Money Tips Daily by Charles Kelly, former IFA and author of

Earlier this week, I said that interest rates look set to stay low.

This week, the ECB announced that it is reducing interest rates. Trump is demanding that the US federal reserve also cut interest rates and the UK base rates stand at just .75%.

Other central banks are keeping rates low in order to stimulate the flagging economy.

The ECB is also introducing other stimulus measures such as pumping money into the economy by buying €2.8 billion worth of bonds.

As I said, this is good news for borrowers but not so good for savers.

In the UK you can get mortgages at just over 1%, but in some countries you can get mortgage is it close to zero or even negative rate mortgages.

It should be a good time to fix your mortgage rate as there is also a bit of a mortgage work going on with lenders falling over themselves to attract customers.

The property market in the UK has been in the doldrums for the last few years, with some areas such as London fallen sharply. The average price rises in the rest of the country are barely moving.

However, with the conclusion of Brexit finally in sight and ‘no deal’ looking like it is off the table, some agents are reporting an increase in buyer activity.

With Sterling still down at just over £1.20 against the dollar, properties must look cheap for foreign buyers. The pound could also benefit from the Brexit bounce once we come out of the EU. The pound reaches the highest level since July

If you are an overseas investor looking to get into the UK market I’m looking for a partner, let me know.

My personal view is that we have not seen the end of market turbulence, so I’m holding back on investing in the stock market and will only consider below market value shares and property.

Price of gold, silver and other precious metals has risen sharply in the past year, indicating that some investors are nervous and are looking for a safe haven.

I recently reported that the Chinese businessman Jack Ma said that we should all be working 12 hours a day six days a week. In the UK, some believe that we should push towards a 35 or four day working week.

This was introduced in France several years ago and has caused problems for business.

There is an argument that working too many hours causes fatigue and problems, but any top-down legislation trying to force a shorter working week for businesses needs to be carefully considered. Businesses cannot afford to just pay people the same salary for five days while working only four, which would add an extra 20% to their bottom line.

Other news

The London stock exchange has rejected Hong Kong bid thank goodness.

Word of the Day

Quantitative Easing

The short answer is Quantitative easing government central banks printing money.

Putting more money back into the economy in order to stimulate economic activity.

In practice, QE is a monetary policy whereby a central bank buys predetermined amounts of government bonds or other financial assets in order to inject liquidity directly into the economy.

There are more examples and practical steps to getting rich and being happy in my book, Yes, money can buy happiness, I cover the 3 R’s of Money Management, the Money B.E.L.I.E.F System and much more. Check it out on Amazon http://bit.ly/2MoneyBook.

Many people tell me that they want to get into property, but don’t know where to start or which strategy to choose.

“Should I try residential or commercial”, they ask me, “single let buy-to-let or HMO’s?”.

How will I find the money for deposits, which area should I invest in, should I use a limited company? These are all questions I get asked by people wanting to become a professional property investor.

Firstly, let’s get rid of a few myths that may be holding you back from taking the first step.

Myth No.1

You need your own money to get into property.

Not true. There are a number of strategies you can use to get into property investment with either no money or by using other people’s money.

Myth No.2

It takes years of experience and special skills to become a professional property investor.

Nonsense. I’ve seen people become investors within a few weeks of taking a course and go on to build a portfolio much larger than “experienced” investors.

Myth No.3

You need special connections and have to be “in the know” to get all the best deals.

Again, not so. Anybody can build their network and connections in property by learning and simply getting out there and meeting people. There are hundreds of networking events, courses and seminars running every month, all over the country. Not only can you build your connections at these events, but you can also expand your knowledge.

So how can you get started right now?

My friends at Progressive are running several events to give you the opportunity to look at a number of strategies so you can decide which is best for you.

Multiple Streams of Property Income Event

An excellent 3 day event covering multiple streams of income and strategies.

No money for deposits?

Why not start by finding deals and packaging them up to sell on to others. Learn more at the deal packaging discovery day

Deal Packaging Discovery Day

A 1 day event giving you a strategy where you can make money from property without using any of your own money.

We also have a 1 day beginners property secrets course, which can introduce you to property investing.

Beginners Property Secrets Day

Other events:

No Money Down Discovery Day

Joint Venture Finance Day

Serviced Accommodation Discovery Day

House of Multiple Occupancy  (HMO) Discovery Day

I have a limited number of complimentary tickets for these events. If you are interested, message me on Facebook or email me at [email protected]

Money Tips News

Markets Settle on China-US Trade talks.

Don’t ignore parking tickets and bills – more bailiffs being used by local authorities to collect unpaid fines.

2870 retail outlets closed down in first six months of 2019.

LSE receives £32 billion HK bid.

BA pilot strikes damaging the airline’s multi-billion pound brand.

Word of the Day

Revenues and profit.

Revenue, or turnover, is the total amount of income generated by the sale of goods or services by a company or business. Profit, or the “bottom line”, is the amount of income that remains after accounting for all expenses, debts, additional income streams and operating costs.

Turnover is vanity profit is sanity.

See also:

Angel Investor Funding – London Has an Abundance of Money for Scalable New Businesses

How to Obtain Angel-Investor Funding- With Joseph Zipfel, C.I.O. of Start-up Funding Club

https://podcasts.apple.com/gb/podcast/how-to-obtain-angel-investor-funding-joseph-zipfel/id1442532994?i=1000444991715

Earn 25% Tax Free Bonus with Government Help to Buy ISA but only if you start before 30 Nov

There are more examples and practical steps to getting rich and being happy in my book, Yes, money can buy happiness, I cover the 3 R’s of Money Management, the Money B.E.L.I.E.F System and much more. Check it out on Amazon http://bit.ly/2MoneyBook.

There is an abundance of money available for business start-ups and ventures in London.

Word of the Day

Scalable

Businesses which are scalable are businesses which can be scaled up or grown to a large concern where investors can expect to make a return on their investment, as opposed to a one-man-band or lifestyle business.

See also:

How to Obtain Angel-Investor Funding- With Joseph Zipfel, C.I.O. of Start-up Funding Club

https://podcasts.apple.com/gb/podcast/how-to-obtain-angel-investor-funding-joseph-zipfel/id1442532994?i=1000444991715

There are more examples and practical steps to getting rich and being happy in my book, Yes, money can buy happiness, I cover the 3 R’s of Money Management, the Money B.E.L.I.E.F System and much more. Check it out on Amazon http://bit.ly/2MoneyBook.

Low interest rates look set to continue for the foreseeable future. Whilst this is great for borrowers, but disastrous for investors and people retiring on annuities.

Earning just over 1% on an ISA account is not even keeping up with inflation, let alone giving you a good investment return.

Even gross yields on buy-to-let properties in major cities have fallen below 4% and in London or sometimes around 2%. That’s ‘gross’ yield by the way, before costs such as letting charges.

What should you the investor do to improve the yield or income you receive on your money, particularly if you are relying on this to provide retirement income?

You can shop around for the highest rate available on savings accounts, but this is not going to improve your overall return by that much.

You could consider high yielding shares as an alternative to deposit-based investments.

Yes, there is the risk that the value of your capital can go down as well as up, but many of these are blue-chip companies listed on the London Stock Exchange.

Examples of these FTSE100 index listed companies include the insurer Aviva PLC, currently paying a dividend yield of 8%.

Aviva has over 30 million customers, a market capitalisation of £14.2 billion and trades on a P/E ratio of 9.53.

Aviva is listed as a “buy” by most brokers, but could also be affected by Brexit.

Shares can be held within the tax-free wrapper of an ISA, which means that you would not pay tax on the income or growth.

Mining company, Rio Tinto has a market cap of £70 billion and paying a dividend of 5.5%, trading on a P/E of 10.16.

Rio dates back to 1873 and earnings have gone up by 32% each year for the past five years. Its share price is being threatened by unpredictable weather and a weakened outlook for minerals such as iron ore.

House builders Redrow PLC and Persimmon PLC have both done well in the last few years with the push for more new homes and the government Help-to-Buy scheme for first time buyers.

Redrow has a market capitalisation of just over £2 billion, trades on a P/E ratio of 6.46 and currently has a dividend yield of 5.26%.

The company recently reported a jump in annual profits to £406 million for the year ended to 30th of June 2019, up 7% of the previous year, with annual revenue rising by 10% to £2 billion. Revenue was driven by a 13% increase in legal completions to 6443 homes. There was a 2% drop in the average selling price.

Persimmon pays a dividend of 12% or a 1200% than most ISA accounts pay. The company has a market capitalisation of over £6 billion, and reported a profit of £1 billion on revenues of £3 billion, yet trades on a P/E ratio of just 6.75.

Around 200,000 new homes have been built each year for the past few years in the UK. There is still demand for property for various reasons, but builders could be dependent on schemes like the government help to buy.

The price of shares can go down as well as up and dividends and the value of your capital are not guaranteed.

The companies are expected to grow over the longer term, which means you can enjoy dividends and capital growth on your investment.

These are just a few examples of shares offering dividends (a share in the profits) of over 5% of the share price.

Do your own research online. Google high yielding dividend shares, or look at finance sites. 

See your financial advisor, but the best way to invest in shares is to learn more about it yourself.

Word of the Day 

P/E Ratio see:

http://www.moneytipsdaily.com/how-to-earn-higher-yields-on-your-investments/

Weekly News Round Up 

The week has been dominated by the shenanigans going on in parliament, with Boris Johnson losing control of the agenda and opposition party remainers winning three crucial votes.

Other news

Markets and pound bounce back as a ‘no deal brexit’ looks less likely

Germany going into Recession

Earn 25% Tax Free Bonus with Government Help to Buy ISA but only if you start before 30 Nov

Government Help to Save Scheme for low paid 96% undersubscribed

10 TIPS TO GET OUT OF CONSUMER DEBT USING THE M.A.N.A.G.E. D.E.B.T. SYSTEM

Women Need to Invest More Money to Secure Future Prosperity

Government Lose Key Brexit Vote – Johnson will table a motion for an October General Election as 21 MP’s Defy Whip

Cyprus, the Easiest Route to EU Citizenship

A Help to Buy ISA is a government scheme helping you save for a mortgage deposit to buy your first home. You must be a first-time buyer to qualify and not own a property anywhere in the world.

Savings are tax free just like with any ISA product, however, a Help to Buy ISA gives you the added bonus of getting government contributions.

How does the Help to Buy ISA work?

The government tops up your contributions by 25%, up to a maximum contribution limit of £12,000. In other words, for every £200 you save, the government will contribute £50. This means you can earn a maximum of £3,000 from the government.

The minimum amount you need to save in order to qualify for a government bonus is £1,600 (which gives you a £400 bonus).

You can start off your ISA with an initial deposit of up to £1,000 which also qualifies for the 25% boost from the government.

Remember, Help to Buy ISAs are available to each first-time buyer, not each home. So, if you’re buying a property with your partner, you’ll be able to get up to £6,000 towards your deposit.

Help to Buy ISAs are available until 30 November 2019. They won't be available to new savers after this date, but if you opened your Help to Buy ISA before then you can keep saving into your account. You must claim your bonus by 1 December 2030.

Word of the Day

Land Transaction Tax (LTT)

LTT replaced Stamp Duty, which still applies in England, in Wales in 2018.

If you’re buying a home in Wales costing more than £180,000, you’ll have to pay Land Transaction Tax (LTT) on your purchase.

There are more examples and practical steps to getting rich and being happy in my book, Yes, money can buy happiness, I cover the 3 R’s of Money Management, the Money B.E.L.I.E.F System and much more. Check it out on Amazon http://bit.ly/2MoneyBook.

See also:

Women Need to Invest More Money to Secure Future Prosperity

Government Help to Save Scheme for low paid 96% undersubscribed

10 TIPS TO GET OUT OF CONSUMER DEBT USING THE M.A.N.A.G.E. D.E.B.T. SYSTEM

A few days ago, I talked about how women are saving a lower proportion of their income than men. Today I discover that savers are failing to take advantage of a new UK Government scheme, as figures reveal that more than 96% of those eligible are missing out on a 50% top-up bonus worth up to £1,200.

The Help to Save account, launched last September, was designed to encourage people on low incomes to save for their future. However, statistics released by HM Revenue & Customs show that only 132,000 of the 3.5 million people eligible have opened an account.

The scheme allows people on welfare benefits, such as working tax credit and universal credit (combined with certain level of household income) to save up to £50 a month, or £600 per annum, for four years, which will be topped up by the Government by 50p for every £1 saved.

The Help to Save accounts can be held for four years, with a maximum of £2,400 saved with a further £1,200 paid in by the Government.

Anna Bowes, of Savings Champion, the comparison site, told the Telegraph that whilst the Government should be encouraging people to save she was not surprised by the low take-up.

“A lot of this group will not have any spare money to save so it’s not surprising that there’s not been a huge take-up,” she added. “For a lot of people on lower incomes, saving and investing aren't going to be very high on their list of priorities. That being said, it’s encouraging to see 132,000 people have been able to take advantage.”

Ms Bowes questioned how well the scheme had been publicised, since most people have no idea it exists.

But HMRC argue that account holders were already eligible for £14m in bonuses. Tax free bonus payments are allocated every two years. Claimants can only open one account.

John Glen, the economic secretary to the Treasury, said: “Saving shouldn’t be seen as a luxury but as an essential part of planning for the future.

“That’s why I launched the Help to Save scheme last year, and it’s been great to see so many people using it to put money aside for themselves and their loved ones.”

Word of the Day

Universal Credit is a state benefit which is replacing 6 other benefits with a single monthly payment if you're out of work or on a low income

Universal Credit will replace the following benefits:

· Child Tax Credit

· Housing Benefit

· Income Support

· income-based Jobseeker’s Allowance (JSA)

· income-related Employment and Support Allowance (ESA)

· Working Tax Credit

If you currently receive any of these benefits, you cannot claim Universal Credit at the same time.

Universal Credit, being rolled out across the country, has been criticised by landlords with tenants on housing benefit for being slow to start.

There are more examples and practical steps to getting rich and being happy in my book, Yes, money can buy happiness, I cover the 3 R’s of Money Management, the Money B.E.L.I.E.F System and much more. Check it out on Amazon http://bit.ly/2MoneyBook.

See also:

Women Need to Invest More Money to Secure Future Prosperity

Earn 25% Tax Free Bonus with Government Help to Buy ISA but only if you start before 30 Nov

British and American household debt had reached record levels, despite high employment, low taxes and historically low interest rates.

In the UK, the TUC has called for higher pay rises to solve the problem, but we know that is not always the answer. If you cannot manage small amounts of money, chances are you will not manage larger sums. Unless you change your habits, that par rise or bonus will be blown on more stuff or another holiday before you even receive it.

I cover more on managing money in my book on money, but in the meantime, here is: 

THE M.A.N.A.G.E. D.E.B.T. SYSTEM – 10 TIPS TO GET OUT OF CONSUMER DEBT FOR GOOD:

M.A.N.A.G.E. D.E.B.T.

MAKE A LIST

AXE NON-ESSENTIAL OUTGOINGS

NEVER PAY THE MINIMUM PAYMENT ON A CREDIT CARD

APPLY FOR A BALANCE TRANSFER CARD

GENERATE EXTRA CASH

ENTITLEMENT TO BENEFITS OR WELFARE SUPPORT

DON’T IGNORE BILLS OR DEMANDS

ENTER INTO AN ARRANGEMENT

BE PROACTIVE AND ASK FOR HELP

TAKE YOURSELLF OFF CONSUMER DEBT FOR GOOD

Bonus Tips

1. Never use expensive payday lenders, unless you have no other choice, and especially unauthorised doorstep lenders will charge you a small fortune interest.

2. Start building your credit rating by making repayments on time and clearing credit cards faster. The higher your credit rating, the more access you will have to cheaper finance and the less you will be dependent on expensive credit.

Word of the Day

IVA

Individual Voluntary Arrangement

In England and Wales, an individual voluntary arrangement (IVA) is a formal alternative for individuals wishing to avoid bankruptcy.

The IVA was established by and is governed the Insolvency Act 1986 and constitutes a formal repayment proposal presented to a debtor's creditors via an insolvency practitioner. Usually (but not necessarily), the IVA comprises only the claims of unsecured creditors, leaving the rights of secured creditors largely unchanged. Insolvency practitioners charge initial and ongoing fees that are in addition to the debt.

An IVA is a contractual arrangement with creditors and can be as flexible as an individual's own circumstances; they can therefore be based on capital, income, third party payments or a combination of these.

In this process, a debtor who has enough money left over after priority creditors and essential expenses, may be able to arrange an individual voluntary arrangement.

Based on taking independent advice, debtors with less serious problems may wish to consider a debt management plan.

The procedure for businesses is the company voluntary arrangement. There is also Administration where the business is effectively run by an appointed administrator. In the US, companies can take advantage of Chapter 11 rules and many companies have come back from this, including some owned by Donald Trump

There are more examples and practical steps to getting rich and being happy in my book, Yes, money can buy happiness, I cover the 3 R’s of Money Management, the Money B.E.L.I.E.F System and much more. Check it out on Amazon http://bit.ly/2MoneyBook.

See also:

How to get bursaries and assisted places for top private schools

The average British woman invest half the amount they spend on treats, such as clothes, beauty products, gym classes and eating out, says entrepreneur and former Apprentice contestant Jackie Fast.

Writing for City Matters, Jackie said they spend £211 per month on day-today treats, but only £98 on saving and investing.

Jackie did further research and found that women invest 40% less than men.

Whilst there are reasons why woman cannot always invest as much as their male counterparts, such as career breaks and the gender pay gap, women need to up their game when it comes to money management.

As a former financial advisor, I frequently saw women leave the all household finances, such as mortgages, pensions and savings, to their male partner or husband.

This often led to disastrous consequences during times of divorce or widowhood.

Women to take control of their own finances, separate from the family budget. Finance is still not widely taught in schools, so it does require some effort.

See an independent financial advisor or better still learn more about finances through reading quality newspapers and books on money, seminars and courses, or by taking a financial advisor course, as advised in one of my earlier Money Tips podcasts.

Word of the Day

Derivatives

A derivative is an arrangement or product, for instance, as a future, option, or warrant, where the value derives from the value of an underlying asset, such as a commodity, currency, or security.

Due to major growth sector in financial markets the trade in so called derivatives has grown.

In the financial markets, share prices, bond prices, currency rates, interest rates and dividends go up and down, creating risk. Derivative products are financial products which are used to control risk or paradoxically exploit risk. It is also called financial economics.

There are more examples and practical steps to getting rich and being happy in my book, Yes, money can buy happiness, I cover the 3 R’s of Money Management, the Money B.E.L.I.E.F System and much more. Check it out on Amazon http://bit.ly/2MoneyBook.