Top Investment Mistakes People Must Avoid

Top Investment Mistakes People Must Avoid

Introduction: What is investing?

Most people make investment mistakes because they fail to understand what investing is. Investing can be defined as the practice of putting money into activities that generate more money. The main purpose of investing is to make profits and/or generate material results. You can put your money in financial schemes, buy shares, property, etc. Such activities equate to investing.

Investing is crucial because it’s the best way of ensuring your money works for you. To become financially independent, you need to find activities i.e. investments that generate money for you. In fact, it’s very hard to become rich without investing your money. Many people understand this fact so, why is it so hard to become rich? Well, here are the top investment mistakes most people make.

1. Following investment trends blindly

This has to be the most common investment mistake you must avoid. Many people tend to copy other people’s investments without doing their own research. This mistake is catastrophic. Although picking suitable investments is a daunting task, you should never copy someone else’s investments. Investigate and find out if the investment in question is viable according to your own research. Investment trends may appear lucrative at first glance. However, you must do your own research before committing your hard earned money. Your success as an investor is highly dependent on the accuracy of the information you use to make investment decisions so, research thoroughly before following investment trends.

2. Poor goal setting/planning

Most people also tend to set poor investment goals or lack investment goals altogether which is detrimental when it comes to measuring investment success. For instance, you should know why you are investing, how long you want to invest, the risk you should take, when to take profits, etc. Goal setting is very important when investing since investments undergo cycles. The stock market for instance rises and falls with time. Without clear goals/plans, you can’t be able to know when you should liquidate your stock holdings. In such a case, you might return all your gains to the market. In a nutshell, the investment you choose must serve your purpose for investing, and the best way of ensuring your investment purpose is served is to have clear goals.

3. Focusing on current performance of investments

This is another top investment mistake you must avoid. Most people fail as investors because they focus on top performing investments. Although it is possible to make money by investing in something that is currently doing well i.e. stocks, it’s not always a good idea. The best/highest returns are enjoyed by investors who identify lucrative investments before everyone else. In simpler terms, most people fail in investing because they focus on the present instead of the future. You must learn to identify investments long before everyone else otherwise you will enjoy average gains like everyone else. As a result, the future prospects of any investment are more important than the current performance.

4. Investing in the short-term

You should also avoid short-term investment approaches since such approaches never offer significant gains. Investments hardly offer significant returns in a year or two. Unfortunately, most people are in a hurry to reap returns. The importance of practicing patience when investing can’t be overlooked. If you do your research, set clear investment goals and focus on the future, you shouldn’t have a problem picking great investments that are bound to reap you good returns in the future. In fact, you won’t be required to do much once you make lucrative investments. You just need to wait for years to reap big. Think long-term i.e. 5-20+ years.

5. Poor risk management

Many investors also fail because of poor risk management. You should never take too much risk or uncalculated risk when investing. For instance, you shouldn’t invest all your money in one investment since there’s always a risk factor in investing. To avoid being destroyed financially when your investment fails, spread risk by investing in different things as opposed to one thing. You should, however, avoid diversifying too much since such a practice tends to dilute returns. If you are investing using a loan, makes sure you can afford to pay for the loan comfortably whether your investment succeeds or not.

Emerging Money Trends: What You Should Know About Mobile Money

Emerging Money Trends: What You Should Know About Mobile Money

One of the most popular emerging money trends today is mobile money.

Definition

Mobile money can be defined as an alternative method of sending and receiving money. Instead of using cash, credit cards or cheques, mobile money utilises a mobile application and a phone number acts as a bank account number. Consumers are able to use their cell phones to send and receive money as well as access a variety of financial services including loans. Below are interesting facts you should know about mobile money.

Developing countries are leading the way

The mobile money concept is most popular in developing nations with Kenya leading the way. According to the latest statistics, over 90% of all adults in Kenya use mobile money services. Mobile money is also popular in other developing countries like Uganda, Tanzania, and Zimbabwe. Outside Africa, the concept is most popular in Bangladesh and Pakistan. Developing countries attribute the popularity of mobile money to the scarcity of traditional banking services.

In fact, the United Nations among other international bodies have extended their support for mobile money services in developing countries because mobile money addresses financial inclusion problems. The trend is perfect where traditional banks can’t reach. As mobile money services evolve, the trend will easily spread globally serving other purposes besides financial inclusion i.e. to offer financial services more conveniently.

The major setback is agent liquidity

Mobile money services such as sending and receiving money require intermediaries (agents). To use mobile money applications like Kenya’s M-PESA, you must visit an agent to deposit or withdraw money. Although mobile money agents are readily available in developing countries, most lack the liquidity to handle large transactions.

Mobile money services usage varies

Mobile money allows customers to execute numerous transactions ranging from buying airtime to paying for goods and services. Person-to-person payments and airtime top-ups are the most popular mobile money transactions in developing countries. Bill payments are however catching up as the most popular mobile money services in South Asia.

Mobile money is largely cash-based

Contrary to popular belief, mobile money services are largely over-the-counter cash transactions. This may be surprising but true. As mentioned above, most transactions are facilitated by agents. Before you can start transacting, you must load money into your phone. To receive hard cash, you must visit an agent to withdraw. Although it is possible to send money from your phone to your bank account and vice versa, most transactions are still cash based. This will, however, change with time as mobile money services continue being connected to mobile wallets.

Top benefits of mobile money

Mobile money services attract a lot of benefits the most notable being;

1. Unmatched convenience: There are more people in the world with mobile phones than there are people with traditional bank accounts. Mobile money allows people to enjoy banking services anywhere, anytime. You never have to travel to a bank and queue to perform basic banking transactions. Since your mobile number is your bank account number, your phone is your bank.

2. Financial inclusion: Mobile money solves a very common banking problem i.e. financial inclusion. For many years, many people especially those in the developing world haven’t been able to access traditional banking services. Since there are more people with mobile phone globally today, mobile money bridges important gaps by ensuring everyone enjoys basic financial services.

3. Affordable financial services: Mobile money has brought the cost of banking services down. By creating competition in the banking sector, mobile money providers have been able to force banks (especially those in developing countries) to lower transaction fees charged on major services.

Fast, reliable and safe: It takes a few seconds to send or receive money using your phone. Mobile money is also reliable given the fact that it relies on cellular coverage. Mobile money is also safe given the fact that it eliminates the need to handle/carry physical cash. As long as users safeguard their PIN. No. Mobile money remains one of the safest emerging money trends today.

Hard Brexit vs. Soft Brexit: What Does It Actually Mean For The UK?

Hard Brexit vs. Soft Brexit: What Does It Actually Mean For The UK?

British PM Theresa May has finally confirmed that Britain will begin formal Brexit negotiations in March 2017, a process that is expected to last for two years. This comes after months of being reluctant to give a confirmation on the same. The confirmation has however elicited speculation on the kind of relationship the UK intends to develop with its partners after Brexit. According to speculators, the UK has two main options dubbed Hard and Soft Brexit.

What is Hard Brexit?

As the name suggests, a Hard Brexit would be a post-Brexit arrangement whereby the UK takes hard-line positions on migration and EU jurisdictional issues. A Hard Brexit arrangement likely results in the UK giving up full access to customs union with the European Union as well as full access to the EU single market. A Hard Brexit arrangement is likely to focus on giving the UK 100% control over its borders. The UK would also have the freedom to make new trade deals as well as apply laws (within its territory). This arrangement has both pros and cons.

Hard Brexit pros

The UK stands to become a global trading nation in a Hard Brexit arrangement. This is according to Liam Fox, International Trade Secretary. Many global business leaders have also expressed similar sentiments. Many global business leaders agree it is better for the UK to have hard Brexit arrangements that work fully than having arrangements that need to be renegotiated or are uncertain. A hard Brexit arrangement is expected to remove all uncertainties that have surrounded key issues on trade and immigration.

Hard Brexit cons

Although a Hard Brexit is expected to have more pros than cons in the long-term, Hard Brexit arrangements on trade and borders could see the price of British goods and services increase resulting from new tariffs. When the UK executes a full Brexit, the cost of goods such as exported cars may increase slightly stiffening competition. Sectors like agriculture also stand to be affected when the UK loses protections on cheap agricultural imports from abroad.

Bureaucratic checks may also increase when the UK leaves the customs union. It will be harder for UK goods to pass through airports and ports in the EU. Considering some countries i.e. the U.S. have given the EU priority in regards to new trade agreements made post-Brexit, the UK is likely to be on the losing end. It is, however, worth noting that Hard Brexit cons can easily be gotten rid off if the UK purposes to negotiate exceptionally. It will depend solely on the final Brexit negotiations and deals signed by the UK and its partners in the next two years.

What is Soft Brexit?

As the name suggest, a Soft Brexit arrangement would be a post-Brexit arrangement whereby the UK takes a softer stand on key Brexit issues. For instance, a Soft Brexit arrangement is likely to see the UK leaving most of its relationship with the European Union intact with very little to no drastic changes. In a Soft Brexit, the UK would, of course, seize being an EU member but maintain access to the single market.
In regards to trade, a Soft Brexit would see the UK continue to trade with EU states on tariff-free basis. Britain would also remain in the European Union’s customs union eliminating the need for border checks. In a nutshell, Britain would be expected to enjoy arrangements similar to those of countries like Iceland and Norway that are not EU members but enjoy single market access given the fact that they are part of the EEA (European Economic Area).

In return, Britain would be expected to continue accepting freedom of movement of people, goods, service and capital from the EU and be subject to some EU laws as is the case with current Switzerland and EU treaties.

Soft Brexit pros

A Soft Brexit arrangement will maintain the most important UK-EU connections i.e. on trade and borders reducing long-term Brexit risks that the UK hasn’t anticipated. A Soft Brexit is expected to eliminate many economic uncertainties eliminating unnecessary shocks.

Soft Brexit cons

Many people argue that the UK won’t reap the full benefits of Brexit through Soft Brexit arrangements. Some experts argue that Soft Brexit arrangements are a continuation of past arrangements. Nothing will change for the better. Furthermore, there are no negative effects being felt since Brexit as earlier anticipated. In fact, things have improved since the final Brexit vote was cast according to many global institutions including the Bank of England.

Payday Loan Fraudster Used Tinder to Lure and Fleece Women of Thousands

Payday Loan Fraudster Used Tinder to Lure and Fleece Women of Thousands

30-year-old fraudster Jonathan Frame used Tinder, a popular dating application, to lure and fleece lonely women. The Swinton conman would meet lonely women, steal their identity and then run up debt in their names. He would use the stolen personal information to take out payday loans as well as apply for credit cards and overdrafts according to a Manchester Crown Court hearing.

Frame would go as far as rifle through the mail of his unsuspecting victims,  set up fake email accounts and even call up lenders on behalf of his victims to get credit cards activated. In such instances, he would lie that his girlfriend at the time was deaf.
Frame spent part of his proceeds on designer clothes and restaurant meals with his unsuspecting victims. He was also ”kind” enough to buy his victims expensive gifts with part of the money.

During his 1st February 2017 Crown Court sentencing, Frame pleaded for a suspended jail
sentence claiming he had an honest job at a high-end street store. His plea, however, fell on deaf ears as presiding Judge Michael Leeming ruled that community punishment wasn’t an option since fraud was what Frame did for a living.

Frame has been jailed for one and a half years. He admitted to fraudulent offences amounting to £6,990 against two women he met in 2014 on Tinder. During his sentencing, one of the women he fleeced told the Crown Court she had contemplated suicide because of Frame’s actions. The other woman confessed to being scared of dating in the future.
Frame fleeced his first victim £6,221 in a record seven weeks. The woman is liable for the debts accumulated under her name despite being unaware of what was going on. This is because she shared personal details with Frame. The woman fell for Frame’s charm as well as his persuasive nature. She confessed to thinking Frame loved her genuinely, so she trusted him and gave him access to her house and car. Frame used this access to intercept her post and facilitate the fraud.

According to the woman, Frame has ruined her life. She also feels betrayed and doesn’t expect to live debt-free until she turns 31 in 2022. She also expects to struggle securing
a mortgage given the debts she has accumulated. She was just 23 years old when she met Frame. Frame targeted his second victim shortly after fleecing his first victim. His second victim discovered Frame was a fraudster when he left one day for good. She was fleeced of £569 in 13 days.

This is not the first time Frame is finding himself on the wrong side of the law. Frame has been convicted for 21 offences previously mainly for fraud, theft, and far-dodging. The offences date back ten years. In his latest case, Frame’s barrister Paul Hodgkinson defended his client claiming he was genuinely interested in the relationships with his victims despite the impression that he was out to con lonely women. Hodgkinson went ahead and stated that Frame was apologetic for his actions and was only keen on impressing his partners. Judge Michael Leeming wasn’t convinced of Frame’s innocence resulting in an 18-month jail term for the payday loan fraudster.

What is the Future of Money? Can We Live Without it?

What is the Future of Money? Can We Live Without it?

To understand the future of money, we must take a step back and understand the history of money. Before money, there was barter trade which was simply exchanging goods for goods. Barter trade had obvious challenges. For instance, it was hard dividing some goods or agreeing on how to measure the value of certain goods against other goods. Given such challenges, it is clear why money became more popular than barter trade.

Since the beginning of civilisation, the nature of money i.e. as a store of value and medium of exchange remained unchanged until 1944 when the Bretton Woods Conference took place. During this conference, many countries agreed to tie their currencies to the United States dollar as opposed to precious metals like gold and silver. When the United States withdrew from the gold standard (in 1971), all currencies became fiat money i.e. money which derives its value from the government that issues the money.

Fiat money has presented many problems over the decades. For instance, Fiat money can be controlled by governments via central banks when they increase or decrease supply. This has presented a huge problem paving way for digital currency. The biggest underlying issue with Fiat money is trust.

Digital currency

Digital currency aims to solve the problem of trust. Digital currency gets rid of intermediaries in the money chain i.e. the governments and banks. There is no central bank which can increase or decrease the supply of Bitcoins at will. Digital currency also introduces ”unforgettable” digital signatures which are distributed instantly and ubiquitously making the currency a perfect alternative to fiat money. Such digital currencies are known as cryptographic currencies.

A perfect example of cryptographic currency is Bitcoin. The currency is not only secure but works perfectly since payments are processed automatically. Bitcoin also works via a digital ledger which is widely distributed. Bitcoin also works extremely well in regards to storing value. Unlike fiat money which can be printed by governments against the best interests of citizens, Bitcoins can’t be printed into existence. They are acquired by solving complex mathematical problems through a process called mining.

Unlike fiat money supply, Bitcoin supply is also capped making it impossible for an inventor to create an unlimited number of Bitcoins. Ideally, cryptographic currency solves most problems faced by Fiat currencies today including trust issues introduced by governments and private banks. Cryptographic currencies are controlled by algorithms (instead of humans) hence their intuitive appeal.

Facilitating transactions

Since money is crucial for facilitating transactions, the future of money can be seen in the currency that is most likely to facilitate transactions of the future. As more transactions move online, Cryptographic currencies are expected to become increasingly popular. Bitcoin has been tested and proven to facilitate online transactions better than MasterCard and Visa in regards to cost and security.

As mentioned above, cryptographic currencies utilise widely distributed ledgers making them resistant to security attacks compared to centralised institutions like banks. Bitcoin transactions are also instantaneous so they attract lower fees. Moving forward, cryptographic currencies are the best suited for handling transactions in the future.

Democratisation of finance

Fiat money has centralised power into the hands of governments and central banks for a long time. The model appears to have worked well however, there are obvious drawbacks which are evident now more than ever. It’s clear than the fiat money system is controlled by a few bankers, the government, and regulators. As more people begin to discover the systemic challenges of regular currency, a revolution in financial world is eminent.
Cryptographic currencies will make finance more democratic by removing power from a select few and hand it over to the masses. Cryptographic currencies are highly decentralized making them more secure and functional compared to anything we have ever seen before. With payment systems like PayPal which make it very easy to accept electronic online payments, the future of money is in digital currency more so, cryptographic currencies.

Setbacks

Cryptographic currencies have setbacks to. For instance, Bitcoin has suffered from speculative bubbles proving it’s not the perfect currency for storing value. However, Gold has suffered the same setbacks so, currencies will always be vulnerable to speculation. With that said, digital currency is the future of money.

How Can You Protect Your Online Identity from Fraudsters

How Can You Protect Your Online Identity from Fraudsters

Identity theft can be defined as any crime, scam or deception that causes the loss of personal data such as; credit card numbers, banking information, usernames, passwords, etc. that are then used to commit fraud or any other crimes. Online identity is very common in the UK today as well as many other places. Identity theft is, in fact, the most common crime online today. Identity theft causes serious problems. Besides losing your hard earned money, identity theft can also damage your reputation causing other problems such as a poor credit score. You can even lose job opportunities when your identity is damaged online since most companies conduct thorough checks online before they employ people. If your personal information has been used to commit crimes online, your chances of getting a job are very slim. Clearly, identity theft is a serious problem. Considering you have to use your legal name and credit cards among other personal details online today, how can you protect your online identity from fraudsters?

1. Keep your computer and Smartphone security software up-to-date

Since using computers and Smartphones is inevitable today, you must go out of your way to ensure you have installed the best/latest/updated security software always. This tip is very effective but commonly overlooked by most people. Identity thieves exploit outdated security software in computing devices and plant malicious software that steals all kinds of personal information. The importance of investing in the best security software can’t, therefore, be overlooked. Although most people focus on installing the best security software on their computers, you should do the same with your Smartphone if you use it to transact online or engage in any other activities capable of compromising the security of your identity online.

2. Use strong passwords/change your passwords regularly

This is another obvious but commonly overlooked tip for protecting your identity from fraudsters. There are very sophisticated programs today that are capable of cracking passwords so, it’s important to think hard before you set a password. Although it can be a daunting task setting different passwords for every single activity you engage in online, it’s highly advisable to do so for security reasons. Never use the same password twice. Your passwords also need to be long (more than 10 characters) including a mix of uppercase and lowercase letters, symbols, and numbers. The password you use should also exclude your personal information such as your date of birth, age, legal name, etc. You should also change your passwords regularly.

3. Be vigilant (learn how to spot/avoid fraudsters/suspicious activity online)

You should also be on the lookout for fraudsters. If you’ve used the internet for a while, you should be aware of common fraudulent activities online. Ideally, you should be on the lookout for anything that doesn’t feel right. For instance, never click on unsolicited emails/links. You should also ensure you login to secure websites only. Secure websites are labeled nowadays when you check the address bar so it shouldn’t be hard verifying if you are logging into a secure site. You should also avoid clicking on pop-ups or registering for free products/services using your official email. It’s also advisable to avoid accessing sensitive online accounts using public computers since such computers tend to have malicious software. It’s also advisable to buy things from reputable websites only.
You should also be on the lookout for common signs of online identity theft like; inaccurate information on your credit report or receiving new credit cards you haven’t applied for. Exercising vigilance constantly when using the internet is very important since fraudsters are constantly looking for ways of scamming unsuspecting internet users. If you don’t know much about online fraud, start researching today.

4. Never give your personal information to anyone online or offline before you verify their credentials

Identity theft can take place offline when you give personal information i.e. your name, address, email, phone number, bank details to anyone or organisations before you verify their credentials. Although it usually takes plenty of time and effort to verify the credentials of every single organisation or person you give tour personal information, it’s worth the trouble.

Summary

Protecting your identity from fraudsters is very important today given the fact that almost everything is done online today. Most people do their banking online, correspond online, interact online, buy things online, etc. Considering the internet has become part of our daily lives, the importance of protecting your identity can’t be overlooked. You are bound to waste time and effort implementing the measures discussed above. However, it’s better to be safe than sorry. Effects of online fraud i.e. poor credit scores can prevent you from getting loans or cause you to pay high interest rates for payday loans among other types of short term loans. You also stand to lose money and job opportunities if you don’t take measures to protect your personal information online.

National Living Wage Rises To £7.50 in April 2017: How Will It Affect Small Businesses?

National Living Wage Rises To £7.50 in April 2017: How Will It Affect Small Businesses?

The UK’s national living wage will increase by 30% to £7.50 starting April 2017. The increase is expected to benefits millions of workers aged 26 years and above. The minimum amount of money earned by British workers before tax will stand at £11,500 as a result of the increase. Workers aged 25 years and below are expected to get smaller increases. The national living wage increment came as a surprise to most employers. Here’s a summary of how the increase is expected to affect small businesses.

Burden for small businesses

The new national living wage rate is bound to increase the cost of doing business for small businesses. The new rate is expected to force small businesses to reduce their workforce and focus more on productivity. In a nutshell, the new rate is expected to reduce the number of jobs available in the small businesses sector. According to recent surveys done by recruitment firm Manpower, employers have plans to scale back their recruitment plans.

Businesses which have responded on the issue i.e. Costa Coffee plan on transferring the burden to the consumer. This simply means that the cost of goods and services produced by small businesses in the UK will increase. Some businesses have also indicated their preference for younger workers going forward in an effort to bypass the new legislation.

Employers are also expected to make contractual changes to deal with the uncertainties introduced by the new legislation. The contractual changes are expected to help employers gain back some of the control i.e. on what they pay their workers. For instance, some employers are already making contractual changes on bonus payments among other employee benefits. The impact of such contractual changes is expected to increase the number of disgruntled employees introducing other problems i.e. low productivity. Employers should also brace for legal battles as employees contest such contractual changes.

Employee relation issues are also expected to increase as employers take counteractive measures i.e. increase supervision to boost productivity. In a nutshell, small businesses are expected to take up a huge burden as they try to boost productivity as opposed to taking unfavourable measures such as raising prices. In some cases, small businesses will be forced to raise prices which may increase competition and in turn, reduce profits.

Terminology issues

The new rate is also expected to introduce confusion with other wage rates such as; the Living Wage Foundation rate. Small business owners need clear explanations for the new rate to retain integrity.

Neutral effect

Although any increase in national wages tends to do more harm than good for small businesses, the benefits of compliance may neutralise the negative effects. If employers who pay the official rate get accreditation among other notable benefits that allow them to boost profitability, the new rate can have a neutral effect. The national living wage rise could also have a natural effect if the increase in cost is passed on to the shareholders of small businesses in the short term.

Benefits

The new national living wage rate offers some benefits as well. Besides introducing an unnecessary burden to small businesses among other problems like terminology issues, the new rate stands to make accreditation more attractive for businesses that want to gain competitive advantage through differentiation.

Small businesses also stand to benefit from increased productivity. Employees are also less likely to look for other jobs given the increase. This will, in turn, lower recruitment costs. Small businesses are also expected to reap the full benefits of training/investing in their staff.
It’s also worth noting businesses stand to get help. According to George Osborne, businesses will get corporation tax cuts by 2-18% to counteract negative effects of the new rate on profits. Small firms also stand to enjoy exemptions like paying national insurance on staff employed full time.

Summary

The national living wage increase will affect small businesses positively and negatively. The extent of the positive or negative impact is, however, dependent on emerging details as well as how small businesses plan to react. Small business owners who plan early stand to avoid most (if not all) negative effects.

Cash Converters Reverses Losses with Payday Loans

Cash Converters Reverses Losses with Payday Loans

Australia’s leading retail Pawn Broking Company, Cash Converters has returned to profitability thanks to
payday loans after suffering multimillion-dollar losses in 2015. The fortunes of the company have been
turned around by the current online payday lending boom in Australia.
Cash Converters is popular for its bright-yellow pawnshops. The company shifted its business strategy
from traditional pawnbroking to profit from the millions of Australians looking for fast loans online. Cash
Converters plans to retreat from Britain and expand its network in Australia’s fast-growing online lending industry.

The company decided to change strategy after its share price plummeted 50% in 2015 following legal
amendments made in the UK payday loans sector.
According to Cash Converters MD Peter Cumins, the company will focus on Australia’s payday loan
industry where it is already a dominant market player. Cumins is convinced that Cash Converters has the
greatest chance of enjoying sustainable profitability in Australia. He plans on making payday loans an
integral part of the Australian financial sector by delivering high-quality financial products and services
while observing the highest standards of compliance.

According to Cumins, Australian government statistics show that Australia’s short-term lending market is
growing and the range of Australians accessing short-term loans is also broadening driving demand for online loans sophisticated lending products.

In the six months ending December 2016, the total value of Cash Converters’ payday loans increased by
62% to $8.2 million. The company’s online personal loans book grew by 42% to $44.6 million. Cash
Converters isn’t the only payday lender doing well. Money3 is also set to announce impressive results
and enjoy tremendous growth in 2017. The company has already bought online lender, Cash Train
which has already boosted the company’s online loans book by $7 million.

Besides selling its British stores, Cash Converters is also planning to sell its personal loan book worth
$16.9 million (£8.7 million) to boost investment in Australia. According to Cumins, the British network
has been struggling due to tough trading conditions. The company plans to sell its stores in Britain and
assume the role of a master franchisor. Cash Converters is also abandoning Carboodle, its auto financing
business because of weak growth. The company is planning to venture into secured motor-lending
business instead.

Cash Converters will offer a wide variety of loans amounting to $5,000. It is estimated that 1 million+
Australians take out payday loans among other types of short-term loans every year. Back in 2012,
Australia’s short-term loans market was estimated to be worth $800 million to $1 billion. The industry
has grown tremendously since.

Cash Converters made a $15.9 million half-year profit in 2015 up from a loss of $5.3 million the previous
year. Dividend payment stood at 2¢ a share.

New Year Resolutions: Do People Actually Stick To Them?

New Year Resolutions: Do People Actually Stick To Them?

According to statistics, only 10% of people who make New Year resolutions stick to them. This is a shocking statistic given most people make New Year resolutions. So, why is it so hard to stick to New Year resolutions?

1. Unrealistic resolutions: This has to be the most common reason why most people are unable to stick to their New Year resolutions. One of the best ways of achieving any goal is making sure it is realistic. Realistic goals are small and progressive which makes them more manageable. One great way of ensuring you set realistic resolutions is considering your current situation. If you are currently overweight, focus on losing weight gradually first. If you are already fit, it’s OK to push yourself further i.e. focus on building muscle. Focusing on build muscle when you are overweight is unrealistic.

The same applies to making resolutions to become a millionaire when you haven’t even started saving or you don’t have a business plan. There’s nothing fundamentally wrong with having faith in yourself as well as pushing yourself to the limit. However, unrealistic resolutions make your journey extremely hard.This, in turn, leaves you with no option but to quit if you don’t have the willpower. Unfortunately, most people lack the willpower to consistently pursue their goals no matter what.

2. Lack of a plan or poor planning: It’s also impossible to do anything meaningful in life including sticking to New Year resolutions if you don’t have a plan and a solid one for that matter. Resolutions must be backed up by serious action plans that highlight the precise actions you plan on taking to achieve your goals.

Unfortunately, many people make blunt new year resolutions without preparing serious plans aimed at making sure those resolutions see the light of day. For instance, it’s not enough to say you want to save £10,000 this year. You have to sit down and plan how you will actually do it. For instance, do you intend on cutting down your expenditure on entertainment, clothes, shoes, etc.? What’s your plan for saving every month? What adjustments do you intend to make in your lifestyle?

Your plan has to be as detailed as possible for you to increase your chances of success.

3. Wrong perspective: Sometimes it’s just a matter of perspective. Ideally, you shouldn’t wait for the end of every year to make a resolution. Every single day presents an opportunity to learn and make new changes that drive you closer to being the person you have always wanted to be. Waiting for one day every year so that you can make resolutions makes it harder to progress. This is simply because you have to wait another year to make drastic changes when things don’t work out. This shouldn’t be the case. Although we don’t plan to procrastinate, New Year resolutions encourage procrastination which is one of the most common causes of failure. Life changes should be made every day when the need arises and not once a year.

4. Poor time management: Many people also have a hard time sticking to their new year resolutions because of poor time management. In most cases, making realistic resolutions, having a solid plan and the right perspective isn’t enough. You need to set some time apart to implementing those resolutions. Most resolutions require a bigger time commitment than most people anticipate. As a result, it’s extremely hard to stick to your resolutions if you don’t factor in the time aspect. You must create time if you don’t have any and make the necessary adjustments to your daily/weekly/monthly schedule to make sure you don’t interfere with other important commitments while implementing your resolutions.

5. Lack of accountability: Most people also have problems sticking to their new year resolutions because they lack accountability. You must be accountable to someone other than yourself i.e. your family members, friends, etc. if you want to pursue your goals to the end. It may take some courage to share your personal goals. However, your chances of reaching your goals increase when you are accountable to someone other than yourself. Many people lack the self-discipline to check on themselves and make the necessary adjustments to their schedules so, find someone you will be accountable to.

Summary

New year resolutions are great. However, they must be backed by serious action plans. New year resolutions also need to be realistic. You must also become a better time manager and hold yourself accountable if you want to stick to your new year resolutions to the end. Lastly, you need to have the right perspective about life. Every day presents an opportunity for learning so don’t wait for a date to make the necessary changes to your life.

What is the Difference Between Secured and Unsecured Loans?

What is the Difference Between Secured and Unsecured Loans?

Personal loans can either be secured or unsecured. The difference between secured and un-secured loans can be explored in the definition, interest rate, credit requirements, availability and the loan amount. To start with, let’s define secured loans.

What are secured loans?

Secured loans are simply personal loans that are backed (secured) using an asset i.e. some form of property, a car, etc. Since assets back secured loans, lenders have the right to sell the asset in question if a borrower is unable to repay their secured loan. Although most lenders usually give borrowers a chance to meet their repayment obligations before they decide to sell the asset in question, they aren’t legally bound to do so. A lender can sell your security without going to court if you violate the terms of your secured loan. Mortgage loans are perfect examples of secured loans. In such a case, the home/property you purchase is the collateral.

What are unsecured loans?

Unsecured loans are personal loans which don’t require collateral. You don’t need to have a house, a car or any other form of asset to get an unsecured loan. As a result, you don’t stand to lose your property or asset in case you default on the loan. There are however dire consequences of defaulting on unsecured loans. For instance, your lender can sue you. In such instances, there are high chances of losing any asset you own. Defaulting on an unsecured loan (and any loan for that matter) also hurts your credit rating making it ver hard and more costly to get loans in the future. A perfect example of an unsecured loan is a payday loan.
Other significant differences

There are other notable differences between secured and unsecured loans apart for the fact that secured loans require collateral and unsecured loans don’t require collateral. These include;

Interest rate

Secured loans tend to have better interest rate charges than unsecured loans because they are less risky. Since you provide collateral before getting a secured loan, the loan is less risky for the lender. It’s worth noting that the risk factor of a loan is one of the most important considerations when determining the interest a borrower is supposed to pay. Since lenders are less worried about you repaying a secured loan, the interest rate charged is less. Unsecured loans expose lenders to unnecessary risks including other problems i.e. legal fees when pursuing defaulters. This explains why the interest on unsecured loans is usually higher.

Credit requirements

The difference between secured and unsecured loans can also be explored in the credit requirements. For instance, a borrower’s credit history is always a factor when issuing unsecured loans with the exception of payday loans. Unsecured loans are usually given to borrowers with a good credit history i.e. borrowers who have shown a good/impressive ability to repay their loans in the past. Payday loans are an exception because they are usually available to individuals with bad credit. You must, however, have a job or regular source of income to qualify.

For secured loans, however, you don’t need to meet strict credit requirements since you provide security for the loan.

Availability

In regards to availability, unsecured loans are more available than secured loans. Payday loans are widely available than any other types of loans in the UK. It is possible to get unsecured loans easily online or offline through the countless UK loan lenders available today.

Secured loans are less available since they aren’t sought after by many people. Most people don’t have the collateral to secure loans. The few that have collateral/assets usually don’t need loans.

Loan amount

Secured loans tend to be available in larger amounts compared to unsecured loans. Secured loans are specifically suited for individuals with substantial cash needs.

Summary

The above information discusses the main differences between secured and unsecured loans. After reading the above information, you shouldn’t have a problem deciding whether to take a secured or unsecured loan. For instance, secured loans are best suited for you if you have collateral. On the other hand, an unsecured loan such as short term loan will be perfect for you if you need cash immediately, but you have a bad credit score.

Do E-Cigarettes Actually Help You Quit?

Do E-Cigarettes Actually Help You Quit?

Smoking is a difficult habit to stop on will power alone. As a result, many smokers who want to quit turn to all sorts of techniques. E-cigarettes (or e-cigs) are the most popular technique currently. An e-cigarette is simply a cigarette shaped device that contains a nicotine-based liquid which is vaporized and inhaled to offer a stimulating experience that resembles that of smoking a typical tobacco cigarette.

In essence, an e-cigarette is supposed to give you the exact same experience of smoking a typical cigarette minus the harmful effects of smoking tobacco i.e. lung cancer among other diseases like emphysema. Although e-cigarettes appear to be better alternatives to tobacco smoking, there is a lot of controversy surrounding the fact that e-cigarettes can help you quit smoking. The effectiveness of e-cigarettes in regards to helping smokers quit has been embraced and opposed in equal measure.

Many e-cigarette manufacturers claim their e-cigarettes have helped people quit smoking, however, is this true? A lot of people have also been on record claiming e-cigarettes have helped them quit smoking. Are these claims valid or they are simply marketing strategies by e-cigarette manufacturers? Do e-cigarettes actually help you quit?

To help you answer these questions here’s what you need to know about e-cigarettes

E-cigs can give you the same experience as smoking a typical cigarette. If you have problems quitting smoking because you like the whole experience of smoking, e-cigs are a great alternative because they contain the most important ingredient in conventional cigarettes i.e. the nicotine and they also resemble typical cigarettes in every respect.
In essence, shifting to an e-cigarette doesn’t make smoking seem like such a bad idea since it eliminates all the risks associated with tobacco smoking.

What about the nicotine?

It’s worth noting that many people have problems quitting smoking because of nicotine addiction. E-cigarettes contain e-liquid which is simply nicotine, so addiction risks are still present. Some e-cigarette manufacturers, however, claim they don’t actually use nicotine in their e-liquid by instead use harmless liquids that offer the same high as nicotine. In such a case, the effectiveness and safety of an e-cigarette is dependent on the type of e-liquid used.

The effectiveness of an e-cigarette is also dictated by the nicotine strength used. E-cigarettes come in different nicotine strengths. The most effective nicotine strength is one that replicates a typical smoking experience. Personal tastes and preferences must, however, be taken into account since different people may prefer different nicotine strengths hence their preference for different cigarette brands.

E-cigarette manufacturer

The effectiveness of e-cigarettes also depends on the e-cigarette manufacturer in question. Since the e-cigarette industry is relatively new and became popular a few years ago, many unscrupulous e cig manufacturers have come up in an effort to cash in on a profitable trend. Such manufacturers are bound to compromise the quality of the e-cigs they produce which in turn compromises the effectiveness of the e-cigs produced. Considering the industry isn’t strictly regulated currently, it’s hard to say that all e-cigs are effective in helping people quit smoking given the fact that it’s hard to know what chemicals have been used to make every single e-cig in the market today.

What does the science say?

Although the concept of e-cigarettes has been applauded by many, research is still ongoing on the effectiveness of e-cigarettes. Scientists are yet to prove that e-cigs can help tobacco smokers quit. Factors such as poor regulation as well as the relatively new nature of the industry are making it extremely hard to track new information and conduct conclusive studies.

Verdict

It’s not clear whether e-cigarettes actually help you quit. It’s, however, accurate to say that e-cigarettes reduce the health risks associated with smoking traditional tobacco cigarettes because they don’t contain tobacco which introduces severe health risks when smoked. It might, therefore, be worth trying to switch to e-cigs, however, you should be aware of the fact that e-cigs have risks too. For instance, the safety of an e-cig depends on the manufacturer. You should buy e-cigs from reputable manufacturers only otherwise you stand to expose yourself to new health risks.

It is also worth noting that you can quit smoking on volition as well as with the help of medical health practitioners like therapists and counselors.

What Does Low Inflation Actually Mean For A Countries Economy?

What Does Low Inflation Actually Mean For A Countries Economy?

Before assessing the effect of low inflation on a country’s economy, it’s important to define the term inflation.

What is inflation?

Inflation is a term commonly used to refer to the general increase in prices of goods and services. Inflation is measured as an annual % increase. As inflation increases, the purchasing power of every pound decreases. For example, if the inflation rate is 3%, then a £1 loaf of bread will cost £1.03 in one year.
Ideally, the price of goods and services is bound to increase over time. The rise should, however, be gradual otherwise, the economy will suffer. Let’s shift our focus to the effects of inflation on the economy for us to understand the effects of low inflation.

Inflation effects

When prices of goods/services increase, the cost of living also increases. It also becomes more expensive to conduct business in a country with high inflation. The cost of borrowing increases. There is also a corresponding increase in corporate as well as government bond yields. As a result, inflation can have negative as well as positive effects.

If inflation is controlled i.e. kept at low or at reasonable levels, the economy of the country in question prospers. The opposite happens when inflation is too high. Low inflation boosts employment. When people are employed, they have more money to spend. When people are buying more goods and services, the economy grows.

The full impact of low inflation in regards to economic recovery can’t, however, be assessed with unmatched accuracy. To understand this in-depth, it’s important to assess the effects of low inflation on economic metrics such as; the GDP, cost of borrowing and the consumer price index.

Effects of low inflation on GDP

The GDP (Gross domestic product) of a country is simply the value of all goods/services produced by that country. GDP is expressed as a percentage and adjusted for inflation. For instance, if the growth was 8%, but the inflation was 3%, the GDP would be 5%. Low inflation is, therefore, good for the GDP or overall growth of the economy.

Effects of low inflation on cost of borrowing

Theoretically, low inflation can help a country’s economy to recover from depression or recession. The interest rates must, however, be low for this to happen. Low inflation and low interest rates decrease the cost of borrowing encouraging people to take loans and invest or spend. Low-interest rates may, however, make banks reluctant to issue loans since the returns on loans are equally low. A low inflation and low-interest rate environment may, therefore, have a negative effect on consumption.

Low interest rates over a prolonged period of time coupled with low inflation assure the business community of fixed costs. Business owners are able to plan better i.e. when to borrow, market, hiring as well as expand in low interest/low inflation environments. Investors are also in a better place to calculate returns on investments on corporate and government bonds. It’s, however, worth noting that that the effects of low inflation may vary in regards to borrowing.

Effects of low inflation on the consumer price index

Inflation is usually measured by considering the price of essential goods and services as opposed to all goods and services. Inflation focuses on consumables (in the consumer price index) like food prices as well as the price of clothing, housing, energy, education, medical care, communication, and recreation. If the price of all goods/services in the consumer price index increases by say 4%, the rate of inflation is pegged at 4% and the purchasing power decreases by 4%. Low inflation is good since it ensures the cost of essential goods and services remains stable.

Summary

Low inflation is beneficial to the economy on almost every level from the GDP to the cost of borrowing and price of essential goods and services. Low inflation is particularly beneficial to a struggling economy since it helps to keep a check on the price of essentials and also encourages people to borrow and spend. Low inflation must, however, be supplemented by low-interest rates for it to encourage borrowing and spending.