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

Parliament Torn Apart by Brexit - Johnson will table a motion for an October General Election.

The government lost a key vote tonight which could delay Brexit 31 October and will have consequences on the UK for years to come.

A general election is on the cards as Boris Johnson warns MP’s that if the government loses the vote tomorrow on the Bill to delay Brexit and outlaw a ‘no deal’ exit of the European Union.

Other news:

· M&S to drop out of FTSE100 Index.

· Restaurant Group shares drop as it announces closures.

· Manufacturing output down.

· Pound falls again.

· Gold price rises on uncertainty – up 35% in last 12 months.

Word of the Day

Cash ISA

In the UK, investors can invest in a cash ISA and pay no tax interest, which is taxed in non-ISA deposit accounts. The annual tax-free ISA allowance is £20,000, with ome accounts also allowing you to transfer in money invested in the previous tax year so you can maximise returns on all your tax-free savings.

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.

The pound has continued to fall on currency markets amid intensified political uncertainty over Brexit, the BBC reports today, although a couple of cents against the dollar is hardly a catastrophe.

Rumours of a possible snap general election dragged sterling further down, as MPs pushed for a further three-month Brexit extension.

Against the dollar, the British pound fell more than a cent to $1.2050, while against the euro, it fell below the €1.10 mark.

Prime Minister Boris Johnson, who last week said he will suspend parliament, has repeatedly insisted that the UK is ready to leave the EU without a deal, despite his own MP’s threatening to revolt against the government.

Over the weekend, government whips were summoned to the Prime Minister’s Chequers residence where they were given orders to warn Tory MPs that they face deselection at the next election (which could be in a matter of weeks) if they rebel against the party line.

Brexit, currently scheduled to happen on 31 October, is causing uncertainty business and needs to be settled one way or the other.

If he calls a general election this year, it will be the third one in four years and the fourth election if you include the 2016 EU referendum vote.

Despite petitions and mass demonstrations against the suspension of parliament, Johnson’s rating actually increased, intensifying speculation that he may call for an early election to strengthen his wafer-thin DUP-backed majority and scupper opposition attempts to block brexit.

Finally, the Sunday Mail reported yesterday that Labour’s Shadow Chancellor, John McDonald, plans to put the brakes firmly on the buy-to-let market and give private tenants the ‘right-buy-buy’ their rented property at a discount.

Word of the Day

Commodity Markets

A commodity market trades in the primary economic sector in commodities, such as cocoa, fruit and sugar. Hard commodities are mined, such as gold and oil. Investors access about 50 major commodity markets worldwide with purely financial transactions increasingly outnumbering physical trades in which goods are delivered. Futures contracts are the oldest way of investing in commodities. Futures are secured by physical assets. Commodity markets can include physical trading and derivatives trading using spot prices, forwards, futures, and options on futures. Farmers have used a simple form of derivative trading in the commodity market for centuries for price risk management.

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.

Weekly News Round Up 010919

In this episode:

Is China orchestrating Hong Kong riots in order to justify an invasion?

Is China’s economy built on a house of cards?

Why the HK rich are looking at Golden Visas, such as Cyprus, to protect their money.

Also:

Markets settle after a turbulent week.

Recession Coming World Markets Tumble?

Trump’s China tariffs kick-in as trade war threatens world’s economies with recession.

6 Trump Tweets wipes $500 billion off shares in one day

Why is 12-hour-day-work proponent Jack Ma retiring and stepping down as CEO of Alibaba?

Brexit saga heats up as Boris Johnson prorogues parliament causing British Pound to tumble.

Fire Movement’s extreme saving, promising early retirement and way out of the rat race.

How to use Power of Compound Interest to build wealth.

35 Year Mortgages Help First Time Buyers

Word of the Day

Markets

In financial terms, a “market” is a market in which people invest and trade in financial securities and derivatives. Examples of securities shares, stocks and bonds, and precious metals.

The term "market" is also used for exchanges, organizations that facilitate the trade in financial securities, e.g., a stock exchange (e.g. London or Wall Street) or commodity exchange.

Within the financial sector, the term "financial markets" is often used to refer just to the markets that are used to raise finance: for long term finance, the Capital markets; for short term finance, the Money markets. Another common use of the term is as a generic term for all the markets in the financial sector, as in the examples listed below.

Capital markets which consist of:

· Stock markets, enabling companies to raise finance through issues of shares or stock, and provide a secure trading platform to investors.

· Bond markets, provide financing for governments and companies through bonds issues, and provide a secure trading platform to investors.

Other markets:

· Commodity markets.

· Money markets.

· Derivatives markets.

· Futures markets.

· Foreign exchange markets - FOREX.

· Cryptocurrency market.

· Spot market

· Interbank lending market

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.

When I was growing up, my mother was stingy by necessity and bought the cheapest food and clothes she could find. I was embarrassed by this, as in those days it was not cool to be frugal.

Fast forward to the present and it has become fashionable and even cool to be stingy, frugal and penny pinching.

Shops like Primark, money saving comparison sites and online stores like Amazon have all boomed in the last few years.

In my book, Yes, money can buy happiness, and my Money Tips podcasts, I obviously promote saving and investment and earning more than you spend. However, a movement in America called F.I.R.E. takes stinginess to a whole new level.

The seeds of the FIRE movement can be traced back to the 1992 best-selling book Your Money or Your Life written by Vicki Robin and Joe Dominguez, and the 2010 book Early Retirement Extreme by Jacob Lund Fisker.

Followers of the F.I.R.E. or “financial independence” and “retire early”, movement, originating in the US, practice extreme forms of money saving to achieve their goal of early retirement and financial independence.

Devotees target savings of up to 70% of their annual income, which they invest for the long term. Their aim is to build a savings pot of 30 years’ worth of living expenses which they typically keep invested in low-cost tracker funds, withdrawing a maximum 4% every year in the hope they will never spend their capital.

There are a number of obvious flaws in the F.I.R.E. plan....listen for more....

In reality, scrimping and saving alone will not make you rich, and will probably leave you feeling stressed and miserable. Think of yourself as a business, a money-making machine. Like any business, you need to generate income, capital and investment returns, as well as keeping an eye on the purse strings.

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.

End of a Turbulent Week

It’s Friday and it has been a tumultuous week.

Shares recovered from last week’s fall on hopes that the Trump-China trade dispute will be settled soon.

Economies of China and India are slowing and property sectors look to be over geared. Could this cause another banking crisis?

Boris Johnson prorogued Parliament causing a storm of protests with people taking to the streets and court cases started to block him.

Two surveys come out this week which show that consumer confidence and business confidence are both falling.

Consumer spending and borrowing are also down.

The nationwide building society reports that property is barely growing at the moment.

Economic signs are not looking good so it’s not the time to be taken on a huge risky commitment went in the shop in the High Street.

On the other hand, office property in the city has been snapped up despite the doom and gloom around Brexit.

If markets fall and we going to recession it will be a buyers market for businesses, property and shares.

Word of the day

PE Ratio

The price-earnings ratio, also known as P/E ratio, P/E, or PER, is the ratio of a company's share (stock) price to the company's earnings per share. The ratio is used for valuing companies and to find out whether they are overvalued or undervalued.

For example, if share in xyz PLC is trading at £24 and the earnings per share for the last 12-month period is £3, then share xyz PLC has a P/E ratio of 24/3 or 8.

In other words, the buyer of the share is investing £8 for every one pound of earnings.

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.

How many hours a week do you work?

The outspoken Chinese billionaire, co-founder of the online giant Alibaba supports a 9am to 9pm working day, six days a week.

While European countries moves towards shorter working hours – I’m not sure they can get much shorter in France - and more time off, Jack Ma calls for a "996 system", which he describes as an opportunity and a “blessing”.

Mr Ma recently wrote that without this formula, China's economy was "very likely to lose vitality and impetus".

Fellow superrich tech entrepreneur Richard Liu, the boss of ecommerce giant JD.com, supports Ma’s 12-hour-a-day system.

Mr Liu said decades of unprecedented economic growth in China had created more "slackers".

The two entrepreneurs do not appear to care much about their employees having a life outside of work, especially when you add up to two hours uncomfortable commuting time to his “996” formula, which probably ends up closer to 7-11-6.

The communist state has seen economic growth averaging 10% for more than 25 years, from the 1970s into the mid-2000s, which has since levelled out at around 6%, a rate that the U.S. and Europe would die for.

In 1998, Liu founded his company that became JD.com. His work ethic is well documented, saying he would set his alarm to wake him up every two hours to offer his customers a 24-hour, service.

He wrote: "JD in the last four, five years has not made any eliminations, so the number of staff has expanded rapidly, the number of people giving orders has grown and grown, while the those who are working have fallen.

"Instead, the number of slackers has rapidly grown! If this carries on, JD will have no hope! And the company will only be heartlessly kicked out of the market! Slackers are not my brothers!"

Following earlier business successes, including a website building company, Ma co-founded Alibaba, often referred to as “China's eBay”, in 1999 and has developed it into one of the world's biggest internet companies.

In my new book, I write about Jack Ma’s story of how he went from teacher to billionaire using other people’s money (OPM) and investment to grow his business.

Alibaba's market value is now approximately $490bn (£374bn), and Mr Ma's personal wealth is estimated at around $40bn.

Last year, Ma said he will step down as executive chairman in the near future.

Most driven business owners do not just work a 9 to 5 day, unlike their employees who do not have the same skin in the game.

However, there is an argument that working long hours can be counter-productive beyond a certain point. An U.S. Department of Health and Human Services study, Overtime and Extended Work Shifts: Recent Findings on Illnesses, Injuries, and Health Behaviors, found that working beyond eight hours a day posed health risks and offered little productivity.

When I was running a company with staff, the owners worked long hours, but we found that working into the night was unproductive, caused fatigue which led to more errors. Our best employees arrived on time, worked efficiently throughout the day getting their work done and left on time leaving a clear desk.

Some corporations may regard employees as expendable pawns in the game of business, or dismiss burnout as an occupational hazard. The most profitable companies invariably look after their staff with good pay and conditions which bring out the best in people.

Who says 8 hours is the standard working day anyway? Some people can comfortably put in a 10 or 12 hour day, especially when they are doing something they love. Many professionals, such as doctors and lawyers regularly pull 50 to 60 hour weeks. Not everyone has the same desire or stamina. Do whatever is right for you and look after your health and body, as without this you cannot work or enjoy life to the full.

British Pound down to $1.22 and E1.10

Shares up and down

Reminder about PPI deadline – 2 days to go!

Hong Kong crisis – Golden Visas

What is a Golden Visa?

In simple terms, it is a visa in return for money or investment into the host country.

Applicants can secure permanent residency in Europe or Cyprus, a member of the European Union, through investment in real estate. The programme is one of the fastest and simplest investor visa programmes in Europe. It requires investment of just €300,000 into property to gain the Cyprus residency permit. The residency visa is granted within two monthsand covers the whole family. It includes parents of both the main applicant and spouse plus dependent children up to the age of 25. It is valid for life and can be passed down to dependents and spouse.

The permanent residency programme offers ease of travel throughout the European Union and requires just one visit to Cyprus by all family members once every two years. The investment may be made by a company for which the main applicant and spouse are beneficial owners. The investment can be in to a maximum of two properties provided they reach the €300,000 permanent residency limit. The properties purchased must be brand new.

If you would like further information, drop me a line.

Word of the Day

Index

What Is an Index?

An index is an indicator or measure of something, and in finance, it typically refers to a statistical measure of change in a securities market. In the case of financial markets, stock, and bond market indices consist of a hypothetical portfolio of securities representing a particular market or a segment of it. (You cannot invest directly in an index.) The S&P 500 and the US Aggregate Bond Index are common benchmarks for the American stock and bond markets, respectively.

DOW Jones Index

FTSE100 or FTSE250 Index

You can invest in an Index Tracking Fund or ETF.

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

What does BREXIT and leaving the EU on WTO terms actually mean for the UK?

Listen to this jargon-busting episode.

Word of the Day

WTO

The World Trade Organization (WTO) is the only global international organization dealing with the rules of trade between nations. At its heart are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations and ratified in their parliaments. The goal is to ensure that trade flows as smoothly, predictably and freely as possible.

The WTO has over 160 members representing 98 per cent of world trade. Over 20 countries are seeking to join the WTO.

Despite MPs voting against a no deal in March 2019, it still remains the legal default for Brexit until some kind of withdrawal agreement is passed by Parliament. A no deal Brexit would mean we leave the EU, as well as the single market and customs union, and begin trading with the EU on WTO terms.

Under WTO rules, countries set their own import rules, so a no deal Brexit means that the government could, in theory, allow goods and services from all countries across the world to be imported into the UK without tariffs or quotas.

But it doesn’t mean other countries would have to do the same, meaning that UK exports to those countries would, in many cases, face tariffs and restrictions.

In any case, the government have said that under a no deal Brexit scenario, tariffs would still apply to 13% of goods (by value) imported into the UK for up to 12 months. During that time it will undertake a review on a long-term approach to tariffs.

Another way of thinking about free trade is that the UK would be able to decide for itself how trade with other countries would operate. In the longer-term a no deal Brexit would give the UK the greatest agency over its future trade deals, although the exact terms would have to be agreed in negotiation with each individual country. These deals would likely take years to negotiate. Source: https://fullfact.org.

Formation

1 January   1995; 24 years ago

Type

International   trade organization

Purpose

Reduction   of tariffs and other barriers to trade

Headquarters

Centre   William Rappard, Geneva, Switzerland

Membership

164   member states

Official   language

English, French, Spanish

Director-General

Roberto   Azevêdo

Budget

197.2   million Swiss Francs (approx. 209 million US$) in 2018.

Staff

640

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

Albert Einstein once said that compound interest was the most powerful force on earth.

What is compound interest?

In simple terms, compound interest is the effect of interest being earned, paid or on interest.

If you had £100 in the bank earning 7% interest per annum at the end of the year you would have £107. In year two, you are earning 7% on £105, not £100.

The Rule of 72

If you did not touch the interest or savings and the interest continued at 7% per annum how long would it be before your money doubled?

The answer is just over 10 years.

Look at it from another point of you, if you have a credit card debts rolling up at 20% per annum, how long would it be before your debt doubled in size? The answer is just over three years. However, let’s assume you are paying the minimum 2% off of your debt balance, and for the sake of this exercise we assume that effect is that you will be paying 18% on the debt. It would still only take four years before your debt has doubled in size. Furthermore, just paying the minimum payment on your balance would probably take decades before you could clear it.

I’ll give you a quick way to work out how long are some doubles based on an interest rate. It’s called the rule of 72.

If you divide the interest-rate that you are earning into 72 or take 72 and divide it by the interest-rate this will give you the approximate number of years will take to double.

In the above example, if you’re earning 7% per annum, seven into 72 is just over 10, therefore it will take just over 10 years before your money will double.

If I offered you the choice of either £1 million for one penny doubled every day for 28 days, which would you accept? The obvious answer is to take the £1 million, but you’d be wrong to take it, As one penny doubled and compounded over 28 days comes to £1,340,000. Amazing isn’t it. Day one, one penny, day two, two pennies and so on until day 27 it is £650000.

Word of the day

Compound interest and the Rule of 72.

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

Weekly News Roundup 260819

Word of the Day

ETF

An exchange-traded fund (ETF) is a fund of securities—such as stocks—that tracks an underlying index, for instance, the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 Index. ETFs can also contain many types of investments, including stocks, commodities - such as Gold and Silver - bonds, or a mixture of investment types. An exchange-traded fund is a marketable security meaning it has an associated price that allows it to be traded or bought and sold.

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.