension and a changing European Union are impossible to predict, media sensationalism is causing many to fear the worst and sending a state of panic throughout the UK, the U.S and the single market. With cross-border and international deals also declining as investors seek flight, it is difficult to know where to commit your money in the current climate.

 

3 Considerations when Building Investments

 If you are able to step back from the madness and see things through a clearer perspective, however, you will quickly understand that underlying laws which govern change in the financial markets will continue as usual. This means that rather than focusing narrowly on wider, economic factors, you should instead select investment options and build a portfolio to suit your lifestyle.

fluctuating marketHere are three steps you can take to achieve this: –

1. Evaluate your Disposable income levels

Ultimately, it is important to evaluate your levels of disposable income prior to choosing an investment option. After all, you cannot trade with money that must be committed to bills or other expenses, so the amount of freely available capital that you have will dictate your investment strategies. If you have minimal income, for example, it is better to invest in low-risk options such as dividend investments, as these deal with growth blue-chip firms and are known to deliver regular returns.

In contrast, those with higher levels of trading capital may prefer to diversify and invest in higher-risk derivatives and entities such as the forex market.

2. Consider your passions and areas of knowledge

In most markets, knowledge and understanding are an investors’ core weapons. This ties directly into your lifestyle, particularly if you base your investment choices on sectors that you are passionate about or knowledgeable in.

Let’s say that you have an innate understanding of the automotive industry, for example, and regularly keep up-to-date with the latest innovations, trends and events that are shaping the marketplace. You can use these attributes and habits to inform your investment decisions, enabling you to capitalise and improve your returns over time.

3. Remember your Pension Plan

When we discuss investment options it is all too easy to overlook our pension funds, which are often taken for granted as contributions are made automatically. The type of pension plan that you invest in will have a huge impact on your future, however, so it is important that you select an option which is tailored to suit your future lifestyle plans. Take SIPPs (self-invested pension plans), for example, which are hosted by Bestinvest and other wealth management firms. This type of financial product affords you greater flexibility in terms of how you access your pension funds, whether you wish to initially withdraw a lump sum or commit all of your capital to regular, weekly payments.

For more information in investments browse the Investing category on this site

 

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Welcome to Part 3 of a series of posts about investing in property with The House Crowd. Part 1 provides some background to the innovative concept of crowdfunding investment property, and Part 2 outlines the registration process. Now, in Part 3, I’m exploring the exciting bit – shopping for the right investment!

Once you are registered with The House Crowd you can begin looking at information on the properties and development opportunities that are looking for investor funds. Your portfolio summary page will be empty until you have selected an investment.

portfolio summary

The site is regularly updated with the latest investments that are available. Here’s a recent screenshot (hidden some details as these are live investments and I’m not providing investment advice, only showing you for educational purposes).

example investments

For each investment you can see the total amount of investment required, the term and how much the yield will be on per share. The minimum investment for most deals is £1000.

As someone who is used to shopping for mutual funds and index trackers in the equity markets, the research process was really interesting as I could actually see what I could be investing in. The investments on The House Crowd are real properties in the UK that require investor funds and have all gone through a high level of due diligence before they are added to the site.

When looking to select which investment you should note the investment term particularly as this will determine when you can realise any gain which can then be used or reinvested in another project.

To gain experience of using The House Crowd platform, I invested in a Bridging project to fund a brand new development of luxury apartments in Cheshire. The first phase of the project is now fully funded, with the £600,000 second phase set to launch in August this year ahead of a planned June 2017 completion date.

I’m sharing the details to help you gain an understanding of the process.

alderley edge

The development requires a total of £1 million over 3 phases to develop the site. Investors are funding this development and can expect a return of 10% per year. There is a risk of loss as with all investments, but all investors are protected by a registered legal charge using the same structure banks often use to protect their development loans.

 

alderley edge 2In the phase I invested in the target was £530,000 over a term of 12 to 17 months.

 

The artist impression pictures look impressive, but a true investor should be more interested in the Investment pack that is provided for each project.

 

investment pack exampleThis investment is a bridging loan so includes a Lender Fact Sheet which summarises the material terms together with the Lender Terms and Conditions which you must read before investing.

 

If you decided to invest in such a project you would then fill in the application form and once approved, send the funds you are investing to the solicitor who is handling the process. The form of acceptance can be completed both online and by post.

 

If you are investing in your first project with The House Crowd you will also need to send photo ID to comply with Anti Money Laundering legislation, along with a Source Of Funds form.

 

If you are an overseas investor you will also need to provide 2 clarifications of address but unfortunately residents of the USA are excluded from investing.

 

With all the paperwork filled in and sent off, the investment is live and I became a property investor of sorts!

 

I’m excited to see how the build progresses and will be sharing updates in due course.

 

My friend, Sam has already invested in a number of projects with The House Crowd and I’ll be sharing his thoughts about the experience in another post.

Happy Investing!

 

This is Part 3 of the series. Read Part 1 and  Part 2 

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