How Using Storage Can Help You Grow Your Pennies

by Magical Penny on July 12, 2010

This is a guest post from Drew, working with Big Yellow Self Storage. I had not really considered how storage could help you grow your pennies so I hope you find this post a really interesting take on the subject.

Living in any big city, you quickly come to understand that space = money. With this in mind, we have three money making/saving suggestions that will maximize your space.

De-clutter and Rent out a Room

It’s no surprise that so much of our home space is filled with useless clutter after 61% of people questioned in a Big Yellow Self Storage survey last year admitted to hoarding useless items around the house. But hoarding can really cost you -households across London could be making up to a £3 billion a year, just by storing excess clutter to rent out a room. (This equates to over £250 million a month based on average rental incomes across the UK, or an extra personal income of as much as £320 a month or £3,840 a year per household).

Just under a third (26%) of us that have a whole room in our home filled with junk and the research found that over a third (41%) would definitely rent out a room to make money to help in these tougher financial times. Looking at these figures it could well be time to get the junk out of the spare room.

Prepare your House for a Sale

If you are about to put your home on the market, then you should know that it becomes all the more important for you to make the space inviting. It’s a lot like presenting a blank canvas to a new family. Letting them see the potential for how they can make it their own – instead of getting distracted by what’s already there. And when you are giving people the tour of your home, the last thing that you are going to want to do is make it look a lot smaller by failing to clear out any extra items.

Almost every home shows better with less furniture. Remove pieces of furniture that block or hamper paths and walkways and put them in storage. Since your bookcases are now empty, store them. Remove extra leaves from your dining room table to make the room appear larger. Leave just enough furniture in each room to showcase the room’s purpose and plenty of room to move around. You don’t want buyers scratching their heads and saying, “What is this room used for?”

Self Storage Rooms As An Office

The one thing you’ll inevitably need if you’re planning to set up your own business from home is a lot of space. With the help of commercial self storage, you can make this process a lot easier, by storing papers and documents securely offsite. Records are important and have to be maintained, but storing them requires a lot of space. With self storage you can keep your files organised in one location without having to upgrade to a bigger home or office. This isn’t only relevant to smaller businesses either. Expanding businesses can use a facility for equipment, promotional material or to archive documents.

At Big Yellow Self Storage you can store things of all shapes & sizes, with room sizes from 9 sq ft up to 400 sq ft for as little as a week, month, year or for as long you’d like.

Thanks Drew for the guest post! If you feel you have an interesting take on a subject that can help Magical Penny readers to grow their pennies  do get in touch.

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My Crazy Evening in Ireland

by Magical Penny on July 9, 2010

Would you like to have the freedom to visit friends in another country on a whim? It’s not about income level -its all about planning.

Earlier this week I caught plane to Ireland before returning the next morning.

That’s right. I was away from the UK a total of only 14 hours (and six of those I was asleep!).

For some people it might seem like a crazy thing to do. some of my colleagues thought I was mad after revealing to them that I had woken up in another country that morning.

It was the most impulsive decision I’ve made in recent months but I don’t regret it all. In fact I’m still grinning from ear to ear -the surprise look on my friends faces; the exciting kart racing I joined in with; the sheer craziness of an international return flight in the space of 14 hours. It’s what memories are made of!

Of course the financial impact cannot be ignored. The trip was the most expensive holiday I’ve ever been on in terms of the cost per hour. Air-travel and karting are not two of the most frugal ways to spend your time! However, the trip truly encapsulated the Magical Penny philosophy of growing your pennies with a plan.

The aim of Magical Penny has always been to encourage you to get control of your finances to help you lead the life you want to live, both now and in the future.

Mastering personal finance is not about sitting at home, trying not to spend any money. Like a crash diet, this can only work for so long. It’s simply not sustainable. True mastery of personal finance is about working consistently towards specific goals; taking little steps towards them, and refining your budget all the time to help grow your pennies over the long term whilst not feeling deprived.

It’s true that my 14 hour trip was impulsive and spontaneous. And to the uninformed this might seem crazy. Yet it’s much easier if you lay the financial groundwork before you’re spontaneous!

Being spontaneous requires a lot of pre-planning and being impulsive always works best when there has been a lot of preparation behind the scenes.

Of course, as a process, money management is never ‘complete’  but being able to cash-flow a spontaneous visit another country for a few hours is a good benchmark for getting in control of your finances. 🙂

I’m proud I’ve managed to get to such a place. Do you want to be in such a position too?

It’s not easy but I hope this and other Magical Penny posts inspire you to take a look at your own finances to see what steps you can make to grow your pennies in the long run but still be able to do the things today that mean the most to you.

Are you up for the trip?

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My Crazy Evening In Another Country!

by Magical Penny on July 7, 2010

On Tuesday night I worked a full day before rushing out to catch a plane to another country for an evening of fun. I then came back on Wednesday morning (today!), and was back at my desk before 9am.

On the face of it, you might think I’m crazy. Or that it’s not the kind of thing someone with a goal to grow their pennies would do.

Before I spill the beans about my 14 hour adventure I’m interested to hear what you think about this!  What’s your perspective?

Do leave a comment!

I can’t wait to share the full story on Friday 🙂

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Top Business Blog Award Winner: Saving Money Category

by Magical Penny on July 5, 2010

Magical PennyTop Saving Money Blog is proud to announce it has been awarded a position in the Top Business Blog Awards 2010.

And whilst grateful for the recognition the main reason for sharing the news is for the value of the  list of award-winning blogs.

Personal finance blogs are all different and offer new perspectives so if you’re enjoying Magical Penny you’re enjoy and get an immense amount of value from some of the other great blogs as you navigate through a sometimes complicated path towards personal finance mastery!

Just a short one today but there’s some exciting things coming around the corner. Look out for Wednesday’s shocker post too!

Subscribe to make sure you don’t miss it!

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Where Will You Be Ten Years from Today?

by Magical Penny on July 2, 2010

It’s funny how, over time, things change and yet stay the same.

Last night I went back to my high school for its 10th annual music festival. I was an honorary guest as one of the student founders of the festival back in 2001.

It was a wonderful night showcasing the musical talent of the next generation. And being back at school for an evening was really fun.

Naturally, I spent a lot of time comparing what the school is like now with when I was there:

The new facilities; the old curtains.

The new staging lights; the same old corridors.

And whilst it may sound a bit rich coming from a still fresh-faced 24 year old, I felt old!

Time really does fly by.

Legacy

Setting up that first festival in 2001 was certainly nerve wracking for us, a group of inexperienced 15 year olds, but, with Mrs Kilburn’s vision and infectious enthusiasm, we got there and the night was a success (although admittedly not as good as the festivals that followed)!

We had been scared something would go wrong, or that we’d have trouble getting everyone in the younger years involved.

But it worked, and 9 festivals later it’s a regular fixture in the school calendar. Every year-group after us has memories of the annual musical event. It’s Mrs Kilburn’s lasting legacy and gift to the school.

But that’s the funny thing about legacy –you never really know at the time what’s going to stick. Nor do you mk know if your contribution and preparation today will grow into something beyond yourself in the future. Certainly back in 2001, when Mrs Kilburn first dreamed up the idea of a school musical night she never would have thought it would still be around today for its 10th Festival!

How About You?

When I started this blog back in February 2010, a few of my friends thought it was funny I was going to be evangelising about compounding returns, about saving for retirement and planning for a time well into the future.

But like building a legacy, growing your pennies takes time, and you never really know the true effect of your efforts today on tomorrow.

The one thing you can control however, is what you do today. Over time things are certain to change, and some things will stay the same. But if you take action today, and maybe try something scary, then who knows? In 10 years time you might be singing your own song of success.

Good luck!

(And happy 4th July weekend American readers!)

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How To Market To Yourself – Magical Penny Podcast #1 –

by Magical Penny on June 30, 2010

I thought I’d try something a little different.

This first Magical Penny audio post is based on Monday’s post about how to employ marketing techniques to help you save and invest money to reach your goals.

Sell to yourself!
[mp3_embed blog_plyrs=”2″]

As always I welcome any feedback on the approach -whether you’d be interested in more audio posts, or if you prefer video or simply the written word.

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Get Rich with Secrets of Top Marketers

by Magical Penny on June 28, 2010

I have a confession. I can watch shopping channels for hours on end.

It’s not what you think. I haven’t bought anything from a TV shopping channel. I do, however, find they make fascinating viewing. And if you take a step back from what they are saying, the techniques they use to peddle their wares can be very entertaining!

The techniques can also be really useful for selling to yourself! Perhaps selling the vision of your savings goals or to keep you on track.
Here’s five selling ideas and how you can use them for good not evil!

1) Use a calendar event

The best marketers often frame their offers in the context of a specific calendar event. The most obvious event is of course Christmas and the new year sales. By associating their marketing with such an event they can ride on the energy of the event and more easily get into the heads of consumers. Christmas is a big example but there are countless others. Have you ever bought anything to “get ready for summer”, or for “back to school”? How about Halloween or valentines day?

When it comes to saving your pennies, using a calendar date can be really helpful too. Firstly it gives you a deadline. For example by saying “I will be driving a new car before Christmas” or “I will be going on an amazing summer holiday in June” you will find it much easier to start saving. Secondly like the big marketers, you can ride on the enthusiasm and energy of a specific event to keep you motivated -it really does making saving ‘fun’ when you have a clear goal in sight.

2) Have a Vision

On the biggest ‘tricks’ of marketers is selling a vision. In the classic world of ‘infomercials’ the ‘vision’ starts really glumy before giving you a solution. This montage of infomercial ‘problems’shows this perfectly:

Having a ‘vision’ of how you want your life to be in the future is great for maintaining focus on saving too (although of course for most people its better to focus on making positive visions come true rather than saving to avoid a less fortunate fate (although if that works for you, then go for it).

3) Scarcity

Another brilliant trick of marketers is the idea of making things scarce. This can increase demand and give the product in question a more premium feel.

For example, just this last week the iPhone 4 was launched in the UK, leading to queues and sell-outs in shops around the country. Marketing scarcity can create a great buzz for the product and can makes the purchase more of an ‘event’ (see #1).

I actually stood in a queue for an iPhone 4 at the weekend in London, and it was a great atmosphere. Of course, it was my friend who was going to actually buy the phone!

You may not realise it but when it comes to saving, there’s a real scarsity too – time. There’s only so many days to save for the myriad of expenses that come up in life, most notably, weddings, houses and, ultimately, retirement. If you’re in your 20s you are in the best position to start saving for such long-term goals because of the power of compound interest. Everything you put into savings and investments before your 30th birthday has over 30 years to grow and compound.

Time is the most scare resource there is so you must take advantage of it, even if you just start small.

4) The Power of the List

Marketers are always talking about the size…of their list.

‘Lists’ are contact details of potential customers that marketers can sell things too. They can be immensely helpful for everyone involved -potential customers can sign up to the lists that matter to them and can hear about amazing deals before anyone else. It also saves time for the customer as they don’t have to trawl the Internet or the shops looking for that perfect item -they can opt-in to hear about exactly the kind of things they need or like to buy. Of course lists are brilliant for marketers too because they can sell directly to people who are interested in what they have to say so they are more likely to close the sale. (I have a list too!)

Similarly when it comes to saving money, the power is in the list. If you make a note of everything you want in life, both in the short, medium and long term it not only gives you time to reflect on your possible purchases, but it also actually means you can almost guarantee you’ll get what you want as you have a goal to work towards.

Having a list helps you avoid unncessary purchases and  you get what you really want. Win Win.

The ‘list’ that works for me is actually a PowerPoint slide show of all the shiny gadgets and travel destinations I want to visit. I set it up last year and I’ve yet to buy anything or visit any of the places of the list but I’m certainly closer than I was as I have something to aim towards as I save for those shiny bikes, electronics, and trips of a lifetime.

5) Stick to What Works

When marketers hit on a particularly successful technique or campaign, what do they do?

Try something else?

Not often.

Instead they do what works!

As an example, as a marketing research consultant I’ve worked with clients who use almost the same advertising campaign over and over again. And rather than resulting in ‘burn-out’, the campaigns have become more and more successful!

Similarly, Internet marketers often use the same marketing emails repeatedly and see sales come in like clockwork. Obviously there’s only so many times you can use a particular strategy but sticking with what works can be a brilliant marketing strategy that saves money and time. There’s no need to ‘reinvent the wheel’.

It’s just the same when it comes to saving and investing. If something is working, keep at it.

There is a danger for some who find themselves trying different ‘money hacks’ or different investment strategies all the time. We all have our own money quirks and habits and things that work for me might not work for you or yours for me. When you come across something that works for you, for example having a more ‘flexible’ budget rather than tracking every penny, by all means stick to it.

When it comes to money management, there is little black and white so when you find something that’s working for you, stick with it!

I hope these tips have been helpful for when you need to market to yourself. I’m writing this on Sunday night so now, if you excuse me, I’ve got some infomercials to watch before bed!

More Reading

I’ve written about marketing to yourself before:

Financial Lessons of a cheese pedlar

I’ve also made a ‘confession’ before too:

“It Starts When You Save”

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How To Save Money

by Magical Penny on June 23, 2010

Sometime you can’t just shout “SAVE MONEY NOW!” and expect it to work.

I was recently approached by a PHD student studying the psychology of saving with a view to helping more people save for the things that matter to them in life.

The student was interested in my thoughts on which psychological approach to saving is best: a linear or circular approach. Let me explain.

The linear approach

This approach sees life as a long journey and your savings goals are markers along the road that you must reach: You follow the linier path through life and save for key events accordingly.  Such an approach would therefore see retirement as a distant destination that needs to be saved for gradually over time. Or perhaps, as retirement is so far away for young people, other savings priorities, like perhaps a house or a car, take precedence because they help you have the things you need today.

A linear savings approach can be dangerous as it might be used as a crutch for people who can’t or don’t want to save for long-term goals now -they can justify:

“I’ll save for retirement later because I need to save for a house first”

They can prioritise what is more closer on the linear path -this focus on the short/medium term can be both good and bad -good because it provides focus, but bad because the long term future may be neglected.

Personally I find the linear approach really helpful. However, it works for me for two reasons:

  • Firstly I’m good at delaying spending (sometimes too good) so I appreciate it might be easier for me than others with more immediate demands on their money.
  • Secondly I’ve never had a problem saving for retirement. For me, it doesn’t seem that long away in the grand scheme of things and I’m amazed that others don’t want to take advantage of the amazing opportunity to compound savings over time. I don’t know why but this mindset is rare as most people can’t think of many things more boring than saving for retirement or they have too many commitments in the present to put money away for a distant, undefined future.

There is another approach to saving however that is more universal:

The circular approach

This approach is focused on today.

Rather than focusing on where you need to be in 10 years time, you look at this month’s income and save a proportion for the many different goals you might have.  You do this every month, reassessing your income and savings goals each month to help you reach your goals.

Whilst the Linear approach is great for some, I would imagine the vast majority of people would do well to follow the Circular method because it means you take action now. By focusing on the present, to what you can control, you are more likely to find yourself being successful at saving money.

Not Clear Cut

Of course, over the course of our lives, we all use both these ‘mindsets’: we need to look to the future but we also manage our lives day-to-day.

However it’s worth having a think about what works best for you. Do you perform better when you’re chipping away at a large impressive goal gradually over time? Or do you do prefer to have frequent smaller goals. The impressive large goals work really well for me but there’s a benefit to little monthly successes too.

When the student asked me which method I would recommend for my blog readers I told her it would the circular approach, particularly as the purpose of my blog is to get people to ‘start’ making more conscious saving and spending choices.

You can use “circular savings” if you find the future daunting. Whilst you might not know what your retirement will look like you can certainly start carving out a small part of your monthly budget for that purpose.

Circular saving makes budgeting more ‘real’ and gives you an element of control. The immediacy of the ‘circular’ method is therefore an appealing psychological approach to saving money.

So…given the above are you ready to SAVE MONEY NOW?! 🙂

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Be Comfortable Being Uncomfortable

by Magical Penny on June 21, 2010

I’m sure you’ve heard the expression to “Step out of your comfort zone”. People say it’s a positive thing and, on reflection, it often is.

It pushes you in new directions, broadens your life experiences and in the long term tends to lead to good places.

What people don’t really talk about, however, is just how painful and scary or simply how hard it is when the challenge at hand is right in front of you. When you actually have to make that first step.

  • Changing jobs or pushing for new responsibilities.
  • Trying things you’ve never done before
  • Asking someone out
  • And yes, of course, saving and investing.

All these thing can be easy to read about (or watch) but when it comes down to it they can be much much harder to actually do.

Yet stepping out of your comfort zone can supercharge your career prospects, speed-up your personal development, help you start and build relationships, and yes, even grow your pennies.

None of this is as easy as it sometimes might seem when reading books or blogs, but if you want to make tomorrow better than today then there’s no surer way: Be comfortable being uncomfortable.

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How to Invest Effortlessly (almost)

by Magical Penny on June 18, 2010

For some investors, the thrill of investing in individual stocks is appealing, fun and potentially profitable.

There are even ‘fun’ games where you play with fantasy money and see if you can beat the market. ‘The Other Adam’, regular reader and frequent commenter sent me a link to the Telegraph’s ‘Fantasy Fund Manager’ page today, and a few years ago I played around with investing £100,000 at Bullbearings, a  fantasy stock market site.

However, I’m not really a fan.

I’d rather spend my time reading, writing, cycling or singing rather than buying and selling shares and pouring over earnings reports and industry press releases.

In fact, one of the reasons I wanted to set up Magical Penny was to evangelise that you too can take advantage of  the power of compounding investment returns without having to dedicate hours and hours to researching companies.

Whilst it’s definitely worth learning the basics of investing you don’t have to spend hours and hours researching, creating and managing your investment portfolio. As long as you are consistently saving for the long term you can get to a point pretty quickly where your road to wealth is set on auto-pilot and, barring unfortunate events, and the destination inevitable!

The ‘Set it and Forget it’ strategy

Once you have set up your investments it doesn’t take too much time to maintain. Certainly you shouldn’t be ignoring the performance of your investments completely but it really does not take much time to start building a nest-egg for your future.

Here’s one simple way to grow your pennies in a nutshell:

  1. Find a small consistent amount you can save each month.
  2. Make it automatic so you don’t need will-power to maintain or make excuses why this month is not a month for investing.
  3. Do a little reading about unit trusts.
  4. Choose a few with low fees.
  5. Check how you’re doing every so often.
  6. Get on with your life.

If you’ve been reading Magical Penny for a while I hope you’re at least around step 3 and preparing  for the next steps  to grow your pennies.

If you are more interested in the fun of individual share investing then I can certainly recommend the brilliant Monevator blog.

You may have noticed there are lots of links in this post. You can click on them all apart this one.

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