text:
Overdrafts and the FIRE movement
I read an article today, which granted is a few days old, about how to escape the insanely high charges and fees linked to many overdraft facilities offered by high street lenders. Overdrafts, in my experience, tend to be overlooked as a form of debt but that is exactly what they are. Overdrafts can also be one of the most expensive forms of debt you have. The image below, taken from the Daily Mail article, illustrates the equivalent interest charged by main high street banks for their overdraft facilities.
This is not an article to argue that overdrafts are evil; far from it actually. As I argued in my blog on credit cards, it is not the facility itself that is evil. The core problem is that people are, generally speaking, bad at managing money. According to a fairly recent article in The Guardian, the average household in the U.K. spends almost £1,000 more than it earns in a typical year. Without seeing the raw data, only certain conclusions can be drawn. Any "average" can be skewed by outliers in the data set but with credit card debt in the U.K. standing at over £70 billion it is clear that something is not quite right in how people manage their money.
The article that prompted this blog suggests that a potential way to escape the overdraft prison is to use a credit card to pay off the overdraft. Initially, I can see how someone who is not financially literate may believe this to be a good idea. Some credit cards offer a low, or even zero, interest arrangement to move funds from the credit card into a bank account to clear the overdraft. The amount of interest charged would drastically reduce and everyone is happy. Unfortunately, it is not that simple.
The one question that is not being asked here is how did the overdraft debt accumulate in the first place? If Mr Customer is spending more than he earns, then clearing the overdraft is probably only a temporary reprieve. The debt, whether on the credit card, the overdraft or both will continue to build up. Transferring debt from overdraft to credit card, without addressing your spending, is like taking a painkiller for a broken leg without treating the break itself.
Overdrafts can be useful as an emergency form of credit. In my experience, so many people live in their overdrafts and ignore the fact they are paying what is essentially another form of tax each month. It all comes down to money management and financial education. Swapping one form of debt for another is not sound financial advice if day-to-day spending is not carefully controlled. The key to financial stability is learning how to budget.
The FIRE Movement
I didn't realise that my philosophy towards money actually had a movement named after it. FIRE is an acronym for "financial independence, retire early" and looks at how prudent spending and investing can allow for one to build up a portfolio of investments that provide passive income, allowing one to retire from paid work.
The FIRE plan calls on followers to save 25 times what they think they need to live off for a year; in other words work out what you annual income you need from investments generating a 4% return. If you think you need £12,000 per year, you would need investments worth £300,000 that have a yield of at least 4%. I personally aim for a 5% yield, so £12,000 in income would require £240,000 worth of investments.
I strongly believe that as a goal or ideal, this can work. However, you need to be earning a good amount of money. With the best will in the world, earning minimum wage will not let you work towards this goal in a realistic fashion. This should not put those people off completely though. Investing any surplus income, no matter how small, is generally a good idea. Surviving in retirement is only likely to get more difficult and anything you can do to help yourself in retirement is a bonus. Even if you cannot accumulate enough passive income to retire early, you may still be able to make your eventual retirement more comfortable.
My goal is to be able to retire by the time I am fifty. I am currently on track for that, and I've only this month turned 35. I have fifteen years of work ahead of me. It seems like a long way off but watching my investments grow is all the motivation I need on days like today, and today has been a particularly stressful day.
If you have found this post interesting and would like to read more about Money from Now We Live, please visit our Money page for a full list of articles.
Thank you for reading. If you have enjoyed exploring Now We Live, please follow us on Facebook, Twitter and Instagram. If you would like to contribute to Now We Live, please refer to our submissions page.
John Lewis
It is hardly controversial to suggest that the high street, as we know it, is doomed. Since the internet started to make inroads into our shopping habits, the high street has been swimming against the tide to compete with the many advantages that the internet has. I remember my first experience with online shopping was with a company called CD Wow. I could not understand how I could buy DVDs at half the price of HMV or WH Smith and have them delivered to my door. I was sure it was a scam. Once I realised how easy it was to buy online and have the item with me in a few days, I never really looked back and CD Wow, followed by Amazon, have had a lot of my money.
For a long time, the high street has tried to compete by reducing prices. Specific retailers, such as HMV, have moved away from concentrating solely on music and film, and have branched out into electronics, books and increasingly memorabilia such as Pop-Vinyl. High street shops have also moved away from keeping large inventories of stock on-site and I'm guessing we have all walked out of shops such as Currys, PC World, John Lewis, Schuh and others frustrated that they did not have in stock what we wanted. The staff in-store, inevitably, direct us to their website where we can order the item we wanted. If this was a boxing match, it would be like a heavyweight (the internet) squaring off against a featherweight (the high street) as the featherweight has one arm tied behind its back (low in-store stock) and is using the one good arm to punch itself in the face (directing customers online).
John Lewis has today announced their half-year profits have fallen by 99%. I'm not actually surprised. My only surprise is that John Lewis have plodded along for so long without such a drastic crash. The leaders of John Lewis are blaming this performance on challenging market and political conditions such as Brexit and a prevalence of promotional offers from other retailers. I think it is much more basic than this.
Let's turn our attention to why people shop online over the high street.
Quote taken from Daily Mail. Link to article at bottom of this post.
Taken from BBC. Link at end of this post.
I've just done a little google-fu to compare John Lewis with Amazon. This is not supposed to be a comprehensive exercise, but just a quick snapshot of the difference between the two retailers. I've compared fragrance, kitchen devices and electrical.
Nespresso Expert Coffee Machine
John Lewis: £249.99 (Magimix) or £202.49 (KRUPS)
Amazon: £202
Boss Eau de Toilette (100ml)
John Lewis: £47
Amazon: £38.94
Samsung UE49NU7500 49-Inch TV
John Lewis: £649
Amazon: £579
These were honestly the first three things I searched for. Why did I choose these? I recently bought a new TV. I'm also looking for new aftershave and was browsing new coffee machines earlier. Like I said, not particularly scientific but I dare say that this would be replicated for many items John Lewis sell. Generally, the internet is cheaper. If you are shopping for a new coffee machine, then the Nespresso Expert is a great choice. I have one and can't find anything better.
There have been times when I have wanted an item immediately. I've walked into a high street store, such as John Lewis and wanted to buy an iPad, activity tracker, laptop and so on. I browse the display and choose the item I want. I wait for a member of staff to become available. I wait some more. I wait a little more and eventually I either leave the store empty handed or someone comes over and asks how they can help. A few minutes later I am told they do not have the item in stock, but it can be delivered within a few days. Normally, I leave the store and before I have physically left the premises I have ordered the item for next day delivery through Amazon Prime.
Expert Opinion and Advice
It's great when you can go to a store and get advice about a purchase. But what good is that advice, if the store can't then meet your need and supply you with the product when you want it? With information being available in quantity and quality for free via the internet, even this supposed advantage of expert advice on the high street is being eroded. If you go to a store, you will get a single opinion of one member of staff. Online, you can quickly skim dozens, hundreds or thousands of reviews of a product before buying.
With the retail battleground skewed so far in favour of online shopping, retailers have had to adapt to meet this challenge but in my opinion they are just making their own chances of success more unlikely. The high street will never be able to compete with cost or convenience when it comes to online shopping. Think about it, a large electronics store can either have products stored at dozens of locations around the U.K. to cater for shoppers going into physical stores. Alternatively, they can have one centralised warehouse with a fleet of drivers ready to deliver items within a day or two or being ordered. An example from personal experience, I ordered some protein supplements from MyProtein at 22:00 and they were delivered before midday the following day.
It is far cheaper to run an online business and much easier to fulfil customer needs than it is from a high street store. So, what is the high street's answer?
Reduce Staff Levels
Over recent years there has been a very real reduction in the number of people working in retail. The Guardian (link at end of article) reported in July this year that a fifth of retailers were looking to axe jobs in the coming months. This is not the answer. The one advantage that the high street has is the face-to-face interaction with another human being. Promote this advantage. I've lost count of the number of times I have been in John Lewis, HMV, Waterstones or Next and walked out as I can't find anyone to help me. I end up taking my iPhone out, firing up the Amazon app and ordering what I wanted as I leave the store. I want to give these shops my money, but if they don't have anyone to take my money then how can they hope to compete or survive?
What is John Lewis?
Another tactic the high street has adopted to meet the changing nature of retail is to diversify. The retailers move out of their niche and start trying to appeal to everyone. This is also counter-productive. My local John Lewis has twenty-plus TVs on display, as well as a huge number of phones, laptops and audio equipment. The high street cannot compete with the internet for choice, so why fight that battle? Focus on quality. Know your niche and stick to it. Have those products in stock and have the staff ready to take the sale. What is the point in having twenty variations of a product on display if half of them are not in stock? Why reduce staffing levels so that the few members of staff still employed spend their time having to check when the items will be able to be delivered, whilst the customer can order it themselves through Amazon for a lower cost with an earlier delivery date?
It is not just with their products that John Lewis are attempting to diversify, but also it seems with the customer they want to attract. For a long time, John Lewis was seen as a retailer appealing to the middle class and above. However, they have increasingly moved into having their own "basics" range of products, and their Price Match policy ("never knowingly undersold") is in my opinion counter-productive. You cannot appeal to everyone without alienating your core customer base, so stop trying. Know your customer and appeal to them. Is John Lewis trying to be a premium retailer appealing to those with lots of disposable income? Or is it trying to attract those from poorer backgrounds? From a marketing standpoint, I can't see how you can effectively attract those two customer groups without alienating the other.
It would take a brave person to look at John Lewis and say the solution is to hire more staff, reduce product range and scrap the Price Match policy, but if I had the keys to the kingdom that is exactly the first three things I would do. The John Lewis brand is not yet beyond repair, but if they decide to go the other direction and fire more staff, increase their product range and double down on the price match policy then they are just voluntarily tying one arm behind their back and punching themselves in the face with the other arm.
Thank you for reading. If you have enjoyed exploring Now We Live, please follow us on Facebook, Twitter and Instagram. If you would like to contribute to Now We Live, please refer to our submissions page.
Daily Mail: https://www.dailymail.co.uk/money/markets/article-6164241/How-did-John-Lewis-let-virtually-profit-making-wiped-space-just-year.html
BBC: https://www.bbc.co.uk/news/business-45506322
I am frequently asked about my investment strategy or what my goals or plans are. On the surface, these questions appear to be asking the same thing. However, I think there are subtle differences between a strategy, goal and plan.
Google's definition of strategy is;
"a plan of action designed to achieve a long-term or overall aim."
Google's definition of goal is;
"the object of a person's ambition or effort; an aim or desired result."
Google's definition of plan is;
"a detailed proposal for doing or achieving something."
It is interesting that the definition of strategy includes the word plan. My internal understanding is that one must have a plan to act in accordance with a strategy to achieve a goal.
In reverse order, my goal is to achieve financial freedom by the time I am fifty years old. My definition of financial freedom is not having to work to have money to survive and enjoy life.
My strategy is to invest in Income Generating Assets (IGAs) that provide passive income.
My plan is to improve my financial education and to continue to invest at least thirty-percent of my net income into investments, with a preferred level of fifty-percent (but I love to travel which eats into this!)
There are some key rules in my investment strategy. If I don't understand an investment, I stay clear. There is a name for investing without understanding; gambling. With any gamble you may get lucky and win but eventually you will lose. In any transaction or investment there is always a winner and loser. If you don't understand the investment, you are almost certainly the loser. For the most part, there also needs to be a stable track record of income from the investment. I expect a clear timetable of when I will receive the income and a decent expectation as to the level of that income. I also need clarity on how I can release the cash from the investment if needed. I am happy to tie my funds up, but I want to know how I can get at the cash if necessary. I expect the level of income to increase in line with the expected difficulty in releasing the cash invested. There is also the basic requirement that the company is on stable financial footing with good cash flow, in an sector that is also stable with potential for growth.
I'm not a fan of Independent Financial Advisors. I acknowledge there are many reputable and hard-working advisors out there guided by a strong moral compass who act in the best interests of their clients. However, my view is that if I was to engage the services of an IFA, I would want to understand our discussions. That would involve educating myself financially. So, if I'm going to educate myself financially I may as well just give myself the advice. We are in an age where information is readily available. I've said before and will repeat it now; there is no excuse for ignorance.
As part of my strategy to accumulate IGAs, my plan calls on me to improve my financial education. I monitor my investments closely, but recently I have started to wonder if I am looking at my investments in enough detail or through the correct lens.
I classify investments into four broad types; cash, bonds, equities and property. At present I focus my investments into bonds, equities and property. With interest rates so low there is little point in keeping much cash, as cash. I treat my bonds as cash. The bonds are easily converted back to cash within two weeks. Although they do not earn interest, they do offer the opportunity to win prizes on a monthly basis. In case you have not figured it out yet, I am talking about Premium Bonds. As interest rates rise, I will probably rethink this approach as it is sensible to maintain at least some liquidity. I believe that a person should, where possible, have enough liquid cash to cover basic living expenses for a minimum period of six months. I feel nervous when I do not have this safety net. Moving forward I will be increasing my liquidity temporarily, and I will explain why shortly.
The bulk of my investments are based in property and equities (shares) as these are great IGAs if you do the research and act accordingly. I do not invest in BTL directly, and you can click here for a previous article explaining why. Instead, I use crowdfunding platforms to invest in a range of properties. This reduces the amount of risk, hassle and expenses. It is a great example of Passive Income from an IGA.
Part of my strategy is to accumulate shares that pay a regular dividend. Capital growth is also important, but is largely secondary to income. Although I like to seek value where I can, I do not try to time the market. As the old saying goes, "it's not timing the market but time in the market that counts." Countless articles have been published that demonstrate how the stock market outperforms standard savings accounts over the long-term. Some Google-fu will explore this in greater depth.
Although I have bought and sold shares in an attempt to "time the market" this has only ever been in special circumstances. The first is when I spotted an opportunity to buy shares in an emerging airline that was increasing its profile in the U.K. I did some research and was happy with what I discovered. I had a fifty-percent return on that trade. The second instance was just after the Brexit vote when the stock market dropped off the side of a cliff. It was always going to snap back to normality and many people made a lot of money off the back of the Brexit vote. All those people claiming the economy would tank in the event of a successful "leave" vote; I'm betting that many of them were hoovering up shares the morning after at a drastically reduced price as investors who lacked the experience and/or knowledge dropped their shares like hot potatoes. Like I said before, in any investment there is a winner and a loser.
I mentioned before that I am going to increase the proportion of my investments in cash or bonds in the coming months. I am expecting that on March 29th, 2019, the stock market will drop again as people panic sell their shares. I want to make sure I have enough cash to capitalise on these panic-sellers. Many people are worried about next year, but I'm actually excited. If the stock market does not crash, then I will have some spare cash to invest elsewhere. If the market does crash, it will be a buyers' market and there will be bargains galore.
Today I have completed an analysis of how productive my investments are and, just because, I have put together a few pie charts.
A high level overview of how I invest.
A high level overview of how those assets generate income.
It's the first time for some months that I have looked at how my IGAs are generating income proportionally to how much is invested in that class. Equities seem to be punching above their weight where as property and bonds are underperforming. However, shares are volatile and the value of the investment fluctuates by the minute during trading hours. Property is generally more stable. Should a professional investor or fund manager look at this profile I imagine they would class it as "high-risk". However, I've spoken before about how I view investing in equities as low-risk. Refer to the articles in the Money section of Now We Live for more information.
Overview of which sectors I have invested in.
How each sector is providing income.
I almost did not include the airline in this, as I have only recently started purchasing shares in that company. I am investing in a budget airline that is a competitor to Ryanair, who can't seem to stop shooting themselves in the foot. I suspect that this competitor may start to steal some of Ryanair's market share. I'm not going overboard with this investment, but rather testing the water. It's a bit of a speculative investment but as long as it's not taking up a significant proportion of my resources I am happy to take the occasional punt if I think there is a reasonable chance of return.
I believe that immersing oneself in a subject allows for subconscious processing of information. This is part of what creates a "gut-feeling" or "intuition". My gut-feeling is that this investment will pay off. We will see over time.
In the fall out of the banking crash a decade ago, banking shares were undervalued in my opinion. I invested heavily in banking shares from 2011-2016 but then switched my focus to other areas, including property. It is interesting that banking seems to be punching above its weight for income, with the energy sector appearing to provide a stable return on the amount invested.
I appreciate this analysis is rather basic, but it has been an interesting exercise for me to look at my investments in this way.
How I have invested in different properties by region.
Overview of income from those regions.
Wales and the South Coast seem to be performing well. Yorkshire and Derbyshire are not generating enough income and I may look to scale back my investment in Derbyshire. However, I am reluctant to give up the Yorkshire investment. The property I am investing in is an apartment complex in an area that I believe will undergo significant development and regeneration in the coming months and years. I believe the value of the investment will increase and I will see significant capital growth. Now, this may seem antithetical to my overall strategy; passive income from IGAs, however much like with the airline stock I have a gut-feeling this will be a good investment over time.
I hope you have found this blog interesting. It was a rewarding experience for me writing it, as it forced me to think about my investments in a different way. It reminds me of the quote from Seneca, the Roman philosopher; "while we teach, we learn."
Thank you for reading. If you have enjoyed exploring Now We Live, please follow us on Facebook, Twitter and Instagram. If you would like to contribute to Now We Live, please refer to our submissions page.
Planning for Retirement
Retirement seems a long way off but time has a way of passing without you realising. Days can drag as weeks, months and years flash past. I often think about some of the financial mistakes I've made in the past and how much further along in my plans I could be now had I learned certain lessons earlier in life. There's little value in dwelling on the past though. My plan is to be able to give up paid work at the age of fifty which is just over fifteen years away. I may decide to continue working at that point, but the plan calls for me to be able to make that choice on my own terms without being trapped in the "rat race" and having to work for someone else to make ends meet. So far, I'm on track but I'm impatient. I want to have more and I want it now.
I'm signed up to a pretty good pension through my employer but a private pension, and state pension, will not be enough to give me the quality of life I desire in my later life. I want to be comfortable in later life, not having to worry about paying for either food or electricity because I can't afford both. It seems tragic to me that most people work hard for their best years and then have little left over in retirement. As our society changes and we generally live longer, the strain on the economy is starting to tell. One only has to look at the NHS for proof of this. I'm not convinced that the same level of welfare will be available to people in my generation when they get to their retirement, as is available to those currently in their retirement. Something will have to give at some point.
In my experience, most people do not really understand how pensions work. I'm not an expert either, but I think I have a better understanding than the average person. The same people who think that pensions are "safe" tend to think that the stock market is "risky". These people will be surprised to learn that many pension schemes are actually linked in large part to the performance of the stock market, with pension contributions used to purchase units in trusts or funds that are invested in various stocks. The two, pensions and the stock market, are so closely linked that to say one is "safe" and the other is "risky" is just a completely absurd statement to make. The only risk here is not having a full understanding of what your retirement plan is or how it will be achieved.
Will you want time in the sun after retiring? You'll need more than just a basic pension.
In FU Money, Dan Lok talks about your "number" which is the amount of money at which you will have the life you want. I can't remember the specific items on Dan Lok's list, but he details all the different things he spends his money on and arrives at an annual figure. I think Dan's figure was in the region of $600,000 per year, but I'm ready to be corrected on that. Not everyone will have the same figure. Some people will have more modest desires and they could be happy with £12,000 per year, assuming they have no costs for housing. The point is to have a figure and an idea of what life you want. Make a list of all your different financial commitments and what they cost. Use that as the basis for your figure for retirement. The earlier in life you think about this, the better your chances are of achieving it. I have a figure in mind that will see me live a comfortable life when I hit fifty. I'm not going to talk about my figure specifically as it is private to me, but I will talk about my strategy for reaching that figure.
I made a decision when planning my retirement to ignore inflation in an active sense. If I was to factor inflation into my planning I would drive myself insane looking at spreadsheets and calculations. My somewhat simplistic approach is to assume that my cost of living in fifteen years will increase in line with inflation, but the value of my investments will also increase roughly in line with inflation and perhaps even outpace inflation. If we are looking at annual inflation of roughly 2%-3%, then so long as the value of my investments increase by more than this, I am doing well. Generally, the stock market will have peaks and troughs but over an extended period it will return anything from 3%-8% and sometimes more. Most cash savings accounts offer a derisory return of under 1%.
Passive Income
I have three main areas that I invest in; property, stocks and bonds. The primary goal is to generate passive income; income that is generated for me without any work needed from me.
I've spoken before about how I don't think Buy-To-Let is a good idea for most people. I invest in property through crowd funding, which are generally large apartment blocks or student accommodation. I buy shares in these properties and earn rental income as dividends. Each month I roll up my dividend and reinvest that money into more shares in those properties, as well as using some of my earned income to buy additional shares. At present, I'm getting a 5% return on this investment. Rather than my return depending on just one or two dwellings, my investment is spread across dozens of different dwellings which reduces the risk to my investment.
I also invest in the stock market. I have shares in five different UK companies. I chose each stock after careful consideration and research. A good starting point for anyone looking to understand the stock market is the book Shares Made Simple, which I have linked below:
One requirement I had was for the stocks to have a stable dividend record. I now receive a dividend ten months of the year from my portfolio of stocks. Again, each dividend is rolled back up into the overall investment. There are lots of different platforms for buying and selling shares. For those investing modest amounts, there are platforms that offer a certain number of commission free trades per month, such as Trading212. I don't personally like Trading212. I find the interface complicated and difficult to navigate. Some people swear by it though. There are other platforms that offer various levels of commission to buy and sell shares on an ad hoc basis, with smaller fees charged for regular investments where you invest a certain amount each month.
I use a service from a high street bank that is simple to use and charges a very low commission for regular investments. If I want to sell my shares, the commission is higher but I have no intention of selling these shares. My dividends are paid directly into my bank account and then I either use them to purchase more shares, or I direct that dividend to a different investment.
With interest rates being so low for regular savings, I choose to keep my cash in Premium Bonds. I know this will not make sense to some people as Premium Bonds do not generate a return as such, but rather pay out monthly prizes. My reasoning is that a typical cash savings account will generate just a few pounds for each thousand deposited. This is not really of any value. It's a good idea to have some money that is fairly liquid and Premium Bonds offer that. I can sell the bonds and have the money in my account within a couple of weeks. For any major emergency I have a decent credit limit that I can use whilst those bonds are being sold. It's difficult to envisage a situation where I need to pay for something that cannot be paid for by credit card until those funds are free. There is also the possibility that the bonds will win a big prize. To me, there is more value in a potential big prize than a definite insignificant return.
Education is the key to understanding the stock market.
I'm approaching a point at which I need to spread my wings and look at foreign investments. I don't feel comfortable keeping all my eggs in the UK basket, especially with Brexit looming on the horizon (something I'm still not convinced will actually happen, but that's a different subject). I think the next part of my financial education will be looking at how to invest in foreign markets without paying lots of commission. Whether or not Brexit actually happens, I don't think we will see major capital gains in the UK stock market for a few years. I'm also concerned about investing in the US as I see their political situation as a powder keg ready to explode at any moment. Perhaps something in Europe or the Far East could be an idea, but I definitely need to do my research.
The only risk with investing is not doing the research. Investing without research is gambling. You might win, but you'll probably lose. One of the best bits of advice I have discovered is that in any investment opportunity there is a winner and a loser. If you don't understand the investment, then you are probably the loser and someone else is making money at your expense. There are two areas of a person's financial life that should receive a lot of personal attention; your mortgage and your retirement. In my experience, these are the two things that people ignore or only give a small amount of attention to every so often. As some of you will know, I'm a mortgage advisor and I speak to people about mortgages for over thirty hours a week. It never ceases to amaze me how many people will base their decision, not on qualified advice, but rather the opinion of a friend or family member with no qualification or experience in the field.
Take control of your financial future. It does not cost much to learn, especially in the internet age where there is a vast library of information available for free. There really is no excuse for ignorance in 2018. I've included some links to some books that I have found useful in improving my financial education. I hope you will find them just as useful.
If you enjoy reading Now We Live, please follow us on Facebook, Twitter and Instagram. If you want to write for Now We Live, please refer to our submission guidelines.
Buy-To-Let: Not a good investment?
A friend of mine has been messaging me over the last few days asking for advice and information about buying a property to rent out. I've done my best to answer his questions, but ended my reply by saying that I don't think he should go with a buy-to-let (BTL) if he wants to make money. There are other ways for people to make money with less risk and greater return.
Before going any further however, a few points.
First, I am not a qualified financial advisor. What follows is my opinion, rather than advice.
Second, I am a qualified mortgage advisor so I think I have a decent understanding of what it takes to obtain a mortgage.
Third, the following article is aimed at a particular audience. It is not aimed at those who are experienced in property and investing. It is not aimed at those who are wealthy with lots of disposable income and can afford to take risks. It is not aimed at those buying property under the umbrella of a Limited Company.
This article is aimed at those who may not be financially confident or experienced, and who believe that buying a BTL is a safe, guaranteed way to make money.
Money pit or gold mine?
For the sake of clarity, I will use an example property based on research and experience. This property will be a two-bedroom apartment in Sheffield city centre. The property is on the market for £120,000.
How does BTL work?
With a BTL mortgage the deposit requirements are normally higher than for a property you are going to live in yourself. For a residential mortgage you can normally put down as little as 10% subject to lending criteria and credit scoring. For a BTL it is normally expected that you will put down a minimum of 25% and often you need to put down at least 40% of the purchase price to obtain good interest rates. In our example, assuming my friend goes ahead he will have to put down £30,000 as a deposit as a minimum.
Running Upfront Expense Total: £30,000.
The deposit is not the only one-off cost to be paid however. For a BTL, Stamp Duty will also be payable at a rate of 3% of the purchase price up to £125,000. Beyond this Stamp Duty rises to 5% and then 8%. So, in addition to the £30,000 deposit, my friend will have to pay £3,600 in Stamp Duty.
Running Upfront Expense Total: £33,600.
There will also be valuation fees and legal fees to consider. Some lenders will offer a basic valuation service which checks that the property is basically in liveable condition. It will not be a full and thorough survey. The costs for these can easily range up to £1,000, although the less detailed surveys can cost just a few hundred. The question is how much of a risk are you willing to take? You could spend tens of thousands in deposit and fees and then scrimp on your survey and find the property needs thousands of pounds worth of repairs. None of this accounts for the legal fees which can easily account for £500-£1,000 as well. Assuming that my friend went for a comprehensive survey and found a reasonably priced solicitor the total fees here could come in at around £1,500.
Running Upfront Expense Total: £35,100.
Is the property going to be furnished or unfurnished? If furnished, then this can easily add on a few hundred to a few thousand more depending on how far you want to go. I'm not going to get side tracked too much here except to point out that this is just another expense to consider. Let us assume my friend goes the unfurnished route.
So far I have described some of the upfront costs that will need to be considered. This list is by no means exhaustive and there are always going to be unexpected expenses when buying a property. If you are going to rent out the property there are also health and safety checks to be carried out for the gas, electric and so on. I don't have experience in arranging these, as anytime I look at investing in BTL I add up the costs to this point (as well as the ongoing costs) and usually decide to invest elsewhere.
Another consideration is whether my friend will manage the property himself. Will he draw up the contract or use an off-the-shelf contract? Will he collect rent himself? Will he organise any repairs and maintenance that will come up from time to time? Will he deal with the inventory at the start and end of the tenancy? Will he advertise and market the property himself? Complete referencing and vetting of prospective tenants?
Renting a property out and managing it yourself can become a full-time job. I know a lot of people who have dabbled in BTL, managing the property on their own, and not a single one of them has found it rewarding either personally or financially. So the other option is engaging a management company or letting agent.
I've googled a reputable letting agent and calculated their fees based on this information. The property my friend is looking at should rent for £600-£650 per month. I'll go with £650.
Arranging Viewings and General Marketing: One month rent + VAT.
Tenancy Set Up: £300.
Rent Collection Only: 10% of rent payable.
Full Management (Rent Collection in addition to maintenance and other related services): 13%.
Extend Tenancy: £150.
This does include fees for statements, billing, key-cutting, extra property visits and so on.
So, my friend would have to sacrifice his first month's rent and pay VAT (20% of £650 = £130) on top to just arrange viewings and market the property. Then an extra £300 to set up a tenancy.
Running Upfront Expense Total: £35,530.
Net rent received after letting agent cut (full management): £520
Ongoing Costs
The main ongoing cost is going to be the mortgage. Assuming a 25% deposit, you can probably expect a rate of between 1.5%-2.5% depending on lender and whether you will opt to pay a fee. Many BTL deals will come with a fee. Assuming a modest fee of £500 for the interest rate, which comes in at 2.0 % and assuming the mortgage will be interest only the monthly payment would be around £150.
Running Upfront Expense Total: £36,030.
Net Rent after mortgage: £370.
It can be time intensive to have to calculate all these costs as a landlord.
It's important to remember that on an interest only mortgage none of the debt is being repaid. At the end of the mortgage term, the debt will need to be paid back in full. It's also important to remember that once the initial interest rate ends, the rate will likely jump up and it can easily revert to a rate double that of the initial rate. The alternative is to switch to a new deal (likely coming with product fees again) or even switch lender (product, legal and valuation fees to be paid).
For this property there are other costs to consider. A city centre apartment will come with service charges and ground rent. I see these costs regularly through my job and this sort of property will easily have a minimum ground rent of £100 per year and almost certainly service charges that amount to over £75 per month.
Net Rent after service charge: £295.
Tax is another expense. I'm not a tax expert, but when I've looked into this for myself the information seems to suggest that you are allowed some reasonable expenses to be removed from the tax calculation but this does not amount to much. My friend is a basic rate tax-payer and will pay 20% tax in this band on income received.
I'm not sure if my friend would be taxed on the rent before agents' fees are deducted or after. To load the case in my friend's favour I will assume it is taxed on the amount received after the agent takes their cut; so 20% of £520 which comes to £104
Net Rent after all previous charges and rent: £191.
As I've mentioned, I'm not a tax expert or a financial advisor and some of this information may not be entirely accurate. Please do the research and feel free to comment with any corrections.
In addition to what has already been covered, there are other costs to take into account. The first to mention is "void periods", which are the periods of time in which the property may be vacant. Although your property may be between tenants the utility companies will still expect to be paid, and so will the mortgage lender. A good rule of thumb is to account for one month "void" per year.
Net Rent (accounting for a 1/12 reduction of gross rent annually): £136.
Landlord's insurance is another cost that is often overlooked. Some google-fu suggests policies can range from £15-£25 per month depending on how much cover you want.
Net Rent assuming basic cover: £121.
In summary, my friend will have "paid" upfront £36,030 to achieve a potential return of £1,452 per annum. This assumes only one month "void" per year, and that the tenant does not keep changing (as would cost more with agent to draw up additional tenancy agreements). It also assumes the tenant will actually pay their rent. I know two people who have had BTL with tenants that refused to pay rent. It is remarkably difficult to legally evict a tenant that is not paying rent.
£1,452 / £36,030 = 4.03%.
For all the above stress, effort and uncertainty the best my friend can hope for is a return of 4.03%.
Becoming a landlord is hard work. It's stressful. There are no guarantees that money will be made. Many properties can become a black hole into which money disappears. It is difficult to get your money back. In my opinion, BTL should not be considered by those who are not financially literate or experienced. Don't misunderstand me, I am not anti-property. I invest in several properties through other channels and receive my own rental income but this is all passive income with no day-to-day involvement from me. My return ranges from 4%-7% across the six properties I receive income from. I also invest in the stock market with companies that have a track record of paying dividends. I'm earning between 5% and 7% on these investments with no day-to-day involvement from myself. It's completely passive income.
If my friend has £36,030 to invest there are plenty of other options other than BTL, and many other options for someone that is starting their financial journey. My opinion is that a BTL should not be a person's first investment. The first investment should be improving one's own financial education. From that point on, the mysteries of the stock market and beyond will become clear.
Thank you for reading. If you have enjoyed exploring Now We Live, please follow us on Facebook, Twitter and Instagram. If you would like to contribute to Now We Live, please refer to our submissions page.
Anyone with a passing interest in psychology will have probably heard of Maslow's Hierarchy of Needs (HoN). Here is a visual representation of the Hierarchy of Needs.
By FireflySixtySeven - Own work using Inkscape, based on Maslow's paper, A Theory of Human Motivation., CC BY-SA 4.0, Link
The HoN is supposed to demonstrate the personal development of people as they move from the lower base of the pyramid to the upper levels. The idea is that you can't sufficiently achieve the higher levels without building on the foundation of the levels below. I'm not going to focus too much on the different levels in Maslow's theory as that is not the focus of this blog, but rather I wanted you to have an idea of the structure of the pyramid as I discuss my ideas around the Hierarchy of Financial Needs. If you want to read more about Maslow's HoN there is a link to the Wikipedia entry at the bottom of this blog.
This is my proposed Hierarchy of Financial Needs (HoFN).
The base of the pyramid is Shelter, Warmth and Food (and water). These are the basic physiological necessities of survival. We need to be protected from the elements. We need our bodies to remain at a comfortable temperature and we need food and water to sustain us. These are the absolute fundamental parts of human survival and it makes sense that most people pay their mortgage/rent first and food shopping is a priority for spending.
The second level up refers to things that are not essential but are almost essential. Things that we generally need but if it came to a choice between spending your last tenner on food shopping or a haircut, most people would choose food.
The third level up is, in my experience, where people generally fall down. It comes down to how you prioritise your spending. There was once a time, not that long ago, when the internet was a luxury. I would now argue that it is a basic utility like electricity or water. However, there are huge differences in how you can purchase internet access. It is possible to buy mobile home broadband via a dongle or pay-as-you-go router for as little as a tenner a month. This will let people complete everyday stuff online but will probably struggle with streaming video or gaming. A quick bit of google-fu shows that you can get superfast fibre broadband with BT for anything up to and possibly over £55 per month. I'm not even sure if this includes line rental or not. But that is an eye-watering figure for internet access in my opinion. I have fibre broadband with unlimited data for £22 per month with no line rental.
I used to sell phone lines and broadband for one of the major providers. The number of people that had no clue what they were paying for was staggering. There were people who wanted to pay top dollar for superfast broadband and when I asked them what they used the internet for, it was things like general browsing and the occasional email. That person does not need 20mb speed. They could probably get by on a quarter of that with no real issue. However, they did not bother to spend a bit of time researching what they needed and it could end up costing them three or four times as much for internet access.
There is a similar issue with TV packages. I pay for my TV licence (£12 per month) and I also have Netflix (£8 per month) and Amazon Instant Video (roughly £80 per year for Prime membership which also provides cloud storage, free delivery and other benefits). I occasionally pay for the WWE Network (£10 per month). All in, we're talking £37 per month with some of that figure paying for other Amazon Prime benefits. A little more google-fu shows that if you pay for Sky TV with all the bells and whistles you could easily pay over £70 per month. How many of these "bells and whistles" are needed? Some of them include HD channels, the ability to record multiple shows, TV show boxsets on demand and so on. If you can afford it and you think you are getting value for money, then great. However, take a moment to think about how many channels you actually watch. Do you have all these "bells and whistles" and if so, do you use them?
My opinion is that in our society, basic TV is pretty much a utility but all the other add-ons are luxuries. The problem is that many people view the top packages as necessities and I'm betting that many of those people paying for it will either hardly use any of the facilities they are paying for or use them as background noise whilst scanning Facebook on their mobile.
I have the fourth level called Entertainment. I'm referring to things like cinema, theatre, socialising and so on. These are things that can be good for the mood but are not essential to basic survival. The fifth level is all about luxuries in life; holidays, fine dining and so on.
In an ideal world, people would budget from the bottom up spending money on the basics of survival with surplus money moving up the pyramid. In my experience many people just throw their money at all levels without thought. Then, they run out of money before the next payday. As such, the basics of survival are paid for on credit. This debt is not paid off which then adds another layer to the pyramid as the person needs to pay that debt back somehow. However, the person already has more money going out than coming in so this debt will never really get paid. Instead, the person simply runs out of money earlier in their pay cycle and resorts to credit a day or two earlier. Over the course of weeks and months this debt spirals out of control.
Effective money management is a skill that can be learned. It just takes practice. The first step is to get an accurate idea of what you are spending. This is easier if you pay for most things on card. Just go through your statements and your list of direct debits. Use the HoFN and see where the different proportions of your money are going.
In this blog I compared the cost of two things; internet and TV and just between those two things a saving of £80 per month can be made with some thought and research. How much money could you save on your phone bill, food shopping, insurance and other bills?
As I've mentioned in previous blogs, I am not a financial advisor. I'm just someone who thinks a lot about money and hate to see people struggle financially when they could be doing so much better. Money management is an essential life skill. It's at the very core of your life from the day you start taking control of your own finances. There are people who are in severe financial hardship. This blog is probably not going to help them very much. There is only so much you can do to tweak your finances and if you still have too much month left at the end of your money, then I can't change that. There are more qualified people than me out there that can help. Please see links below for Stepchange, a government backed debt advice charity.
Thank you for reading. If you have enjoyed exploring Now We Live, please follow us on Facebook, Twitter and Instagram. If you would like to contribute to Now We Live, please refer to our submissions page.
I read an article in The Guardian [1] today that really pissed me off. For those familiar with the money section of The Guardian, they run an article every so often focusing on how different people spend their money. The column is called How I Spend It. Now, I realise that it is not meant to be an advice piece, much like my blog. I'm not a financial advisor. I have some financial qualifications like a Certificate in Mortgage Advice and Practice which means I am qualified to give mortgage advice. But I'm not a financial advisor. I've read extensively around money, budgeting and how people accumulate either wealth or debt. I may not be qualified but I think I am knowledgeable and experienced.
Anyway, in this article the young woman talks about how she "invests" in experiences. I agree that life is for living and that we should not live to work. However, experiences in the sense of holidays, restaurants, drinking and so on are not investments in my opinion. They are luxuries. In my experience, the average person who prioritises experiences over building a solid foundation of wealth based in assets will inevitably accumulate debt. The telling thing for me in the article came near the end when the young woman explains that her Dad bought the property she lives in and she pays £250 per month for the mortgage and an extra "couple of hundred" for the bills. Unless there is some extraordinary set of circumstances, this woman is paying under market value for her "rent" and probably not paying the full cost of the bills either. I'm not saying this is wrong; her Dad has obviously helped her out but I don't see the benefit, or point, of the article. It's not giving the average person any real direction on how to spend their money apart from a vague argument for the benefits of living in the now and spending disposable income on "experiences".
It really grates on me when people promote this idea of living in the now and "it's just money". What does that even mean? "It's just money?"
A few days ago Yahoo Finance [2] reported that the Financial Conduct Authority released a report stating they may recommend that the minimum payment requirement on credit cards be scrapped. Apparently this will increase the amount people repay on their credit cards. Let that sink in. Removing the minimum payment requirement will increase the amount people will repay. I can sort of see how this would work for some people, but only those who are financially literate already. Unfortunately, in my experience, most people are not financially literate.
Over the years I have known and interacted with a number of financial professionals from brokers to advisors. Many of them do not practice what they preach and are heavily in debt with credit cards being the main type of debt. According to The Money Charity [3], in January 2018 UK credit card debt stood at £70.35 billion, or just over £2,500 per household. I was speaking to a friend of a friend today, who had been pointed in my direction as my friend knew I have an interest in money. This friend of a friend was heavily in credit card debt and was thinking of taking a loan to pay the debt off. Their credit card debt stood at a little over £20,000 and had accumulated over the course of three years through normal day-to-day spending. A rough, back-of-the-napkin calculation suggests that debt must have increased by roughly £500-£600 per month, every month for three years. The loan would have a repayment of £280 per month over nine years at roughly 9% interest. Not bad compared to the high rates being charged on some of the credit card statements I was looking at, with total monthly payments on the cards coming at just under £600 for the minimum payment.
My first question to this person was; "what will you do with the credit cards once you pay them off?"
The person thought for a moment and admitted they would keep them open as they wouldn't get used as they would be saving £300 per month with this loan. Think about what you know about this person. Are they saving £300 per month?
Let's look at the numbers again.
The credit card debt has been growing for three years at roughly £500-£600 per month.
The minimum payment is roughly £600 per month. Interest is being charged at almost 19%. For the sake of simplicity, I will talk in general terms now. Each payment being made is roughly half interest and half capital. This will obviously change over time so long as no debt is being added to the total. After maybe thirty monthly payments, the monthly payment of £600 will be 80% capital and 20% interest. What is missing here?
The person through normal day to day spending has been increasing their credit card debt by £500-£600 per month. So, as they pay £300 off the capital, they are actually increasing their capital by a minimum of £200 per month. It's not sustainable and will only lead to one outcome; default and possible bankruptcy.
I say again; debt increasing by £500-£600 per month. The person pays £600 per month, but on the interest charged only around £300 is coming off the debt which is increasing at a faster rate (£500-£600 per month) than it is being paid off (£300 per month).
So, coming back to my question "what will you do with the credit cards once you pay them off?"
Simply saying you will be saving £300 per month with the loan is financial insanity. You are already losing £500+ per month. If they clear their credit cards, they still have to make the loan payments of £280 per month. On top of that their debt will start to increase by roughly £200-£300 per month and in a few years they will end up right back where they started.
Scrapping minimum payments on credit cards is not the answer. Increasing the minimum payment is. Those people who live life in the now with no regard to money are more likely, in my experience, to live beyond their means and build up credit card debt that can never really be repaid. Inevitably these debts are written off as, per the old saying "you can't get blood from a stone" but that is why my APR is 19% instead of half that. That is how the credit card companies get their money and make their profit.
If you can afford to live a good life and enjoy experiences without getting into debt, like the young woman in The Guardian article, then great. More power to you. Enjoy your life. With that fortune comes responsibility to make sure that you understand how your privilege permits you to do this and how it is not possible or responsible for other people to necessarily follow in your path.
I think credit cards can be a fantastic tool. I have a credit card that takes some real hammer. Almost all my disposable income is, in some way, filtered through my credit card. I do this because I earn Avios points (air miles) but I near enough always reduce the balance to zero within a few days or weeks of spending on it. My credit card comes with a modest fee (£30ish per year) and for that I can use the card abroad with no fees or commission. It's a fantastic tool in the right hands. The APR is pretty scary at almost 30% but I rarely am charged interest because I reduce the balance to zero almost instantly. I am not anti-credit. I am anti-irresponsible lending. In my opinion credit cards should come with much tougher affordability assessments. It's just so easy to get credit, even after the crash of a decade ago.
If you are struggling with debt then I strongly recommend you contact Stepchange, a government backed charity that can assist and advice on matters relating to debt.
Thank you for reading. If you have enjoyed exploring Now We Live, please follow us on Facebook, Twitter and Instagram. If you would like to contribute to Now We Live, please refer to our submissions page.
My Financial Journey
So I've been asked a few times by different people about the things I invest money in. I'm not a qualified financial advisor, so I'm always reluctant to give advice as such. When I talk about money I find that most people are not very receptive to the conversation. I see either a blank look in their eyes or irritation or even anger. I love food and I love travelling. I post a lot of pictures of the food I eat and the places I travel. People ask how I can afford it. It's not about having lots of money but rather how you manage that money.
A previous post of mine detailed how even just on minimum wage it is possible to get by with some basic money management and an awareness of where your money is going. Obviously every person's circumstances are different. I will not tell you how to spend your money because I'm not qualified to do that. What I would recommend you do is take some time to really analyse what you spend your money on. Read some books, articles, blogs. Listen to podcasts. Read the financial pages of newspapers online. There is a wealth of information out there for free about how to manage money. Some of the information is better than the rest. I can't tell you what the golden rule is but as a general rule, if it sounds too good to be true then it probably is. If someone says they can make you millions overnight, then it's almost certainly not true. In my own personal experience, making money is a process. It requires thought, action and experience. This is my experience. What follows does not constitute advice or a recommendation.
I want to make money. I want to be wealthy. I don't want to have to work. I want to be able to do what I want, when I want, where I want, with whom I want. The lottery is a con. Gambling will only lose you money in the long run. And as far as I know, I don't have a wealthy uncle in Luxembourg ready to leave me millions. As such, the responsibility for making money is on me alone.
When I first started looking at how to make money I did some really stupid things. I invested in the stock market without really doing any research. This was just another form of gamble. I lost money. I wanted the quick hit and although some people do make insane money from the stock market, from what I can tell you need serious capital upfront to make overnight riches. I personally believe the stock market is a fairly risk free method of making money long-term but I appreciate there is always the risk that the company I invest in could go under and I lose my money. However, my thought process is roughly as follows.
I don't put all my eggs in one basket though. I have shares in five companies. I'm not going to name them as I don't want to be seen to be making a recommendation, but they are spread across different sectors and are all listed on the FTSE. I made sure to research each business thoroughly after being guided through different books on sharedealing. A good starting point in my opinion is the book Shares Made Simple for which I will include a link at the bottom of this article if you want to buy it on Amazon. A major factor for me is passive income; that is income generated without me actively doing anything. Part of the reason I chose these shares is because I receive dividend income in ten of the twelve months of the year. I'm earning around 4% on these shares each year; that is 4% of the value of the investment. Compared to the best savings account my bank offers (2%) it's a no brainer for me. But I'm fully aware of two things; the value of my investment can fluctuate drastically over the short term and it might not be possible to quickly release the money invested if I need it.
Another way I am investing my money is through crowd funded property. There are several websites out there that offer this service. There is also peer-to-peer lending. The internet is great for this sort of thing. Before I signed up to invest my money I monitored the website I use for months. I researched it. I read reviews. I thought about it and thought about it and then made the decision to invest.
Investing without research is gambling.
All of this requires you to actually have money to invest though. There's no magic solution here either, you have to have more money coming in than going out. Most people I speak to have absolutely no idea where their money goes. They don't budget. They simply live payday to payday. I check all my accounts daily. I check all my investments daily. I have a monthly budget spreadsheet which details all my commitments and the days they are due. It sounds like a lot of work. It isn't. It takes five minutes each day, or less. There was time to be invested upfront. It took time to go through my accounts and through the direct debits. It took time to set the spreadsheets up but all a spreadsheet replaces is a pen, paper and calculator. The best thing I ever did was track every penny spent on a normal month of household shopping. I thought I knew how much we spent on groceries. I was way, way out. Again, it sounds like a lot of work but it isn't. How much work is it to have a note on your phone, or a post-it on your fridge, with a running total of how much you have spent on food? You can't know how much you have to invest until you know how much you are spending. If you have more money going out than coming in, then I guess you're in trouble and I would strongly recommend you seek financial advice at the earliest possible opportunity. There are resources out there with the Money Advice Service, Stepchange and Citizens Advice.
"Live in days. Work in months. Think in years. Plan in decades."
I don't know where that quote comes from. I stumbled across it sometime ago and it struck a chord with me. My plan for over a decade has been to build a foundation to allow me to retire from work by the time I am fifty. I'm on track to do that earning just above the UK national average wage. I am using the power of compounding to help me along with this.
"Compound interest is the most powerful force in the universe." Albert Einstein. Possibly.
There is some debate over whether or not Einstein actually said this but it is hard to argue with the statement. Compound interest is where interest is earned on interest. For example; if you have £100 and that earns 5% interest then you will have £105. If you earn another 5% then you do not have £110. Instead, you have £110.25. If you have £100,000 and you earn 5% then you will have £105,000. If you earn another 5% then you will not have £110,000 but rather £110,250. If you project this over years and decades then the power of compounding really starts to snowball.
As well as investing a proportion of my salary into investments each month all the money I earn from those investments in put back into those same investments. My money is making me money. This is the secret of passive income.
I have a figure in my mind; a figure for the income I need to have the life I want without having to work. Once my passive income hits that figure, then I will retire.
Live in days. Work in months. Think in years. Plan in decades.
Will my plan work? Maybe, maybe not. But I think my plan is better than no plan. Most people I speak to don't have a plan beyond working until the age they can draw a pension and they see this as a safe option. Well there have been enough well publicised pension scandals recently to make me doubt how much more safe this is than educating oneself and taking control of ones' own financial future. Especially when you consider many of these pensions tend to be tied to stock market anyway!
Like I said, I'm not a qualified financial advisor. I don't have any professional experience in investments or pensions. I'm just someone who has read a few books and decided to tackle my future head on. What works for me may not work for you. If you want to learn more then there are a vast number of books out there on the subject of money. Some of my favourites are linked at the bottom of this article to their Amazon listing.
Thank you for reading. If you have enjoyed exploring Now We Live, please follow us on Facebook, Twitter and Instagram. If you would like to contribute to Now We Live, please refer to our submissions page.
So I saw a meme on Facebook about Tory Britain. Here it is:
Now, I am no friend to the Tories but something about this just did not sit well with me. I'm going to explain why.
According to gov.uk, the national minimum wage for those aged over 25 is £7.83p/h. Over a 40 hour week this comes to £313.20p/w, or a basic salary of £16,286p/a.
Assuming that this person has a standard tax code then they will take home, after tax, just over £1,200pcm. So, two incomes at minimum wage would be £2,400 net.
What are the standard living expenses?
Using Sheffield as an example….
What are people spending their money on?
I've worked in banking on and off for roughly ten years. I think I have a decent handle on what the average person spends their money on, and for the most part it's on luxuries that people believe are necessities. For example; in the above calculations I talk about mobile phones. There was a time when people did not have mobiles phones and it was not that long ago. Today, a top of the range smartphone could set you back over £1,000 if you buy it without a contract. If you get this type of phone on contract then you can easily spend £40 a month or more on top of an upfront cost which, many but not all people, will stick on a credit card. This is where the cycle starts.
I don't have Sky, Virgin or BT TV packages. I pay for Netflix, Amazon Prime and occasionally get a pass for Now TV. In my mind, these are luxuries. They don't cost much in the grand scheme of things, maybe an average of £20 a month, but I would cancel them without a second thought if keeping them meant I would slowly sink into debt.
The National Lottery. What a rip off. It is a tax which occasionally might pay off but you could play it for decade after decade and only lose money. I just checked the cost of the tickets; £2 for the National Lottery and £2.5 for the Euromillions. One ticket per play each week will set you back around £26 per month. Whenever anyone wins on the lottery and I see a post like "I just won £100!", I ask a few questions; "When did you last win?" and "How much have you spent to win that £100?" It's like the person who throws £20 at a fruit machine and wins £10 and walks away feeling smug.
I went out for a few drinks with my girlfriend the other week. We don't drink much. Not because we are militant about anything, it's just we don't generally like the hustle and bustle of busy nights out. We had maybe six drinks between us. This came to over £20. Many of my friends will go out a minimum of once a week and have twice as many drinks and the obligatory takeaway after. That £20 I spent could easily be spent two or three times over.
On top of this is the lunches, takeaway coffee each day, foreign holidays, day trips, cinema, clubbing, new TVs, new computers, games consoles and so on, and so on. The Tory government is crap. Labour is not much better. But please, stop blaming other people for your lack of basic money management. Yes, I know, there are people that are unlucky and get into a spiral of debt through no fault of their own. People who manage their money very well but have circumstances beyond their control. This post is not aimed at those people. It is aimed at the ones who will spend and spend and spend money that they don't have, on things that they don't need, and then complain that they have no money.
I mentioned before that paying for those things on credit card is where it all starts. Credit cards are great when used correctly. They should not be used for long term debt. The rates of interest are high and getting into that mentality just means that you are more likely to keep adding to the debt rather than manage your money in the here and now. If you add £50 to your credit card debt each month from the age of twenty-one and only pay the minimum payment each month then it is entirely possible you will have thousands in credit card debt by the time you are thirty. The sting in the tail is that by the time the debt snowballs to that level, the minimum payment will be much higher which means you might then be running at a monthly deficit. This leads to more credit card debt or worse; payday loans.
It's absurd that money management is not taught at a young age in this country. It should be a basic part of schooling from an early age. There also needs to be a shift in attitudes towards what is a necessity and what is a luxury. Of course we all want nice things but to state that "40 hours a week is barely enough to pay rent and utilities even with dual incomes" is just false in many cases. Perhaps what is more accurate is that "40 hours a week is barely enough to pay rent and utilities even with dual incomes when we also go abroad twice a year and watch Sky Sports on our 50 inch flatscreen whilst scrolling through Facebook on our brand new smartphones which replaced the ones that still worked but were no longer considered cool."
In the internet age there is a wealth of information freely available. There is no excuse for not educating oneself and checking the accuracy of claims posted by other people.
If you are interested in learning more about money there are several books I can recommend. Rich Dad, Poor Dad by Robert Kiyosaki and Money by Rob Moore. I've included links to them on Amazon below.
If you are struggling financially I would strongly advise that you seek help from at least one of the following sources:
The Money Advice Service
Citizens Advice
Thank you for reading. If you have enjoyed exploring Now We Live, please follow us on Facebook, Twitter and Instagram. If you would like to contribute to Now We Live, please refer to our submissions page.
David Scothern
Critic. Writer. Thinker. Observer. Creator of nowwelive.com.
September 2018


text:
FLAT (a modification of O. Eng. flet, an obsolete word of Teutonic origin, meaning the ground beneath the feet), a term commonly used as an adjective, signifying level in surface, level with the ground, and so, figuratively, fallen, dead, inanimate, tasteless, dull; or, by another transference, downright; or, in music, below the true pitch. In a substantival form, the term is used in physical geography for a level tract.
The word is also generally applied by modern usage to a self-contained residence or separate dwelling (in Scots law, the term flatted house is still used), consisting of a suite of rooms which form a portion, usually on a single floor, of a larger building, called the tenement house, the remainder being similarly divided. The approach to it is over a hall, passage and stairway, which are common to all residents in the building, but from which each private flat is divided off by its own outer door (Clode, Tenement Houses and Flats, pp. 1, 2).
There is in England a considerable body of special law applicable to flats. The following points deserve notice: - (i.) The occupants of distinct suites of rooms in a building divided into flats are generally, and subject, of course, to any special terms in their agreements, not lodgers but tenants with exclusive possession of separate dwelling-houses placed one above the other. They are, therefore, liable to distress by the immediate landlord, and each flat is separately rateable, though as a general rule by the contract of tenancy the rates are payable by the landlord. Flats used solely for business purposes are exempt from house tax, by the Customs and Inland Revenue Act 1878 (see Grant, v. Langston, 1900, A.C. 383); and, by the Revenue Act 1903 (s. 11), provision is made for excluding from assessment or for assessing at a low rate buildings used for providing separate dwellings at rents not exceeding 60 a year. It appears that tenants of a flat would not come within the meaning of "lodger" for the purposes of the Lodgers' Goods Protection Act 1871. (ii.) The owner of an upper storey, without any express grant or enjoyment for any given time, has a right to the support of the lower storey (Dalton v. Angus, 1881, 6 A.C. 740, 793). The owner of the lower storey, however, so long as he does nothing actively in the way of withdrawing its support, is not bound to repair, in the absence of a special covenant imposing that obligation upon him. The right of support being an easement in favour of the owner of the upper storey, it is for him to repair. He is in law entitled to enter on the lower storey for the purpose of doing the necessary repairs. It appears, however, that there is an implied obligation by the landlord to the tenants to keep the common stair and the lift or elevator in repair, and, for breach x. 16 of this duty, he will be liable to a third party who, while visiting a tenant in the course of business, is injured by its defective condition (Miller v. Hancock, 1893, 2 Q.B. 177). No such liability would be involved in a mere licence to the tenants to use a part of the building not essential to the enjoyment of their flats. (iii.) In case of the destruction of the flat by fire, the rent abates pro tanto and an apportionment is made; pari ratione, where a flat is totally destroyed, the rent abates altogether (Clode, p. 14); unless the tenant has entered into an express and unqualified agreement to pay rent, when he will remain liable till the expiration of his tenancy. (iv.) Where the agreements for letting the flats in a single building are in common form, an agreement by the lessor not to depart from the kind of building there indicated may be held to be implied. Thus an injunction has been granted to restrain the conversion into a club of a large part of a building, adapted to occupation in residential flats, at the instance of a tenant who held under an agreement in a common form binding the tenants to rules suitable only for residential purposes (Hudson v. Cripps,1896, Ch. 265). (v.) The porter is usually appointed and paid by the landlord, who is liable for his acts while engaged on his general duties; while engaged on any special duty for any tenant the porter is the servant of the latter, who is liable for his conduct within the scope of his employment.
In Scots law the rights and obligations of the lessors and lessees of flats, or - as they are called - "flatted houses," spring partly from the exclusive possession by each lessee of his own flat, partly from the common interest of all in the tenement as a whole. The "law of the tenement" may be thus summed up. The solum on which the flatted house stands, the area in front and the back ground are presumed to belong to the owner of the lowest floor or the owners of each floor severally, subject to the common right of the other proprietors to prevent injury to their flats, especially by depriving them of light. The external walls belong to each owner in so far as they enclose his flat; but the other owners can prevent operations on them which would endanger the security of the building. The roof and uppermost storey belong to the highest owner or owners, but he or they may be compelled to keep them in repair and to refrain from injuring them. The gables are common to the owner of each flat, so far as they bound his property, and to the owner of the adjoining house; but he and the other owners in the building have cross rights of common interest to prevent injury to the stability of the building. The floor and ceiling of each flat are divided in ownership by an ideal line drawn through the middle of the joists; they may be used for ordinary purposes, but may not be weakened or exposed to unusual risk from fire. The common passages and stairs are the common property of all to whose premises they form an access, and the walls which bound them are the common property of those persons and of the owners on their farther side.
In the United States the term "apartment-house" is applied to what in England are called flats. The general law is the same as in England. The French Code Civil provides (Art. 664) that where the different storeys of a house belong to different owners the main walls and roof are at the charge of all the owners, each one in proportion to the value of the storey belonging to him. The proprietor of each storey is responsible for his own flooring. The proprietor of the first storey makes the staircase which leads to it, the proprietor of the second, beginning from where the former ended, makes the staircase leading to his and so on. There are similar provisions in the Civil Codes of Belgium (Art. 664), Quebec (Art. 521), St Lucia (Art. 471).
Authorities.-ENGLISH LAw: Clode, Law of Tenement-Houses and Flats (London, 1889); Daniels, Manual of the Law of Flats (London, 1905). SCOTS LAW: Erskine, Principles of the Law of Scotland (loth ed., Edinburgh, 1903); Bell, Principles of the Law of Scotland (loth ed., Edinburgh, 1899). AMERICAN LAW: Bouvier, Law Dicty. (Boston and London, 1897). FOREIGN LAWS: Burge, Foreign and Colonial Laws (2nd ed., London, 1906). (A. W. R.)
- Please bookmark this page (add it to your favorites)
- If you wish to link to this page, you can do so by referring to the URL address below.
This page was last modified 29-SEP-18
Copyright © 2018 ITA all rights reserved.

subset: commoncrawl


text:
Para-Equestrian drivers, as well as riders, attended the clinic hosted by USEF at the Rancho Murieta Equestrian Center in California. In attendance were six of our drivers working with cllnicians Hardy Zantke and Diane Kastama to whom we owe a heartfelt thank you. There were joint sessions and lunches with the para dressage riders, coaches, USDFD Board members, US Para Equestrian Association representatives and USEF Para Discipline Director, Laureen Johnson.
Break out sessions for the drivers included dressage on day one, cones instruction on day two, and wonderful opportunities to share ideas and collaborate with other para-equestrians and program directors. In the afternoon on day two the para riders were game enough to even give driving a try!! See photos below.
Many thanks to USEF for hosting such a memorable event!!


text:
We specialise in bespoke wedding cakes and flowers which are designed especially for you. We offer 25+ different flavours and each tier of your cake can be different if so wished.
10 per cent discount off of the final order if you choose us for both your wedding cake and flowers.
Approach your cake maker and/or florist after you have decided on your wedding colours/ theme and have booked your venue. Colour swatches (or paint cards) can insure you colour scheme is co-ordinated.
It is never too early to book the date with your supplier, amendments can always be made nearer the wedding date.
Undertake research so that when you meet your designer she/he has some idea of your taste. Download pictures of designs you like as a starting point so that the designer can see your preferences.
This supplier doesn't currently have any Reviews. Be the first to submit a Review for Primrose Cottage Cakes & Flowers.
You need to be logged in to request a review removal. Login
You need to be logged in to respond to a review. Login
1 The Downs, Great Dunmow, Essex, CM6 1DS
Choose the dates you'd prefer to get married on.
Please select the ideal day and time that you would be available to go on a tour around {:venue_name:}.
The more information you give us, the easier it is for us to help you. Also, feel free to ask us any questions!
Fill in your details and we'll pass them on to {:venue_name:}
By clicking "Send Reply" you agree to your contact details being passed on to this supplier.


text:
Date: September 19th
Time: 13.00
Duration: 1.5 hours
Location: Scene Room, H15
Keynote speaker:
Peter Thirup Baeck: Head of Research, Nesta (UK)
Moderator: Alex Farcet (Partner at Rainmaking)
Hanne Brinch: Found Aid founder & CEO, (a platform designed to help foundations track the progress of their grantees)
David Dencker: Grant Compass co-founder & CEO (Grant Compass connects philanthropic foundations & grant seekers.)
Christian Vintergaard: CEO of Danish Foundation for Entrepreneurship
The event will include audience Q&A as well as a networking opportunity.
Yet there is an explosion of startups focused on doing good *and* being financially sustainable – should we enable foundations to invest in those?
Addressing the SDGs and the most pressing problems global is both a trillion EURO problem and opportunity. Would unlocking foundations to invest in Tech For Good make a difference, and if so how should that be done?
Join in the lively debate and network with peers at this interactive event.


text:
We at Help at Hearing are aware that keeping our people hydrated will aid them to perform at their very best throughout the day. As a result, we decided to invest in water coolers from AquAid.
Our unique relationship with AquAid has also given our organisation the opportunity to help those further afield less fortunate than ourselves.
Our decision to install a water cooler from AquAid means that for each machine that we have, we have donated £20 per year per cooler to The Africa Trust. Through our contributions to The Africa Trust an 'Elephant Pump' is being installed in Africa on our behalf.
This pump will bring much needed clean, fresh drinking water and improve the quality of life of those who will have access to our well.


text:
You don't want to find yourself in a Sushi restaurant not knowing enough about the fish on offer. Here we will introduce all the different types of Edo-style Sushi (Edomaesushi) Ingredients. *Japanese terms will be italicized on sushi ingredients page.
<Ika/Tako-Squid/ Octopus>
Aori ika-Bigfin reef squid
Hotaru ika-Firefly squid
Iidako-Ocellated octopus
Kensaki ika (Shiroika)-Swordtip squid
Mizudako-North-pacific giant octpus
Shin ika-Baby cuttlefish
Sumi ika (Kouika)-Cuttlefish
Surume ika-Japanese common squid
Tako (Madako)-Octopus
Yari ika-Spear squid
We hope this information will be helpful.
Revision date: December 2, 2016


text:
Adrienne Warren to Star on Broadway as Tina Turner
Warren will bring her acclaimed West End performance to New York City.
Tony nominee Adrienne Warren will reprise her acclaimed West End performance as Tina Turner in the Broadway premiere of Tina — The Tina Turner Musical, set to have its New York premiere in this fall.
Directed by Phyllida Lloyd and written by Katori Hall with Frank Ketelaar and Kees Prins, Tina explores the rise of musician Tina Turner, from her humble beginnings in Nutbush, Tennessee, to her transformation into the global Queen of Rock 'n' Roll. It premiered in April 2018 at the Aldwych Theater in London.
The production will have choreography by Anthony van Laast, with set and costume designs by Mark Thompson, musical supervision, additional music and arrangements by Nicholas Skilbeck, lighting by Bruno Poet, sound by Nevin Steinberg, projection design by Jeff Sugg, and orchestrations by Ethan Popp.
Warren stars in the West End production through April 13. Additional information, including dates, further casting, and Broadway theater, will be confirmed in the coming months.


text:
You can download Freelance Invoice Template Indesign in your computer by clicking resolution image in Download by size:. Don't forget to rate and comment if you interest with this wallpaper.
Freelance invoice template indesign – Invoicing clients for products and services is a natural part of doing business but having to continually prepare invoices often becomes a repetitive task. This is the reason it makes great sense to use an invoice template.
Not only does a great looking invoice project more of a professional image, but it will also allow you to prepare your bills much faster and with much less fuss. In addition to this, each invoice becomes standardized, meaning that they all follow a similar design and format, which makes book keeping and tax processing, again, much simpler.
Typically, a standard template will include all the basic elements required in order to compile an extensive invoice. Templates can also be designed to allow the insertion of your business details such as logo, company name, address and other contact information like telephone number, email and fax. With these details in place, clients can immediately identify with your invoices as having originated from the place of business, which in turn can expedite payments, filing and general administrative tasks. Standard invoices will also help streamline house business administrative tasks also.
Recall, efficiency is the key, of course along with professionalism. The basic principle of having a ready made template is to expedite the entire process of invoicing, without sacrificing quality or short cutting professionalism. This is where an invoice template can be extremely helpful to your business. Check it out the sample of freelance invoice template indesign below at the attachment page.
Download by size:Handphone Tablet Desktop (Original Size)


text:
Samantha Moore had a tragic childhood, but she has found a way to cope. While being passed from one foster home to another, she discovered that she always did well in school, especially in English literature. When real life was too harsh, she disappeared into other lives: Elizabeth Bennet's, Jane Eyre's, or Elinor Dashwood's. For times when she had to act fierce, she personified the Count of Monte Cristo's Edmond Dantes. Samantha finds it difficult to make friends, partly because she tends to talk in lengthy quotations from the classics rather than using words of her own.
As the novel opens, Father John, the head of the group home where Sam has lived since her teens, has good news for her. Sam has been casting about for direction in her life, and Father John has found an anonymous donor who will give her a grant to graduate school at Northwestern University. The catch is that it is in journalism, not English lit. The only requirement is that she write to the donor regularly to keep him abreast of her progress, and so the novel is composed almost completely of Samantha's letters to her benefactor, who asks her to call him Mr. Knightley, after the hero of Austen's Emma.
Sam struggles with grad school, especially with one terrifying professor who gives her the first poor grades she's ever had. He says that he cannot hear her own voice in her writing, and that she is holding back. Sometimes Sam thinks about quitting, and if she doesn't please this one instructor, he may take that decision out of her hands. Adding to her stress, Father John has asked her to mentor one of the new teens at Grace House, a surly boy who runs almost as fast as she does. Her one bright spot is that she gets to meet one of her author heroes, Alex Powell, who is much younger than she expected. All of these details of her life are faithfully relayed to Mr. Knightley, and since he never writes back, her letters become more of a journal, and as time goes on she reveals more and more of her emotions and her inner transformation.
I read this sweet novel while I had the flu, and it was just what the doctor ordered: a romance with a bit of substance and a bit of fun. As a reader, you'll see the end coming a mile away, but you'd be terribly disappointed in a romance with a tragic ending, wouldn't you? Samantha goes through some true character development in this book, changes that are necessary for her to succeed in life, and the reader will be coaxing her on the whole way. This novel is perfect for everyone—well, maybe every woman—and since it's by Thomas Nelson publishers, it's perfectly fine to lend to your teenage daughter, as well. Enjoy!
Disclaimer: I read an advance reader copy of this book. Opinions expressed are solely my own and do not reflect those of my employer or anyone else.