Okay, the new year is here an it is time to review your finances. You know it has to be done. Your bank is probably making a fortune out of your inactivity, so be proactive and sort it out! Income: The first place to start with your financial wellbeing is to earn more and spend less. Well, earning more may be awkward, but make sure you are claiming all your tax allowances and tax credits. Have you filled in your form for Working Tax Credit or Child Tax Credit. Over 80% of eligeable claimants this year are throwing away £500 by failing to claim the additional benefits available for newborns. Ring you tax office and get a form or check out Inlandrevenue.gov.uk. Do you wear an awful uniform to work? If so, you may be able to claim extra money to cover cleaning costs from the taxman!! Honest!! Ask them. Are you in the right job? Could you earn more by changing employer? Do you claim all the travel expenses you are entitled to? Claim! And put the extra money in a separate savings account! Outgoings: Spend less. Shop around when buying. Stockpile BOGOF offers from your supermarket. Check out prices online. Buy your CDs from CD-wow.com instead of HMV. Go out a little less. Have a drink at home before eating out and watch your bill reduce when you drink less in the restaurant! Stop buying the first round in the pub and don't get yourself a drink in when its your round! Mortgage: The best way to get the income down. If you are paying more than 5% for your mortgage and there are no penalties for moving it, move it! Britannia, Halifax and Intelligent Finance, alongside First Direct, have good deals. The IF and First Direct offerings are vest if you offset your savings to reduce your overall interest bill. A typical rate many pay is 5.75%. Knock 1% off a £50k mortgage and you are £500 a year better off! Shop around and you can save £1,000 in the first year. Current Account: While the savings here
are a little less spectacular, simply keep an eye on it. With a typical bank charge at around £30, making a mistake is not clever. Check your account online daily to make sure you cannot make a mistake. Ask for an overdraft limit way above what you need and make sure you never use it. Switch your account to somebody like the Halifax who will charge you 8.9% if you go overdrawn (typically 16% elsewhere) and pay you 3% if you actually have money in (typically 0.1%). This may not be quite as good value if your net income is less than £1,000 a month though. Savings: While chasing the rate is a good idea, simply forcing the habit is perhaps the challenge here. Most of us fritter money away. Set up a standing order for £50 a month or more for every pay day. If the money disappears from your account before you have a chance to spend it, you will never notice it missing. This will mean that you have £600 next December to pay for Christmas - plus a little interest! Accounts that allow only one withdrawal a year are perfect. Lambeth Building Society, Birmingham Midshires and the good old Halifax again have decent rates for this sort of saving. If you like a brand new car, you probably need to save £200 a month or more on an ongoing basis to change your car every four years! Save it, rather than paying interest on a loan! Loan: If you have a loan, you are probably paying too much for it. Switch it to somebody like Cahoot.com (7%) or see if you can secure it on your home at the mortgage rate. Just make sure you do not extend the term. A £10,000 loan at 9.9% can be switched to around 5.75% saving around £25 per month. Credit Protection Insurance on secured loans is usually cheaper too. The only other word of warning is not to secure debt close to, or above, the value of your home. Some lenders allow you to borrow 125% of value ? but this could mean you cannot move home should the need arise! Credit Card: Switch any existing debt in
to a low cost credit card such as IF (7.9%) or Cahoot (7%) and do not use that card again. Some issuers give a rate for life of balance such as American Express 4.9%. This is good as long as you never use the card for anything else! Simply pay as much as you can each month until the debt is gone. Feel free to take out a separate cashback credit card for all spending. Goldfish (1% cashback in vouchers); Morethan (0.8% cashback) and Amercian Express (1%, but not as widely accepted in UK). The trick is only to use it for purchases where you know your next pay packet will cover the whole bill. Always pay the balance off in full from now on. Collect your cashback points once a year when you need it. On typical family expenditure you should be able to collect an extra £150 a year. Pension & Investment: If your firm offers any sort of pension scheme, make sure you are in it. If it is a final salary scheme, get in now! If they close it later, hopefully you will retain your rights. These things are like gold dust!! If you have not got access to anything other than a stakeholder pension, take professional advice. Personally, I think you need to be investing at least 10% of your income in a private pension scheme to make it worthwhile. If you simply cannot do this, something like a FTSE Tracker ISA for £25 a month or more (Marks & Spencer have a low cost option) where you pays your money and forget about it is handy. Please remember to increase this contribution every time you get a pay rise! Ideally, at least one third of any pay rise should go towards savings for retirement (eg £15,000 salary gets a 3% rise worth £450 a year. Increase you contributions by £12 a month). If you are young free and single, pile the money in now! You won't have much later!! Life Assurance & Critical Illness Cover: Review your premiums. Ideally, you should be insured for around 8 to 10 times your salary if you have financial dependents. I jest not.
Hopefully your employer gives you some cover. Hopefully your mortgage is covered too. But you do not want to give a surviving spouse a financial disaster to handle. If you used to smoke and do not now, you could see 40% coming off existing premiums. Act now on critical illness cover. This cover pays out if you suffer something nasty that should kill you but does not. Premium rates are beginning to edge up but are currently at an all time low! See an INDEPENDENT financial adviser for life and critical illness cover. They can ensure you get the right amount of cover and the right conditions covered. Permanent Health Insurance: This is usually significantly cheaper than mortgage or credit insurance, although it does not cover redundancy. But, if you are off work, it does replace your income! Few people have it but everybody should. Premiums usually start at around £10 per month. If you have an employer that pays you for 6 months, that £10 should get an office worker aged 30 a replacement income of around £800 a month. See that independent adviser again! Loyalty Cards: Boots, Tesco, Nectar. Simple policy. Make sure you collect the points wherever they are available. And spend them in a cost efficient way. Some of the ways Tesco let you spend (eg Alton Towers, hotel accommodation etc) give you true value and allow you to have fun and frolics on the cheap. Alternatively, you can be boring and use the points and vouchers earned to reduce the cost of Christmas. You have no choice if you do not rigidly use the cards. Again, a typical family should be able to accumulate around £100 a year this way. Buildings / Contents / Motor / Travel Insurance: The message is simple. Shop round. Halifax, Direct Line, Tesco and Esure seem to be the competitive players in these markets at the moment. With home cover, do not wait until renewal. Do it now! Also review your gas, electricity and mobile phones. The suggestions
here are generalisations and you should get professional advice for your circumstances. The logic is simple though. Save money on your loan, bank account, mortgage and credit cards. Use it to save for the future and to protect your present. Good habits lead to future wealth and happiness. Try it. Discipline yourself!! He who spends 99% of his money is always better off. He who spends 101% of his money will become bankrupt sooner or later. Summary: 1. Claim all your tax allowances. 2. Move your mortgage. 3. Switch your current account. 4. Get the savings habit sorted. 5. Switch your credit card debts to a low cost balance transfer for life deal. 6. Make all future credit card spending on a cashback card and pay the balance in full each month. 7. Secure any existing debts on your home at a lower rate for the sam eterm. 8. Make sure you have adequate provision for your retirment. Start now! 9. Review your life and critical illness cover. 10. Insure your income. It is worth a lot to you. 11. Shop around for insurances. Never accept the renewal. 12. Shop around for power and review your mobile phone contract. Good luck!
There is now so much freely available information around that few people need to spend any money on financial advice. Having seen friends and even family stung for huge fees I am very sceptical. The moral is you must do your homework first before seeking any advice. In line with the old 80-20 adage that applies to most things in life, 80% or more of the rules and regulations and general information available relates to endless detail covering every possible if and but of a situation. Just 20% or less will contain all the information that will make you as well informed, and probably more up to date than any financial advisor. Money sites like xel-finance.com, moneyextra.com, iii.com, thisismoney.com, moneysupermarket.com, etc, etc are packed with all the basic information you are ever likely to need. For tax issues the Inland Revenue website: inlandrevenue.gov.uk, is very well written and easy to understand. There may be exceptional circumstances when you feel you need expert guidance, maybe pension options, overseas investments, handling trusts, land and property issues, unravelling inheritance issues. However it is absolutely vital that you do your homework first and end up with a list of very precise queries. You need to ensure, in advance and in writing, that your chosen financial advisor has knowledge in the field and appreciates what advise you are after; you mustn't let them go off at any tangents. Their time is most certainly your money. The biggest problem with independent financial advisors is that they are so paranoid about being sued for bad advise that the regulations and their insurers require them to take you through a hugely detailed and broad view of your circumstances. The first few hours of consulting your IFA will be filling in your detailed financial history. Even if you are well organised and know what you have and where you are it will probably have to be transferred onto their own forms. You will be
charged an hourly rate for their time, and their secretary's, and so called analysis, research and expenses. The hourly rate will be anything from £50 to hundreds of pounds. They will either present you with a bill or put the charges on account to be offset against commissions they will receive on investments that they hope you will be persuaded to buy. If you have any query regarding a financial product, visit, and compare the financial websites. You will find endless links on financial planning and what to take into consideration; links to every possible product, what it is, how it works, how it is taxed, how to buy and sell, to monitor performance and compare performance to any other product. You will find information on every possible share, unit trust, investment trust, pension fund, bond, building society, national savings products, mortgage, tax free investment etc etc as well as links to the regulatory authorities. If you decide to buy any equity based funds shop around the financial brokers; they will refund most of the initial charge as extra units or as a cash back. To buy shares go through the internet share dealers, they are cheaper than banks etc and instant.
Many of us may be happy to trust our GP, Dentist, Accountant or Solicitor (and in many cases pay them a lot of money), but why do people expect Independent Financial Advice for free? Do you know how well qualified your adviser is? If they work directly for an insurance company or bank they will be highly regulated, but can probably only advise you on the products that their organisation offers. They are not independent. There is now a growing trend for fee-based advice that is unbiased and untainted by commissions. Why the reluctance to pay for it though? Good advice may appear expensive but should save you money (or make you money) in the long term. How many people would think of building a house without an Architect? Why build your entire financial future without the help of a well-qualified professional? Most IFAs (not solicitors or accountants who can also give advice by default) must have passed the Financial Planning Certificate Exam (FPC). It's three papers and pretty easy to get, so if your adviser failed, move on to the next. However, the Society of Financial Advisers (SOFA) offer many more complex exams under the banner of the Advanced Financial Planning Certificate (AFPC). There are more than a dozen different papers covering all areas of personal and business financial planning. Each paper is considered to be as difficult as an A level exam and three papers are required to gain the AFPC level or Membership of SOFA (initials MSFA). Another three gives Associateship and a further four Fellowship. I urge anyone seeking advice to press for a consultant with at least AFPC level qualifications - preferably including the very demanding Pensions paper. This simple piece of paper will show that your adviser demonstrated a high level of competance and knowledge and a varied field of subjects and is well placed to help you. It will not rule out bad advice
or fraud, but that occurs in every industry. We must raise our game though and the expectations of the public.
How many of you know what independent financial advice is, for that matter how many of you care! Independent financial advice is exactly what it says. It is impartial, it can be given freely with no bias to any particular Bank, Building Society, Investment House ot other institution. How many people bother to take independent fiancial advice why should they? Firstly - how many of you have mortgage with your Bank or Building Society - Why? Probably because it was easy. Secondly - how many of you have a pension with Prudential, the Co-Op or again with your Bank or Building Society - Why? Again, probably because it was easy. How do you know you have made the right choice? Becuase the institution who sold you the product told you. Of course they would tell you they were the best, but what have you goto to compare them with. How can you prove them wrong. Independent Financial Advisers (IFA's) have been around for many years, unfortunately, there has been some bad press in the past. Which only related to a few unscrupulous Companies, but nevertheless put some people off. If you are making a big decision - i.e. buying a new three piece suite, you don't go to one shop and buy the first one you see, you shop around. This is exactly what an IFA does, he/she shops around for the best available product for your personal requirements. IFA's are regulated by a regulator (normally the Personal Investment Authority) and they have to operate within the guidelines set down by this body. You can find details of IFA's in your area in the Yellow Pages, or via the Personal Investment Authority. But it is usually by personal recommendation. You do have a choice - exercise your right to use it.
This is a review on how to get your business plan approved... After the invasion of Internet, in the last 7 years or so, lots of investment companies have turned themselves in to Angel’s who put heavy money on a good idea. The other factor is that most of the heavy funding have don’t lot of flacks in the current technology market. Its very important, that these VC’s have become now more rigid in their policies. Some of the VC’s no doubt have done some bad investments but again it is not their fault, it is the people who have taken money and used it for personal purposes. What’s happening today is a IIT graduate has some great idea, and he presents it in a nice manner to these VC’s and they do get funded, but happens next is that, the amount of money pumped in is heavy and these fresh IITian’s don’t have the sustainability to continue in a proper manner, they start spending lavishly and get away from their business goals and you blame the Internet that one more dotcoms is falling. If we actually scrutinize the entire downfall of this so called dotcoms bubble, the companies which have really fallen are the one, who have spent lavishly on Salaries, spent heavily on advertisements, heavily spent on Infrastruture, they really don’t have any proper revenue model in place. I agree with the fact that most of these VC’s are dumb and they have made some terrible investment. Imagine a guy like Rupert Murdoch putting money on websites like Chaitime and Netplilgrim Its really sad to see some good amount of money going waste. Now, I wanted to get in some money for my venture and “IT IS NOT A DOTCOM VENTURE “ for at least 4mths I studied VC’s style of working and what I needed to get my idea’s being funded. First let us know what is this VC’s all about… Venture Capitalist Venture capital is a form of financing for a company i
n which you give up some level of ownership and control of the business in exchange for capital over a limited timeframe, usually 3-5 years. The exit of the venture capitalist can be an IPO, a merger or acquisition, or a buyout of the investor. Unlike banks, which seek their return through interest payments, venture firms are looking for capital appreciation. Their payoff is how much their original investment has increased. Venture firms generally are looking for a return of five to ten times the original investment at exit Now, we know what a VC, is let us understand what is business plan all about. Business Plan Business plan is a detail about the venture, which you are getting into. If you are seeking start-up funding for a new business or funds for expanding your present business, your investors or banker will expect you to have a business plan available for their review. All businesses need a plan to define where they are going and how they are going to get there. These are some information you need in your business plan. Who your customers are by their age, sex, income/educational level and residence (or if this is a wholesale business, by industry, size of business, location)? What is the size of your customer base by the categories above? Who are your direct competitors? Who are your indirect competitors (products that aren’t the same as yours, but are an alternative for your customers; for instance, a train is an indirect competitor for an airline, whereas different airlines are direct competitors with each other)? Now if your expertise is not in making business plan but you know what to be their in that plan, then get hold of consultants who charge pretty high, but it will be worth it, because they specialise on that and their wont be any loop holes in the plan. You don’t want anything to go wrong on the last moment. Because, its your Baby and you don’t
want it to fail. Once your Business Plan is ready you need to get your plan approved so what do you do next. 1. First and the most important thing, “BELIEVE IN YOURSLEF “ 2. Preparation is a critical factor in funding. Allocate plenty of time and energy to it. Plan each and everything at least 4 to 5mths in advance. 3. See to it that all your financial details are in place. 4. Identify professional references who can support your reliability and the need for your product. 5. Write a business summary covering the main points of the business plan. This will be the first introduction of your business. Getting past the first cut will depend on how well you sell your business in this summary. 6. Identify venture capital firms that specialize in your type of business. 7. Learn as much as possible about the funding process for each of the firms. 8. If possible talk with businesses that have been funded by each of the firms. 9. Select 8-10 venture capital firms that you definitely wish to approach. 10. Customize submission information to fit the preference of each firm, including reformatting the business plan if needed. 11. About 2 weeks after applying, call to arrange for an in-person visit, if possible. 12. Do not be afraid to continue to keep in touch. Do not be a pest, but also do not be afraid to ask when you might know something and if they mind you checking in occasionally. Whom…do they fund… Business opportunities are everywhere for venture capitalists. Hundreds of business plans cross their desks every month, offering myriad opportunities. However, the successful venture capitalist invests in people first and business plans second. Though the theory were in real estate the investors looks for, the three biggest criteria are ’’location, location and location.’’ The venture capita
l axiom is people, people and people. There are five major characteristics that investors look for in entrepreneurs are: Leadership. It’s often assumed that entrepreneurs are born leaders, but that’s not necessarily true. Sometimes it takes years to acquire the quality. And sometimes it never surfaces. Vision Vision doesn’t come magically; it comes from hard work. Thomas Edison said, ’’Opportunity is missed by most people because it is dressed in overalls and looks like work.’’ The entrepreneur should need a vision and goal of were to take his business then only he will be able to take his business to leaps and bounds. Integrity Unlike leadership and vision, this quality is nearly impossible to assess on first impression. But after six months of working closely with an entrepreneur, integrity, or the lack of it, becomes apparent Openness Its always said that you need to have a flat organisation and should listen to others. Its important that you don’t make them follow you, they should follow you on their own. Its necessary to respect thoughts and take input from others. Dedication: Much has been written about the classic traits of entrepreneurs: stubbornness, dedication, pursuit of a goal despite adversity. The importance of perseverance and patience in all those entrepreneurial efforts cannot be underestimated. Overall, you need to believe in what your are doing and need to be street smart. Have a vision, have a goal, you will see that you will grow really high in life.. HAVE A SUCCESSFUL CAREER!!! Explore your way to glory…
In this day and age of pensions, mortgages etc being sold by everybody from your bank to your supermarket not to mention all the other outlets on the way it is hard to decide which policy is best for you. I like to shop around for things like car insurance myself and am pretty sure that I get a great deal however for other things the small print etc can be far too complicated and nobody wants to take out a policy, mortgage etc only to find out that we are paying for something which is not right for us. So I would strongly recommend that anyone in such a situation seek the help of an Independent Financial Advisor. IFAs as they are referred to are supposed to be independent i.e. they will offer you products from all companies not just from a selected few hence getting you the best deal for you, however in the past many have been found not to be. When you approach an IFA they should tell you both verbally and in writing how they will get paid for offering you their services. You can pay a fee up front or you can agree that they get a payment from whichever company you finally take out your policy etc with. Talking to an IFA should not cost you any money, unless previously negotiated, so if you do not like the service offered to you there is nothing stopping you going elsewhere. If you do talk to an IFA it is best to talk to one who has been referred to you by a friend, family member etc who has used and been pleased with their service. In my case I was referred, by a friend, to Brian Wilson of Poynton Financial Services in 1993 and have used him ever since. His address is 17 Park Lane, Poynton, Cheshire, SK12 1RD, telephone 01625 850860, fax 01625 850742. I believe that he has clients throughout the UK. Over the years that I have known Brian I can honestly say that he has given me excellent advice. He organised a pension and endowment for me and moved my mortgage. He has always given me great service and I
believe that he has offered me more advice than I have paid for from the policies that I have taken out with him. He has even given me free advice on a financial matter for a family member. When I moved house I wanted to move my mortgage as I was not happy with my existing company because of problems that I had experienced with their administration, he persuaded me to stay with them and negotiated a very good deal for me. Brian works with his wife and has a large number of years experience in the financial industry, he is very friendly but professional and offers a fantastic service. I cannot recommend him highly enough.
Whatever should l do?? Someone please has got to help me. You may think l'm crazy, well l probably am. The thing is this is not really an op on financial advice but l didn't know where to put it. You all need to give me some financial advice though. I have had a very personal E.Mail from a gentleman who is a top official in a foreign National Petroleum Corporation. He says that they have $38 million dollers that they have to put into a bank account in this country preferably and that l would receive 30% of this if l let them use my bank. Now this is such a problem as l wouldn't know what to do with so much money? Whatever sort of a con is this. He has emailed me twice wanting information about me (which l haven't given) to ensure that l am a god fearing and trustworthy individual. They say they got my name from the their Chamber of commerce! Hmm course they did, what ever sort of fool do they think l am. Anyway after much deliberation l decided that l should put this notice up on dooyoo and see if anyone else has had such a thing and they could tell me and we could all share the money. It says on email that l should watch my words on the emails l send and be very careful. This makes me quite uncomfortable, who am l dealing with here? All jokes aside this has got me a little perturbed. I am a greedy cow and if l throw all that money away i'd be gutted. (hehe) I could have a field day in Tesco for my weekly shop with this (l could probably buy some of tesco itself). Dooyoo know anything about this, anybody! Wanna share? Dooyoo? They probably want my $38 million and then will give me 30% back. Well l'm here to tell you they're not getting it. I'm keeping my 38 million grains of rice to myself (thats about the only thing l've got 38 million of). I just had a thought l wonder if its 38 million dooyoo miles? I'm gonna sen
d it to BBC Watchdog and see what they make of it all. I'd really appreciate any feed-back on this. Thanks Sandyd UPDATE: I have printed copies of the emails and am taking them to a policewoman friend of mine. I also emailed the Nigerians to say that l am sure that this is some kind of scam and that they had disturbed me. If it wasn't/ isn't a scam then the police will know what to do. I am pretty scared though, l have to admit, as you have visions of, having dobbed them in, a gang of undesirables turning up at your home and ot being very nice to poor little me. (ooh, l know l joke but it is a bit disturbing). Thankyou to those of you that gave me advice. I did actually hear from the Police and they told me to ignore it (they wanted all the money themselves, l know). It is actually a scam that is going about. The reason being to get your bank account details, access the account and even if theres no money in it use your name for fraudulent purposes. (The precise details of which they didn't elaborate). So be warned, aparantly especially from the Nigerians there is a con in practically every email. They are very dangerous to get involved with and can be very bad for your health (not to mention good name and bank balance). So if you recieve anything like it just email them back to go away and not bother you with their scam. (Then send the details of the kosher ones to me and we'll split the money).
When we first started looking at buying our own home, having rented for a year, we asked around for the name of a financial advisor, feeling that one referred by word of mouth must be a good one. The man duly came and set out his stall and was very nice and very helpful showing us all our options. He found us a great mortage that gave us a discount for 3 year, after which we could change it so we could benefit from another discount. Everything went swimmingly and he seemed to work really hard for us so we had no complaints and duly recomended him to others. How it backfired on us and all those others taken in by him, when we came to change our mortgage 3 years afterwards, we could not contact him, nobody had heard of him, his office had shut up shop. SO we turned to a large financial services organiseation who sorted us out a better mortgage for better terms. Everything going to plan, and about to sign on the dotted line, when the advisor suddenly said, you are signed up to this building society for 5 years, and will have to pay 2900 to get away from them. This was written in the smallest of small print. We had been assured that we were only in this for 3 years and that there was no early redemption fee etc. Anyway that is all sorted now, but by coincidence last week, the disappeared financial advisor turned up on our doorstep asking us about changing our mortgage, i very nearly slapped his face and told him he was 2 year too early. So people beware, always always read everything from these people, we signed blind on the advice of a seemingly charming man, and it has cost us nearly 3000.