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I have been using Valued Opinions web-site for more than six months now and have found it to be the second highest paying site out of the ones I have been using: Global Opinions has paid me about £100; Valued Opinions more than £50; Ciao-Surveys and One Poll both about £20 each; Global Opinions Panel and Home of Research only about £5 or so. Valued Opinions does however pay a good rate per hour, probably almost as much as Global Opinions Panel (I estimate about £4 per hour for me - typically about £1.00 for a 15 minute survey)
Valued Opinions web-site is very easy to use and navigate and generally the surveys are not too boring (assuming you don't spend all day answering surveys) and the payment is reasonable. The web-site claims that surveys are typically between £1 and £5 and up to £50. I have never received more than £5 but £1, £1.50 and £2 surveys are the most frequent ones. The money is credited to the account within 28 days of completing a survey and once £10 has been accumulated a gift voucher can be requested. If you opt for Amazon vouchers these are emailed to you and can be used immediately.
If you start doing a survey that you have been invited to participate in and don't qualify for some reason (most surveys start with some questions about you to see if you are part of their desired audience) rather than receiving a small amount of money like with some survey sites you will be entered into a prize draw. This has happened to me quite a few times, but so far I have not won anything. More often than not, though, I do qualify for the surveys.
The surveys can be about a very wide range of topics: business and office equipment, grocery shopping, consumer electronics, cars, holidays and travel etc.
Overall I would say that Valued Opinions is one of the best of the many survey sites. The surveys are not too long or boring, the payment for the time taken is as good or better than most of the competition, although still probably no more than minimum wage.
Global Test Market is one of many survey web-sites that I have tried in my search for ways of making some extra money when I have some spare time. In my experience it is one of the best and does give a reasonable payout for the amount of time involved. It is an American web-site and payment is in US dollars, but this is not a problem for people in the UK.
I have been using globaltestmarket.com for a few months. They have invited me to do quite a few well paid surveys and now I have earned almost £100. The surveys are paid in "points" where one point is $0.05 and a survey may pay 35 to 100 points on completion or 5 point if you don't qualify, so even when I don't qualify I don't get the feeling of disappointment and wasted time that I get with some other sites.
I estimate payment per hour to be about $8.00 to $10.00 (i.e. about minimum wage), but this will depend on how fast you are at doing these surveys or whether you are doing something else at the same time. Minimum payout is 1000 points (i.e. $50.00) which sounds quite high, but it doesn't take long to reach this amount. When you reach 1000 points or more you can request a cheque which will arrive within a few weeks.
The web-site is easy to navigate and is similar to so many other survey web-sites. Registering is quick and easy and once you have registered emails will start arriving inviting you to participate in the surveys. Clicking on the link in the email will take you through to the survey and you account will be credited on completion so you only need to log into your account occasionally to check your points balance or request payment. The surveys vary in length, but generally take between ten and twenty minutes.
Le Mans is famous for the 24-hour race, which is a favourite of many British car racing and classic car enthusiasts. Various classes of sports car compete in a battle of reliability, attrition, fuel efficiency and speed during one weekend a year in mid June (13-14 June 2009). It is a full weekend event; the race starts on the Saturday afternoon at 2pm and runs continuously for 24 hours, but for the average British person the fun begins some days before at the start of the road trip to France. And there are some races and testing in the days leading up to the race weekend. The race is organized by Automobile Club de l'Ouest and the official web site is www.lemans.org and is held at the Circuit de la Sarthe starting at 14:00
I have been to this event several times, in a variety of classic and not so classic cars: the last few times I took my old Ferrari 308 (the Magnum car) or Alfa Spider (similar to the one Dustin Hoffman drove in The Graduate), but the majority of the British contingent have classic British sports cars. It is traditional to stock up with supplies (i.e. Beer and in my case a tent due to lack of boot space) at a local Supermarche, then camp with the cars near the race track and try to build a wall round the tents and cars out of small empty French beer bottles.
Despite the beer-fuelled hoards the atmosphere is generally jovial and good-natured. There is plenty to do before and during the race (including watching the cars go round if you like that sort of thing) There are fairground attractions and plenty of places to eat and drink, although food quality is generally fairly low by French standards and toilet facilities are very sub-standard and if you want a shower at one of the camp-sites you may have to queue for a while.
Some people go to Le Mans 24 hr race to watch the cars and follow the various teams' performance and, even if you have been tempted by the culinary delights, Ferris wheel or dodgem cars, you can keep track of the progress on the local radio station which is broadcast in English for the benefit of their British guests.
There are usually some smaller races before the main event, but the actual 24 hour race is a fairly complex affair with several competitions between different classes of car all running on the same track at the same time: LMP1, LMP2, GT1 and GT2. The LMP cars are purpose built racing cars with very high top-speeds and the GT cars look like normal roads cars: Corvettes, Aston Martins etc. and the rules change each year. The race consists of some sections of normal road, closed to traffic for the event and some sections of racetrack complete with grandstands, pit-lanes etc. The object of the race is to go as far as possible during the 24 hours, so this is as much about fuel efficiency, reliability and just staying awake as it is about speed. The drivers can be swapped during pit stops.
This is a fun event, a bit like The Glastonbury Festival, but with less music and mud, and more cars. I would only recommend camping at the racetrack if you can survive without the finer luxuries (like a shower or clean toilets) but it is possible to stay in an hotel a few miles away, if you book some time in advance.
Kew Gardens, in west London, are probably the best and most famous botanical gardens in the world and the model on which many others are based. There are several interesting buildings including a royal palace and large glasshouses ranging from a few years old to several hundred years housing tropical plants and even the world's oldest pot-plant, which lives in the Palm-House. Outside there are plants and trees from all over the world. There are indoor and outdoor restaurants including one in the Orangery, another historic building in the park. Kew Gardens is also used as a venue for summer concerts, including Jools Holland who frequently plays there.
The main emphasis of the gardens is of course botany, but it is also a good place to see animals. Wild Indian Ring-Necked Parakeets live in Kew, Richmond Park and the surroundings. These small parrots, according to local folk-law, escaped during the filming of a drama (The area is popular with film-makers due to its proximity to central London, Television and Film Studios) There are also some black swans in one of the lakes and a good variety of other bird-life. There are also some very rare newts living in some of the ponds although you are unlikely to see these.
The Pagoda in Kew was built in 1762 for Princess Augusta, the Princess of Wales, mother of King George III and originator of the first botanical gardens at this site. It has recently been opened to the public after many years of being closed and gives a fantastic view across Richmond Borough. It is almost 50 metres tall (more than 150 feet) and was the tallest Chinese style building in Europe at the time of construction. It is a fairly accurate imitation of a Chinese construction although should have an odd number of storeys to be completely accurate.
Kew has more than 10% of all known plant species of the world, but the southern British climate cannot support many of these species, so there are several different glass-houses providing different climates. The Temperate House (built in 1861) and The Palm House are perhaps the most impressive, but the newer Princess Diana glasshouse is also extremely impressive.
Getting to Kew gardens by car can be a bit slow, because of the traffic in that area, although it is a short walk from Kew Gardens tube station on the District Line and the Lion Gate entrance is just a mile or so from Richmond railway station. There is a fairly large car park near the main entrance off Kew Green, near Kew Bridge. Kew Gardens is a wonderful place to spend a few hours, but is quite expensive at £13 (free for children) and another £5 for entrance to the Palace.
Zazzle.com is yet another way of making some money on the internet; A web-site that allows you to sell your photographs or artwork. Unlike many photograph libraries, which can have very strict quality requirement and only sell the image you have created, Zazzle generate products featuring your art-work, which they sell and you receive commission. The products include T-Shirts, posters, framed prints, mugs, mouse pads, American postage stamps, skateboards, shoes, bags, postcards and greeting cards.
The products are created virtually on the screen from jpeg files uploaded to the web-site. The actual product will not be made until someone orders them, but the on-screen representation of each item is very good. All you have to do is open an account and upload the pictures into your library, then tell the web-site which picture you want available on each type of product. You can add a description and key-words/tags for each item so that other people can search for it, then make it available for sale. Commission is paid on any sales you make at a default rate of 10%, although you can change the commission rate. A greeting card that sells for $2.65 will gain you $0.26 in commission or a $14 T shirt $1.40 etc.
Separate "Galleries" can be created for different types of image or product and you creations can then be marketed via the Zazzle community, which is similar to many other internet communities. You will acquire a fan-club and can become other peoples' fans and exchange messages or comments on their work. Examples of mine are at: http://www.zazzle.com/AndyPo
I joined Zazzle because I have published many of my travel and wildlife photographs on Squidoo.com in conjunction with various travel reviews (many of which are also published here, but without the photos: e.g. www.squidoo.com/borneomonkeys ) and I receive a reasonable income each month from people looking at my photos. Other squidoo and Zazzle users recommended that I publish the photos on Zazzle then promote them via my articles published on Squidoo. When someone finds one of my articles via a web-search, if they like the photos they can purchase an apron, mug or hat with the image on. So I get money from internet traffic, but also occasionally for selling products with the images on. I expected to make nothing at all, but after just a couple of months I am getting the occasional sale and a small amount of commission and I haven't made a huge effort in marketing my galleries. Many of the other users of the site have put rather more effort into creating the products. Mine simply have my photographs on, but many users add captions or greetings inside the cards etc.
Setting up a Zazzle galleries is fairly quick, although uploading the photos is a bit slow because you need to upload a large high quality file, but the web-site is easy to navigate. The amount of money you make from publishing artwork in this way will depend on how well you market it. Twitter and Squidoo are ideal methods for doing this externally, but being active in the Zazzle community could also work. Don't expect to get rich, but Zazzle could be a fun way to make a bit of extra money from the internet. There is also a UK Zazzle web-site, but I joined the US web-site because of the larger potential audience.
The Investors Chronicle magazine is published by The Financial Times Limited and is probably the most respected weekly investment magazine in the UK. It also has a very comprehensive free web-site and a free daily email service. So why buy the magazine? The magazine gives an overview of the economy and markets, but also suggested investment strategies, fund suggestions, news and comment.
I have a weekly subscription to Investors Chronicle which usually costs £149 for a year although there are often special offers and the price drops for longer subscriptions. Buying from the news agent costs £3.75 a week. I also get a daily email alert which gives me access to much of the information in the magazine, sometimes even before the magazine arrive. This makes the hard copy magazine a luxury, but it is great to get away from the computer occasionally.
The magazine has the following sections: Seven Days, which gives a good concise overview of the week's market movement; News which is a more detailed look at the week's news; Comment, which has several articles by various contributors including "Mr Bearbull" a column which has appeared in the magazine since the 1950s; Strategies, giving a selection of investment ideas for the coming weeks, months or years; Companies, provides news, reports, results, updates, director dealing, takeovers rights issues etc. and tips; Funds, for investment trust, unit trust, OEIC and ETF news, tips and manager interviews; and finally the Trading section which suggests trading ideas for the weeks ahead, mostly based on technical analysis (lots of charts and explanations)
I would be very wary of of blindly following the investment tips in any publication, even one with as good credentials as the Investor's Chronicle, but the share tips, tip updates and other strategy suggestions are certainly a good place to start your research if you are searching for investment ideas. The explanation of the technical analysis approach to short-term trading is also a useful insight for me into this higher risk style of investment.
The coverage of the magazine is very good and offers a lot of investment and trading information in a weekly magazine which would be useful even if you had read the Financial Times or Bloomberg every day. I definitely recommend the free web-site and email alerts and if, like me, you like reading a magazine rather than a laptop or mobile phone and can justify the cost, get the magazine.
After semi-retiring from a proper well-paid consulting job, last year, I have spent a lot of my time trading shares, bonds and obscure derivatives for a living (good timing!) so accurate detailed financial information is essential. There are many competing web-sites that provide financial information, but ft.com is one of the best and certainly one to which I refer on a daily basis. The FT newspaper has been one of the best, if not the best, source of financial data and news for many decades, giving good global and local news coverage. The FT web-site is an on-line version of the newspaper, giving access to most of the articles from the daily and weekend newspapers for free, although some articles and services are only available to subscribers.
The layout of the web-site is pretty similar to the newspaper (and it's even pink, just like the newspaper) with the various sections clearly marked across the top-banner: Front Page; UK; World; Companies; Markets; Lex; Comment; Business Life and Weekend. Each page has headlines of articles in reverse order of publication, with links through to the full story. Most of these links are available to non-subscribers, but some may come up with a request for you to register for a free trial of the full subscription services.
The main news articles are concise and apparently accurate (well I believe most of them anyway) but some people may find them a bit dry or boring, when compared to the more sensational style of some other newspapers. They are not completely lacking humour, but certainly give the impression that they are business-like. The main news items cover all aspects of world new, not just business, but obviously more emphasis is given to the business related news, even on the front page. Progressing onto the Companies and Markets sections gives a very good in-depth analysis of company results and the movements of the various markets around the world.
Selecting each tab at the top of the Front Page gives an overview of the news for that section, but also breaks the news down to sub-sections. e.g. selecting Companies gives the main headlines for company news, but there are also sub-sections allowing the news to be filtered for individual types of business: Energy; Industrials; Transport etc. This is a very easy web-site to navigate.
The Markets and Markets Data sections are the most useful for me, giving me a good overview of what is happening to my various investments. There is even a Stock Screener allowing you to type in criteria you require from a share (e.g. price to earnings ratio) which will output potential shares you may be interested in. There is a good portfolio tool into which you can enter details of all of you investments and have them updated in almost real-time (20 minutes delay) Most of the articles provide information, company results, market data etc. and some provide comments or tips about possible movements in prices or even trading ideas, fund recommendations etc.
FT web-site is a very useful site with some of the best coverage available anywhere on the internet of financial news and good concise coverage of other news and sport. It could easily replace the newspaper (although I still buy the newspaper at the weekend because it gets me a way from this computer)
I have been reading and writing on dooyoo for a few months now and have received a reasonable amount of money, but I haven't actually spent it yet. It would be a shame to put it in the bank-account and have it just disappear or get spent on bills. After all, it takes quite a lot of time and effort to accumulate the money in the first place, so it should be spent on a luxury or something memorable. My time on this web-site has certainly been fun, but it doesn't pay minimum wage (of course no web-site does and Dooyoo is actually one of the best money-making sites)
I would like to say that I shall give all of the money to charity. My favourite charity is The World Wildlife Fund and I already have a monthly standing order to them. They do a lot of very important work all over the world, protecting endangered species and habitats. This is a real passion of mine and many of my holidays are spent on safari or in jungles and part of the cost of each trip should go towards conservation of the local habitat. I take a lots of photographs on my travels and carry up to twelve kilograms of camera equipment on many of these trips.
Instead of giving the money to charity, this time I am saving up my Dooyoo awards for a new camera. All of my cameras are huge SLRs and I don't use any zoom lenses, so I miss a lot of photographs either because I don't have the right lens on the camera or because I left the camera in the hotel because I'm exhausted from carrying it around all day, so I need a good compact camera. The problem is I don't like compact cameras; they don't fit in my huge hands, they are slow, don't have a view-finder (I'm quite old fashioned) and the sensors inside them are too small and have too many pixels causing terrible noise and saturation problems. There is however one exception: The Canon G10. It's a bit expensive, at almost £400, but it is made of metal, looks quite old fashioned and even has a view-finder. It still suffers from the noise problems experienced on all compact cameras, but not as badly as most. Unfortunately I'm only about half-way to my goal and my next holiday is looming. Hopefully this review will go some way towards paying for the camera.
Thanks for reading.
ETF Securities is a company that issues Exchange Traded Commodities (ETCs) and Exchange Traded Funds (ETFs) which are an inexpensive collective investment fund, similar to a unit trust, that can be held in an ISA (individual Savings Account). ETFS was one of the first providers of ETFs and calls itself the "global pioneer" of ETCs and has a huge array of possible investment funds ranging from stock-market trackers to commodities, precious metals or even lean hogs.
Exchange Traded Funds or ETCs are an alternative to other kinds of collective investment funds, such as Mutual Funds (in the US), Unit Trusts or Investment Trusts. ETFs are a relatively new invention, especially in the UK, but in the USA there are many hundreds to choose between and the number of available funds is continuously increasing. ETFs are passively managed, either tracking an index or using some sort of screening algorithm to determine the undelying investments. They have the advantage that, as a consequence, they have far lower fees and total expense ratio (TER) than managed funds. i.e. no over-priced fund-manger to pay.
Pros and Cons of ETFs
Exchange Traded Funds and ETCs are very similar to Unit Trusts except the price is quoted continuously through the trading day, like a share or an Investment Trusts rather than just once and there is no real manager, because they simply track an index (or other more complex screening algorithm) using computers, therefore have very low annual fee and small bid/offer spread. This makes them very good for short term trading.
The main disadvantage is you will have exposure to the whole index including badly performing companies or assets, whereas with a managed fund, if the manager is good, you may be able to avoid exposure to the badly performing assets (fund-managers however do not have a good reputation for justifying their fees)
How to Buy ETFs
ETFs are available from any stock broker in the same way you might buy a share, stock or managed fund and can be held in an ISA (although there may be a trading fee unlike when buying a unit trust). They are also listed in many good financial publications such as the Financial Times.
There are now many other companies providing ETFs and ETCs including: iShares Plc (currently owned by Barclays although they are trying to sell it) and Lyxor ETF. They all tend to have low charges, when compared to managed funds, but even so, it may be worth shopping around for alternative similar products, when investing.
What Can You Invest In?
ETFS can be used to gain exposure to: Stock indices such as the S&P, Dow, FTSE etc.; Bond indices in many countries; Commodity Prices e.g. Gold, Silver, coffee; currencies; Agricultural commodities such as lean hogs (ticker symbol: HOGS) The ETFS web-site give a overview of the funds available from them. The majority are quoted in dollars, although a few are quoted in Sterling as well.
ETFs and ETCs are a very good inexpensive way of gaining exposure to investment markets, avoiding the high cost of a team of investment managers and analysts. They are probably slightly riskier and are aimed at more experienced investors who can manage their investments themselves. ETF Securities is a good provider of global ETFs and ETCs with a very good range, albeit with a heavy US investor bias. UK or European investors should also consider other providers such as iShares.
This article is based on my article published on Squidoo: http://www.squidoo.com/investinginexchangetradedfundsetf
I signed up for several review and survey sites about six months ago, partly just as an experiment to see if any of them really did pay enough to make it worth while spending my time contributing to these sites. I have found the review sites (such as dooyoo) quite addictive, whereas the survey web-sites can be rather dull. Surveys do, however, sometimes pay a reasonable amount of money for your time. OnePoll has the advantage that the surveys are often very short and therefore less boring.
Many of the surveys that I get invited to take, from other web-sites, are about business or shopping and take a significant amount of time, perhaps 20 minutes, for £1.50, whereas some of the OnePoll surveys are less than 5 minutes for £0.10. It's still not a good rate of pay, but I can rattle through several while doing something else. Some surveys may even be just one or two trivial questions, such as: "Which of these celebrities would you most like to have dinner with?" although some may be rather longer with just a 5p payment or entry to a prize draw for an iPod Shuffle or Amazon vouchers. Some of the surveys are targeted to certain groups e.g.: women, men over 27, drivers, children under 18, people with pet dogs etc.
Typically I might be offered a few surveys per day, so potentially an income of a of pound or more a week! O.K. When I put it like that it doesn't sound that great. OnePoll does not email you to invite you for a survey. Instead you will need to sign in to the site and check the available surveys. Many of the surveys recently have been about changes in behaviour or spending habits since the credit crunch, shopping and cooking etc.
The minimum payment is £40 which could take months to achieve, even if you check your available surveys every day. Signing up for OnePoll pays an initial fee of £2.50 into the account to get you started (or hooked) I have made about £20.00 already, so just another few hundred surveys and I can claim my money.
You are not going to get rich by answering surveys on OnePoll, although the payment per hour is probably comparable to many of the other, better survey sites, but with far shorter, more trivial surveys. Reaching the £40.00 minimum payout could take months.
Trivago is yet another review site that allows you to make a bit of extra cash from writing. It is an excellent travel web-site offering a reviews of an enormous number of hotels and tourist attractions from all over the world, with a useful search facility. It is certainly a good place to do your research when booking a holiday, but I shall review the web-site more from the perspective of its community and money-making opportunities.
Trivago is rather different to other review web-sites in that they publish the amount of revenue that they have received (from the sale of accommodation via booking partners etc.) during the month, and how much of it you are entitled to. 50% of the money is given back to the web-site contributors and your total number of shares and the resulting estimated payment can be accessed from your account at any time. To receive payment you will need to become a member of the web-site, but you can earn money from a variety of activities other than just reviewing hotels and attractions; uploading photographs, rating review and photos, adding hotels and attractions to the database and other database maintenance also receive payment in the form of "shares" (at time of writing 1500 shares was worth approximately £1.00):
Add a photo to an attraction (about 75 shares)
Rate other peoples' photos (2 shares)
Rate an hotel or attraction review (2 shares)
Add hotels, attractions and external links to other reviews (about 600, 150 and 250 shares)
General web-site administration (various amounts)
Photos are easy to upload, and if you cut down the file size and have a fast internet connection you could upload quite a few in a short time, but you do need to find the appropriate attraction or hotel to add them to first and add a comment and date to each one. Reviews can be briefer than you might publish here on dooyoo, but you could still reuse a review from here. In addition to the text you will need to fill in various forms describing when you were there, the purpose of the trip, food quality etc.
As you gain more experience and more shares, your "job title" will change as you get promoted up the ranks and you will gain extra operations that you are allowed to perform and earn money for. I am a "Holiday Enthusiast" (Level 3), apparently, but the ranks are Sightseer, Excursionist, Holiday Enthusiast, Vacation Pro, Globe-Trotter, Discoverer, Administrator (Levels 7 to 9) The number of shares you earn during the month determines how much of the earned income will be received by you.
There is no fixed number of shares for writing a review or adding a photo etc. and the number depends on it's quality, but could it could be up to about 100 shares for a photo and a lot more for a review or attraction, although rating a photo or review gets you fixed number of 2 shares. The rating is a little strange and complicated in that an initial number of shares is allocated to the review, photo etc. then that number is multiplied by the average rating of the people who review your work, so the number of shares received will vary from day to day until the end of the month when the shares are converted to a payment.
In a typical month you would require about 1500 shares to make £1 so twenty photos or about four brief hotel reviews could gain you £1, but you would need to rate 750 photos or reviews for the same amount.
This is a reasonable way of making money, it's fun and if you have a lot of digital photos easily uploadable to the web-site. The minimum payout is 25 Euros or approximately £24.99 which could take a while to achieve. Payment is by Paypal or Moneybookers and there is a 1 Euro charge.
This review is also published on Squidoo (with a comparison of other sites):
There are many writing communities on the internet, such as Dooyoo and Ciao which concentrate on consumer reviews, but Helium claims to be more of a creative writing community. You can write about almost anything, from vacation diaries and reviews to financial advice, politics or write about your favourite hobbies and in exchange you will receive payment depending on the popularity and quality of the review, additional bonuses and prizes. In reality many "reviews" written for Dooyoo could also be published on Helium; I started writing on Helium a few months ago (under the name of AndyPo) as a way of reusing some of my articles from dooyoo and Ciao, rewriting them to suit titles currently available on the Helium web-site. It is also possible to request a new title to be added to suit an article you have already written or intend to write.
Joining a writing community like Helium should be a good way to practice, get feedback on your writing and improve your style, although there isn't that much of a community and very little feedback. After submitting an article you are immediately redirected to a reviewing page to allow you to rate other articles which appear in pairs and you have to choose which is better. Your score as a writer is measured in stars and you must also maintain at least one "rating star" to continue receiving payment for any traffic to your articles for which you must rate at least ten articles every 30 days.
For reasonable earnings you will need to write a lot of articles, but they then stay there gaining royalties and you don't need to do anything apart from rate enough other articles to maintain at least one rating star. The higher the quality and the more traffic, the more you earn. This initially will not make a huge amount of money for each articles, but the revenue will build up and there is also a "Market Place" where you can compete to write articles for other publications for much larger amounts of money (e.g. a few hundred dollars, if you win the contract) You can also enter your writing for regular competitions. My most lucrative articles have made about $0.20 each month from being read and I have also received a few $1.00 "Adjustments"
The amount of payment does vary, but currently appears to be $0.01 each time one of your articles is read, which is rather less than dooyoo, although dooyoo only pays each time a member reads your articles, whereas Helium pays when anyone reads the article, so theoretically you could earn significantly more by promoting your work externally e.g. Twittering your articles repeatedly or asking all of your Facebook friends to read your work. In addition to this there is a $1.00 payment for any articles written for titles that haven't yet been used. The minimum payout is $25 which could take a while to achieve. The earning may seem low, per article, but the lack of community to interact with and no requirement to review other articles to promote traffic to yours, means that you may spend very little time submitting and maintaining each article. If you are already active in the dooyoo community and don't want yet another community to interact with, then the unfriendliness of the Helium site may be a bonus.
Corporate bonds do look too good to be true at the moment, with bonds issued by large solvent companies paying 6% or more with a good chance of a capital gain as well. Usually this should cause concern, but the main reason for this is that bonds have been sold off by hedge funds because they need cash to remain solvent and bonds are easier to sell in a market like this. While stock markets have suffered during recent economic turmoil, bond markets have been more secure. They have not been immune to the banking troubles, but should be far more resilient to further trouble.
What are they?
Corporate bonds are IOUs issues by companies when they need to raise cash. They are an alternative source of finances to shares, but instead of then owning part of the company and sharing the profits (which is fairly risky) with a bond you are promised your money back on a certain date with a regular fixed interest payment or "coupon" (originally called that because the bond certificate had coupons attached that could be torn off and redeemed on certain dates) Good solvent companies will pay the coupons and the original sum. The main risk with bonds is that if a company becomes insolvent it may default on their payments.
Bonds can be traded after they have been issued and may have a value above or below the issue price so the coupon (yield) may be more or less than the original published yield and you may make a loss or gain if you hold to matturity. The Gross Redemption Yield is the effective percentage yield you will get if you do hang on to them until expiry (This value is available in financial publications and web-sites) The value of the bond depends on how the apparent solvency, credit rating and bank interests rates have changes since issue
Reducing the Risk
A simple rule of investing states that the higher the risk of an investment the higher the return. This is the Risk Premium: The amount you get paid for taking the extra risk. So if you want to make lots of money you need to take more risks. It is however possible to reduce the risk, without reducing the return, by building a balanced portfolio. The risk of buying a single bond (or share) is high with many possible unknown influences on the price. Buying two bonds results in some reduction of risk because a drop in one price may not affect the other one adversely. Many bonds are highly correlated to each other, so having two bonds in the same field (e.g. BP and Shell) does not reduce the risk as much as two bonds in unrelated industries (e.g. BP and Lloyds) Mixing bonds with other asset-classes will also improve volatility of the over-all portfolio (e.g. mixing shares, bonds, property and gold bars)
Individual bonds can be purchased via a broker, in the same way you might buy shares, stocks etc. or you can buy bond-funds, unit trusts, investment trusts or ETFs (or Zero Dividend Preference Shares which are a more obscure bond-like alternative) To diversify risk, as described above, you need exposure to a range of different bonds; if you want to buy many bonds in a relatively small portfolio you would incur a lot of charges from your broker. For instant exposure to bond markets ETFs (exchange Traded Funds) provide low cost exposure to whole markets or sub-sets of bond markets. For a managed, diversified exposure use unit trusts etc. which have higher charges (typically above 1% annual charge) iShares issue a UK corporate bond-tracker EFT (symbol SLXX) which has very low charges and gives a good exposure to UK corporate bonds, although this does include a lot of financial industry bonds (banks etc.).
Government bonds pay out a defined sum every year (The "coupon") and a final sum on maturity on a predefined date. The income and final payment is predictable and governments of stable countries rarely default on their payments. Corporate bonds are similar and bond holders will always be paid first, before share-holders (but after any bank debt is paid), even if the company gets into financial trouble, but the health of a company's finances must always be taken into consideration.
Governments and corporate bonds are rated by rating agencies (Moody give ratings: Aaa to B3 and S&P and Fitch give AAA to CCC-) to indicate the chance of default. A bond rated at AAA or Aaa is extremely unlikely to default, AA/Aa1, A/A2, B/Ba2 or CCC/B3 are increasingly more likely to. Low rated bonds (rated Ba1 to B3 or BB+ to CCC-) are often called high-yield, Sub-investment grade or Junk bonds; the coupons are high to compensate for the chance of default. Higher rated bonds with low chance of default are called "investment grade bonds" (Aaa to Baa3 or AAA to BBB-) Corporate bonds, in general, pay a higher yield depending on the perceived quality of the company.
A simple rule of bond investment: When bank interest rates go down bond prices generally go up because the income from a bond is fixed so the income seems more attractive. How much the price goes up or down is determined by the "duration" of the bond. This is also a measure of risk of the bond; the longer the duration the riskier the bond.
Here's some maths, but ignore this if you prefer - the value of the Modified Duration is often published for each bond or fund, so knowing how it is calculated is not important
The duration concept was developed by F. Macaulay
Macaulay duration = SUM((PV(Cash Flow).t/P0)
(PV(Cash Flow) = the present value of cash flow to be received at time t
P0 = current price of the bond
Modified Duration = Mac_D/(1 + r)
r = yield to maturity
Investing in individual corporate bonds is fairly risky in that the company could default or go bust, so a portfolio of bonds would help to reduce the risk or better still a managed bond fund (e.g. an exchange traded fund or ETF, mutal-fund, unit trust or OEIC) Unfortunately these do no have a defined end date, but they will have an average "duration" value published, just like any bond, which defines the weighted-average amount of time for the bond or fund's cash-flows to be received by the investor (i.e. how long before half of the total payout - coupons and redemption value - is received) Choosing an ETF with a similar duration to your ideal individual bond would give a similar effect. The lower the duration the less risky the bond or fund and the lower the sensitivity to the bank base rate - as bank base-rate goes up generally the bond-price goes down and vice versa:
Change in Bond-Price = -(Duration) x (Bond Price) x (Change in Bond Yield)
or more forally: dP = -(ModD)(P0)(dr)
Zero Dividend Preference Shares behave like a zero coupon bond which makes them far easier to use: no complicated duration calculations to worry about because all of the payout is at the end on the predefined end-date.
Corporate bonds are paying historically high yields at the moment, many times higher than you can get from a bank deposit account, but with the possibility of capital gain as well. There are of course risks, but the current price of many bonds would imply a very high rate of insolvency, higher even that during the 1930s. This is of course possible, but seems unlikely (although the current economic situation seemed unlikely to many people a couple of years ago) Blue chip shares are also paying a high dividend at the moment, but dividends can be cut with very little warning. With the government starting it's Quantitative Easing this week (i.e. buying billions of punds worth of Gilts and corporate bonds) this may be an excellent opportunity to buy.
This article was also published on Squidoo: http://www.squidoo.com/investinginbondsgiltsgovernmentcorporatedebt
I have an addictive personality. I gave up alcohol once. It was the worst eight hours of my life, but giving up Dooyoo is even worse. I have tried giving up or cutting down on several occasions. Giving up Ciao was far easier (I have given up several times, although I'm back again now) because of the way the payment system works; Ciao pays any amount over £5 at any time, whereas Dooyoo pays exactly £50 whenever you reach that threshold. Each time I reach £50 I request a cheque then next time I check the account I find 50p in there again, so I have to earn another £49.50 to get my hands on that 50p. Is that addiction or am I just very mean? O.K. I could request a £10 Amazon voucher instead of waiting for my £50 cheque, but I like real money.
The community at Dooyoo is particularly good, so if anyone leaves a comment or reads and rates one of my reviews I always want to reciprocate, but I do find that I spend far too much time here; far more than I ought to. Receiving a single email each morning, from Dooyoo, telling me which reviews have been rated is also a problem in that it means the first thing I have to do each day is check my Dooyoo account and this can take half an hour or more. From Ciao I receive an email each time someone rates my reviews, so I don't need to process them all in one go and I can reply to each one in turn, whenever I get some free time. Of course this does result in a rather full email inbox.
There are many other addictive community web-sites, such as facebook and Myspace which don't pay, but also www.trivago.co.uk, the travel review site and Squidoo which do pay. I rarely check my Facebook, MySpace or Trivago accounts these days, but Squidoo is every bit as addictive as Dooyoo. Dooyoo is one of the best paying review sites, but we obviously don't do it just for the money, because it doesn't even pay minimum wage, if you include the time spent reading and rating reviews.
Dooyoo is addictive, but I think I've got it under control. I better do some work now.
I have several Lacie external hard-disks attached to my Apple Mac computers and have mostly found them to be reliable, quiet and fast, until a few weeks ago when one of them (a 500GB Porsche designed one which I purchased about 18 months ago) failed. I needed a replacement and after quite a lot of research decided to risk buying a Lacie again.
This is an inexpensive 1TB disc in a stylish compact case: 4.6 x 7.6 x 1.8 inches, which is actually slightly larger than the previous Porsche designed models, so it doesn't stack neatly with them. The power-supply is separate and the case has no cooling fan. The design is very simple and neat with a fairly robust looking case and a shiny black finish. The power switch and connections are at the rear and a strip light runs along the bottom of the case, at the front, giving an interesting blue glow from underneath. This would not look out of place in a lounge, attached to a HiFi or home cinema system. I was impressed with the styling and apparent quality, when I took it out of the box, but by the time I had plugged it in, the case was covered in dust (O.K. maybe I should have cleaned my desk before I started installing it) which shows up very well on the shiny black surface. I am also not sure how resilient it will be to scratches. The most important thing however is how robust the disk inside is, which I have yet to find out.
Connectivity and compatibility
The disk-drive has just one USB 2.0 interface. All of my other Lacie drives have FireWire, which was much faster than USB 1.1 (400 Mbps versus 12 Mbps), but USB 2.0 is actually faster (480 Mbps) and seems to be becoming the industry standard because it is cheaper to implement. Firewire800 is faster still at 800 Mbps but is rarely used. Firewire has the advantage that it can be daisy-chained (e.g. several disks pluged into one FireWire port) whereas USB is hub-based requiring a USB port for each disk.
What do you get in the box:
LaCie Hard Disk, a USB 2.0 cable, an external power supply with both a UK and a US power cable, a Quick Install Guide and LaCie Utilities already preloaded on the drive (User Manual, LaCie '1-Click' Backup Software for Windows & Mac, LaCie SilverKeeper Backup Software (Mac), LaCie Setup Assistant)
Is it any good?
This disk-drive is billed a being quiet (fanless), stylish and fast all for an affordable price. It is certainly inexpensive (I paid £87 from Amazon and it will probably be even cheaper now) It doesn't have a fan, so there is no fan-noise, but the disk itself is fairly noisy. It probably wouldn't be annoyingly loud in a lounge home cinema or HiFi situation although would occasionally be audible. In an office it would be quite acceptable. Obviously the speed of the device is not just down to the speed of the interface used, but using my newish macbook I would guess that it is about as fast as the other Lacie disks, using FireWire (I haven't done accurate speed tests) My old iMac only has USB 1.1 which of course would have been painfully slow, but I have not been able to make that work, yet. This is probably because the old iMac has an old version of the Mac OS X 10.2 so I would probably need to reformat the disk or instal a later version of the OS to make it work, which I won't bother trying.
Ease of Use
This really is a "plug and play" device. I took it out of the box, plugged it in, turned it on, followed the simple on-screen setups menu, using the default setting, which took about a minute. After that it was simply a case of clicking on the Lacie icon on the screen to access the disk drive in the usual way. Unfortunately when I then unmounted it and tried plugging it into my old iMac (as described above) it wasn't recognised, although it does clearly state in the specification that only OS X 10.3 and later are supported. It took about 7 hours to backup nearly 1TB of data from four of my other disks although if I had done it using USB 1.1 it would have taken a week.
Capacity : 1 TB
Hi-Speed USB 2.0
Rotational Speed (rpm) : 7200
Cache : 8MB
Transfer Rate : Up to 480Mbits/s (60MB/s)
Burst Transfer Rate : Up to 30-35MB/s
Fan : Fanless
Size : 4.6 x 7.6 x 1.8 in. / 117 x 193 x 45 mm
Weight : 33.5 oz. / 950 g
System Requirements : Computer with USB 2.0 (USB 1.1 compatible); Windows 2000, Windows XP, Windows VistaTM
Mac OS X 10.3 or higher;
Pentium II 350MHz processor or greater
G3, G4, G5 Mac Intel processor or greater;
32MB RAM minimum
A good inexpensive back-up disk, which looks good if you dust it regularly and should be compatible with most new computers (although if you have Apple Mac OS X 1.2 or older it won't work straight out of the box)
Also published on Ciao.co.uk