I am offended by the amount of junk email, pop ups, and safelist adverts I get telling me that Surveys are a valid "Work at Home" plan. There is just no way on Earth that anyone is making a living by doing online surveys, and I be pushed to believe that anyone is making any significant second income this way at all. Here is how I got on from an Evening of survey taking:
Opinion World - 15 mins; entry into a prize draw.
Ciao - 11mins; should have been credited £1 but it's never appeared.
Ciao - 2mins; survey has reached maximum participants.
Ciao - 2mins; survey has reached maximum participants.
New Vista - 2mins; enough people with my profile already.
Opinion World - 2mins; survey now closed.
Pinecone - 20mins; £3! Hooray!
Global Test Market - 2mins; Survey closed.
Global Test Market - 2mins; knocked out because of my occupation.
Ciao - 2mins; survey now closed.
Opinion World - 2mins; knocked out because I didn't want to take out a secured loan in the next 6 months.
Ciao - 2mins; kicked out because I am not a company decision maker.
Toluna - 2mins; survey closed.
Toluna - 2mins; kicked off because I don't rent my property.
Ipsos - 10mins; unclear on whether I have won anything or not!
Toluna - 2mins; survey closed.
Global Test Market - 2mins; kicked off because I haven't taken a flight in the last year.
Toluna - 2mins; not part of target group required.
Opinion World - 2mins; survey now closed
Overall then, I spent one and a half hours to earn £3 in Tesco Vouchers. I've not cherrypicked the above surveys. This is genuine! In over 1 year of doing Ciao surveys I've amassed an amazing £2.79!
I firmly believe that most of the online survey sites are actually just fronts to try and sell you stuff. Never, under any circumstances pay to join them!
Monday 22 September 2008
Friday 12 September 2008
What is a Vendor Gifted Deposit?
In certain cases, money saved through negotiation on a property can be used as what's referred to as a "Vendor Gifted Deposit".
Here is an example of how a deal such as this would work: Let's say that you find a property advertised at £90,000. It would certainly value at this price but you manage to negotiate a buying price with the vendor of £75,000. What you now need to do is get the seller to price the property in the sale contract at £90,000 and give you £15,000 back at completion. The net result is that you have a mortgage for £75,000 as you would have always done; the vendor receives £75,000 as they would have always done, however now the bank is satisfied that the need for a deposit has been met.
When organising a Vendor Gifted deposit, there are two rules which must be met. Firstly, not all banks accept this method of providing a deposit - so you must find a bank who does. Secondly, the surveyor must agree that the asking price is fair. In other words, we cannot over-inflate the asking price to make it look like a deposit is there.
At the moment, Bank of Scotland and Woolwich will still accept a 5% vendor gifted deposit, whereas Halifax will still do 10%. It is widely thought that this loophole will be closed in the near future.
Vendor gifted deposit is the easiest way of purchasing a house if you don't have at least a 5% deposit to put down.
If you don't have a deposit then I would recommend using the Vendor Gifted Deposit method. Note though that the banks who allow this will not allow unlimited over payments - just 10% per annum. Therefore you need to reduce the term at the outset if you'd like to get your mortgage finished as early as possible.
Ross Taylor is the author of "Money, Mortgages and Magic" and "The No B.S. Credit Crunch Ready Guide to Buy to Let in 2008". Ross is a successful Financial Adviser specialising in First Time Buyers and Buy to Let. He owns over £2million worth of property in the UK and regularly gives lectures on Financial Planning. To read more by Ross please visit http://www.uncommonadvice.co.uk
Article Source: http://EzineArticles.com/?expert=Ross_Taylor
Here is an example of how a deal such as this would work: Let's say that you find a property advertised at £90,000. It would certainly value at this price but you manage to negotiate a buying price with the vendor of £75,000. What you now need to do is get the seller to price the property in the sale contract at £90,000 and give you £15,000 back at completion. The net result is that you have a mortgage for £75,000 as you would have always done; the vendor receives £75,000 as they would have always done, however now the bank is satisfied that the need for a deposit has been met.
When organising a Vendor Gifted deposit, there are two rules which must be met. Firstly, not all banks accept this method of providing a deposit - so you must find a bank who does. Secondly, the surveyor must agree that the asking price is fair. In other words, we cannot over-inflate the asking price to make it look like a deposit is there.
At the moment, Bank of Scotland and Woolwich will still accept a 5% vendor gifted deposit, whereas Halifax will still do 10%. It is widely thought that this loophole will be closed in the near future.
Vendor gifted deposit is the easiest way of purchasing a house if you don't have at least a 5% deposit to put down.
If you don't have a deposit then I would recommend using the Vendor Gifted Deposit method. Note though that the banks who allow this will not allow unlimited over payments - just 10% per annum. Therefore you need to reduce the term at the outset if you'd like to get your mortgage finished as early as possible.
Ross Taylor is the author of "Money, Mortgages and Magic" and "The No B.S. Credit Crunch Ready Guide to Buy to Let in 2008". Ross is a successful Financial Adviser specialising in First Time Buyers and Buy to Let. He owns over £2million worth of property in the UK and regularly gives lectures on Financial Planning. To read more by Ross please visit http://www.uncommonadvice.co.uk
Article Source: http://EzineArticles.com/?expert=Ross_Taylor
Sunday 7 September 2008
Increase the Chances of your Property Selling by 100%
In the future, if Marketing students need to write an essay about a "Buyers Market" then they could do no better than a case study of UK property in 2008. More and more vendors are beginning to realise that they need to something special to sell their house - but many are still oblivious to what is actually going to sell their house. In reality there are only four rules to maximise your chances of getting a sale
1. There is no shortage of stock out there. For your house to be noticed above all the others then you need to be presenting it at it's very best. Get the kids toys hidden in the garage. Give the house a lick of paint. Get the front door washed down and the stairs hovered. If you can't manage these things then you need to drop the asking price into the first banding that makes your place look like Buckingham Palace.
2. Again - there is no shortage of stock out there. Your house must be keenly priced or it will sit on the shelf for a year. Have a look on Rightmove and bring up your competition. If rule 1 (make your house the most attractive amongst it competition) does not fit then you must make it the cheapest in its group. If you can't make it the cheapest in its group, perhaps because you have no equity, then you'd better get the feather duster out!
3. Not all Estate Agents are equal. Ask your agent how they finished in the last board count (they'll know what you mean). If they weren't first or second then dump them. Don't go multi - you'll look desperate and the individual agents will try less to sell your property as they may put in a lot of effort only for someone else to steal their glory. Get a board up - a good 25% of sales will come from people on your street or individuals visiting them. Get into the 21st Century. If your agent is not on Rightmove then they just aren't in the game.
In reality - only 1 in 10 properties that are currently on the market will be abiding by these rules. So if you currently can't sell take a good look at your situation.
In "Mortgages, Money and Magic" I have written an 88 page plan showing how you can buy a property with little or no money down and then go on to own that property outright within 10 years. Visit http://www.uncommonadvice.co.uk to learn more.
Article Source: http://EzineArticles.com/?expert=Ross_Taylor
1. There is no shortage of stock out there. For your house to be noticed above all the others then you need to be presenting it at it's very best. Get the kids toys hidden in the garage. Give the house a lick of paint. Get the front door washed down and the stairs hovered. If you can't manage these things then you need to drop the asking price into the first banding that makes your place look like Buckingham Palace.
2. Again - there is no shortage of stock out there. Your house must be keenly priced or it will sit on the shelf for a year. Have a look on Rightmove and bring up your competition. If rule 1 (make your house the most attractive amongst it competition) does not fit then you must make it the cheapest in its group. If you can't make it the cheapest in its group, perhaps because you have no equity, then you'd better get the feather duster out!
3. Not all Estate Agents are equal. Ask your agent how they finished in the last board count (they'll know what you mean). If they weren't first or second then dump them. Don't go multi - you'll look desperate and the individual agents will try less to sell your property as they may put in a lot of effort only for someone else to steal their glory. Get a board up - a good 25% of sales will come from people on your street or individuals visiting them. Get into the 21st Century. If your agent is not on Rightmove then they just aren't in the game.
In reality - only 1 in 10 properties that are currently on the market will be abiding by these rules. So if you currently can't sell take a good look at your situation.
In "Mortgages, Money and Magic" I have written an 88 page plan showing how you can buy a property with little or no money down and then go on to own that property outright within 10 years. Visit http://www.uncommonadvice.co.uk to learn more.
Article Source: http://EzineArticles.com/?expert=Ross_Taylor
Repossessions are not just the realm of the Subprime
I note from reading American articles that over the pond repossessions are almost wholly a subprime problem. I can assure you that isn't the case here in the UK - and this point is likely to be reinforced in the near future.
Through my job (I am a Mortgage Adviser and closely work with Estate Agents), I am privy to finding out the repossessing lender in homes which are marketed within the Agency I work in. I know this may not be reflective of the country as a whole but I am finding that the majority of repossessions are properties secured with Northern Rock. Now please note that Northern Rock were never a subprime lender. Rather than defaulting on the mortgage because they are people who can't handle credit very well it is more likely that they have been the victim of "rate shock".
Rate shock occurs when people come off their "mortgage deal", whether it is a fixed rate, tracker, discount or whatever. The loan reverts from the deal to the respective bank or building society's Standard Variable Rate (SVR). This rate will generally be 1 or 2% higher than the deal, meaning a huge jump in monthly payments. In the past people would remortgage in order to avoid going onto the SVR by getting a deal with another bank. Due to the Credit Crunch though the banks don't want you if your mortgage is large compared to the value of your house - as many Northern Rock customers have found out.
The scary fact is that 1.2 million homeowners currently on fixed rate deals are due to end within 6 months. Many of these people will have little to worry about - but I estimate that the vast majority will see an increase to monthly payments and at least half will have to adjust their lifestyle in order to cope with rate shock.
The only way of cushioning the blow is to reduce your mortgage debt now in order to soften the blow of rate shock. By taking action now you can offset the jump in monthly costs. Take a look at your finances today. Check that you can overpay on your mortgage and then do so. Every penny counts - literally.
Article Source: http://EzineArticles.com/?expert=Ross_Taylor
Through my job (I am a Mortgage Adviser and closely work with Estate Agents), I am privy to finding out the repossessing lender in homes which are marketed within the Agency I work in. I know this may not be reflective of the country as a whole but I am finding that the majority of repossessions are properties secured with Northern Rock. Now please note that Northern Rock were never a subprime lender. Rather than defaulting on the mortgage because they are people who can't handle credit very well it is more likely that they have been the victim of "rate shock".
Rate shock occurs when people come off their "mortgage deal", whether it is a fixed rate, tracker, discount or whatever. The loan reverts from the deal to the respective bank or building society's Standard Variable Rate (SVR). This rate will generally be 1 or 2% higher than the deal, meaning a huge jump in monthly payments. In the past people would remortgage in order to avoid going onto the SVR by getting a deal with another bank. Due to the Credit Crunch though the banks don't want you if your mortgage is large compared to the value of your house - as many Northern Rock customers have found out.
The scary fact is that 1.2 million homeowners currently on fixed rate deals are due to end within 6 months. Many of these people will have little to worry about - but I estimate that the vast majority will see an increase to monthly payments and at least half will have to adjust their lifestyle in order to cope with rate shock.
The only way of cushioning the blow is to reduce your mortgage debt now in order to soften the blow of rate shock. By taking action now you can offset the jump in monthly costs. Take a look at your finances today. Check that you can overpay on your mortgage and then do so. Every penny counts - literally.
Article Source: http://EzineArticles.com/?expert=Ross_Taylor
Inflation and Recession - Look Through the Statistics to Find the Real Story
Two pieces of data reaching my desk today have once again made me question the value of headline statistics.
Firstly, the Organisation for Economic Co-Operation and Development has predicted that Britain is on the brink of recession with negative growth forecasted for second half of 2009. This is the first time that any of the major economic forecasters have used the "r" word. The OECD is very bearish when it comes to the UK, especially when compared to the US, which has predicted growth will rise to 1.8%.
However, also this morning I have watched score of videos on Youtube from the American politician, Ron Paul with quite opposing views. I've also seen Wall Street economists blast the Whit House for cutting figures released to suit their own political agenda. This is something we see regularly here in the UK too. Note that the children are now to remain in schooling to the first leaving date after their 16th birthday - who think this decision may have been made to massage unemployment figures on the brink of a recession?
Secondly, the OECD predicted that inflation would see some moderation, assuming commodity prices stay where they are. Note the italics! There is more chance of Elvis Presley winning the Euromillions than commodity prices standing still. Oil is considerably more expensive than it was last year - no argument. Primary industry is spending more to grow, dig or farm hence we will pay more at the checkout counter. Also, even if inflation were to fall back to 3%, it doesn't put any more cash in our pockets. Quite the opposite in fact. Imagine if a tank of petrol costs £100 in year 1, and then rises to £110 in year 2 because inflation is 10%. If, in year 3, inflation falls to 3%, then a tank now costs £113.30 - it doesn't recede back to £103.
At times of financial turmoil my recommendation is to get the fundamentals in place. Look after shelter, food and fuel before anything else. If you have a mortgage then don't give a hoot about what car you are going to get next year, what holiday you are going on, what rate you can get on an ISA, or what is going to happen with inflation. Instead, use absolutely every spare penny you have to bring down your mortgage debt.
By doing this you will at least ensure you have a roof over your head, whilst others can't sleep at night with worry.
Firstly, the Organisation for Economic Co-Operation and Development has predicted that Britain is on the brink of recession with negative growth forecasted for second half of 2009. This is the first time that any of the major economic forecasters have used the "r" word. The OECD is very bearish when it comes to the UK, especially when compared to the US, which has predicted growth will rise to 1.8%.
However, also this morning I have watched score of videos on Youtube from the American politician, Ron Paul with quite opposing views. I've also seen Wall Street economists blast the Whit House for cutting figures released to suit their own political agenda. This is something we see regularly here in the UK too. Note that the children are now to remain in schooling to the first leaving date after their 16th birthday - who think this decision may have been made to massage unemployment figures on the brink of a recession?
Secondly, the OECD predicted that inflation would see some moderation, assuming commodity prices stay where they are. Note the italics! There is more chance of Elvis Presley winning the Euromillions than commodity prices standing still. Oil is considerably more expensive than it was last year - no argument. Primary industry is spending more to grow, dig or farm hence we will pay more at the checkout counter. Also, even if inflation were to fall back to 3%, it doesn't put any more cash in our pockets. Quite the opposite in fact. Imagine if a tank of petrol costs £100 in year 1, and then rises to £110 in year 2 because inflation is 10%. If, in year 3, inflation falls to 3%, then a tank now costs £113.30 - it doesn't recede back to £103.
At times of financial turmoil my recommendation is to get the fundamentals in place. Look after shelter, food and fuel before anything else. If you have a mortgage then don't give a hoot about what car you are going to get next year, what holiday you are going on, what rate you can get on an ISA, or what is going to happen with inflation. Instead, use absolutely every spare penny you have to bring down your mortgage debt.
By doing this you will at least ensure you have a roof over your head, whilst others can't sleep at night with worry.
The Common Sense Route to Happiness
Research has revealed that Lottery winners and Paraplegics show the same levels of happiness. Can you believe this? One group have came across unbelievable fortune by hitting the million to one chance of picking random numbers. By no skill whatsoever they have been given a cheque for huge amounts of cash - tax free. The other group have had their life decimated by tragedy. It is unlikely that they will be able to look after themselves. Therefore, it is almost incomprehensible to believe that these two groups can be equally happy, and yet that is the case.
This is because happiness is not directly correlated to the amount of money you have in the bank. Happiness is created in your own mind. I think that everyone can actually relate to this if you see enough examples. To my mind, think about the happiness of the man who has just been released from prison. He doesn't think about the pain of the previous period, but rather looks ahead with a fresh sense of freedom to the future. On the other side of the coin, look at the unhappiness of a star such as Kurt Kobain. Thousands in the bank but an inability to find contentment in their life.
For those of us who are Working Class or Middle Class though there are many ways in which Personal Finance and Happiness are intangibly linked. From my own experience I can see an obvious way in which money-in-the-bank and happiness are one and the same. I call it Common Sense - but it's actually an uncommon notion. Here is what I am talking about: If you have been on holiday to "Butlins" and you enjoyed it, then there is no need to upgrade to Disneyworld when you have more cash coming in. Happiness is Happiness. You don't get more Happiness by going to Disneyworld. Media pressure may make you think that way but it just isn't the case. Don't fall for Lifestyle Inflation. The same applies to Cars, Houses, Food, Toys, TVs, Washing Machines etc etc etc.
There used to be a common saying, "be happy with your lot", and although in terms of ambition and your goals in life I would totally disagree with in, in terms of being happy it should actually be the watchword of your life. By sticking with the simplest and cheapest thing that makes you happy, you will find that not only will your life be more fulfilled but also your savings should increase relatively quickly.
The opposite of being happy with your lot is "keeping up with the Joneses". Your next door neighbour gets a conservatory so you want one too. Your best friend gets a new car so you need one too. It's all nonsense - and is by no means the road to happiness. It creates a nature of always wanting more. Unless you have an enormous wage cheque then this process can only lead to misery.
Take action today to find your base line happiness level. I'm happy with a run-around that gets me from A to B so I have no need, want or desire for a Porsche. I'm happy with homemade soup for tea so no need for a takeaway. Set your stall out today and start the good fight against Lifestyle Inflation!
New FREE download available at http://www.uncommonadvice.co.uk Ross Taylor is the author of "Mortgages, Money and Magic" and "The No B.S. Credit Crunch Ready Guide to Buy to Let in 2008". Ross is a succesful Financial Adviser specialising in First Time Buyers and Buy to Let. He owns over £2million worth of property in the UK and regularly gives lectures on Financial Planning.
Article Source: http://EzineArticles.com/?expert=Ross_Taylor
This is because happiness is not directly correlated to the amount of money you have in the bank. Happiness is created in your own mind. I think that everyone can actually relate to this if you see enough examples. To my mind, think about the happiness of the man who has just been released from prison. He doesn't think about the pain of the previous period, but rather looks ahead with a fresh sense of freedom to the future. On the other side of the coin, look at the unhappiness of a star such as Kurt Kobain. Thousands in the bank but an inability to find contentment in their life.
For those of us who are Working Class or Middle Class though there are many ways in which Personal Finance and Happiness are intangibly linked. From my own experience I can see an obvious way in which money-in-the-bank and happiness are one and the same. I call it Common Sense - but it's actually an uncommon notion. Here is what I am talking about: If you have been on holiday to "Butlins" and you enjoyed it, then there is no need to upgrade to Disneyworld when you have more cash coming in. Happiness is Happiness. You don't get more Happiness by going to Disneyworld. Media pressure may make you think that way but it just isn't the case. Don't fall for Lifestyle Inflation. The same applies to Cars, Houses, Food, Toys, TVs, Washing Machines etc etc etc.
There used to be a common saying, "be happy with your lot", and although in terms of ambition and your goals in life I would totally disagree with in, in terms of being happy it should actually be the watchword of your life. By sticking with the simplest and cheapest thing that makes you happy, you will find that not only will your life be more fulfilled but also your savings should increase relatively quickly.
The opposite of being happy with your lot is "keeping up with the Joneses". Your next door neighbour gets a conservatory so you want one too. Your best friend gets a new car so you need one too. It's all nonsense - and is by no means the road to happiness. It creates a nature of always wanting more. Unless you have an enormous wage cheque then this process can only lead to misery.
Take action today to find your base line happiness level. I'm happy with a run-around that gets me from A to B so I have no need, want or desire for a Porsche. I'm happy with homemade soup for tea so no need for a takeaway. Set your stall out today and start the good fight against Lifestyle Inflation!
New FREE download available at http://www.uncommonadvice.co.uk Ross Taylor is the author of "Mortgages, Money and Magic" and "The No B.S. Credit Crunch Ready Guide to Buy to Let in 2008". Ross is a succesful Financial Adviser specialising in First Time Buyers and Buy to Let. He owns over £2million worth of property in the UK and regularly gives lectures on Financial Planning.
Article Source: http://EzineArticles.com/?expert=Ross_Taylor
Thursday 4 September 2008
You don't recognise the prophet in your own home!
I found the above saying to be very true this week. For 6 weeks I have been accurately predicting the Friday night evictee on the Big Brother show. I have been happily making cash week in, week out as the results have rolled my way.
Now, I am personally against gambling, so how I have managed to reconcile this with myself? Easily - I have been gambling; I have been using science.
When Gallop and Mori run a poll they ask 1000 random people their opinion. The results from these 1000 people can be reliably extrapolated to gauge the views of the nation. The same process can be applied to Big Brother. At http://www.thisisbigbrother.com/index.php a poll has been running from week to week with 5000+ votes taking place. How can it go wrong? Two weeks ago the poll showed that Lisa was favoured to go when she was up for eviction against Sarah. This went against the odds on offer at the bookies where Sarah was round 4/6 and Lisa odds against at 6/4.
This scenario has been repeated week after week. This brings me to this week's finale. Mikey is favourite on Betfair at around Even money, and has had over £100,000 placed on him to win. However, our system suggests otherwise:
Rachel 31.9%
Sara 27.9%
Rex 18.5%
Michael 12.0%
Darnell9.8%
Total votes: 5507 votes
According to this poll (OF OVER 5000 VOTES!) Michael is actually 4th favourite - behind even the odorous Rex.
This system has not been wrong yet - get your money on Rachel AND Sarah to hedge your bets. Rachel is currently available at 3/1 and Sarah at 8/1. Pile in.
Now, I am personally against gambling, so how I have managed to reconcile this with myself? Easily - I have been gambling; I have been using science.
When Gallop and Mori run a poll they ask 1000 random people their opinion. The results from these 1000 people can be reliably extrapolated to gauge the views of the nation. The same process can be applied to Big Brother. At http://www.thisisbigbrother.com/index.php a poll has been running from week to week with 5000+ votes taking place. How can it go wrong? Two weeks ago the poll showed that Lisa was favoured to go when she was up for eviction against Sarah. This went against the odds on offer at the bookies where Sarah was round 4/6 and Lisa odds against at 6/4.
This scenario has been repeated week after week. This brings me to this week's finale. Mikey is favourite on Betfair at around Even money, and has had over £100,000 placed on him to win. However, our system suggests otherwise:
Rachel 31.9%
Sara 27.9%
Rex 18.5%
Michael 12.0%
Darnell9.8%
Total votes: 5507 votes
According to this poll (OF OVER 5000 VOTES!) Michael is actually 4th favourite - behind even the odorous Rex.
This system has not been wrong yet - get your money on Rachel AND Sarah to hedge your bets. Rachel is currently available at 3/1 and Sarah at 8/1. Pile in.
Bank of England holds rates at 5%
The MPC have announced that the Base Rate is to be held at 5%. No surprises at the BoE continues with its wait and see approach - as predicted at http://www.uncommonadvice.co.uk.
This will be the case for the remainder of 2008.
This will be the case for the remainder of 2008.
Sunday 31 August 2008
99 Things to do when you are skint
I came across a fantastic post today at http://www.marcandangel.com/2008/07/14/101-dirt-cheap-ways-to-enjoy-yourself/. The title was "101 dirt cheap ways to enjoy yourself" and it really struck a chord with me. I am a natural skinflint but as with everyone I flop in front of the TV when I come home from work and then splurge every little while on a meal, a night at the pub or a night away. This sort of lifestyle is both expensive and somewhat dull and boring!
The original post had some negative comments saying that half of the options would actually be pretty expensive to do, so I thought I'd take the chance to strip out some of the costs here.
The next time you have a spare weekend - but also want to save some cash, refer to this list, stick a pin in your monitor and go for it!
The original post had some negative comments saying that half of the options would actually be pretty expensive to do, so I thought I'd take the chance to strip out some of the costs here.
The next time you have a spare weekend - but also want to save some cash, refer to this list, stick a pin in your monitor and go for it!
- Get up to your local library, take out a few books and enter the world of pure imagination. Check out http://www.marcandangel.com/2008/08/11/30-books-everyone-should-read-before-their-30th-birthday/ for ideas.
- Rake out your old tapes and CD's to rediscover the songs you loved. Make yourself up a new mix tape. See if you've got anything that beats this (I doubt it) - http://www.youtube.com/watch?v=oKTiwCez6Zs
- Go for a picnic. Get inspiration here, http://www.waitrose.com/summer08/picnicspots.aspx but keep it local to bring the cost down.
- Bake some biscuits. I love this one! If you don't know how to do it, nip across to http://www.scottishrecipes.co.uk/shortbread.htm
- Start blogging. Nobody keeps a boring old diary nowadays when you can bring it bang up to date at http://www.blogger.com/. You'll even get paid if visitors click the little adverts (so I'm told!)
- Head for the hills. Rambling is a fantastic pastime because it is fun, healthy, cheap and takes up a long time. I love the Ochil Hills in Central Scotland, but it doesn't matter where you are in the UK, there is always somewhere to have an adventure. Visit http://www.ramblers.org.uk/ to learn more, or http://en.wikipedia.org/wiki/Ochil_Hills if you are anywhere near the Ochils. If you (unfortunately) live in Southern England, visit Wikipedia to find the highest point in your county. I did this for Northants and had a lovely trip to find it and climb it (took 5 minutes!)
- This one is a straight scrape from the original article, "Head downtown with a friend and two digital cameras. Shoot as many funny and interesting photos as you can. Then go home and sort through them all". I couldn't put this better myself. In the past I've played similar games - I recall going through Edinburgh with my mates trying to spot people who looked like they were famous. It's surprisingly fun! See if you can spot any better lookalikes than the frankly disappointing ones here: http://www.celebritylookalikes.co.uk/default.asp
- Put all your belongings on EBay! Sell everything that isn't nailed down. Clean out the loft and all your cupboards. Spring clean your life! http://www.ebay.co.uk/
- Have a family board games championship (unless you've sold them on EBay already - see point 8). They may seem like old hat now but Risk, Monopoly, Cluedo etc were all fun in their day. Chess is perennially fantastic! (I LOVE CHESS). http://www.princeton.edu/~jedwards/cif/intro.html
- Happen on reddit. I've just discovered this site and am strangely intrigued. Content is posted and then voted up or down a chart by followers. At the moment, "Would you vote for an atheist president" is No.1. I like the controversial section best.
- Become a conversationalist. I'm not much of a talker but there has been occasions when I've got into some really deep conversations. I remember chatting for hours about how life on Earth started, and also why did the ball move when Gary McCallister ran up to take a penalty for Scotland against England at Euro 96. Here are some conversation starters: http://www.conversationexchange.com/resources/conversation-topics.php. Avoid politics and religion unless you want it to turn into a fight. Here is the Uri Geller website, where you'll see how he claimed to rob Scotland of their rightful win! http://uri-geller.com/newc.htm
- Have a romantic bath. Go for it. Fill the bath with bubbles. Get the candles out. Soft music. Aromatic oils. Even have a Flake if you want! http://www.youtube.com/watch?v=DCLggnjbsqQ&feature=related, This is utter luxury - but within everyone's budget!
- Learn to play a musical instrument. Start with "Smoke on the water". Supposedly it's really easy to learn but I know I'd be impressed. http://www.guitarchordsmagic.com/guitar-song-chords/smoke-on-the-water.html
- Go swimming. I personally hate swimming but I can see how it is a good, cheap way to pass the time. Can you swim a length under water? Can you do a handstand on the bottom of the pool?
- Wii championship. I've not got a Wii but there is a PS2 lying in a drawer somewhere. Get it out, dust it down and invite the friends around for a classic gaming championship. Paperboy anyone? http://en.wikipedia.org/wiki/Paperboy_(video_game)
- Fly a kite. This a three pronged adventure. Firstly, making the kite http://www.my-best-kite.com/how-to-make-a-kite.html. Secondly, getting to your chosen windy hilltop and thirdly actually flying it!
- Discover new music. Take the songs you loved the most from point 2, visit http://www.last.fm/ and search for artists like your favs. I'll wager you'll find something you've never heard before in your life.... and love it!
- Look at the stars. I found an amazing website at http://www.galaxypix.com/Stargazing/, but the real thrill for me would be looking into the skys and spotting a UFO. Imagine the fame and money you cold make if you caught a UFO on camera. There was a famous UFO hunter from the same village as I was brought up in. You can join up with him and his gang to spend an evening skygazing with a difference. http://www.spookystuff.co.uk/HowToGoOnAUFOSpottingTrip.html gives good details on how to go about it.
- Watch a classic movie. http://www.lovefilm.com/browse/collections.html?node_id=6550 is a list of the BFI top 100 movies. I'm not sure about the Third Man being tops but it takes all sorts.
- Play poker. Do you remember the TV programme called "Roseanne". I remember thinking how great it looked when Dan used to get all his mates around for a Poker evening. Why not do the same? It doesn't have to cost anything. http://www.entertainmentexpert.co.uk/PokerParty.html
- Play other card games. I'm not really from a card playing family, but when I visit my in-laws they love to get the cards out.
- Find some wildflowers. I remember when I was small, I could pick up any book from my Gran's bookshelf only for a pressed wild flower to fall out. This seems to have died out nowadays but it could still be a cheap way to spend an afternoon. Once again, this hobby has many parts. Going for a country walk, finding the flowers, pressing them. Visit http://www.wildflowers.co.uk/ to find out more.
- Test drive a really expensive car. I don't know if I'd have the guts to ask for a test-drive of a car I'd have no intention of buying but if you do then more power to you! http://www.my50.com/goal.php?goal=e806b0b4613f8115
- Get drunk on cheap lager. Relive your teenage days by drinking the old favourites like Kestrel lager and Electric White Cider. A nightout at the pub nowadays would cost upwards of £50 all in but you can still have a rare time with £5 worth of gutrot!
- Have a BBQ. This can be done on the cheap, and still be as much fun as if it was a professional chef leading the way. Try some of the recipes at http://www.bbq.co.uk/bbq-recipes/index.aspx
- Go on a Charity Shop Safari. Spend the day browsing all the charity shops in your town. Challenge your mates to who can make the most tasteless purchase, or who can make the most profit on EBay from a purchase. You could even help the charity shops of your town by knocking together a review page like this, http://www.timeout.com/london/features/2503/5.html
- Go for a moonlight stroll. Very romantic indeed. I couldn't find a suitable website to suggest for further investigation, so option 27a is construct a website for the UK's Best Moonlit Walk locations.
- Make a pizza from scratch. This is too easy and boring so I'd like to pimp this into making a "Pizza Crunch" from scratch. http://blog.23x.net/13/what-is-a-deep-fried-pizza.html#comment-409 has the lowdown. If you like it, tell your mates - the World needs to know the goodness that is deep fried Pizza.
- Get crafty! I used to snigger at craft fayre types but you've got to take your hat off to some of the things these guys knock out. Take a peek at http://www.craft-fair.co.uk/Learning.cfm. As a fan of money I'd like to try soap making to see if they could then be sold on at EBay.
- Write a poem. I love Robert Burns but I know I could never be in his league however I'm sure that with a bit of practice I could write the best poem on my street. Discover Burns at http://www.robertburns.org/ and get started writing poetry at http://www.poetry.com/. Once again I have a slight hidden agenda in recommending the latter site as there is a $100,000 prize to be won.
- Eat Strawberries. Not one for me, I'm more of a pizza crunch man but the fruit lovers out there will appreciate this. Dip them in sugar, dip them in cream, pretend you are at Wimbledon. More info at http://www.bbc.co.uk/food/recipes/mostof_strawberries.shtml.
- Go camping. This is an all time classic. If you sit at home watching TV, bored out of your skull, when you could be in the Great Outdoors then you are missing out on life! Get prepared so that you can get out in the tent next summer. All these sites can help: http://forums.moneysavingexpert.com/showthread.html?p=13780391 (hat's off to the guy's at http://www.moneysavingexpert.com/ - that's activity 32a; spend a day exploring Martin Lewis' site), http://www.ukcampsite.co.uk/ and best of all, learn some camping ghost stories for the kids at http://www.skyatdusk.com/ThisOldTent/index2.html (nice site).
- Take a bike ride. Once again not one for me, however I do like having a go on the Exercise bike - to extremes! If you're handy then visit http://www.instructables.com/id/Turn-an-exercise-bike-into-an-energy-bike/ to see if you can turn your exercise bike into a power source. If you really want to go for it then try pushing yourself to the limit. Pushing the limits of your body clears your mind. See if you can emulate these guys - http://archive.theargus.co.uk/2001/8/30/172627.html.
- Learn body language by people watching on the street. I loved doing this, without actually knowing I was doing it on Edinburgh's Princes Street in the 80s. http://en.wikipedia.org/wiki/Peoplewatching
- The original articles says "build a backyard bonfire and roast marshmallows" but I'd suggest tying this in with the camping suggestion and getting out into the Countryside. I've never done it myself but it looks fun. If you're too embarrassed to ask how to do it then please see http://www.ehow.com/how_1164_roast-marshmallow.html (p.s. I'd have to refer to this!)
- Feed the ducks at a local beauty spot. This is one of my favourite things to do with my kids. It is a very loving and caring thing to do. Visit http://wwt.org.uk/visitus/4/visit_us.html, http://en.wikipedia.org/wiki/List_of_SSSIs_by_Area_of_Search and http://uk.answers.yahoo.com/question/index?qid=20080716132329AA6dkyn, Take your crumbs in a Sunblest bag.
- Have a funny movie marathon. I suggest Fletch, Monty Python and the Holy Grail, The Graduate and Weird Science. Classic night in. I just found out they are making a Fletch prequel! This is the best FREE night ever!! Join the cult of Fletch by starting at http://en.wikipedia.org/wiki/Fletch_(film)
- I didn't understand post 38 on the original article so I'm adding in: go to a pub happy hour. When I lived in Dundee it was still possible to never pay more than a £1 for a pint of beer if you timed your drinking correctly and made sure you hit each pub as the Happy Hours were commencing. Get out there and see if any pubs in your town have a happy hour. Imagine how popular you'd be if you could make a guide to your town like this one for Covent Garden in London, http://www.coventgardenlife.com/specialoffers/specialoffers.asp?type=drinking.
- Make the most of local carnivals, fetes, festivals etc. There is always something on in your area - ALWAYS. Even the most tucked away hamlet in the Highlands of Scotland has a hooley now and again. If, when you read "festival" you think "beer festival" then hop over to the good fellas over at http://www.camra.org.uk/page.aspx?o=yearofbeer.
- Make a Knickerbocker Glory. I've never done it but I'd love to do something like this to impress my family and friends. It looks easy but then again so did the little exercises on the Generation Game! http://www.wikihow.com/Make-a-Knickerbocker-Glory shows you how.
- Recreate Pulp Fiction by giving your girl a seductive foot massage! Once again, a new one for me but always worth a try (and free). Make sure you get permission first though unlikesh our Dutch friendsh: http://www.abc.net.au/news/newsitems/200408/s1171170.htm
- My biggest talent is talking rubbish according to my Mrs. (and my mum, and a few other people actually). I can tell stories about me and my showbiz mates including Stephen Fry, Keith Chegwin, Dave Gorman and Ross Davidson (The Admiral - may he rest in peace) despite never meeting any of them for more than 5 minutes. If you've got time on your hands take this chance to improve your tall stories enough to enter the National tall story contest.............. did I ever tell you about the time I was in a pub fight with Joe Calzaghe, I had the better of him until it got split up.
- Option 43 of the original post was go canoeing or kayaking but in my opinion that costs cash so I'm going to suggest going for a midnight skinny dip! Now this is one I have done! Not the most sensible thing to do BUT you will remember it for a long time. Here are three suggestions - http://www.guardian.co.uk/travel/2008/jun/13/uk.skinnydipping.swimming. I did it here - http://www.stanwicklakes.org.uk/. An experience not to be forgotten even in a lifetime of odd experiences.
- Skim stones. A classic. Pretend you are Huckleberry Finn by chewing on a bit if straw and seeing how many skims you can get. If you beat seven I'll pop your picture on this site!
- Chase a sunset. I like this one. It doesn't matter if you live in rural Cornwall or a tower block in Glasgow City Centre, sunsets are beautiful. Combine this with camping to top off a stunning, cheap weekend away. http://www.bbc.co.uk/cornwall/photos/sunset_sunrise/1.shtml shows some of the most beautiful sunsets in Cornwall. Could you compile a similar compilation for your county? it may be possible to make cash by listing the pictures on a stock photo site.
- Play 5 a side football. Good exercise, fun and cheap. 5 a side is the game of choice for the 30-something British male. Get your mates together and have a game this week.
- Sit in on a University Lecture. This suggestion is naughty but nice. Go to your local university. Wait for a crowd of first years to gather outside a lecture hall and just join in. Pretend you are a student for the day. The super long scarf is an optional extra.
- Learn a magic trick. Magic is always impressive so imagine how popular you'd be if you could reel off a few tricks to stun your friends and family. There are literally thousands of magic tricks to try your hand at at http://www.learnmagictricks.org/.
- Discover the tricks of the trade needed to win a Street Fight. Whatever you do, don't go out and start one! Learn the tricks here, http://www.wikihow.com/Win-a-Street-Fight. Then learn how to make your own punchbag for practice here: http://www.tipking.co.uk/punch_bag.shtml.
- Go Ten Pin Bowling. I don't know if this should be included in a dirt cheap list because I used to get told it was really expensive by my mum! However it could be really cheap if you go as a group, save up vouchers or go on a deal night. Start with AMF who are the biggest Ten Pin Bowling company in the UK, http://www.amfbowling.co.uk/landing/frenzy.aspx.
- Strictly Come Dancing may sweep the UK off it's feet every year but you'll never turn me into a dancer. I'd look like Dumbo in a tutu. However if I had time on my hands I'd give the Charleston a try. http://www.ehow.com/how_2071535_dance-charleston.html gives the basics. Enjoy the fact that you're looking like a fool whilst learning. It's all part of life's rich tapestry.
- Start growing your own veg. There is a fantastic post over at Frugal Dad (http://frugaldad.com/2008/03/03/how-to-build-a-square-foot-garden/) that shows in the simplest details how to start off your own Vegetable patch.
- Reminisce. Crack open the old photo albums and think back to the days of wine and roses.
- Now take your favourite photos and create a digital slideshow with them. Add a groovy sidetrack.
- The original post suggested going fishing but I don't think that is a very cheap pastime at all. Instead I suggest visiting the excellent http://www.randomthingstodo.com/ and clicking through until you find the first free activity.
- Go to a Show House and get some "ideal home" ideas. Post them on your blog.
- Do you like playing Paper, Scissors, Stone? I know you do, because everyone does. It is good, harmless fun. Have you ever seen Derren Brown play it? Supposedly he has never been defeated. Learn how he does it and then challenge your mates to a contest. http://www.ebook-maniacs.com/derren_brown.pdf.
- Surfing is not necessarily a cheap thing to do unless we skinflint it down to the bare bones. Go to http://www.yha.org.uk/find-accommodation/wales/hostels/Port-Eynon/index.aspx to find cheap accomadation and then build a surfboard from foam http://www.ehow.com/how_2286589_cut-surfboard-out-foam.html.
- Have a water bomb fight. Fun for all ages. No need to purchase any super water pistols at £15 from Woolworths, just fill up normal balloons at the tap. If you are adventurous, make a homemade version of this baby - http://www.urbanjunkie.co.uk/product.php/247/0/wild-sling-water-bomb-launcher.
- I've never done a "slip and slide" like that suggested in the original post so I'm going to suggest good old fashioned Cheese Rolling http://www.cheese-rolling.co.uk/. Only attempt this if you are brave (or incredibly stupid). For the rest of us, watching is more than enough entertainment.
- PYO soft fruit. Pick Your Own seems a very 80s thing to me nowadays but if it get's you outside then it is a good thing. http://www.timesonline.co.uk/tol/life_and_style/food_and_drink/real_food/article4565138.ece has some of the UK's favourite PYO locations.
- Letterboxing (http://en.wikipedia.org/wiki/Letterboxing) is a new one on me, but it is basically a posh Treasure Hunt. It doesn't have to be a full Aneka Rice number. Even a small scale Treasure Hunt can be free and excellent fun!
- I watched a program once about Astral Projection and have been strangely obsessed with it ever since. I don't know if it could be possible to master on a rainy Sunday afternoon but it wouldn't do you any harm to try. http://www.psychics.co.uk/astraltravel/ gives you an idea on how to get started.
- How far can you throw a paper airplane? Ken Blackburn made a paper airplane that stayed afloat for 27.6 seconds, and he has a cracking website. Visit it at http://www.paperplane.org/.
- Why do women hate jokes whilst men love them? Don't spend your time worrying about this trivial fact. Instead LYAO at some of the best jokes on the web. Start at http://en.wikipedia.org/wiki/World.
- For activity 66, don't bother rollerblading as suggested on the original post. It is expensive, and a tad childish for me. Rather than making like a kid from FAME, try tracing your family tree. I am informed that genealogy is the second most common pastime on the net ( I assume porn is number 1, and with tongue in cheek you know that surfing for porn goes before all my 100 suggestions here!)
- "What is this life if, full of care,We have no time to stand and stare." William Henry Davies. Find the quietest place you know and learn the meaning of chilling out.
- This activity is a bit black hat but get down to your local train station and nab a paper that someone has left on the platform. I assure you that a FREE paper is a much better read than one you've paid for!
- Enough said. The greatest free pastime - a meal for two.
- Re post 67. "We are the boys from Alloa, we drink your beer and wine, for all your conversation, your XXXX's not bigger than mine." Ross Taylor. Crack out the wines of the world from Tesco and savour the greatest vineyards without leaving the house. No need to spit in a bucket. The Tesco wine range may not be the cheapest but use your clubcard to get the points, ideas here: http://www.tesco.com/winestore/controller.aspx?Ntt=Mixed+case&Ne=60177&Ntx=mode+matchall&N=70032&catTitle=Mixed%20case%20wines&Ntk=Descriptors&Nr=70002.
- Have you ever seen Rocky, when he is training to beat the big Russian and he runs to the top of the mountain and screams at the top of his voice? That is what being a man is all about. Do it now. Each year there is a hill race in Alva, Clackmannashire, and on a number of occasions I've stood in awe as I've watched the runners charge non-stop to the peak and back. Real men! http://www.scottishhillracing.co.uk/RaceDetails.aspx?RaceID=RA-0164
- Visit a website you've never been to before but everyone else knows about. Go to http://www.alexa.com/site/ds/top_sites?cc=GB&ts_mode=country&lang=none and scroll down until you find a site you've never seen before. You don't know what you're missing out on.
- Make one of these items: http://www.makegizmos.com/things%20to%20make/things%20to%20make%20index.htm. If they are any good then list them on EBay. You may make a few pennies!
- I've never played Twister but it looks like fun. Give it a go. Whilst we're thinking about classic games, introduce your kids to Ker Plunk. Unbeatable.
- Do a group text to everyone on your phone: "Hello. How are you?"
- Climb a tree. I know, I know..... I knocked out rollerblading for being childish but kept in tree climbing - but it's fun!
- Toss Pancakes. Pancakes taste nice, and the fun of tossing them should be an experienced shared between all parents and children. No need to wait until Pancake Day, try it this weekend. Here's how - http://www.deliaonline.com/cookery-school/how-to/how-to-make-pancakes,25,AR.html.
- The original post is learn to juggle but I've always found juggling a bit "Sylvia Young theatre school". Instead settle down to a little gem on Youtube called "Money as debt" at http://www.youtube.com/watch?v=vVkFb26u9g8. It is a total of 47 minutes but will have you asking questions for hours. I love it. Infotainment, if there is such a word. This is a bit like "Marx for Beginners" by Rius, which I also heartily recommend.
- Explore you local area. There are Acres of Diamonds in your own backyard - no need to travel the world for thrills. Get the ordnance survey map for your local area and make a point of visiting all the special features. Every place of worship, every cairn, castle and earthwork. http://www.ordnancesurvey.co.uk/oswebsite/education/pdf/25knewEGMlegend.pdf will show you all the symbols to learn.
- Book a break at a Youth Hostel. Cheap and cheerful - the best way to discover Scotland, England and Wales. Start here: http://www.syha.org.uk/SYHA/web/site/home/home.asp.
- Enter all the items you have in your cupboard into http://www.recipematcher.com/ and surprise your family with your amazing culinary skills.
- Knock your heart out to the all-time best Karaoke hits ever... but with a twist! Here is your choices: 1. Angels - Robbie Williams2. Dance The Night Away - The Mavericks3. Dancing Queen - Abba4. Bohemian Rhapsody - Queen5. Delilah - Tom Jones6. My Way - Frank Sinatra7. Suspicious Minds - Elvis Presley8. Summer Nights - Grease9. If Tomorrow Never Comes - Ronan Keating10. I Will Survive - Gloria Gaynor . The twist is that you have to dress up like your chosen star AND it has to be filmed and played back later!
- Read this book, http://www.amazon.com/gp/offer-listing/0878301178/ref=dp_olp_2, learn the skills and then relist the book back at Amazon.
- Create a vision board. This is basically a collage showing the wish list of your life. Learn all about it at http://www.visionboardsite.com/ and http://www.mastermoves.com/products/vision-boards.html. There is magic in vision boards.
- Try some new drinks. I recommend Belhaven Best. You will love it!
- Click here: http://www.google.co.uk/search?num=100&hl=en&rlz=1T4ADBR_enGB273GB273&q=tim+ferriss+&meta= and enter the world of my current role model, Mr Tim Ferriss, author of the 4 Hour Work Week.
- Take a dog out for a walk. Note I say "a" dog rather than "your" dog. Remember - we are keeping this cheap or FREE.
- Get involved with http://randomactsofkindness.org/. Take it to new levels.
- Have a walk round your area and note anything of interest in the local skips. Don't get caught!
- If it snowing then don't bother sledging or building a snowman or anything so boring. Do it in style - http://www.igloobuilding.org/index.php?option=com_content&view=article&id=46&Itemid=28.
- Do people still turn the mattress over? For one night only, pile up all the mattresses in your house, bring all the duvets together and get snuggled up for the comfiest sleep of all time!
- Play this crazy game - http://www.addictinggames.com/keepyuppy.html, but be aware that it is more addictive than heroin!
- Take a trip down memory lane by arranging a School Reunion. http://www.ehow.com/how_135373_organize-high-school.html has the details.
- Run a mile (then run back).
- Can you climb ropes? Go for it this weekend. http://en.wikipedia.org/wiki/Rope_climbing.
- Get down to the beach and do absolutely nothing other than watch everyone enjoy themselves.
- Sample the low life by trying America's most unhealthy dish - http://www.menshealth.com/eatthis/20-Worst-Foods/1_The_Worst_Food_in_America.php.
- Treat the person you love to a super duper cuddle.
- Play Hide and Seek!
Saturday 30 August 2008
Yippee!
I've been included in the 141st Festival of Frugality. Please pop across to http://almostfrugal.com/ to have a look!
Friday 29 August 2008
Thursday 28 August 2008
Keep personal finance simple!
Once again today I was reminded of the fact that Personal Finance is, in fact, simple. Never mind The Credit Crunch, mortgage rates, Inflation, discretionary income, interest rates ad infinitum. You only need to make sure of three things in order to be a success in Personal Finance. You only need to: 1) Resist taking on new debt. 2) Minimise the amount you spend. 3) Maximise the amount you earn.
Live by these rules and you won't go far wrong. Unfortunately for us these simple rules seem much harder to observe in real life. We seem by nature to be able to blatantly ignore common sense even when it is banging on our door with an oversized gavel. The same notions occur when we look at weight loss. We all know that in order to lose weight we need to eat less (equivalent of rule 2) and exercise more (the equivalent of rule 3), and yet the Weight Loss industry makes mega millions every year on the back of the new "breakthrough" whether it be good natured or modern-day snake oil.
Another quaint notion that we always seem to follow is the idea of starting new procedures around a datal attraction. The new diet will commence on return from your holidays, or I'll start saving after my birthday. The most common manifestation of this is, of course, the New Year's Resolution.
Today is August 27th 2008, and we quickly approach the final quarter of the year. Please take this opportunity to look beyond the hype to realise the simplicity of Personal Finance. A primary school child could understand it, but it takes an adult to enact the processes.
The first action to be taken is to resolve to obtain no credit during the month. Cash is king. If you don't have enough cash to buy something between now and the end of the year then don't get it. The Rolling Stones were absolutely correct when they sang "You can't always get what you want, but if you try sometimes, you just might find, you'll get what you need". This is very true. Happiness is not in trinkets, but inside your own mind.
The second action to take is review your spending. Get your Bank or Credit card statement out to see what you actually spend. Split up all costs and drill them down to the penny. Once you have done this look to the findings line by line and decide whether each thing was worth it. Whilst looking at my own spends I can see that the money I've spent on electricity has given me a return whilst the money I (over)spent on beer has just left me a headache! By making sure you get your money's worth from every penny that leaves your pocket your spending will automatically err towards the minimal sustainable level. Repeat this exercise often and by the end of the quarter you'll find you have a whole new attitude towards personal finance. I myself have been very surprised by the change this simple exercise has brought about.
Finally, begin to take action in the way of bringing more money into the family purse. This may be by working overtime, asking for a raise, taking on a second job or instigating new income streams. The trick is not the accumulation of extra cash - for anyone can bring in a little bit more money if they look for it. Rather the trick is acquiring extra monies without it also resulting in lifestyle inflation. If you get a promotion don't rush out to reward yourself with a shopping spree. If you have a huge sales month then don't spend that commission cheque on a new car. Keep the extra cash and make it work for you by means of investing it. Even a vehicle as simple as an ISA will be keeping you in pocket long after any new car is rusting in the scrap yard.
In conclusion, keep it simple. It's Personal Finance - not Rocket Science!
Live by these rules and you won't go far wrong. Unfortunately for us these simple rules seem much harder to observe in real life. We seem by nature to be able to blatantly ignore common sense even when it is banging on our door with an oversized gavel. The same notions occur when we look at weight loss. We all know that in order to lose weight we need to eat less (equivalent of rule 2) and exercise more (the equivalent of rule 3), and yet the Weight Loss industry makes mega millions every year on the back of the new "breakthrough" whether it be good natured or modern-day snake oil.
Another quaint notion that we always seem to follow is the idea of starting new procedures around a datal attraction. The new diet will commence on return from your holidays, or I'll start saving after my birthday. The most common manifestation of this is, of course, the New Year's Resolution.
Today is August 27th 2008, and we quickly approach the final quarter of the year. Please take this opportunity to look beyond the hype to realise the simplicity of Personal Finance. A primary school child could understand it, but it takes an adult to enact the processes.
The first action to be taken is to resolve to obtain no credit during the month. Cash is king. If you don't have enough cash to buy something between now and the end of the year then don't get it. The Rolling Stones were absolutely correct when they sang "You can't always get what you want, but if you try sometimes, you just might find, you'll get what you need". This is very true. Happiness is not in trinkets, but inside your own mind.
The second action to take is review your spending. Get your Bank or Credit card statement out to see what you actually spend. Split up all costs and drill them down to the penny. Once you have done this look to the findings line by line and decide whether each thing was worth it. Whilst looking at my own spends I can see that the money I've spent on electricity has given me a return whilst the money I (over)spent on beer has just left me a headache! By making sure you get your money's worth from every penny that leaves your pocket your spending will automatically err towards the minimal sustainable level. Repeat this exercise often and by the end of the quarter you'll find you have a whole new attitude towards personal finance. I myself have been very surprised by the change this simple exercise has brought about.
Finally, begin to take action in the way of bringing more money into the family purse. This may be by working overtime, asking for a raise, taking on a second job or instigating new income streams. The trick is not the accumulation of extra cash - for anyone can bring in a little bit more money if they look for it. Rather the trick is acquiring extra monies without it also resulting in lifestyle inflation. If you get a promotion don't rush out to reward yourself with a shopping spree. If you have a huge sales month then don't spend that commission cheque on a new car. Keep the extra cash and make it work for you by means of investing it. Even a vehicle as simple as an ISA will be keeping you in pocket long after any new car is rusting in the scrap yard.
In conclusion, keep it simple. It's Personal Finance - not Rocket Science!
4 Things that First Time Buyers Must NOT do!
Go to every Mortgage Adviser in town - it is well known that every time a credit check is ran on you a "footprint" is left. When banks review your credit they see these footprints and assume that you must have been declined - or else why would you be asking them for money? The easy way to find the best mortgage deal is to simply go to the best mortgage adviser in town. Locate a good, local, independent, whole of market mortgage adviser.
Suffer Paralysis by analysis - all First Time Buyers set off with the intention that they will shop around until they find the perfect property. Unfortunately the perfect property doesn't exist, and some amount of compromise is always required. Don't view so many houses that you begin to forget why a certain place was once your favourite. The same applies to mortgage deals if you read too many articles and sit with too many advisers your head will start to go round and round in circles. This feeling is paralysis by analysis. Eventually you will be so scared to make the wrong decision that you won't make any decision at all. To combat this just set your stall out at the beginning, i.e. if you want a 3 bed with ORP in a good area then stop when you find it. Don't wait for the perfect 3 bed with lots of ORP in a fantastic area.
Overstretch themselves - the simple rule to follow is go for the cheapest property you will be happy in. Stick to the traditional 2.7 times joint earnings for your mortgage. It is better to live in a lesser home and have a life than to live in a mansion but have spam for tea every night.
Say no to life insurance - as a FTB it is likely that you will have no life insurance before you take out your first mortgage. Many FTB's leave it that way as they feel that it something they don't really require. However there comes a time in everyone's life when they want life insurance. It usually comes when you have children, or when you have a health scare. Now be aware that Life Insurance isn't always cheap. A £10 policy at age 21 will be considerably more expensive when your aged 41. I am the Tightest Man in Britain and I can still see that life cover is a necessary evil.
Get fooled by shared ownership - Shared ownership or shared equity essentially means paying the same as a mortgage month to month but only getting a percentage of the good stuff - appreciation! Instead of using shared ownership as a means of buying a bigger house, how about the quaint notion of starting at the bottom of the ladder and working your way up?
If First Time Buyers were to heed this advice then they will find the whole process a much more interesting journey.
Suffer Paralysis by analysis - all First Time Buyers set off with the intention that they will shop around until they find the perfect property. Unfortunately the perfect property doesn't exist, and some amount of compromise is always required. Don't view so many houses that you begin to forget why a certain place was once your favourite. The same applies to mortgage deals if you read too many articles and sit with too many advisers your head will start to go round and round in circles. This feeling is paralysis by analysis. Eventually you will be so scared to make the wrong decision that you won't make any decision at all. To combat this just set your stall out at the beginning, i.e. if you want a 3 bed with ORP in a good area then stop when you find it. Don't wait for the perfect 3 bed with lots of ORP in a fantastic area.
Overstretch themselves - the simple rule to follow is go for the cheapest property you will be happy in. Stick to the traditional 2.7 times joint earnings for your mortgage. It is better to live in a lesser home and have a life than to live in a mansion but have spam for tea every night.
Say no to life insurance - as a FTB it is likely that you will have no life insurance before you take out your first mortgage. Many FTB's leave it that way as they feel that it something they don't really require. However there comes a time in everyone's life when they want life insurance. It usually comes when you have children, or when you have a health scare. Now be aware that Life Insurance isn't always cheap. A £10 policy at age 21 will be considerably more expensive when your aged 41. I am the Tightest Man in Britain and I can still see that life cover is a necessary evil.
Get fooled by shared ownership - Shared ownership or shared equity essentially means paying the same as a mortgage month to month but only getting a percentage of the good stuff - appreciation! Instead of using shared ownership as a means of buying a bigger house, how about the quaint notion of starting at the bottom of the ladder and working your way up?
If First Time Buyers were to heed this advice then they will find the whole process a much more interesting journey.
Negative Equity basically means that the size of your mortgage AND any secured loans you may have is greater than the value of your house. The scourge of the 1990s is back in a big way and is set to engulf a whole new generation of home-owners. International investment bank Morgan Stanley has said that 1.2 million British homes could be in negative equity before the end of next year. Contrary to speculation and rumours, being in Negative Equity does not mean that you will automatically be threatened with repossession by your lender.
However, you are going to have issues ahead of you which could cause a lot of sleepless nights. When your current mortgage deal ends it will be impossible to switch to a competitive new product unless you have a large windfall of cash in order to reduce your outstanding debt. Consequently you will be stuck on your bank's Standard Variable Rate (SVR) which will be somewhere between 6.5% to 10% and above. For most people this will lead to much larger monthly payments. Also, because the rate is variable it could rise in the future as the government puts pressure on the Bank of England to control inflation.
This jump in monthly payments is referred to as "rate shock" and this is what you should be really worried about. If your mortgage was to go up by £500 a month, would that cause you problems? Don't take it lightly, higher mortgage payments lead to arrears and arrears lead to repossession. Already, there have been more repossession procedures started in 2008 than in any other year since 1992. It doesn't matter if you live in a slum or in the best neighbourhood in town - the bank don't care. Families are being moved out of their homes under force because they can't come to terms with the rate shock.
Can you imagine the shame? Can you imagine the embarassment of having to phone an estate agent to go back into a property which was once your family home? How would it feel to look your children in the eye when you are in the waiting room at the council emergency housing office?
Repossession is not the end of the matter however. What most people don't realise is that you still have responsibility for the property until it is sold. When the locks get changed - you are charged. Also, with today's market it is not guaranteed that the property will sell quickly. As the market shrinks the debt piles up and the likelihood of a repossessed owner getting on the ladder again shrinks and shrinks.
So what should you do as a homeowner with negative equity? Well the answer to that is really based on your own circumstances and independent advice should be sought. It is universally the case, however, that you can create equity more easily than you first realise. By channelling cash into the right funds, taking a long term view and paying yourself first, Negative Equity can quickly become a thing of the past.
However, you are going to have issues ahead of you which could cause a lot of sleepless nights. When your current mortgage deal ends it will be impossible to switch to a competitive new product unless you have a large windfall of cash in order to reduce your outstanding debt. Consequently you will be stuck on your bank's Standard Variable Rate (SVR) which will be somewhere between 6.5% to 10% and above. For most people this will lead to much larger monthly payments. Also, because the rate is variable it could rise in the future as the government puts pressure on the Bank of England to control inflation.
This jump in monthly payments is referred to as "rate shock" and this is what you should be really worried about. If your mortgage was to go up by £500 a month, would that cause you problems? Don't take it lightly, higher mortgage payments lead to arrears and arrears lead to repossession. Already, there have been more repossession procedures started in 2008 than in any other year since 1992. It doesn't matter if you live in a slum or in the best neighbourhood in town - the bank don't care. Families are being moved out of their homes under force because they can't come to terms with the rate shock.
Can you imagine the shame? Can you imagine the embarassment of having to phone an estate agent to go back into a property which was once your family home? How would it feel to look your children in the eye when you are in the waiting room at the council emergency housing office?
Repossession is not the end of the matter however. What most people don't realise is that you still have responsibility for the property until it is sold. When the locks get changed - you are charged. Also, with today's market it is not guaranteed that the property will sell quickly. As the market shrinks the debt piles up and the likelihood of a repossessed owner getting on the ladder again shrinks and shrinks.
So what should you do as a homeowner with negative equity? Well the answer to that is really based on your own circumstances and independent advice should be sought. It is universally the case, however, that you can create equity more easily than you first realise. By channelling cash into the right funds, taking a long term view and paying yourself first, Negative Equity can quickly become a thing of the past.
20 items to remove from your shopping trolley NOW!
A recent poll from the Co-Operative Bank has shown that inflation is already beginning to kick in - and the public are changing their shopping patterns to suit. This is a classic example of how inflation can change society in unexpected ways. If there was a massive tropical storm and the banana crop was wiped out people would eat more apples rather than pay extra for bananas. This type of thinking is now being reflected at Supermarket checkouts up and down the UK. The interesting point to me is that the list of 20 luxury items being left on the shelves by shoppers shows nothing (absolutely nothing) that a frugal shopper would be buying anyhow. Here is the list, alongside my comments:
1. Flowers - available for free in every woodland and hedgerow in the UK.
2. Magazines - it's hard to find a magazine nowadays that doesn't have the same (or very similar) content available on the web for free.
3. CDs - rather than buy a new CD just listen to your current one, or adapt a "one in/ one out" strategy - for every new CD you buy; you need to sell an old one on one of the online marketplaces.
4. Bottled Water - Evian backwards is Naïve. Enough said.
5. Hand wash - nothing beats good old fashioned soap.
6. Quilted toilet paper - "ownbrand" does the job.
7. Candles - these might look nice, but they haven't served a valid purpose (outwith power cuts) since the days of Thomas Edison.
8. Branded washing up liquid - as per the toilet roll, "ownbrand" will do the job. Think about it this way, Tesco, Asda et al don't have their own brewery. The "ownbrand" cans of Lager on their shelves are being made somewhere. It may well be the case that Tesco's own lager is in fact very, very similar to the brand sold elsewhere on the shelves. The same applies to almost every other item in the store.
9. Organic produce - organic produce could be available for free every day of the year...In your own back garden.
10. Branded food - use the Credit Crunch as an excuse to go fresh. Lay off the macaroni and cheese and go for a homemade dish.
11. Fresh coffee - I'm not a coffee drinker so it would be unfair for me to comment too much on this one. I do know, however, that your body craves whatever you have to eat or drink a lot. If you drink a lot of Coke then your body will crave coke. If you drink a lot of wine then your body will crave wine. Taking things forward, if you drink a lot of low cost coffee your body will end up craving low cost coffee - problem solved (the knack of course is sticking to an inferior product whilst your body adapts).
12. Uncut bread - the best thing sliced bread is (wait for it) Sliced Bread! Don't mess around with bread; it all tastes the same after a couple of chews. If you are only using it for toast then it is really irrelevant which brand you go with.
13. Nail polish - like it or lump it, beauty products are going to have to take a back seat during the Credit Crunch. If the thought of doing without cosmetics makes you cringe then now might be the time to discover natural alternatives. Remember - less is more!
14. Fake tan - such self indulgence should be consigned to the waste bin of the 90s. The Dale Winton look is out!
15. Multi Vitamins - if you follow point 9 then there should be no need for extra vitamins.
16. Fabric Conditioner -I don't even know what this is!
17. Teeth whitening toothpaste - this is another area where a trip to your granny's can help. People had white teeth before the days of teeth whitening toothpaste. The secret is Bicarbonate of Soda. You will find that by looking, you can find alternatives to all of today's luxuries within easy reach.
18. Wine - I promote abstaining from alcohol completely but if you can't then seek alternatives. The theme throughout has been either abstaining, finding a cheap "ownbrand" alternative or making it at home. In my opinion I'd lean towards a cheap alternative. If I had a pound for every time I had heard people say that you can get an excellent bottle of wine at Tesco for a fiver I'd be a rich(er) man.
19. Desserts - if you fancy a dessert then why not have some jelly - another occasion when thinking back to what your granny would've done when times were tight.
20. Napkins - this list must have been written by a Lord! Unless you are having candlelit dinners every night then I'm pretty sure that the average family will be able to live without these.
1. Flowers - available for free in every woodland and hedgerow in the UK.
2. Magazines - it's hard to find a magazine nowadays that doesn't have the same (or very similar) content available on the web for free.
3. CDs - rather than buy a new CD just listen to your current one, or adapt a "one in/ one out" strategy - for every new CD you buy; you need to sell an old one on one of the online marketplaces.
4. Bottled Water - Evian backwards is Naïve. Enough said.
5. Hand wash - nothing beats good old fashioned soap.
6. Quilted toilet paper - "ownbrand" does the job.
7. Candles - these might look nice, but they haven't served a valid purpose (outwith power cuts) since the days of Thomas Edison.
8. Branded washing up liquid - as per the toilet roll, "ownbrand" will do the job. Think about it this way, Tesco, Asda et al don't have their own brewery. The "ownbrand" cans of Lager on their shelves are being made somewhere. It may well be the case that Tesco's own lager is in fact very, very similar to the brand sold elsewhere on the shelves. The same applies to almost every other item in the store.
9. Organic produce - organic produce could be available for free every day of the year...In your own back garden.
10. Branded food - use the Credit Crunch as an excuse to go fresh. Lay off the macaroni and cheese and go for a homemade dish.
11. Fresh coffee - I'm not a coffee drinker so it would be unfair for me to comment too much on this one. I do know, however, that your body craves whatever you have to eat or drink a lot. If you drink a lot of Coke then your body will crave coke. If you drink a lot of wine then your body will crave wine. Taking things forward, if you drink a lot of low cost coffee your body will end up craving low cost coffee - problem solved (the knack of course is sticking to an inferior product whilst your body adapts).
12. Uncut bread - the best thing sliced bread is (wait for it) Sliced Bread! Don't mess around with bread; it all tastes the same after a couple of chews. If you are only using it for toast then it is really irrelevant which brand you go with.
13. Nail polish - like it or lump it, beauty products are going to have to take a back seat during the Credit Crunch. If the thought of doing without cosmetics makes you cringe then now might be the time to discover natural alternatives. Remember - less is more!
14. Fake tan - such self indulgence should be consigned to the waste bin of the 90s. The Dale Winton look is out!
15. Multi Vitamins - if you follow point 9 then there should be no need for extra vitamins.
16. Fabric Conditioner -I don't even know what this is!
17. Teeth whitening toothpaste - this is another area where a trip to your granny's can help. People had white teeth before the days of teeth whitening toothpaste. The secret is Bicarbonate of Soda. You will find that by looking, you can find alternatives to all of today's luxuries within easy reach.
18. Wine - I promote abstaining from alcohol completely but if you can't then seek alternatives. The theme throughout has been either abstaining, finding a cheap "ownbrand" alternative or making it at home. In my opinion I'd lean towards a cheap alternative. If I had a pound for every time I had heard people say that you can get an excellent bottle of wine at Tesco for a fiver I'd be a rich(er) man.
19. Desserts - if you fancy a dessert then why not have some jelly - another occasion when thinking back to what your granny would've done when times were tight.
20. Napkins - this list must have been written by a Lord! Unless you are having candlelit dinners every night then I'm pretty sure that the average family will be able to live without these.
Monday 18 August 2008
Is your life full of STUFF?
I’ve just finished reading “Your Money or Your Life” by Joe Dominguez and Vicki Robin and I can highly recommend it. The aspect of the book which I would like to talk about today is the fundamental spiritual or psychological aspect of spending. When it comes to spending, some purchases may be wiser than others – at least as far as happiness is concerned. The book rightly says that we need to see what return we are getting for our life energy (money). For example, £50 spent on a day out with your children is always going to money better spent than £50 worth of bank account charges or 8 packs of cigarettes. In all aspects of life, people receive more enduring pleasure and satisfaction from investing in life experiences than material possessions. The old song “The Best Things in Life are Free” is true. Experiences are the new status symbols. Ask your dad if he’d rather have a new jumper or an hour behind the wheel of a Ferrari. Ask your mum if she’d rather have some new shoes or a lovely meal on a moonlit quayside. As we mature these basic fundamentals of life become more self-evident so don’t expect it to work for a child! The point I am getting at is that if you are serious about Personal Finance or achieving Financial Freedom then you need to substitute STUFF with FEELINGS. As I look around my living room I see a multitude of STUFF which gives me no pleasure whatsoever. Items that I simply don’t need. The feeling of having the cash back in my bank account would actually leave me feeling better than having these dust-collectors on my shelf. I am thinking about exercise bikes, lamps, ornaments, videos, books, vases, candles, stereo units, CDs, DVDs. Even the sideboard on which these items sit is STUFF that I don’t really need. Today I vow to declutter my life and take back some of the cash which I have wasted over the years. From now on there will be no more purchases other than the necessities of food, drink, shelter, transport and warmth. Once I know I can go back to basics then I can reintroduce the FEELINGS that will give me great pleasure in the years to come. The golden times that makes life worth living. Experiential purchases are a more meaningful part of a person’s identity. Please take this opportunity to turn the spotlight on yourself. Have you bought STUFF that gives you no pleasure?
Sunday 17 August 2008
Make sure you stay on track
I received a fantastic email today that really got me thinking. It was the usual autoresponder churn which I generally delete straight away but on this occasion, the subject line, "3 questions you really need to ask yourself", intrigued me.
The first question was, "if your life could be exactly what you want it to be, what would it look like?" For me, I'd like to have a job where I start and finish really early. I'd be up at the crack of dawn and enjoy a heart breakfast. I'd go out and work for a few hours and then return in the early afternoon at the latest. During the afternoon I'll have some free time to myself which I may use to run a small internet business, visit relatives, go for a hill walk, play some snooker, play darts and read books. I will then prepare a lovely dinner which the family sit around the table to eat together. In the evening we'll take part in activities. There are no money worries whatsoever. We don't spend, spend, spend but there is enough to live very comfortably if you're not fussy. It's just not an issue.
The second question was, "how much money will you need to earn each and every month for the rest of your life to support this lifestyle?". This is another question which I have thought about in the past, and I feel that a monthly income of £2000 would be enough. This amount would be enough to pay the mortgage, the bills and still have enough left over to support charities, take day trips, share with family and friends, live life and enjoy holidays. Initially I'd like a maximum of £1000 of this money coming from linear sources i.e. a job, with the other half coming from residual sources such as the rental income from my properties.
The third question is when I really sat up and took notice: "If you keep doing what you're doing right now, will you ever meet the monthly income goal?". When I took a couple of minutes to think about this I began to get a horrible feeling in the pit of my stomach as I began to realise the answer was simply NEVER! If I continue at my current rate of progress, I will never get my end result.
On reflection I have lost focus over the last 6 months. I have been too busy working IN my business to be working ON my business. I have been shuffling paper, moving sideways instead of taking steps towards my goal.
In order to get back on track, I've decided to take a couple of days off work. I'm making my path so clear that it will be impossible to get lost. The answer to my problem is to reassess where I am at the moment, reaffirm my destination BUT this time ensure that I have put in place some sort of feedback mechanism to ensure that I stay on track.
It is easy to over-complicate life but if we can easily bring everything task in life down to three things: set goals, take action, review. If we can do this consistently then we won't go far wrong!
Please take this opportunity to ask yourself these three questions. You may find the answers are not what you want to hear but I hope they make you wake up and get back onto the Fast Track of Life! Good Luck.
The first question was, "if your life could be exactly what you want it to be, what would it look like?" For me, I'd like to have a job where I start and finish really early. I'd be up at the crack of dawn and enjoy a heart breakfast. I'd go out and work for a few hours and then return in the early afternoon at the latest. During the afternoon I'll have some free time to myself which I may use to run a small internet business, visit relatives, go for a hill walk, play some snooker, play darts and read books. I will then prepare a lovely dinner which the family sit around the table to eat together. In the evening we'll take part in activities. There are no money worries whatsoever. We don't spend, spend, spend but there is enough to live very comfortably if you're not fussy. It's just not an issue.
The second question was, "how much money will you need to earn each and every month for the rest of your life to support this lifestyle?". This is another question which I have thought about in the past, and I feel that a monthly income of £2000 would be enough. This amount would be enough to pay the mortgage, the bills and still have enough left over to support charities, take day trips, share with family and friends, live life and enjoy holidays. Initially I'd like a maximum of £1000 of this money coming from linear sources i.e. a job, with the other half coming from residual sources such as the rental income from my properties.
The third question is when I really sat up and took notice: "If you keep doing what you're doing right now, will you ever meet the monthly income goal?". When I took a couple of minutes to think about this I began to get a horrible feeling in the pit of my stomach as I began to realise the answer was simply NEVER! If I continue at my current rate of progress, I will never get my end result.
On reflection I have lost focus over the last 6 months. I have been too busy working IN my business to be working ON my business. I have been shuffling paper, moving sideways instead of taking steps towards my goal.
In order to get back on track, I've decided to take a couple of days off work. I'm making my path so clear that it will be impossible to get lost. The answer to my problem is to reassess where I am at the moment, reaffirm my destination BUT this time ensure that I have put in place some sort of feedback mechanism to ensure that I stay on track.
It is easy to over-complicate life but if we can easily bring everything task in life down to three things: set goals, take action, review. If we can do this consistently then we won't go far wrong!
Please take this opportunity to ask yourself these three questions. You may find the answers are not what you want to hear but I hope they make you wake up and get back onto the Fast Track of Life! Good Luck.
Saturday 9 August 2008
Dealing with Negative Equity
Negative Equity basically means that the size of your mortgage AND any secured loans you may have is greater than the value of your house. The scourge of the 1990s is back in a big way and is set to engulf a whole new generation of home-owners. International investment bank Morgan Stanley has said that 1.2 million British homes could be in negative equity before the end of next year. Contrary to speculation and rumours, being in Negative Equity does not mean that you will automatically be threatened with repossession by your lender.
However, you are going to have issues ahead of you which could cause a lot of sleepless nights. When your current mortgage deal ends it will be impossible to switch to a competitive new product unless you have a large windfall of cash in order to reduce your outstanding debt. Consequently you will be stuck on your bank's Standard Variable Rate (SVR) which will be somewhere between 6.5% to 10% and above. For most people this will lead to much larger monthly payments. Also, because the rate is variable it could rise in the future as the government puts pressure on the Bank of England to control inflation.
This jump in monthly payments is referred to as "rate shock" and this is what you should be really worried about. If your mortgage was to go up by £500 a month, would that cause you problems? Don't take it lightly, higher mortgage payments lead to arrears and arrears lead to repossession. Already, there have been more repossession procedures started in 2008 than in any other year since 1992. It doesn't matter if you live in a slum or in the best neighbourhood in town - the bank don't care. Families are being moved out of their homes under force because they can't come to terms with the rate shock.
Can you imagine the shame? Can you imagine the embarassment of having to phone an estate agent to go back into a property which was once your family home? How would it feel to look your children in the eye when you are in the waiting room at the council emergency housing office?
Repossession is not the end of the matter however. What most people don't realise is that you still have responsibility for the property until it is sold. When the locks get changed - you are charged. Also, with today's market it is not guaranteed that the property will sell quickly. As the market shrinks the debt piles up and the likelihood of a repossessed owner getting on the ladder again shrinks and shrinks.
So what should you do as a homeowner with negative equity? Well the answer to that is really based on your own circumstances and independent advice should be sought. It is universally the case, however, that you can create equity more easily than you first realise. By channelling cash into the right funds, taking a long term view and paying yourself first, Negative Equity can quickly become a thing of the past.
However, you are going to have issues ahead of you which could cause a lot of sleepless nights. When your current mortgage deal ends it will be impossible to switch to a competitive new product unless you have a large windfall of cash in order to reduce your outstanding debt. Consequently you will be stuck on your bank's Standard Variable Rate (SVR) which will be somewhere between 6.5% to 10% and above. For most people this will lead to much larger monthly payments. Also, because the rate is variable it could rise in the future as the government puts pressure on the Bank of England to control inflation.
This jump in monthly payments is referred to as "rate shock" and this is what you should be really worried about. If your mortgage was to go up by £500 a month, would that cause you problems? Don't take it lightly, higher mortgage payments lead to arrears and arrears lead to repossession. Already, there have been more repossession procedures started in 2008 than in any other year since 1992. It doesn't matter if you live in a slum or in the best neighbourhood in town - the bank don't care. Families are being moved out of their homes under force because they can't come to terms with the rate shock.
Can you imagine the shame? Can you imagine the embarassment of having to phone an estate agent to go back into a property which was once your family home? How would it feel to look your children in the eye when you are in the waiting room at the council emergency housing office?
Repossession is not the end of the matter however. What most people don't realise is that you still have responsibility for the property until it is sold. When the locks get changed - you are charged. Also, with today's market it is not guaranteed that the property will sell quickly. As the market shrinks the debt piles up and the likelihood of a repossessed owner getting on the ladder again shrinks and shrinks.
So what should you do as a homeowner with negative equity? Well the answer to that is really based on your own circumstances and independent advice should be sought. It is universally the case, however, that you can create equity more easily than you first realise. By channelling cash into the right funds, taking a long term view and paying yourself first, Negative Equity can quickly become a thing of the past.
Wednesday 30 July 2008
Save Money by Giving up Work!
In “Mortgages, Money and Magic” I relay a plan where anyone on an average wage can pay off their mortgage within 10 years. As a mortgage (or rent for those who let) is one of life’s biggest costs it makes sense to shake off the debt as soon as possible. Once the mortgage has gone it could create the freedom in your life to:
Spend quality time with your family and friends.
Be more full of life as opposed to living Groundhog Day.
Follow opportunities that you wouldn’t have time for before.
Make a contribution to the world.
Take on a job which reflected your values or interests as opposed to being a wage slave.
For me, being Mortgage free would mean the end of the 9-5 routine. I could get up when I wanted, read the books I wanted to read, participate in hobbies, and most importantly spend time with my loved ones. Live would be for living!
However, there are still bills to pay when your mortgage is finished. There is still council tax and utility bills. Insurances and food. I have dealt separately with building residual income streams, but in this article I wanted to show that ending your job can actually free up cash. Look at it this way:
Commuting – by not working we no longer have to indulge in the tedious daily pursuit of commuting. The average distance traveled by UK workers is 8.5 miles to work making a round trip of 17 miles. At 15p a mile that makes the weekly petrol cost up to £12.75 or £55.25 per month. We should also take into account wear and tear, road tax, car insurance and parking. Therefore by giving up work you could save roughly £100 per month on traveling.
Work clothes – if you no longer work, or work from home there is nothing stopping you staying in your pyjama’s for the whole day. There’s no need to get a new suit every six months, makeup, fancy shoes, briefcases or even shaving foam! In total, another saving of at least £25 per month.
Meals – it’s hard to get away from shelling out at least a couple of quid on meals everyday but if your no longer in the rat race you’ll have had such a healthy breakfast you’ll no longer need the midday sugar rush.
Childcare – if you are no longer in full time work you’re going to make a saving in Child Care cost. Remember the Golden Rule with Kids – Presence is more important than presents. A day spent having fun with your kids is worth a million nights of coming home knackered and slumping in front of the TV, irritated by the children’s noise. £140 per month saved for those with kids.
Escape Costs – if you day is spent doing worthwhile and rewarding activities they’ll be less need to “treat yourself” with escapist activities such as boozing, meals out, cinema trips, ten pin bowling etc. We shall quantify this as a saving of £50 per month.
No more daily grind – we refer to work as the daily grind because that is exactly what it is. By avoiding it our health will naturally improve. When others are in their 1m x 1m cubicle you could be in the park with the kids, down at the sauna or hiking round your local hills. Which do you think is healthier? It’s hard to put a monetary value on your health but it’s obvious that savings are there to be made. Prescriptions and medicine are the obvious ones. Let’s average it out at £10 per month.
In “Mortgages, Money and Magic” I recommend avoiding Foreign Holidays as a means to making overpayments on your mortgage. This sacrifice is easier to make if you no longer have a 9-5 job – every day is a holiday! Save yourself £100 per month easy.
There are numerous over little savings that can be made too: reduced mobile phone bills, less mileage to Conferences etc, trade magazines no longer required, less need to buy raffle tickets/ sponsor workmates. The list goes on.
In summary if you need £1000 to live on when you are a worker; this could easily be reduced to about £750 when “work-related” costs are removed. Think about these when planning your future after your mortgage is paid off.
Spend quality time with your family and friends.
Be more full of life as opposed to living Groundhog Day.
Follow opportunities that you wouldn’t have time for before.
Make a contribution to the world.
Take on a job which reflected your values or interests as opposed to being a wage slave.
For me, being Mortgage free would mean the end of the 9-5 routine. I could get up when I wanted, read the books I wanted to read, participate in hobbies, and most importantly spend time with my loved ones. Live would be for living!
However, there are still bills to pay when your mortgage is finished. There is still council tax and utility bills. Insurances and food. I have dealt separately with building residual income streams, but in this article I wanted to show that ending your job can actually free up cash. Look at it this way:
Commuting – by not working we no longer have to indulge in the tedious daily pursuit of commuting. The average distance traveled by UK workers is 8.5 miles to work making a round trip of 17 miles. At 15p a mile that makes the weekly petrol cost up to £12.75 or £55.25 per month. We should also take into account wear and tear, road tax, car insurance and parking. Therefore by giving up work you could save roughly £100 per month on traveling.
Work clothes – if you no longer work, or work from home there is nothing stopping you staying in your pyjama’s for the whole day. There’s no need to get a new suit every six months, makeup, fancy shoes, briefcases or even shaving foam! In total, another saving of at least £25 per month.
Meals – it’s hard to get away from shelling out at least a couple of quid on meals everyday but if your no longer in the rat race you’ll have had such a healthy breakfast you’ll no longer need the midday sugar rush.
Childcare – if you are no longer in full time work you’re going to make a saving in Child Care cost. Remember the Golden Rule with Kids – Presence is more important than presents. A day spent having fun with your kids is worth a million nights of coming home knackered and slumping in front of the TV, irritated by the children’s noise. £140 per month saved for those with kids.
Escape Costs – if you day is spent doing worthwhile and rewarding activities they’ll be less need to “treat yourself” with escapist activities such as boozing, meals out, cinema trips, ten pin bowling etc. We shall quantify this as a saving of £50 per month.
No more daily grind – we refer to work as the daily grind because that is exactly what it is. By avoiding it our health will naturally improve. When others are in their 1m x 1m cubicle you could be in the park with the kids, down at the sauna or hiking round your local hills. Which do you think is healthier? It’s hard to put a monetary value on your health but it’s obvious that savings are there to be made. Prescriptions and medicine are the obvious ones. Let’s average it out at £10 per month.
In “Mortgages, Money and Magic” I recommend avoiding Foreign Holidays as a means to making overpayments on your mortgage. This sacrifice is easier to make if you no longer have a 9-5 job – every day is a holiday! Save yourself £100 per month easy.
There are numerous over little savings that can be made too: reduced mobile phone bills, less mileage to Conferences etc, trade magazines no longer required, less need to buy raffle tickets/ sponsor workmates. The list goes on.
In summary if you need £1000 to live on when you are a worker; this could easily be reduced to about £750 when “work-related” costs are removed. Think about these when planning your future after your mortgage is paid off.
Monday 28 July 2008
www.uncommonadvice.co.uk is proved right yet again!
A report released today by the National Housing Federation has put forward the view that the average house price in the UK will rise over the next 5 years by 25%. before you say it, this report was not drafted by council lefties but rather Oxford economists. They predict that house prices will fall by 2.1% in 2009 and then increase by 1.3% in 2010, 5.2% in 2011, 9.2% in 2012 and 9.3% in 2013.
The Chief Executive of the federation stated that, "..... despite concerns about the current market downturn, house prices will resume upwards". All markets abide by the rules of supply and demand, so lets look at the basics:
The Chief Executive of the federation stated that, "..... despite concerns about the current market downturn, house prices will resume upwards". All markets abide by the rules of supply and demand, so lets look at the basics:
- the total number of new homes expected to be completed in 2008 is likely to be 120,000 against a government target of 200,000.
- one in every 4 local authority areas has seen its housing list double but the slowdown in newbuilds means that there is less public housing coming on stream.
- 1.5million people in the UK live in an overcrowded house.
- 73,360 households are officially homeless.
Mark my words 2008 is going to be remembered as a blip in an otherwise upwards house price trajectory. Therefore, it is of vital importance for First Time Buyers to act now - especially in the areas where it is still possible to get a 3 bedroom property with parking for less than £125,000; namely, the North East, the North West, the East Midlands and the West Midlands.
The fundamentals are still in place. It is simply the case that a herd mentality has spread across the country. Don't wait to buy property - buy property then wait! Mark my words
Pay off your Mortgage in 10 years - avoid the 7 Deadly Sins!
It’s amazing how many of the new ideas and theory’s that come out are simply a rehash of previous doctrines. Look at the Law of Attraction – and then compare it to ideas set out in the bible 2000 years ago, “ask and it shall be given unto you, seek and ye shall find”. In “Mortgages, Money and Magic” I set out a plan as to how any average couple can buy a property without requiring a deposit and then go on to own that property outright within 10 years. Obviously you can’t make an omelette without breaking some eggs. Sacrifices have to be made. Here I will look at the 7 main sacrifices as they relate to the 7 deadly sins.
Envy – When someone buys themselves a new car or a new holiday you are going to be jealous. You have to realise though that you don’t need material things to make yourself feel better. The person with the new car has probably dug themselves deeper into debt to get the short lived buzz of having something new. Think of the car, the holiday or anything else that will be available to you when the millstone of a mortgage is taken off your neck. Sacrifice getting a new car – stick to secondhand.
Pride – It’s good to support your team, but with the average in the Premiership season ticket at £615 it’s not cheap. Try to achieve value for money in everything you do. Learn to do without. I can guarantee you that going to football matches is something that can quite easily be substituted for other less expensive pastimes. Sacrifice going to the Football.
Sloth – You get nothing for nothing. In order to pay off your mortgage within a decade it is necessary to get off your bottom and actually earn some cash. The beauty of my plan however is that I can show you how to do it without being a city whiz kind. An “average” job paying £22,000 to £26,000 would be sufficient. If necessary sacrifice evenings and weekends now so that your mortgage is paid off by the time you reach middle age. You’ll have more time than ever when your mortgage is paid off whilst your contemporaries are still struggling.
Greed – it’s never good to have too much of something so make your money compartmentalized. You should have a fund for repairs, a fund for food, a fund for clothes etc. By separating your cash out it makes it much harder to get greedy. All greed is ultimately self-destructive but make sure you sacrifice the worst source of greed – alcohol.
Wrath – Don’t get angry when someone lights up next to you, think of the money they are burning away when they buy that packet of ciggies – and feel safe in the knowledge that you will be mortgage free whilst they are literally burning cash daily. Sacrifice the fags.
Gluttony – there is no need to be a glutton with takeaway after takeaway when it is possible to eat like a king for 50p a night. Get creative in the kitchen and your wallet AND waistline will benefit.
Lust – having a sex drive can be the impetus for a lot of good change in your life, but draw the line when the lust inside you means you are throwing money down the pan. Make sure you embark on this plan with the person you intend to be with for the duration. Sacrifice the casual relationships.
In summary, without winning the lottery or having a massive life insurance payout, paying off your mortgage within 10 years is going to take many sacrifices. Deep down we know that these sacrifices are for the best because the Seven Deadly sins are all instinctive. They are innate. To achieve the goal you must: sacrifice the new car; sacrifice the foreign holiday; bring in at least an average wage; sacrifice cigarettes and alcohol; sacrifice the takeaways and sacrifice the casual sex.
If you have the strength of character to achieve this then you are well on the way to being able to pay your mortgage off in a decade.
Envy – When someone buys themselves a new car or a new holiday you are going to be jealous. You have to realise though that you don’t need material things to make yourself feel better. The person with the new car has probably dug themselves deeper into debt to get the short lived buzz of having something new. Think of the car, the holiday or anything else that will be available to you when the millstone of a mortgage is taken off your neck. Sacrifice getting a new car – stick to secondhand.
Pride – It’s good to support your team, but with the average in the Premiership season ticket at £615 it’s not cheap. Try to achieve value for money in everything you do. Learn to do without. I can guarantee you that going to football matches is something that can quite easily be substituted for other less expensive pastimes. Sacrifice going to the Football.
Sloth – You get nothing for nothing. In order to pay off your mortgage within a decade it is necessary to get off your bottom and actually earn some cash. The beauty of my plan however is that I can show you how to do it without being a city whiz kind. An “average” job paying £22,000 to £26,000 would be sufficient. If necessary sacrifice evenings and weekends now so that your mortgage is paid off by the time you reach middle age. You’ll have more time than ever when your mortgage is paid off whilst your contemporaries are still struggling.
Greed – it’s never good to have too much of something so make your money compartmentalized. You should have a fund for repairs, a fund for food, a fund for clothes etc. By separating your cash out it makes it much harder to get greedy. All greed is ultimately self-destructive but make sure you sacrifice the worst source of greed – alcohol.
Wrath – Don’t get angry when someone lights up next to you, think of the money they are burning away when they buy that packet of ciggies – and feel safe in the knowledge that you will be mortgage free whilst they are literally burning cash daily. Sacrifice the fags.
Gluttony – there is no need to be a glutton with takeaway after takeaway when it is possible to eat like a king for 50p a night. Get creative in the kitchen and your wallet AND waistline will benefit.
Lust – having a sex drive can be the impetus for a lot of good change in your life, but draw the line when the lust inside you means you are throwing money down the pan. Make sure you embark on this plan with the person you intend to be with for the duration. Sacrifice the casual relationships.
In summary, without winning the lottery or having a massive life insurance payout, paying off your mortgage within 10 years is going to take many sacrifices. Deep down we know that these sacrifices are for the best because the Seven Deadly sins are all instinctive. They are innate. To achieve the goal you must: sacrifice the new car; sacrifice the foreign holiday; bring in at least an average wage; sacrifice cigarettes and alcohol; sacrifice the takeaways and sacrifice the casual sex.
If you have the strength of character to achieve this then you are well on the way to being able to pay your mortgage off in a decade.
Sunday 27 July 2008
Never rent! There are easy rules to follow to find your perfect house!
You can’t get rich renting. You can’t get rich renting. You can’t get rich renting.
If you rent for a lifetime then you will spend hundreds of thousands of pounds and end up exactly where you started – owning nothing. If you buy a house and pay down your mortgage you will eventually own a tangible asset. Unfortunately for us, Houses aren’t available for £99 down at your local IKEA. Most of us are going to need to take on debt in the form of a mortgage in order to make a house purchase. At the moment, due to the Credit Crunch, many people are seeing renting as a better alternative to taking on a mortgage, and who could blame them? Mortgage rates are the highest they have been for decades, large deposits are required – and what for? The house you buy is likely to be worth a lot less this time next year. Remember though that you can’t get rich renting! So how do you work your way through the maze and decide how much of a house is enough? Here are the easy rules I would follow:
· Visit www.rightmove.co.uk
· Search for properties for sale in your town.
· In the search filters only look at resale houses with 3 bedrooms and display with lowest prices first.
· Ignore properties in the worst two areas of town.
· Write down the first 3 properties you come across which are available with Off Road Parking.
· View all 3. Offer the same amount of money on all 3 (at least 10% less than list price). Work upwards until the first acceptance.
I recommend offering the same on all three houses because this is not a beauty contest. From the outset I would make my intentions clear to the Estate Agent. I would say something like, “I am interested not only in this property you have to offer Mr Estate Agent, but also another two with your competitors. I have no particular favourite – I just want one of them at the cheapest price possible”. I guarantee you that as soon as the Estate Agent knows that you are also looking elsewhere they will redouble their negotiation efforts with the vendor. If two agents come back at the same price then pick the one you prefer – thinking long term.
I guarantee you that in three quarters of the UK you will find a property available that fits within the above criteria at under £125,000.
Have a look at www.uncommonadvice.co.uk to find out how you can then go on to purchase that property and pay the mortgage off within 10 years.
If you rent for a lifetime then you will spend hundreds of thousands of pounds and end up exactly where you started – owning nothing. If you buy a house and pay down your mortgage you will eventually own a tangible asset. Unfortunately for us, Houses aren’t available for £99 down at your local IKEA. Most of us are going to need to take on debt in the form of a mortgage in order to make a house purchase. At the moment, due to the Credit Crunch, many people are seeing renting as a better alternative to taking on a mortgage, and who could blame them? Mortgage rates are the highest they have been for decades, large deposits are required – and what for? The house you buy is likely to be worth a lot less this time next year. Remember though that you can’t get rich renting! So how do you work your way through the maze and decide how much of a house is enough? Here are the easy rules I would follow:
· Visit www.rightmove.co.uk
· Search for properties for sale in your town.
· In the search filters only look at resale houses with 3 bedrooms and display with lowest prices first.
· Ignore properties in the worst two areas of town.
· Write down the first 3 properties you come across which are available with Off Road Parking.
· View all 3. Offer the same amount of money on all 3 (at least 10% less than list price). Work upwards until the first acceptance.
I recommend offering the same on all three houses because this is not a beauty contest. From the outset I would make my intentions clear to the Estate Agent. I would say something like, “I am interested not only in this property you have to offer Mr Estate Agent, but also another two with your competitors. I have no particular favourite – I just want one of them at the cheapest price possible”. I guarantee you that as soon as the Estate Agent knows that you are also looking elsewhere they will redouble their negotiation efforts with the vendor. If two agents come back at the same price then pick the one you prefer – thinking long term.
I guarantee you that in three quarters of the UK you will find a property available that fits within the above criteria at under £125,000.
Have a look at www.uncommonadvice.co.uk to find out how you can then go on to purchase that property and pay the mortgage off within 10 years.
Friday 25 July 2008
4 Reasons why real Property Investors need to wake up NOW!
Throughout history it is amazing to note that many, many millionaires have made their fortunes whilst others are mumping around complaing about their misfortunes and generally whining baout the economy. The best example I can think of is Joe kennedy (the father of John F. Kennedy) who was one of the only men to come out of the Stock Market Crash of 1929 smelling of roses. These men of steel show repetitive traits - they have a plan and they stick to it. They stay calm whilst all around them people are losing their heads. We should adapt these traits to the current UK housing situation. If you are an investor then now is actually the best time to be in the game for a long time. Look at the current opportunities and fomulate a strategy around them:
1. Repossession rates are going through the roof! All over the UK people are facing rate shock as they come off their fixed rates. The increased monthly payments lead to arrears. Elsewhere, increased costs at the fuel pumps, and higher expenses at the checkout are pushing more and more pressure onto the family purse. For some, this undoubtably leads to breaking point. Repo's are now running at almost the highest rate since records began. Although unfortunate for those concerned, the flood of cheap properties onto the market makes it Christmas Day for the Professional Investor.
2. Less competiton. Two summers ago a competitively priced house coming onto the market in a readily lettable area would have created a furore. Investors would be heading down to the Estate Agents like a flock of geese. Now the same property would hardly raise an eyebrow even with a For Sale board up, an editorial in the local rag, a highlighted position on Rightmove, 500 mailings and 50 call outs. No-one is buying! Therefore, as an Investor you will have your pick of th bunch. I am not overexaggerating here. At this moment in time I can reliably reveal that there are probably 3 or 4 investors still actively buying in Corby, Northants, perhaps 1 in Wellingborough and roughly the same in Rushden. If we assume that this picture is replicated across the country then we can extrapolate and predict that there is (very roughly) about 6000 investors buying at the moment in the UK. 6000 people have their choice of thousands upon thousands upon thousands of bargains. Choice breeds bargains. It is a buyers market.
3. Estate Agents are getting desperate. Imagine if you went back in time to a year ago and called your local Estate Agent to offer £85000 on a property which was on the market for £100000. I can guarantee you that that offer would be immediately placed in "the round file" (dustbin). the agent wouldn't even bother passing the offer on to the vendor. Today it is a completely different story. The agent may be wondering where there next wage cheque is coming from and will therefore do everything they can to make the deal happen. You;d be amazed how much influence an agent has on local house prices at a micro-level. Throw in the offer and then let the agent do their stuff. If the agent poo poos you then move on and find a more pro active firm to deal with.
5. Rents are creeping up. Ok, please imagine two situations. In the first instance you are a FTB couple who would have possibly bought a house together last year but now can't due to the Credit Crunch restrictions. In the second instance you are a family who are beginning to struggle due to rate shock and are looking to get off the ladder. Now, there are two sides to every story. What goes up must come down. If there are losers like the two examples then there must consequently be winners too. The winners are landlords because all the people who are in the situations referred to above will end up in rental sector. With the reduced supply of rental houses (due to the near disappearance of BTL mortgages) properties that means that a sellers (or Landlords more correctly) market is being created. Rents will naturally rise as market condtions prevail.
Read this article and understand - now is the time to buy.
1. Repossession rates are going through the roof! All over the UK people are facing rate shock as they come off their fixed rates. The increased monthly payments lead to arrears. Elsewhere, increased costs at the fuel pumps, and higher expenses at the checkout are pushing more and more pressure onto the family purse. For some, this undoubtably leads to breaking point. Repo's are now running at almost the highest rate since records began. Although unfortunate for those concerned, the flood of cheap properties onto the market makes it Christmas Day for the Professional Investor.
2. Less competiton. Two summers ago a competitively priced house coming onto the market in a readily lettable area would have created a furore. Investors would be heading down to the Estate Agents like a flock of geese. Now the same property would hardly raise an eyebrow even with a For Sale board up, an editorial in the local rag, a highlighted position on Rightmove, 500 mailings and 50 call outs. No-one is buying! Therefore, as an Investor you will have your pick of th bunch. I am not overexaggerating here. At this moment in time I can reliably reveal that there are probably 3 or 4 investors still actively buying in Corby, Northants, perhaps 1 in Wellingborough and roughly the same in Rushden. If we assume that this picture is replicated across the country then we can extrapolate and predict that there is (very roughly) about 6000 investors buying at the moment in the UK. 6000 people have their choice of thousands upon thousands upon thousands of bargains. Choice breeds bargains. It is a buyers market.
3. Estate Agents are getting desperate. Imagine if you went back in time to a year ago and called your local Estate Agent to offer £85000 on a property which was on the market for £100000. I can guarantee you that that offer would be immediately placed in "the round file" (dustbin). the agent wouldn't even bother passing the offer on to the vendor. Today it is a completely different story. The agent may be wondering where there next wage cheque is coming from and will therefore do everything they can to make the deal happen. You;d be amazed how much influence an agent has on local house prices at a micro-level. Throw in the offer and then let the agent do their stuff. If the agent poo poos you then move on and find a more pro active firm to deal with.
5. Rents are creeping up. Ok, please imagine two situations. In the first instance you are a FTB couple who would have possibly bought a house together last year but now can't due to the Credit Crunch restrictions. In the second instance you are a family who are beginning to struggle due to rate shock and are looking to get off the ladder. Now, there are two sides to every story. What goes up must come down. If there are losers like the two examples then there must consequently be winners too. The winners are landlords because all the people who are in the situations referred to above will end up in rental sector. With the reduced supply of rental houses (due to the near disappearance of BTL mortgages) properties that means that a sellers (or Landlords more correctly) market is being created. Rents will naturally rise as market condtions prevail.
Read this article and understand - now is the time to buy.
The stupidest thing people say about property
The stupidest thing I hear people say at the moment is "I'm waiting until the property market bottom outs until I buy!". Who do you think you are - Donald Trump. The reason this is such a crazy thing to come out with is because:1. There is no such thing as a UK property market. Even within a single street house prices move as amazingly different paces. Take the example of a street I know well. On this street I've seen 3 bed terraces sell for £100,000 then £90,000 then £80,000 over the last 6 months - but try telling this to Mr. Hard Nosed Vendor at no.42 who is sticking to his guns with an asking price of £129,950! If we can't get a single message across within the space of 200 yards, what chance across the whole nation?2. Who knows when the market has hit rock bottom? I jokingly said at the start that you'd have to have the business acumen of Donald Trump to time the market but perhaps this analogy is not too far from the truth. How many people do you know who purposefully timed the 80s property boom correctly? How many got in and got out of the Dot Com boom in the black? How many made a killing when gold tripled between 2006 and 2008? How many bought Vodafone stock the week before they got a 3G licence? I'm going to guess that the answer to all these questions is none or not many. So why, oh why, do we listen to the pub know it alls when it comes to property? 3. Just because you wait for the market to bottom out doesn't mean that everyone else will. There is an old saying that the deal of a lifetime comes along every week - and this is as true in property as it is in other investments realms. Whilst you are waiting for the perfect deal others will have bought crackers? Don't get paralysis by analysis. By all means do your research and due dilligence but make sure that when a deal fits you don't let it pass by - just in case the market hasn't quite reached rock bottom.
In summary realise that there is no such thing as the UK housing market no matter what the Daily Hate may like to tell you. If you find a property that is a good deal then don;t rest on your laurels. Buy when the sale is on!
In summary realise that there is no such thing as the UK housing market no matter what the Daily Hate may like to tell you. If you find a property that is a good deal then don;t rest on your laurels. Buy when the sale is on!
Mortgage Misery - The 3 hurdles faced by First Time Buyers
The "Credit Crunch" refers to the fact that it is now more difficult for a First Time buyer to get a mortgage than at any time since the 1970s - but why is it harder? What have the banks actually done to make it harder. There are 3 main hurdles that First Time Buyers have had put in front of them.
1. Higher Lending rates. In 2006 it was possible to get a 2year fixed 125% mortgage from Northern Rock at 5.79%. Now even a 90% 2 year fixed rate is going to cost upwards of 7%. However - there is a way to get round this. By negotiating with the vendor to achieve a "vendor gifted deposit" of 10%, it is possible to get a rate of 6.44%. On this rate a mortgage of £92000 is going to cost less than £500 - still cheaper than renting. It is important to remember that although 6.44% may seem high, rates are still historically low. If you can own a property (even on interest only) for around about the same monthly cost than renting then it always makes sense to make the purchase - particularly when your deposit is being paid for you.
2. Larger deposit required. "LTV" is the key acronym of the Credit Crunch. It stands for Loan to Value and refers to the size of your deposit as compared to the value of your house. 10% LTV good/ 99% LTV bad. Firstly, the "Together" mortgage, where a FTB was given enough money to purchase the property and surplus cash up to the lesser of 25% of the property value or £30k. Very soon afterwards 100% mortgages went. 95% mortgages are still in existence but are as rare as the rocking horse proverbial. In reality though a FTB can get a 90% mortgage by once again negotiating a 10% Vendor Gifted Deposit,
3. Banks have added more rules. This is ture. In terms of properties, FTB's shouldn't go out looking to max themselves out with 5x joint income mortgages - banks just wont stretch that far at the moment. Banks have also taken a distinct dislike to New Build Flats but who can blame them? Thousands of these are lying empty across England. Obviously the Credit Crunch has also meant that those with Bad credit will now struggle to get a mortgage. Is this surprising though? If you have bad credit the get used to renting. For the frest of the First Time Buyers ot there though, if you are 18 and earning, have ID and a Credit Report then you are likely to be eligible for a mortgage.
In conclusion, don't believe the hype in the newspaper. It is true that the Credit Crunch has meant that rates have went up, LTV's have came down and criteria has tightened but all this must be weighed up against the fact that house prices have fallen and many, many vendors have became more realistic on prices as opposed to shoving it on the market at a ridiculous price and waiting for the market to catch up.
1. Higher Lending rates. In 2006 it was possible to get a 2year fixed 125% mortgage from Northern Rock at 5.79%. Now even a 90% 2 year fixed rate is going to cost upwards of 7%. However - there is a way to get round this. By negotiating with the vendor to achieve a "vendor gifted deposit" of 10%, it is possible to get a rate of 6.44%. On this rate a mortgage of £92000 is going to cost less than £500 - still cheaper than renting. It is important to remember that although 6.44% may seem high, rates are still historically low. If you can own a property (even on interest only) for around about the same monthly cost than renting then it always makes sense to make the purchase - particularly when your deposit is being paid for you.
2. Larger deposit required. "LTV" is the key acronym of the Credit Crunch. It stands for Loan to Value and refers to the size of your deposit as compared to the value of your house. 10% LTV good/ 99% LTV bad. Firstly, the "Together" mortgage, where a FTB was given enough money to purchase the property and surplus cash up to the lesser of 25% of the property value or £30k. Very soon afterwards 100% mortgages went. 95% mortgages are still in existence but are as rare as the rocking horse proverbial. In reality though a FTB can get a 90% mortgage by once again negotiating a 10% Vendor Gifted Deposit,
3. Banks have added more rules. This is ture. In terms of properties, FTB's shouldn't go out looking to max themselves out with 5x joint income mortgages - banks just wont stretch that far at the moment. Banks have also taken a distinct dislike to New Build Flats but who can blame them? Thousands of these are lying empty across England. Obviously the Credit Crunch has also meant that those with Bad credit will now struggle to get a mortgage. Is this surprising though? If you have bad credit the get used to renting. For the frest of the First Time Buyers ot there though, if you are 18 and earning, have ID and a Credit Report then you are likely to be eligible for a mortgage.
In conclusion, don't believe the hype in the newspaper. It is true that the Credit Crunch has meant that rates have went up, LTV's have came down and criteria has tightened but all this must be weighed up against the fact that house prices have fallen and many, many vendors have became more realistic on prices as opposed to shoving it on the market at a ridiculous price and waiting for the market to catch up.
Thursday 24 July 2008
How the little things add up
You may have heard of the "Latte Factor", and although this term is aimed at an American audience, it is only the brand names that change in the UK. Here is how small costs you may have at the moment would exponentially grow if you invested the cash as opposed to wasting it. In all circumstances, I'll assume you save the cash for 32 years (from the average First Time Buyer age until retirement) and that the money gets saved into an account paying 6.25% interest (tax free):
Daily Newspaper - £10,534 Sausage roll and can of pop - £39,505 20 fags a day - £221,233 Packet of chewing gum - £18,346
Total - £289,618
As you can see, these small costs add to up to a fortune overtime. It is necessary to think about this carefully and make a decision. Would you rather have the instant gratification of the above, or would you rather have £289,618? It seems an obvious answer but why then are so little of us making the right choice.
If you want the cash then look at ways you can replace, substitute and amend. Learn how to break habits. Discover new ways of doing things. For those that want to break from the norm and do things differently there is a massive support network on the internet.
If you want to live life differently then think about how you can use your new wealth to good effect. Doesn't it rock your world to think that changing your life in so small a way can eventually lead to you becoming a millionaire and beyond. This is the Butterfly effect in real life!
http://www.uncommonadvice.co.uk
Article Source: http://EzineArticles.com/?expert=Ross_Taylor
Daily Newspaper - £10,534 Sausage roll and can of pop - £39,505 20 fags a day - £221,233 Packet of chewing gum - £18,346
Total - £289,618
As you can see, these small costs add to up to a fortune overtime. It is necessary to think about this carefully and make a decision. Would you rather have the instant gratification of the above, or would you rather have £289,618? It seems an obvious answer but why then are so little of us making the right choice.
If you want the cash then look at ways you can replace, substitute and amend. Learn how to break habits. Discover new ways of doing things. For those that want to break from the norm and do things differently there is a massive support network on the internet.
If you want to live life differently then think about how you can use your new wealth to good effect. Doesn't it rock your world to think that changing your life in so small a way can eventually lead to you becoming a millionaire and beyond. This is the Butterfly effect in real life!
http://www.uncommonadvice.co.uk
Article Source: http://EzineArticles.com/?expert=Ross_Taylor
Subscribe to:
Posts (Atom)
Posts
