Category Archives: Money

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.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.
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.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.
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.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.
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.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.
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.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.
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.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.
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.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.
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.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.
Top Energy-Saving Tips For Your Home in the UK

Top Energy-Saving Tips For Your Home in the UK

Your monthly energy bill may not seem like much . However, it adds up to a lot of money every year. The average monthly energy bill (depending on the house) ranges from £61 for a small house to £125 for a large house according to the latest statistics. Considering you don’t have to spend as much money as you do on energy bills, you can save plenty of money if you decide to become more energy conscious. It is possible to pay approximately half of what you normally pay by considering the energy saving tips below. Here’s what you need to do;

1. Switch off lights/appliances you don’t need: This is an obvious but commonly overlooked energy saving tip in most households in the UK and around the world. If you just switched off all the lights you don’t need at any given time in your home, you are bound to save some money every year. The same applies to appliances. You should switch off/unplug all appliances and chargers you don’t need at any given time to save energy. It’s worth noting that leaving appliances on standby isn’t enough. Most appliances must be turned off completely, otherwise they will continue consuming power. You can save approximately £50 (even more) per year by following this tip alone.

2. Switch to energy saving bulbs (LEDs): This is another great home energy saving tip to consider. Typical light bulbs consume up to 10 times more power than energy saving bulbs. Considering every household has plenty of bulbs, switching to LEDs will definitely lower your energy bill. Although energy saving bulbs are more expensive than typical light bulbs, the savings you stand to enjoy justifies the cost. Furthermore, LEDs produce light that is bright enough. Switching to LEDs costs approximately £100 for the average household however you stand to recoup your investment in less than a year.

3. Draught-proof your home: Most UK households spend the most electricity on heating. Draught proofing your home is an excellent way to ensure you don’t have to use home heating appliances for extended time periods. It’s worth noting that households lose heat via draughts around windows and doors. Blocking these gaps will ensure your home retains heat much longer during cold seasons reducing your energy bill in the process. Considering you stand to save £100+ annually and you don’t have to hire a professional to draught proof your home, this tip comes highly recommended.

4. Use energy efficient appliances: You can also save more on your energy bill by sticking to appliances which have been certified energy efficient i.e. Energy Star appliances. Such appliances have a blue Energy Star label. It’s easy to find Energy Star appliances in the UK so you shouldn’t have a problem implementing this tip. To avoid incurring huge costs initially, you can switch to Energy Star appliances gradually. Switching to an Energy Star appliance i.e. a fridge can save you up to £100 a year.

5. Transition to solar power: Solar power is the cheapest form of power available today. Although installing solar power in your home is costly, the saving you stand to enjoy in the long-term is significant given the fact that you will never have to pay any monthly energy bill going forward. Solar power also has other notable benefits i.e. it is cleaner/safer. To avoid incurring a huge initial cost, you can transition slowly i.e. install a solar water heater first since water heating contributes significantly to your monthly energy bill.

Summary

It is possible to reduce your monthly energy bill by more than 50% by taking the above measures. Obvious measures such as switching off lights and appliances you don’t need as well as using energy-efficient appliances go a long way in ensuring you pay only for the energy you need/use. Measures such as draught proofing your home will reduce your energy bill significantly during cold weather. To enjoy the greatest energy savings, in the long run, consider transitioning to solar power.
Many people take out short-term loans such as payday loans to settle emergency bills i.e. electricity bills. Get your energy bill in control and forget about taking out loans to cover such bills.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.
What Are Bridging Loans?

What Are Bridging Loans?

Bridging loans are short term loans extended to individuals who have to pay their debt soon but haven’t had access to their main line of credit yet. Bridging loans ‘bridge’ the gap that exists when you have pressing cash needs that must be attended to immediately but you still have to wait for your main line of credit to become available.

Bridging loans are popular in real estate investments. They resemble payday loans but in a real estate context. The loans usually facilitate property purchases that wouldn’t normally be possible. In today’s world of downsizing and upgrading homes, the chances of finding your next home before you clear your current mortgage loan is very high. In such a case, a bridging loan will be perfect for you.

Bridging loans are short term loans like payday loans. However, they are larger. The loans are also high-interest. Bridging loans are typically meant to help you buy new property while you are waiting to sell/receive proceeds from the sale of existing property. The loans are also used to help individuals planning to sell their property/home quickly after renovating. Bridging loans are also ideal for individuals planning to buy property at an auction.

How do bridging loans work?

The loan amount you receive is usually dictated by the equity you have in your existing property. Interest is usually calculated on a short term basis i.e. on the term of the loan which is usually less than a year. Your credit rating or credit score is also considered when calculating interest. Banks also consider other normal lending criteria. Borrowers are expected to make their repayments normally until the property in question is sold. Bridging loans also attract new property purchase costs such as legal fees and stamp duty.

When are bridging loans good for you?

Bridging loans are great options for property investments that require large sums of money in a short time. In such instances, traditional forms of financing aren’t suitable because they take too long to process. Banks take long to process mortgage loan applications. In cases where you need to buy property from an auction, it might not be possible to secure financing in time if you apply for a typical mortgage loan.
Some borrowers also use bridging loans today as simple alternatives to mainstream lending. If you home has some equity, you can always get a bridging loan to take care of some pressing cash needs. It is, however, advisable to think about all your options before using a bridging loan as an alternative to mainstream lending. Bridging loans are perfect when you have a clear exit strategy i.e. an ongoing property sale that is about to be concluded. A bridging loan will also be perfect for you when you intend to use it for property investment purposes only i.e. when you want to a buy-to-let mortgage.

You should also consider taking a bridging loan when you are sure you can get access to a mortgage loan with a mainstream lender. This is important since it eliminates the risk of losing your home/property in case you are unable to meet your repayment obligations. In simpler terms, you shouldn’t take a bridging loan if you can’t qualify for a typical mortgage loan. The FCA has raised concerns about financial advisers recommending bridging loans too quickly. This can be attributed to the high-risk and high-interest aspect of such loans. Ideally, you should tread carefully if you haven’t taken on a bridging loan before. Besides the high-risk and high-interest aspect, bridging loans also tend to attract hefty fees and some hidden charges as well which could easily render the loan unmanageable.

In a nutshell, a bridging loan shouldn’t be viewed as a suitable alternative to traditional lending. Short term loans like payday loans are better alternatives since there are lenders that offer high borrowing limits capable of catering for substantial cash needs.

Getting a bridging loan

There are many bridging lenders in the UK ranging from small one-man bands to professional outfits regulated by the FCA. When taking out a bridging loan, stick to lenders who are regulated by the FCA since such lenders are bound legally to recommend bridging loans when they are appropriate for you.
 

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.
What Does the New £1 Coin Mean for the UK?

What Does the New £1 Coin Mean for the UK?

The UK has released a new £1 coin that is set to become the most secure coin in the world.
This new release puts an end to the reign of the old £1 coin that has been in circulation for thirty years now. The new £1 coin which has 12 sides will enter circulation officially on March 28th, 2017. The old coin will stop being used as legal tender from 15th November 2017. The Royal Mint is set to make 1.5 billion + new £1 coins.

Brief history

The British government has always had plans to replace the £1 note and coin. The plans were first launched on 21st April 1983. Since then, the British Royal Mint has made over 2.2. Billion £1 coins. There has been an increasing need to replace the old £1 coin since statistics indicate that one in every thirty £1 coins exchanged in the recent past has been fake. The increasing vulnerability of the old £1 coin informed the decision to introduce the new £1 coin.

Features of the new coin

The new £1 coin has numerous security features among them being a hologram. Depending on the angle from which you view the coin from, the hologram changes (from the pound symbol to 1). Also, the new coin features an outer and an inner ring coloured using gold and silver respectively. The coin is also lighter and thinner than the old coin and features smaller lettering. The diameter is, however, larger. The old coin also has milled edges.
Also, there are more than 25 different designs appearing on the new coin. The design ranges from trees to dragons. The new coin has borrowed its design from the old twelve-sided threepenny bit that seized being in circulation back in 1971. The new coin also features a latent image, has very small lettering, and milled edges (groves on the alternate sides of the coin).

Effects

It’s worth noting that approximately £1.3 billion is stored in savings jars (in coins) across the UK and the current one pound coin accounts for approximately 33% of these coins. As a result, people have been urged to either spend their old £1 coins or return them before they seize being legal tender. People also have the option of banking their old coins.

Another notable effect revolves around counterfeiting. The new one pound coin was designed solely to stop counterfeiting. As a result, businesses across the UK are expected to save the millions lost in counterfeit one pound coins. The new coin features 12 sides which are instantly recognizable. The coin also has a secret high-security feature that prevents counterfeiting in the future.

All UK businesses are also expected to prepare for the introduction, co-circulation as well as demonetisation periods i.e. when the coin is first introduced, when it will be in circulation alongside the old coin as well as when the old coin stops being used as legal tender.

When preparing for introduction, all business are expected to check if they operate equipment i.e. vending machines which accept/handle the old £1 coin. If so, business owners should contact their equipment suppliers to know if they will need any adaptations or replacements on their machines and when those adaptations or replacements should be performed. Business owners are also expected to train their staff on the new coin features as well as consider any other changes to cash handling processes.

During the co-circulation period, business owners should have equipment accepting/dispensing the new coin. During the demonetization period i.e. 16th October 2017 onwards, all coin handling equipment should accept the new coin. Business are however free to decline payments made using the old coin. Business owners who handle machines which accept the old pound coin i.e. vending machines stand to be most affected. Such businesses must incur the cost of updating their machines or risk losing business.

What happens to the old coins?

According to the 2014 budget announcement, the old £1 coins which will be returned will be meltdown and reused to make more new £1 coins. Old coins should be spent before 15th October 2017.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.
Higher Education in the U.K vs. USA: Is it worth the debt

Higher Education in the U.K vs. USA: Is it worth the debt

According to a recent Sutton Trust report, UK graduates face higher debt levels compared to their US counterparts. According to the report, US graduates leave with higher education debt averaging £19,100 to £29,100 depending on factors such as the institution attended while UK graduates leave with approximately £44,500 in debt. Higher education debt has always been higher in the U.S. The UK has however overtaken the U.S. causing huge concerns.

UK graduates also have a higher debt to starting salary ratio than their U.S. counterparts. The Sutton Trust Report, however, states that the repayment system in the UK is more advantageous to borrowers. The report which focuses on graduate debt in the UK and U.S. among other countries such as; Australia, New Zealand and Canada recommends that UK legislators assess UK’s higher education funding policies as well as the impact of those policies on poor students.

The report also calls for a complex assessment on whether UK’s current student loan system provides value for money to higher education learners as well as taxpayers. There are huge concerns about policies adopted in the UK on student funding such as maintenance grants which are set to be scrapped and replaced by loans which feature a frozen repayment threshold. Poor students are bound to be hit hardest by these policies increasing the debt levels of UK students even further to £50,000+ after graduation. This begs the question; is higher education worth the debt?

a. Many jobs today still require a degree

Most people still argue that taking a student loan is worth it because most jobs in the UK, as well as most places around the world still, require a degree. Although students stand to accumulate thousands of pounds in debt, majority of the jobs require a bachelor’s degree as the minimum and most important requirement. You must have a college degree to get a job in the industries offering the most jobs today i.e. the finance, engineering and education industries.

b. If you will make enough to pay off your student loan comfortably, go for it

If there are prospects of earning enough money to repay your loan, taking a student loan is worth it. Although repaying £44,500 may seem challenging when you consider interest on the loan over periods exceeding ten years, devoting approximately 10% of your salary every month will be adequate to clear a typical student loan. Furthermore, it’s better to dedicate a small percentage of your future income that have no income at all because you didn’t take a student loan.

c. Your future earning potential is higher

A degree increases your earning potential exponentially over a lifetime. Earning a university degree sets you up for better-paying jobs in the future that a high school graduate may not have access to. A degree also opens up doors for higher learning opportunities which increase your earning potential even further. In essence, a £44,500 student loan isn’t much when you compare what you stand to earn in a lifetime once you graduate, get a job and advance in your career.

d. The benefits of higher education go way beyond education

It is also worth taking a student loan since you stand to enjoy greater benefits than simply getting a good job and salary in the future. Higher education broadens your perspective in life allowing you to make better/more informed decisions in life. The goal of higher education goes way beyond earning a living. For instance, studying abroad will definitely increase your general knowledge, social skills and broaden your horizon about life and people in general. These benefits are extremely valuable although they can’t be quantified.

Summary

Accumulating debt isn’t interesting. Taking debt is however justified in some cases. For instance, taking a student loan to pursue higher education is wise since the benefits you stand to gain far outweigh the cost. Although the UK has the highest student debt levels currently, you should really consider taking a student loan if you want to increase your chances of securing a good job in any of the major industries. In most cases, students are able to pay off their student loans fast when they secure a job after graduation. You should, however, choose the higher education institution you go to wisely and avoid unnecessary expenses throughout your studies to keep the debt at manageable levels.

Is the Company Director of Swift Money Limited.
He oversees all day to day operations of the company and actively participates in providing information regarding the payday/short term loan industry.