5 money saving tips for your home

by Magical Penny 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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Aligning Your Investment Options With Your Lifestyle

by Magical Penny on June 29, 2016

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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Part 3 – Choose the Investments With The House Crowd

by Magical Penny on June 27, 2016

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, David 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.

Update: Read his story here.

Happy Investing!

 

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

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UK Out of the EU

by Magical Penny on June 24, 2016

We woke up this morning (or stayed up all night…) to learn the UK is leaving the EU.

leave

It’s come at the end of what has been an intense, arguably dis-organised  and definitely tragic campaign.

The markets have predictably reacted negatively with both equities and currency falling sharply in early trading. It now seems we’ll enter an extended period of uncertainty both for the UK and the European Union (EU) as the details of the exit are worked out. In the grand scheme of things, the near-term economic impact is likely to be limited, but there is a risk that the shock of the result triggers wider pent-up concerns around more substantive factors.

As an investor however, you should sit tight and don’t make any rash moves. You should not be investing with money you need in the next 5 years at least, so by selling now you are only going to crystalise a paper loss.

With a vote of 52% the electorate has instructed the Government to begin the process of negotiating an exit from the EU. This has never happened before and is likely to be protracted and difficult. On purely economic grounds, many will want as orderly and amicable a process as possible. However, with a number of polls on the continent showing increasing dissatisfaction with the EU and growing separatist sentiment, there is a very strong risk that the politics overrides the economic and investment case.

In such a scenario, the incentive for EU politicians would seem to be to make any exit as painful as possible to quell domestic factions which could lead to further disintegration of the trading bloc.

In the last week or so the initial market sentiment seemed to have shifted to favour a Remain vote. The pressure valve that is the currency has seen sterling fall particularly sharply, touching levels not seen since 1985, while global equity markets are deeply into negative territory. Whilst market swings witnessed in the run up to the election had more to do with investors trying to second guess one another than true market impact, the prospect of protracted uncertainty across the UK and Europe is likely to keep volatility elevated.

Mid- and small-sized companies are likely to face more pressure being more tapped in to the UK economy, compared with the big multinationals that most investors hold in their portfolios.

In the long term the economic impact of the UK leaving the EU is effectively unknowable, but many analysts expect the impact to be relatively limited.

That said, perhaps one of the major investment concerns from this vote is the risk it becomes a trigger for pent-up concerns across Europe. Not only is political instability likely to drive volatility in markets, there are also worrying signs of a growing appetite for government interference in the actions of nominally independent Central banks, just as the unconventional monetary policy experiments extend further into the unknown.

Uncertainty around how the UK actually leaves the EU and on what terms will remain for the foreseeable future, but is likely to fade into more of a background process.

Bottom line: this result should not change your long term financial planning, but the increased volatility over the next few weeks and months might make following your investment performance in the short term a little more scary.

Stay the course.

 

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How Likely Is Winning The Lottery? Why growing your own wealth is the smarter choice

by Magical Penny on June 22, 2016

One of the reasons I set up Magical Penny was to encourage people to dream and explain how starting to invest and save can start the journey to becoming wealthy.
By investing and saving consistently over time, and using the power of compound interest to your advantage, your pennies can grow quicker than you might think.
But as humans we are oftentimes tempted to take shortcuts…like playing the lottery!

But how likely is that to happen?

This infographic from Lottoland explains:
oddsofbecomingrich[4]
  • Winning the lottery is almost as likely as having identical quadruplets – with a 1 in 14 million chance. This is less likely than becoming the President of the United States of America.
  • You’re more likely to get rich on the Antique Roadshow than dating a supermodel (1 in 60,000/1 in 88,000)
  • You’re also more likely to marry a millionaire than you are being born with 11 fingers or toes (1 in 215/1 in 500).

How do you like those odds?

Yeah, me neither.
To fix it, have a read of some of the investing or saving articles on Magical Penny for information and inspiration to grow your pennies.
Good luck.

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Will new bank regulations cause the next financial crisis?

by Magical Penny on June 20, 2016

By now, there isn’t much left to be said about the great financial crash of 2007-2008 that hasn’t already been said countless times before.

today is soon the past, the future is foreverIt’s been written about from every conceivable angle in countless books, blogs, newspapers, and magazines, featured as the subject of many a TV show and documentary, and even turned into a major Hollywood film starring Christian Bale and Brad Pitt.

Such widespread coverage -even almost a decade later- isn’t unwarranted. Widely considered to be the biggest economic crisis since The Great Depression back in the 1930s, the disaster threatened to destroy major financial institutions until government bailouts came to the rescue, caused unprecedented levels of mass unemployment, and forced banking regulation authorities to spend the next several years doing all they could to prevent such a catastrophe from ever happening again.

Yet as banks face spending the remainder of this year ensuring they achieve SA-CCR compliance before it comes into effect on January 1st, 2017, experts are now warning that these same regulations which aim to prevent another economic meltdown could well end up being the very thing that causes one.

Replacing current risk forecasting methods

One of numerous banking regulations put forth by the Basel Committee, SA-CCR (Standardised Approach for measuring Counter Credit Risk) takes the place of existing risk forecasting practices CEM (Current Exposure Method) and the SM (Standardised Method), and -when it comes into effect at the start of next year- will impact not just banks, but the entire finance industry.

It’s this one-size-fits-all approach to predicting potential risks that researchers from The London School of Economics’ Systemic Risk Centre (SRC) say could lead to an even bigger financial crisis than the one that struck eight years ago.

In a report issued last year, the SRC researchers argued against the idea held by banking regulators that it’s possible to have a single, uniformed model of forecasting future risk that is “knowledgeable and correct.” Further, the report’s’ authors suggest that by opting for one set of compliance regulations over another, those authorities stand every chance of “backing the wrong horse,” leaving banks vulnerable.

cautionCause for concern

Worryingly, given just how much banks are investing in ensuring SA-CCR compliance, these regulations -along with other rules stemming from the Basel Committee, were singled out by the SCR as a serious cause for concern.

According to the report, SA-CCR and similar methods “less accurately measured and forecast” risk than those they’re set to replace from 2017 onwards. Not the likes of CEM and SM were necessarily without flaws.

The SRC report goes on to state that whilst no form of regulation compliance currently in place -nor any set to come into force over the next two years- is 100% perfect, some could prove invaluable in safeguarding certain individual components of the global finance system.

fluctuating marketProtecting individual components of the financial system

This stems from the belief the SRC suggests is currently held by regulators that, because these individual elements are secure on their own, the system as a whole is immune from a repeat of the 2007 – 2008 crisis.

The report’s authors suggest that the truth however, is that there is likely to be a number of economic imbalances in the system which are not only undetected now, but will continue to be so under the one-size-fits-all regulation, and that these imbalances could spell disaster in the future if they’re not detected by SA-CCR and similar banking regulation.

By sticking rigidly to this one uniform credit risk regulation, the likelihood that some problem will come to the fore increases. Since all institutions will have missed it by following a standardised method of forecasting risk, any weakness in the system will cause the entire global financial sector to suffer at once.

The alternative, encouraged by the SRC report, is to stop forcing all institutions to follow a single, industry-wide risk model. By doing so, the likelihood of at least some institutions using a model which ensures they’re prepared for an as-yet-unknown problem increases.

This will mean that rather than the industry as a whole winding up on the brink of another major collapse, those institutions who were ready can remain strong enough to support a recovery, ultimately saving the finance sector from dealing with consequences more far-reaching and even more serious than those of 2007-2008. In other words, the very same consequences banking regulators have just spent the better part of the past decade looking to avoid.

 

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Crowdfunding in Property through The House Crowd – Part 2

by Magical Penny on June 17, 2016

the house crowdThis is part 2 of a series of posts about crowdfunding with The House Crowd. Read Part 1 here where I detail the types of investment opportunities available. In the next post I will share my experiences of signing up and the range of investment projects on the platform

 

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.  But in the past, investing in property involved being a lot more hands-on than investing in companies shares. Property requires up-keep and repairs, and investors need their properties to be occupied by tenants to keep cash-flow positive. Investing in property also used to involve much bigger sums of money to be invested.

the house crowdEnter The House Crowd. Using the power of crowdfunding, even small-time investors with only a few hundred pounds now have an opportunity to invest in property and enjoy the returns it can provide, without needing a huge deposit or without having to be hands-on finding tenants and keeping the property well maintained.

So, how do you get started?

Property investment is not for everyone, and you should ensure you have paid off your debts and have an emergency fund in place before you begin with any investing.

The first stage is registering with The House Crowd. Once you have put in your details you can then see investment information. It is done this way to conform with the Financial Conduct Authority regulations about investments. Once you’ve submitted your username and other details, you will then be taken through a short quiz to prove you understand what you are investing in. It’s not exactly rocket-science but you need to prove to The House Crowd that you understand how the investments are structured.

The House Crowd profileIf you intend to invest in a specific buy to let property the structure used to accomplish this means you are actually investing in shares in a Special Purpose Vehicle (a limited company called an SPV) that will own the property outright free of any mortgage, unless stated otherwise. The other investments options are funding development opportunities and secured loans which allow you to get your capital back at the end of a pre-determined period of time, along with interest. You do not own any actual property directly and as with all investments there is an element of risk. The key thing an investor should understand is how much risk and whether the predicted return on the investment is worth the risk.

When I signed up to The House Crowd, I was able to go through the questionnaire in only about 15 minutes during a lunch break. This included time I spent reading through the material on the website describing the investment process (the Secured Loan Guide, and Equity Investment Guide are both recommended reading). By creating an account and going through the questionnaire I was not signing up to a specific investment and I was under no obligation to purchase anything.

Another piece of recommended reading is the Risk Warning. As with all investments there is an element of risk and you should not invest money you might need access to in the short term. You should also not be investing if you have consumer debt as you can almost always make a better return by paying off debt than you can with an investment.

Having gone through the required reading and questionnaire I was now logged in and it was time to go shopping for investments!

 

Since I began this journey with The House Crowd, I’ve found two friends of mine have also used the service. First I recommend you read my friend Maria’s post about The House Crowd on The Money Principle. The second is my friend David. Read his story here.

Next week, in Part 3 I will share how to go about picking the investment for you, and which property development project I’m currently invested in.

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Ask Me Anything: 10 Answers to Your Questions about CFDs

by Magical Penny on June 16, 2016

What are CFDs?

financial newsIn finance, CFDs (Contract for Difference) are leveraged derivative products. They are referred to as derivatives since their values are derived from values of other assets such as shares, market indexes or commodities.

Trading in CFDs involves taking positions on the variance in values of underlying assets over specific periods of time. In simple terms, traders place bets on whether or not values of underlying assets are going to change (by falling or rising) in the near future, in comparison to what the original values had been before execution of the contracts.

What are the risks associated with trading in CFDs?

There are various complexities and risks in trading that may prevent retail investors from achieving their investment objectives and needs. They can be classified into four broad categories;

 

  1. Investment risk- possibility of investment markets moving against the traders/ investors.
  2. Client money risk- danger of the CFD provider losing all or some of the finances held on behalf of investors.
  3. Counterparty risk- risk of a counterparty (such as the CFD provider) failing to fulfill contractual obligations.
  4. Liquidity, execution & gapping risks- when the trading mechanics and market conditions prevent investors (through CFD providers) from trading when they want to or at undesirable prices.


BuyingWhat are some of the factors that investors must put into consideration regarding fees and charges levied by providers?

Prospective investors should establish fees and charges that are compulsory and those that aren’t. They should find out if they’ll be required to pay costs of data and software even if they don’t execute any trading transactions.

Additionally, investors should find out if there are account inactivity fees and also if there are any charges for making money transfers into and out of CFD trading accounts.

Can CFDs enable investors to achieve the investment objectives and needs that they have?

Before investing in CFDs, it’s important to differentiate between perception and reality.

The general expectation among investors is that they can be easily traded without much effort. However, CFD trading is quite complicated and requires regularly monitoring.

Many believe that CFDs always generate high returns. The reality is that traders often suffer huge losses. Substantial financial returns on certain individual trades are often counter-balanced by financial losses on others.

Some people believe that CFDs trading and online share trading are very similar. The reality is that although there is similarity in trading platforms, the associated risks and nature of trading are very different.

Some people also believe that they can acquire necessary trading skills by simply attending education seminars. However, extensive training is required in addition to the basic knowledge learnt in education seminars.

How can investors determine the suitability of CFDs providers?

Investors should understand who is the specific company that is providing the CFDs.

There should be adequate information concerning the history, financial strength and performance of the provider.

Are all CFDs the same?

CFDs can be broadly classified into three:

  1. Market Maker Model-this is whereby CFD providers determine their own price for underlying -assets on which they are traded.
  2. Exchange Traded Model- a model whereby trading is done using CFDs that have been listed on the stock exchange.
  3. Direct Market-Access Model- whereby CFD providers place clients’ orders in the market for underlying assets. Prices paid by investors depend on the underlying market.

What are some of the trading essentials?

It’s important for investors to understand how their CFD providers handle trades, including how much they’ll be required to pay as well as trading platforms used.

Trading platforms are systems that CFD providers use to allow investors to execute trading activities. There are various platforms used by providers. Traders can place orders to buy or sell using mobile phones or at websites such as CMC Markets via online platforms.

Some trading platforms are easy to use while others are quite difficult.

Apart from the trading platform, there are other trading essentials that investors must take into consideration. They include; related charges and fees (such as interest), margin requirements, margin calls & liquidation, stop losses and dividend payments.

sell buy smallIs it important to conduct adequate research before making investment decisions?

Of course.

Trading in CFDs consumes a lot of time and is quite complicated. It’s therefore important to conduct adequate due diligence and research. It’s also important to exercise a lot of patience before making important investment decisions.

Research can be conducted by extensively studying the PDS (Product Disclosure Statement).

Necessary information can also be obtained from the following sources; website of the CFD provider, seminars, consultants, friends and family members.

What are some of the important disclosure yardsticks for Over the Counter CFDs?

The yardsticks help investors in understanding the risks associated with Over-The-Counter CFDs and decide whether or not to trade in them.

The following are six important disclosure yardsticks for Over-The-Counter CFDs;

  1. Client qualification
  2. Margin calls
  3. Opening collateral
  4. Suspended underlying assets
  5. Counter-party risk (hedging),
  6. Client money and counter-party risk (financial resources).

What are some of the precautionary measures that prospective investors need to take?

It’s very important for investors to test the trading platform of prospective CFD providers before signing up. They should also ensure that they have sufficient finances and time to engage in trading.

Additionally, they shouldn’t be easily convinced by promotional gimmicks and/or pressure selling tactics.

If you do decide to explore this investment strategy then good luck. If it doesn’t seem right for you, have a read of the other investing articles here on Magical Penny to find a more appropriate strategy.

 

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Life Insurance: What Do You Need To Know?

by Magical Penny on June 16, 2016

So, you have decided that you need Life Insurance.  What do you need to know? We asked one of the largest life insurance brokers in the United States Big Lou Insurance and here’s what they told us.

life insuranceLife Insurance is not like car, home, or private medical Insurance


With car insurance you simply give the insurance agent or broker your car’s registration number and a couple other pieces of information. Underwriting takes place in seconds and the broker can have a legitimate quote for coverage within a few minutes.  

Home insurance is basically the same with just a few pieces of information about your house and type of lock on your property.  Private medical insurance is a bit more involved, with your age and gender and whether or not you use tobacco, but it’s not too bad and in seconds you can have an offer for insurance.

Life Insurance is a very different and complex process. It’s invasive, there’s a thorough underwriting process, and prices and policy options have a massive range from one company to another.

Therefore, you should treat life insurance differently from your other insurance. You also need a broker or financial adviser who treats it differently.  Of course, with a few pieces of information, such as your gender, age, height and weight, anybody can get a “quote” from 100 insurance companies.

That “quote” however is subject to a number of underwriting criteria that your broker didn’t ask you about.  Some of the information needed about you is available to the insurance companies in real time, but most of it is not.  If you use a good insurance broker, they already know this and may ask you to go through their prequalification process.  

Otherwise, life insurance companies will want to examine your driving record, your prescription drug use, your lifestyle and more…Information from previous life insurance applications can be accessed quickly by the insurance company, but not your broker or financial adviser when providing that “quote”.  

The information that is most needed by the insurance company is contained in your medical records which are not digital and are protected by privacy laws. The records are with your doctor and have to be sent to the insurance company during the underwriting process. There are a myriad of things your broker can’t possibly know in a few minutes to give you an accurate “quote”.  

So, do you want a broker who can run a bunch of low “quotes” or a broker or financial adviser who will take some time to get you the best possible rate?

life insuranceSo What Can You Do To Get Acceptable Life Insurance?

First, remember that a “quote” is just a “quote” until an application is submitted, fully underwritten, and your policy is delivered.

As mentioned above, a quote in life insurance is just that—it’s a ballpark figure that can and will change.

Watch Out For the Bait and Switch Sales Process

Remember—unlike in car, home, or private medical insurance your quote is incomplete. Because of this fact, many brokers simply quote you the lowest possible rate from their preferred insurance company so you will just say yes, knowing that when your rate comes back higher than expected they can rely on your desire to get coverage rather than start over somewhere else.

It’s a sales ploy used by most insurance brokers out there.  The goal is to just get you into the lengthy and burdensome process so they have you locked in. It works most of the time.  What you need to know is that you need to give your broker a lot of information about your health profile to get a realistic quote.  

Very few people get the best rate possible, and many people get hung up on rate class description rather than on reality. You hear the word Preferred or Elite or Best Class and you want to be the best. It’s just another sales tactic.

What you don’t realize is that the third best rate at one insurance company can be lower than the best rate somewhere else.  Instead of being focused on what the sales guy wants you to focused on, the lowest “quote”, you should be focused on all the details that are going to determine the price of the policy that is actually delivered to you.  While you were focused on the lowest “quote” your broker or adviser missed the fact that your family history precluded you from getting that rate and if you had applied at another insurance company you would have ended up with a lower price.  What do you want, the lowest “quote”, Or the best rate possible based on your health profile?

Use an Experienced Insurance Broker that Will Get to Know You

Insurance Companies have niches. While most insurance companies have some similarities, they each have a sweet spot that your broker needs to find. The Insurance companies don’t advertise all their niches, and so the experience of your broker plays a huge role in making sure you apply with the right carrier.  To do this correctly, your broker needs to know a lot of information about your personal health profile.  

Your Broker or Adviser Makes the Difference

Your choice of the life insurance broker or adviser to work with can mean hundreds if not thousands of dollars in savings each year. For all the reasons explained above, your broker or adviser needs to be a full time professional, not just trained in the art of salesmanship, but trained in underwriting and in finding solutions. If your broker is brand new, look elsewhere. If your broker or adviser works with only one company, look elsewhere. If your broker or adviser tries to get your banking information on the first call, look elsewhere.  If your broker or adviser doesn’t ask detailed questions about your health, look elsewhere.  If your broker or adviser doesn’t provide specific solutions based on a knowledge of your health profile, look  elsewhere.

ImportantIf You Have a Few Health Glitches Ensure You Find a Specialized Broker

If you suffer from a chronic illness like diabetes, or you’re overweight, suffer from a heart condition or were recently divorced—your life insurance needs are unique and more complicated than someone who is in perfect health.

You should seek a broker with experience in your particular health condition. If you’re diabetic—find a broker than works exclusively with diabetes sufferers. If you’ve had a heart attack, again seek council with a life insurance agent that has works with heart disease patients in the past.

A broker with experience in impaired risk life insurance will save you a ton of time and money—they know the ins and outs of the process and they know which insurance companies to place your policy with

Actively Participate in the Process

It’s important that you collaborate with your life insurance broker and participate in the process. Remember to be upfront about your health conditions and so they can work with the insurance companies underwriting departments to find you the right company for your unique needs. If you need any help with the process feel free to reach out to Big Lou Insurance at BigLou.com.

 

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How Rainwater Harvesting Can Help Pay Your Bills

by Magical Penny on June 15, 2016

This continues a series about investments into your home that save you money over the long term and add value to your home when it comes to selling. For part 1, see the post about under-floor heating.

waterRainwater harvesting is relatively straightforward – there are a variety of different systems, but the basics involve a tank and a waste water pump. In the past such systems have been used to supply water for your garden, but new technology means that they can now be plumbed into homes and used to wash clothes and flush toilets.

Using these systems can dramatically reduce your water bills, and in some cases almost halve them. Collecting rain from the sky, a rainwater harvesting tank can store and filter up to around 6500 litres of water – a lot when you compare it to your average water butt, which holds just 200 litres.

The Graf System

With this system you can harness rainwater to use in the home for washing, cleaning, flushing toilets and using in the garden. It will involve excavating your garden to bury a water storage tank. The tank is self-cleaning, and one that holds 2700 litres costs around £2500. Installation costs should come in at approximately £1000. You’ll also need a waste water pump, such as those listed here, which use around 10p of energy a week in an average three-bedroom house.

The Ifore Rainwater Harvesting System

An alternative to the Graf system is the Ifore system. This one is installed in the loft of your home and gathers water straight from the roof by replacing four roof panels with a drain. It’s simple to install, and in comparison to the Graf system it’s fairly cheap, costing under £2000 to purchase and install. However, the tank is size-limited at only 455 litres, so in dry periods it’s likely you’ll need to use your mains water supply. There’s very little maintenance to be carried out on the system, and the impact on your bills can be big, with an estimated average saving of around 40 per cent.

preparing the roadAstroturf Lawns and Rainwater Harvesting Systems

Watering your garden can be costly during drier spells, and it can account for around half of the water we use during the summer months. If you want to harvest a significant amount of rainwater to water your garden, one option is to have Astroturf grass fitted with a water tank underneath.

The Astroturf acts as a filter for rainwater, and beneath it lies a self-cleaning water tank. Unlike traditional water tanks, these are not very deep but can be as wide as the area of grass. On average they don’t hold as much water as systems like the Graf system, but they also don’t need a large area to be excavated as long as you’re happy with Astroturf. So they could even be fitted in a small front garden.

It can be quite expensive to have the system installed along with the added cost of Astroturfing the area, but if you’re considering having Astroturf in the first place, then it could be a really good option.

Using a Waste Water Pump

Pumps are a crucial element of rainwater harvesting systems, enabling water to be used around the home and garden simply and efficiently. Combining new technology in water tanks and pump systems allows us to make the most of a natural resource that could otherwise be wasted, and can cut your bills at the same time. There are lots of different types available, so there’s something to meet the needs of every system.

 

 

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