Plum: The Chat Bot That Could Save You Money

Look up advice on the best ways to become more frugal, and step one will almost always be: ‘draw up a budget’. Whilst this is solid, sensible advice, many of us don’t have the time or the knowhow. It’s this feeling of being out of your depth from the off that results in many people sticking with bad financial habits. 

A solution in the palm of your hand 

Plum is the first AI-powered chat bot that operates through Facebook Messenger. This makes it interactive and easy to access, using technology and a platform that most of us are already familiar with. Plum’s aim is essentially to take care of your budgeting on your behalf, and they do so in three main ways: 

1. By linking up your bank, the algorithm can analyse your daily transactions in relation to your regular income and expenses. Learning about your spending habits in this way means they can offer tailored advice on how much you can afford to put away each month, without any hassle on your part. 

1. Take advantage of their investment opportunities, which make it easier for beginners to make a healthy return on their cash, boosting their savings in the process. 

1. By monitoring exactly where your money goes, and what better alternatives are out there, you can switch to cheaper deals in mere moments, ensuring that you never needlessly overpay on your bills. 

Number crunch 

As to whether it works or not, the numbers seem to speak for themselves. A total of £20 million has already been saved by thousands of customers across the UK, with the average saving on bills per user working out at £175. With this extra money in your pocket, it should become easier to achieve Plum’s ideal outcome: the freedom to spend your hard-earned cash on the things you want, rather than having it all tied up in the things you need. 

from Finance Girl http://www.financegirl.co.uk/plum-the-chat-bot-that-could-save-you-money/

Which home improvements add the most value to your home?

The financial crash of 2008 caused house price growth to decline for the first time in over a decade, in turn prompting many home owners to find cost-effective ways to add value to their properties. While small improvements are easy ways to add to the general appeal of a home, they are not likely to add a significant amount to its value. Instead, it’s the larger, more expensive improvements that can really make a difference to the value of a property.

Carrying out these large improvements to add value to your property depends largely on where it is situated with just about all of them requiring approval from building authorities.
Find out what paperwork and approvals you require by speaking to the planning advisor in your area before you start any project on your home. This is even more important if you live in a conservation area, or if your home is listed.

Following are some home improvement ideas that are sure to add value to your home.

Increasing the square footage – the value of your home depends a lot on the amount of space it offers, so one of the most effective ways to add value to your property is to build on an additional bedroom. This is especially appropriate for homes that have two or three bedrooms. Extensions, basement conversions, as well as loft conversions are a few options.

Loft conversion – the value of your home can be increased by about 10% to 20% with a good loft conversion. It is also more-than-likely the way to add an additional room to your house that is least disruptive.

The first thing you would need to do, is to find out if the height will meet local building regulations, by measuring the space in your loft. Normally, regulations stipulate that the minimum height should be 2.1 meters over half of the room after the new floor has been installed. You will also need to determine whether your landing will be able to accommodate the additional stairway.

Loft conversions are normally carried out pretty quickly and since most of the work happens in the loft, there is very little disruption to the rest of the household. Power might be disruption briefly because the wiring in this area must be done properly, and the water supply might also be disrupted in the event that a bathroom is added to the conversion. Noise, especially if windows are added to the loft, will also cause some disruption.

Overall costs could increase if your hot water system is altered by having to replace roof trusses and fire regulations will need to be considered as well. Insulation usually has to be moved with loft conversions so a significant amount of head space could be lost if the insulation is placed up against the roof trusses.

To avoid losing head space, the roof could be raised of course, but apart from a significant amount of disruption that it would cause, it would also be incredibly expensive. Going to the extra expense of raising a roof for a loft conversion is only worth it for extremely high-valued homes, such as those found in some regions of London.

Basement conversion – this is a costly way to add value to a home but can be worth it on high-valued houses. Basement conversions are incredibly disruptive, sometimes requiring the home occupants to move away while work is carried out. The reason for this is because the basement has to be made liveable – a project that will require tanking and digging out. You might also have to meet the rules and regulations associated with fire escapes and ventilation.

It is very important that you check whether the foundations of your home will support a basement conversion, if you are considering an improvement of this type. Costs could run into thousands, since a complete survey and an architect will have to be involved.

After planning, you will have to underpin your house. Then the basement will have to be dug out, lined, concreted and your house supported effectively all through the process. Lighting, heating and access will then have to be provided to make the area liveable. Unless there is an existing basement or your house is exceptionally valuable, this type of conversion is not really worth the effort or the expense.

Conservatory – while these additions are trendy, they don’t really add much to the value of a house. Even though you are adding another room to your home, it’s a room that is only used for a few months of the year. A conservatory should blend in perfectly and match the style of the entire house. You will need to add a custom conservatory if you have a period home, instead of the standard kit conservatory.

A conservatory can take up quite a bit of space. It can add value to the homes of some people, but for many however, it doesn’t warrant the expense. There is also the risk that, if not constructed properly, the addition can even decrease the value of a property.

Install a driveway – converting a front garden into a driveway is worth considering. Apart from reducing insurance, it also guarantees off-street parking and is also more convenient when moving things from your home to your car. A garden, although it is eye-appealing, doesn’t do much to add value to a home. A brick-paved, graveled, or concrete driveway on the other hand, will make your home worth that bit more.

Extend – extra square footage can be added to a home by extending on the side of the house, but your garden will suffer. Many people opt for extending the kitchen, especially if theirs is the small galley-type. Buyers find it more appealing when a home has a nice big kitchen. Although, the cost of a kitchen extension is pretty much the same as the amount of value it adds to your home. You could increase the value however, if you build a bedroom above the kitchen at the same time.

Another great way to add to the value of your home is to convert your existing garage. Most people use their garages for storing junk anyway, so why not convert it into an additional room for your home? You could even take it a step further and build another bedroom above. These are relatively simple conversions that can add a significant amount to the value of your home.

Replace features – sometimes replacing features can do enormous upgrades to a house. These can be things like changing single windows to double glazing, upgrading a boiler to a combi-boiler and replacing inside radiators. The same applies to electrics. Upgrade your fuse box and replace your meter with a smart meter since it will make your home Part P certified and safer. Also, reboot sockets so that they are more convenient for plugging in items without having to use an extension cord.

Small items too, can add up and make your home more appealing, making a buyer put in a good offer. The value of your property can increase by up to £10,000, by simply changing a tired front door, replacing dingy hinges, or increasing the kerb appeal of your home.

 

from Finance Girl http://www.financegirl.co.uk/which-home-improvements-add-the-most-value-to-your-home/

5 Methods for De-Stressing After Work

Any job, whether in an office or not, can cause an immense amount of stress that can linger for days or even weeks. It’s important to recognize when you are falling victim to these stresses early on and learn some methods to help you de-stress when the workday is over and you can finally go home. From being sure to store all your confidential and important company data in a virtual data room to taking a moment to get outside and walk around—all methods are valid and can help you recover to take on the following day successfully.

Shut Everything Off

Once you’ve finally finished up for the day and are ready to head home you should make it a point to shut everything off, including your email notifications and possibly even your phone calls so that you have the proper amount of time to recover and de-stress. By forcing yourself to stay in front of a screen all day it will make you that much more exhausted and unable to properly rest for the remainder of the week. It’s also important to know when to say ‘no’ and decline any last minute requests to do extra work outside of your role. Everyone needs some time to recuperate and clear their minds of work so as to avoid burning themselves out.

Eat A Healthy Dinner

Ending the day with a healthy dinner is a great way to ensure that you are getting all the nutrients you need for your mental and physical health. Take a bit of time on the weekends to plan out your meals for the week so that you aren’t worrying about what you’ll eat last minute and be sure to add all the necessary foods to give you energy and mental clarity for the next day. This also applies to packing the right foods to snack on throughout the day when you are feeling a bit overwhelmed. Feeding yourself brain food will help with any confusion or mental fog you may experience when work begins to pick up.

Rid Yourself Of Stressful Reminders

The last thing you need when you are trying to rest and relax is unhealthy, stressful reminders of your work day or any work you still need to finish. Instead of letting your mind run through these tasks constantly make it a point to avoid them as much as possible during the times you have decided are for de-stressing. Try to not respond to any late night calls from coworkers about office business and rather than keeping all the day’s information on your mind, dump it out and lock it up in a secure virtual data room that you know will keep it safe and easy for you to access it when you need to.

Do Something You Love

The easiest way to relieve some workday stress is by shutting off for the day and doing something that you love rather than worrying about your foot-long to-do list. This could be as simple as just watching a movie or two to unwind at the end of the day or participating in a group activity at a local gym or community centre. Getting out of your work mindset is vital in becoming a balanced and well-rounded individual that is capable of handling whatever is thrown their way throughout the day. By doing what you love you will be able to better recognize the division between work and play.

Exercise Regularly

Exercise could be what someone loves to do, however others don’t find much enjoyment in it. Regardless, maintaining a regular workout schedule has proven to decrease stress levels as well as build a stronger body over all, especially for those who work in an VDR office environment and don’t move around much throughout the day. This exercise could be as simple as taking a walk around your neighbourhood once you get home from work or as intense as running for an hour on a treadmill to burn off some of the anxiety built up during a stressful day. It’s important to remember that by making your body stronger, your mind also becomes stronger and more capable of focusing and remaining productive during a busy work schedule.

from Finance Girl http://www.financegirl.co.uk/5-methods-for-de-stressing-after-work/

Weekend reading: Live fast, buy an annuity

What caught my eye this week.

There are many things I do because I am an investing maniac that you probably shouldn’t.

For starters, I invest actively. That’s why we brought in my passively-pure co-blogger to keep Monevator on the straight and narrow.

Here’s another crazy notion of mine – I want to be able to live off my capital.

I don’t mean reach some lump sum that I can then dwindle down to nothingness while eating grapes and watching Loose Women.

I mean replace a notional salary with an investment income that exceeds it that’s generated from an otherwise unmolested portfolio.¹

This is a pretty quixotic goal on multiple fronts, as some of you have pointed out over the years.

First, it means I need a lot more money amassed before I can declare I’m financially-free on my terms. Not spending the wodge down to zero has a big impact.

Second, I don’t plan at this point to ever entirely stop working for money. So my notional salary will be topped up by some kind of continuing income for years to come, making it all an even weirder modus operandi.

Third, I don’t have kids, have never aspired to, and it’s now looking unlikely I ever will. So there will be no official heirs to leave a woefully under-taxed inheritance to – only friends, relations, and the metaphorical dog’s home.

Really I should plan to spend the lot on Wine, Women, and Whatever – feel free to re-jig for your own sexuality and alcoholic tastes – and go out with empty pockets. Perhaps I will, but it’s not a goal I have in mind.

But for me, investing isn’t really a means to an end, it’s a means to a means.

When I tell people I don’t care much about money, they raise their eyebrows, given my passion for markets – and this site. Obviously on some level I do care about money, but really even spending it is not what motivates me.

I seem to find it all a big game and a passport to self-purpose. In my head I am a bohemian and I lived like a graduate student for decades despite having increasingly chunky assets because I liked it that way. I rarely judge people for not being able to save as I have, because frankly I found it no hardship.

But most people – even most of you – aren’t like that. You’re investing because you have to. You want to be able to retire in comfort, sooner or later, and perhaps have more to spend along the way. You have kids you’d like to help out. You hate your job and want to be free.

Remix to suit.

Who’s weird, anyway?

What you might not realize is that people like you have puzzled economists for decades.

Indeed, even though some of what I’ve written about myself above probably seems a bit out there, lots of people – especially in the US but increasingly here too since the advent of the pension freedoms – are arguably just as irrational.

The reason – the puzzle – is why most people don’t buy annuities when given the choice?

Theoretically annuities maximize the amount of spending you’ll potentially be able to do in an average retirement. This is because annuities spread the risk of any particular retiree outliving their savings among many retirees.

The alternative – to self-insure against a telegram from the Queen – is an expensive option.

I suspect people don’t buy annuities because the thought of being hit by a bus the next year and leaving an annuity company hundreds of thousands of pounds in profit is eye-watering.

But that risk is the price you pay for not running out of money and probably spending more than you would have until the bus comes. Your sadly early demise keeps somebody else having fun at 100.

Also, as you’d be dead, who cares?²

I won’t hash it all out here because Victor Haghani of Elm Funds has done a great job for us.

In a post succinctly entitled The Annuity Puzzle, he makes a few simplifying assumptions and then offers the following graph:

(Click to enlarge)

The blue bars shows a consistent and high spend from an annuity. The red bars show what happens if you have to make sure you don’t run out of money.

It’s a pretty compelling image, presuming the maths checks out. As I say, assumptions are made. Your mileage may vary.

One thing that probably isn’t a valid criticism of the pro-annuity argument though is that annuity rates are too low. If rates are low it’s probably because expected returns from other investments are (in theory) somewhat lower, too.

And low expected returns don’t have anything to do with longevity risk, anyway.

I’m no expert on annuities – they still seem far away so I’ve not crunched the numbers myself. Friend of the site and IFA Mark Meldon wrote a great post on annuities back in May, so check that out. And of course you can see all our articles on deaccumulation for the other side of the argument, such as this one from The Greybeard.

You should also read the full article at Elm Funds.

I’ve long thought I’d buy an inflation-linked annuity to cover my basic income floor. Beyond that I’d be the oldest Wolf of Wall Street on the block, and maybe die as one of those mystery millionaires you read about who horde supermarket vouchers. Albeit from Waitrose or Whole Foods.

But what about you?

From Monevator

How to buy and sell ETFs – Monevator

From the archive-ator: Should you buy gilts directly or invest in a gilt fund? – Monevator

News

Note: Some links are Google search results – in PC/desktop view you can click to read the piece without being a paid subscriber. Try privacy/incognito mode to avoid cookies. Consider subscribing if you read them a lot!³

Speculation ahead of Monday’s UK Budget – ThisIsMoney / The Guardian / FT

Is the London property market slump here to stay? – The Week

Very few people are trading those much-hyped Bitcoin futures – Bloomberg

World’s billionaires became 20% richer in 2017 – Guardian

Anger spreads over squalid new homes built by Persimmon – ThisIsMoney

Can ‘co-living’ solve millennials’ housing woes? – Guardian

(Click to enlarge)

Hedge funds: Still fleecing investors with expensive mediocrity – SL Advisers

Products and services

NS&I changes index-linked savings certificates to track CPI rather than RPI – ThisIsMoney

Active funds fail to keep up with passive fee cost cuts – Money Observer

The pros and cons of the most popular app-only banks – ThisIsMoney

Should you be using Amazon Smile? – Yahoo

Ratesetter will pay you £100 [and me a bonus] if you invest £1,000 with them for a year – Ratesetter

Neil Woodford’s flagship fund halves in size [Search result] – FT

Robinhood app gets almost half its revenues selling customer orders to high-speed traders – Bloomberg

The cost of buying and selling homes in different countries [Search result] – FT

Comment and opinion

Larry Swedroe: Why international diversification works – ETF.com

How often does a 10% US stock market drop get worse? – A Wealth of Common Sense

Academics in defence of active managers – Morningstar

Where is the snowball? – 3652 Days

The case for drip-feeding investing is plausible, but it costs more [Search result] – FT

Ignoring the signs? – The Humble Dollar

Indexing myths that need to be busted – The Evidence-based Investor

Patisserie Valerie: What happened? – Young FI Guy

John Bogle: No such thing as a stock-pickers’ market – Business Standard

Get rich with… lodgers – The Escape Artist

For naughty active types: Year-end rally ahead? – Top Down Charts

Brexit

Ken Fisher: As the Brexit fog clears, UK stocks will bounce back [Search result] – FT

Millennials may lose up to £108,000 over 30 years with no-deal Brexit – Guardian

Why I remain a Remainer [Search result] – FT

RBS plunges on warning Brexit hit to clients may cost it £100 million – Evening Standard

Kindle book bargains

A Million Years in a Day: A Curious History of Daily Life by Greg Jenner – £0.99 on Kindle

Magna Carta: The True Story Behind the Charter by David Starkey – £0.99 on Kindle

You Are a Badass: How to Stop Doubting Your Greatness by Jen Sincero – £0.99 on Kindle

Way of the Wolf: Straight line selling by Jordan Belfort – £0.99 on Kindle

Off our beat

Director Peter Jackson’s colourised World War 1 film looks incredible – The Guardian

Why the world’s recycling system stopped working [Search result] – FT

The Wild West open-world game Red Dead Redemption 2 is a near-miracle – Guardian

Humble exits – Morgan Housel

Remember web bookmarks? [Bookmark Monevator if you do!] – Digg

And finally…

“The intelligent investor is a realist who sells to optimists and buys from pessimists.”
– Ben Graham, The Intelligent Investor

Like these links? Subscribe to get them every Friday!

1. In reality I’d probably continue to tinker until senility sets in. But this would be the high concept.
2. I know, I know, your heirs and spouse.
3. Note some articles can only be accessed through the search results if you’re using PC/desktop view (from mobile/tablet view they bring up the firewall/subscription page). To circumvent, switch your mobile browser to use the desktop view. On Chrome for Android: press the menu button followed by “Request Desktop Site”.

from Monevator http://monevator.com/live-fast-buy-an-annuity/

How to buy and sell ETFs

Okay, so you know how to open an online broker account. The next step on your road to fully-fledged investor status is to actually purchase some investments.

In this article we’ll look at how to buy an ETF (Exchange Traded Fund).

What is an ETF?

Before we get giddy with over-excitement, a quick reminder as to what an ETF is.

ETFs are funds traded on a stock exchange, as the full-fat version of their name suggests.

As investors buy and sell the ETF throughout the day, their price will vary.

Strictly speaking this means the exact price you pay for the ETF depends on supply and demand, rather than on the value of the assets held by the ETF.

In practice though, there is very little difference between the price of a typical ETF and the value of the assets it holds. Any differences are almost always quickly arbitraged away.¹

To be completely accurate, we should note there are some obscure and illiquid ETFs where pricing and asset values may not always align.

There can also be a divergence for brief moments in extreme market turbulence – again usually only with smaller ETFs, or those holding more exotic stuff such as rarely-traded corporate bonds.

Neither factor should concern a passive investor. We should be choosing ETFs that track broad indices, and watching Netflix rather than our portfolios when the market throws a wobbly.

The art of the deal

Let’s get trading! To start we need to navigate to the trading screen.

First off, we need to find the ETF we want to trade. We find it by searching for its ticker symbol.

The ticker is the unique name given to each traded security on the stock exchange. You’ll find the ticker on an ETF’s factsheet, or perhaps from an article like our guide to low-cost funds for passive investors.

In the screen below we’ve typed in HMWO, which is the ticker for one of HSBC’s global equities ETFs:

(Click to enlarge)

The platform finds the ETF and gives us the option to trade (that’s the green arrow in the picture above).

Next we’re taken to the dealing screen:

Woah! Let’s run through the information we’re being bombarded with here.

Nice spread

The first thing you might notice is that there is a difference between the ‘Buy’ and ‘Sell’ prices. The sneaky broker is charging you more to buy the ETF than you’d get if you wanted to sell it.

This is common to all exchange traded securities (shares, bonds, investment trusts and so on):

• The bid/sell² price reflects the market demand for the ETF. That is, what the market will pay for your holding.

• The ask/offer/buy price reflects the market supply for the ETF. That is, the price the market will charge you when selling you their holding.

The difference between the two is called the bid-ask spread. This spread in effect represents the cost of trading in the ETF, ignoring any additional trading fees levied by your platform.

For our example ETF, the spread is very small at around 0.05%³. The ETF we’ve chosen is a large and highly traded security.

For smaller, less frequently traded securities, the spread can be much wider. This means trading such an ETF costs more.⁴

Dealing options

Going back to the screen above, we next see two further options – ‘Deal now’ and ‘Stop losses and limit orders’.

• ‘Deal now’ does what it says on the tin – you’re looking to buy and sell at that moment in the market. The option to deal now is available during market trading hours. That’s 8AM to 4:30PM Monday to Friday for the London Stock Exchange.

• Stop losses and limit orders are different. You don’t immediately buy and sell with these orders. Rather, they are instructions to sell or buy a security if it reaches a particular price, which you set yourself. The idea is you don’t pay more than you want for your chosen security, nor sell a holding for less than you want to get for it. Passive investors in large liquid ETFs can ignore all this, but The Investor has written an article about these more advanced trading options if you’re curious.

We’ll proceed to deal now. We fill in the rest of the details, double check them, and then press the ‘Place a deal’ button.

The Final Countdown

We’re now taken to the following rather intimidating screen:

You’ll notice there’s a big flashing countdown warning us that we have only 15 seconds to accept the offered price. There’s also a fair bit of jargon. We’ll get to that in a moment.

Don’t panic! Remember to keep breathing, and that you are not launching nuclear warheads.

All we need to do is take a few seconds to triple check we’re happy with the details – that we’ve got the right ETF, that we are buying, not selling, and the value of our trade.

Should the countdown elapse the trade simply expires and all we have to do is click the button to refresh our quote. So we needn’t rush.

We click ‘Buy’. A moment later our broker cheerily confirms the trade has gone through. It will show the details of the trade in a screen like this (and will also email or message you this information):

Give yourself a mini fist pump. You’ve successfully bought your first ETF!

Jargon Busting

The last two screens saw a few new terms come up:

• PTM Levy – This is an extra £1 charge made when you buy or sell London Stock Exchange listed shares with a total trade of more than £10,000. It’s used to fund the Panel of Takeovers and Mergers (PTM). The PTM levy is not chargeable on ETFs.⁵ So we didn’t pay a charge.

• Commission – This is the fee our broker stings us with for buying or selling investments. Typically you pay a fee to deal in shares. Though some brokers don’t charge for trading ETFs. Ours does, billing us for £11.95.

• Stamp Duty – Not to be confused with stamp duty on property (technically, that’s called Stamp Duty Land Tax), this is an additional 0.5% charge levied when you buy shares. You don’t pay Stamp Duty when buying an ETF. So again, we didn’t have anything to pay here. That leaves more money for us to compound over time – result!

• Settlement Date – The date at which ownership of the security is transferred. We bought our ETF on 1/10/2018, and it won’t be settled until 3/10/2018. This delay is to reflect the process of legally transferring ownership between buyer and seller. In practice this isn’t a big deal – if you sell via your broker, the money will appear in your account and you can use it to purchase new investments. If you buy, the holding will appear in your list of holdings.⁶ For ETFs and shares, settlement is ‘T+2’ – that is, two days after the trading day. For Corporate Bonds settlement is T+2. For Gilts, T+1.

The Contract Note

All this information is formally set out on a record called a Contract Note. Your broker will provide this to you shortly after you complete your trade. Here’s a copy of ours:

You’ve bought your first ETF

So how was it for you? Hopefully you remembered to keep breathing when the 15-second countdown started and you’re still with us.

It’s really not that scary to buy and sell on the stock market. These days it’s no more complicated than buying novelty socks on Amazon.

Just remember to do your research in advance, and avoid getting drawn into day trading or other wealth-sapping activities. Make your well-researched investments, then go and do something fun and leave them to grow.

• Are you ready to invest? Have a look at some low-cost funds we favour.

Read all The Detail Man’s posts on Monevator, and be sure to check out his own blog at Young FI Guy where he talks about life as a financially free twenty-something.

1. Arbitrage is when sophisticated investors with deep pockets buy one asset and sell another to pocket any anomalies in pricing.
2. These terms are used interchangeably by brokers and investing nerds.
3. Worked out as £0.01/£1.68
4. The relationship between spread and ‘liquidity’ is very complex, something I spent a year of my life researching and investigating for work. I won’t get that year back.
5. It is not charged on Open Ended Investment Companies, aka OEICs, either.
6. Note that when it comes to dividends, you need to legally own the security on what’s called the ‘Record Date’ to be entitled to the dividend.

from Monevator http://monevator.com/how-to-buy-and-sell-etfs/

Need Your Creature Comforts & Luxuries While Studying? How to Have It All

There are many courses of study suitable for a career in finance. While there are professional qualifications, there are also bachelor’s degrees and more advanced degrees for people already working in finance who wish to become better educated.
The trouble comes into it when you want your little luxuries, creature comforts and a stylish place to live too. These aren’t the usual expectations from a young student, but you’re a bit older and have come to expect a certain luxury in your life. Is it even possible to combine the two?

Here are a few suggestions to return to education while not losing your comfortable standard of living.

Premium Student Accommodation with Style

When you’re looking for student accommodation that has a certain flamboyance or Panache (as the French like to say) then the typical low-cost digs won’t cut it. You’re used to a stylishly appointed kitchen with rays of sunshine peeking through to greet you in the morning, a decent coffee maker that produces a cup to rival any Starbucks, and a place to relax (or study) as needed.

Almero Student Mansions are designed to offer premium accommodation for people who are studying in the area but don’t wish to sacrifice the standard of living they’re worked hard to achieve. Along with quality furnishing, fast internet and access to local shops, their properties are picked for their locality to nearby centres of education too.

You can view their current listings here: www.almerostudentmansions.com/properties/manchester/

Figure Out What Matters the Most to You

When you’re keeping your existing home but want to take most of your life with you to a rental in another city, consider what you can take and things to leave behind. Depending on how large of a rental you choose, there’s only so much space. It’s also difficult to relocate by car or on a train if you’re transporting too much stuff.

Cast a discerning eye over your possessions. Decide what are the things you cannot do without. Some items will make anywhere feel like home. That could be the desk you work from, a coloured decorative lamp for those late-night reading sessions, or your own duvet.

Whatever means home to you is what you should pack up and take to a new place. You can find advice on the essential items you should pack here: https://www.timeshighereducation.com/student/advice/packing-university-items-you-do-and-do-not-need.

Arrive Early to Take in Your Surroundings

While you’ll be mostly studying during the day, it’s a good idea to understand the place you’ll relocate to. That doesn’t just mean the area near your college or university. You’ll need to learn where the high street is, the local supermarkets, and the Post Office to pick up book deliveries from Amazon that you missed while in class. Also, don’t forget the nightlife too. Read up to get a good sense of where the cinemas, tasty eateries, happening bars and other places to hang out are located.

So, don’t worry! It’s very possible to keep your comfortable lifestyle and set yourself up as a student. There’s no need to sacrifice – you can have both.

from Finance Girl http://www.financegirl.co.uk/need-your-creature-comforts-luxuries-while-studying-how-to-have-it-all/

Weekend reading: An ethical quandary

What caught my eye this week.

A short while ago the UK blogger DIY Investor wrote passionately about the threat of climate change. He’s now put money into the Impax Environmental Investment trust in part to do something about it:

As I was writing my article on climate change recently, I must admit to a feeling of guilt that I did not hold a ‘green’ fund in my portfolio.

I have some reservations regarding this sector and suspect many funds are not really as green as they make out.

However some are clearly better than others [and] I think that being aware of a potential problem brings with it a responsibility to do something positive.

So, time to make amends.

We get a fair few queries about ethical / SRI¹ investing. In response, The Accumulator wrote a big article about it last year, with a tilt towards passive options.

What jumped out at me from DIY Investor’s write-up though was this section from Impax on the happy consequences of buying a big wodge of its shares:

Environmental impact of £10m investment in IEM plc

• Net CO2 emissions avoided 7,940tco2
  Equivalent to taking 3,940 cars off the road for a year

• Total renewable electricity generated 2,150 MWh
  Equivalent to 520 households’ electricity

• Total water treated, saved, or provided 2,340 megalitres
  Equivalent to 18,500 households’ water consumption

• Total materials recovered/waste treated 1,340 tonnes
  Equivalent to 1,340 households’ waste arising

I am as concerned about the environment as anyone I know. I applaud the aims of both the trust and my fellow blogger.

However I can’t decide whether buying into a trust like this really equates to anything like the impact quoted above.

I’m not doubting the underlying green businesses which it invests in. I haven’t researched them.

Rather, if you buy shares of an investment trust in the open market, you’re simply swapping your money for the shares of someone else. You now own a bunch of companies achieving those lofty targets – but now somebody else does not. Surely it’s a zero sum trade?

It’s only when the fund raises money that new funds will go into the sector.

That’s on the one hand.

On the other hand, the greater the demand for assets like this, the stronger the secondary market and the easier such companies – and funds – will find it to raise money in the future.

So on balance I think owning the fund does no harm and probably a little good – but it would be best to buy into such trusts when they first raise money if you want to make the most impact.

Of course, I own Tesla shares and console myself for putting up with their volatility with the importance I see in its mission.

But then again that electric car / battery / controversy maker will certainly need to raise money again in the future if it’s to achieve its ambitions. Hence its shares really do need all the support they can get.

Do you consider ethical factors when making an investment – and would you feel easier flying to Spain on the back of it?

Let us know in the comments below.

From Monevator

Why would higher bond yields cause share prices to fall? – Monevator

From the archive-ator: Asset allocation rules of thumb – Monevator

News

Note: Some links are Google search results – in PC/desktop view you can click to read the piece without being a paid subscriber. Try privacy/incognito mode to avoid cookies. Consider subscribing if you read them a lot!²

Government borrowing in September lowest since 2007 – BBC

Flat rate pension to rise by 2.6% (or £4.25 a week) from April… – ThisIsMoney

…while the pension Lifetime Allowance will rise to £1,054,800 – Professional Pensions

UK house prices rise at their lowest rate in five years, says ONS – Guardian

Jargon-free pensions statement criticised for leaving out fees [Search result] – FT

Bumper year for income, with FTSE 100 posting 10% dividend growth – ThisIsMoney

(Click to enlarge)

The demographics of UK home buyers shifted after 2009 – Neil Hudson on Twitter

Products and services

Banks to check account names to beat transfer fraud – Guardian

How can a salary sacrifice scheme boost your pension? – ThisIsMoney

Share incentive schemes: Invest in your employer [Search result] – FT

Ratesetter will pay you £100 [and me a bonus] if you invest £1,000 with them for a year – Ratesetter

UK investment trust discounts widen since Brexit vote [Search result] – FT

Investment platform AJ Bell grows customer base ahead of IPO – CityWire

The rise and fall of the ethereum crypto-currency [Search result] – FT

Comment and opinion

Designing an ETF portfolio withdrawal strategy – Just ETF

A bear market comes bearing gifts for most – Humble Dollar

This is the end – Pension Partners

What is your financial tipping point? – Of Dollars and Data

Actually, maybe you should sell some shares this time [US but relevant] – Morningstar

The worst kind of bear market – A Wealth of Common Sense

Nice people have emptier wallets, on average – Scientific America

Shorting pioneer Tom Barton exposed some crazy frauds [Podcast] – Meb Faber

The one-word secret of the best investor you’ve never heard of – The Value Perspective

What colour is your parachute? – Simple Living in Somerset

For stock pickers: Has chasing hot stocks stopped working? – The Macro Tourist

For investing nerds: Why seed fund-raising scaled – Robert Bryce

Another for active-eers: More ways to manage equity risk – Flirting with Models

Brexit

Want a referendum on the final deal? Tomorrow’s London march is for you – People’s Vote

Eggsit means Eggsit – Gary Bainbridge

Brexit and finance – Young FI Guy

Cryptocurrency exchange Coinbase sets up Brexit contingency plan [Search result] – FT

Kindle book bargains

A Million Years in a Day: A Curious History of Daily Life by Greg Jenner – £0.99 on Kindle

The Templars: The Rise and Fall of God’s Holy Warriors by Dan Jones – £0.99 on Kindle

You Are a Badass: How to Stop Doubting Your Greatness by Jen Sincero – £0.99 on Kindle

Way of the Wolf: Straight line selling by Jordan Belfort – £0.99 on Kindle

Pay what you want for a bunch of electronic books [Beware all the trading tomes!] – Humble Bundle

Off our beat

The life-changing magic of tidying up – Get Rich Slowly

How Netflix expanded to 190 countries in seven years – HBR

It’s okay to feel down for no reason – Raptitude

The bad behaviour of wealth managers’ richest clients – Guardian

Saudi Arabia and the common knowledge game – Epsilon Theory

And finally…

“People who succeed in the stock market also accept periodic losses, setbacks, and unexpected occurrences. Calamitous drops do not scare them out of the game.”
– Peter Lynch, One Up On Wall Street

Like these links? Subscribe to get them every Friday!

1. Sustainable, Responsible, Impact Investing.
2. Note some articles can only be accessed through the search results if you’re using PC/desktop view (from mobile/tablet view they bring up the firewall/subscription page). To circumvent, switch your mobile browser to use the desktop view. On Chrome for Android: press the menu button followed by “Request Desktop Site”.

from Monevator http://monevator.com/an-ethical-quandary/

The Road To Financial Freedom: One Smart Investment At A Time

Financial freedom is the be all end all of most goals. Sure, money is great, as is stability, but financial freedom kind of gives you both. You are free to choose your work, your time, your place of business. With financial freedom, you will have the freedom to quit a job you hate, to leave a toxic work environment, to speak your mind to a bad boss. And the best way to get it, is by investing your money wisely.

Think about your career choice

The only way to build this freedom is to first get the money you need. The best, and safest, way to do this is through your own income. Getting loans from your friends, or from banks, means getting a lot of difficulty and lots of complications. That’s why making a good career choice is paramount.

Think about where you actually want to be in a five to ten years’ time. Think about how much money you can make in the long run, and is there a chance your salary can increase (and to which degree). Also, do you actually enjoy the work, or do you hate even waking up in the morning? No sense in spending fifteen years of your life torturing yourself. Also, what are the benefits of this career choice, do they allow for financial freedom? If you made a choice, know that it’s never too late to change. On the other hand, if you’re happy in your career, more power to you.

Retirement and benefit investments

Know this section depends on where you’re set up. It changes based on your government’s regulations and laws. But, know that one of the wiser investments you can do is set up a retirement fund. This can serve as your safety net, for obvious reasons. And while you can go all out and invest everything you have in some prospect, we advise against it.
Know that you should probably speak with a licensed financial advisor to help you out on this. Furthermore, do you have the option of having your employer match your retirement investments? If so, this is an excellent way where you can essentially retire very, very early. The same goes for benefits. Still, you will need to check with your local laws, but do remember this is a very real option. Some people actually invest all their time and energy to set up a system where they can retire as early as 40.

Alternative investments

You have the standard investment options, like real estate, but people don’t really think of the alternative options. One of the things you can do is invest in various stocks. Another option is you putting your money in pink diamond portfolio, or any other diamond brokerage industry. Colored diamonds are facing a resurgence, and so best to strike while the iron is hot.

Some people invest in grain, or in new industries and patents. The point here is that you don’t need to limit yourself to the standard stuff. There is money to be made in these fringe industries, money that not many people focus on. In fact, most forget that such an option even exists. The problem here, of course, is just how well you educated on a topic are. That’s why getting a good portfolio and stockbroker can really help you out. Have a specialized company do it for you, as long as you thoroughly check their credentials.

Real-estate

Understand that when you buy a house or an apartment, that it should actually be part of giving you financial freedom. Keeping a lifelong mortgage on the thing will just take that freedom away from you. So, investing in real-estate is out of the question until you get 100% ownership of your own home.
But, if you can afford it, real estate is one of the best ways to invest. Its stable, its value actually increases over time (if taken care of) and it’s an asset you can turn into real cash any time you want. It’s also an investment that pays for itself if you decide to rent it out. We advise you hire a good real-estate broker when you decide to actually invest in this manner. While this may be one of the more expensive types of investing, it can also be one of the safest and most stable.

Financial freedom is the root and base of all other kinds of freedom. Financial freedom will give you control over your time, over your attitude, over your life. And step by step, one smart investment at a time, you can reach it. Just remember to always keep an open mind, to educate yourself, and to ask for advice if needed. Don’t limit your options, choose more than one investment if you have the means, and then just sit back and relax.

from Finance Girl http://www.financegirl.co.uk/the-road-to-financial-freedom-one-smart-investment-at-a-time-2/

The Road To Financial Freedom: One Smart Investment At A Time

Financial freedom is the be all end all of most goals. Sure, money is great, as is stability, but financial freedom kind of gives you both. You are free to choose your work, your time, your place of business. With financial freedom, you will have the freedom to quit a job you hate, to leave a toxic work environment, to speak your mind to a bad boss. And the best way to get it, is by investing your money wisely.

Think about your career choice

The only way to build this freedom is to first get the money you need. The best, and safest, way to do this is through your own income. Getting loans from your friends, or from banks, means getting a lot of difficulty and lots of complications. That’s why making a good career choice is paramount.

Think about where you actually want to be in a five to ten years’ time. Think about how much money you can make in the long run, and is there a chance your salary can increase (and to which degree). Also, do you actually enjoy the work, or do you hate even waking up in the morning? No sense in spending fifteen years of your life torturing yourself. Also, what are the benefits of this career choice, do they allow for financial freedom? If you made a choice, know that it’s never too late to change. On the other hand, if you’re happy in your career, more power to you.

Retirement and benefit investments

Know this section depends on where you’re set up. It changes based on your government’s regulations and laws. But, know that one of the wiser investments you can do is set up a retirement fund. This can serve as your safety net, for obvious reasons. And while you can go all out and invest everything you have in some prospect, we advise against it.
Know that you should probably speak with a licensed financial advisor to help you out on this. Furthermore, do you have the option of having your employer match your retirement investments? If so, this is an excellent way where you can essentially retire very, very early. The same goes for benefits. Still, you will need to check with your local laws, but do remember this is a very real option. Some people actually invest all their time and energy to set up a system where they can retire as early as 40.

Alternative investments

You have the standard investment options, like real estate, but people don’t really think of the alternative options. One of the things you can do is invest in various stocks. Another option is you putting your money in pink diamond portfolio, or any other diamond brokerage industry. Colored diamonds are facing a resurgence, and so best to strike while the iron is hot.

Some people invest in grain, or in new industries and patents. The point here is that you don’t need to limit yourself to the standard stuff. There is money to be made in these fringe industries, money that not many people focus on. In fact, most forget that such an option even exists. The problem here, of course, is just how well you educated on a topic are. That’s why getting a good portfolio and stockbroker can really help you out. Have a specialized company do it for you, as long as you thoroughly check their credentials.

Real-estate

Understand that when you buy a house or an apartment, that it should actually be part of giving you financial freedom. Keeping a lifelong mortgage on the thing will just take that freedom away from you. So, investing in real-estate is out of the question until you get 100% ownership of your own home.
But, if you can afford it, real estate is one of the best ways to invest. Its stable, its value actually increases over time (if taken care of) and it’s an asset you can turn into real cash any time you want. It’s also an investment that pays for itself if you decide to rent it out. We advise you hire a good real-estate broker when you decide to actually invest in this manner. While this may be one of the more expensive types of investing, it can also be one of the safest and most stable.

Financial freedom is the root and base of all other kinds of freedom. Financial freedom will give you control over your time, over your attitude, over your life. And step by step, one smart investment at a time, you can reach it. Just remember to always keep an open mind, to educate yourself, and to ask for advice if needed. Don’t limit your options, choose more than one investment if you have the means, and then just sit back and relax.

from Finance Girl http://www.financegirl.co.uk/the-road-to-financial-freedom-one-smart-investment-at-a-time/

The Best Apps for New Forex Traders

The leading reason why so many new investors have begun trading in the Forex market is that it is a fast-paced environment based on something most people understand – money. However, understanding your own currency doesn’t necessarily mean that you will understand other major currencies and this is where it gets a bit risky. Yes, Forex is a risky market. Because of this, many new traders employ a trading style called ‘copy trading’ in which they follow and mimic the trades made by seasoned traders who have shown consistent successful trades.

Having said all that, the one thing which new investors can benefit from would be to take advantage of the numerous Forex apps, free or paid, that help them on their journey through Forex trading. If you are new to Forex and are looking to mimic the trading style of successful traders, the one thing you want to learn above all else would be the signals they follow. This is why you need the very best Forex signals app you can find that gives you all the tools you need to make on-the-spot, successful trades.

Understanding the Importance of Forex Signals

The one thing you will learn early on as a Forex trader is that currency pairs are largely reliant on the relative economies. When geopolitical influencers, for example, send one currency spiralling downward, that is a signal that it’s time to act. But how? The best Forex signals app (which you can find a round-up of on InvestinGoal) will let you enter the signals your ‘mentors’ use so that you will be alerted when it’s time to trade.

Why are these signals so important? The answer to that is both simple and complex. When you first began researching Forex, you were told over and over again that this is a volatile market and it is just as easy to lose a small fortune as it is to gain a huge fortune. However, nothing happens overnight and you will need to gain experience in reading the signals to know when to move or when to hold. The market may be volatile but your learning curve does take time, hence the need for Forex copy trading and signals apps.

What to Look for In Forex Apps

There are several things to look for when choosing the best apps, among which are copy trading and signals features. The apps reviewed and recommended by InvestinGoal have been rated based on reliability and availability across platforms. However, you are told that some apps are free and some are paid subscriptions. There is no reason why a free app cannot offer the same benefits of a paid app if you know what you are looking for.

This is where a Forex broker comes into play. Some signals apps are downloadable from your own broker, some allow you to choose a broker based on that platform, and others let you ‘bring your own broker’. The point isn’t always paid vs. free because sometimes you can find a more reliable free app for both Android and iOS than you can when purchasing or subscribing to an app. The one most important feature you are looking for is in that app’s ability to allow you to set signals you are copying from successful traders you are emulating. If your app does that, you’re good to go.

from Finance Girl http://www.financegirl.co.uk/the-best-apps-for-new-forex-traders/

What did low US Treasury yields ever do for us, anyway?

Whether you’re only now peaking out from behind the sofa or you’ve been investing passively like a trooper and refusing to look at your portfolio until Boxing Day, if you’re reading this site you’ve probably seen headlines implicating US bond yields in the recent assault and battery on the stock market.

For example:

• Surging yields raise threat of tipping point for stocks – Wall Street Journal

• Here’s why stock-market investors suddenly freaked out over rising bond yields – MarketWatch

• Treasury yields are increasing again, reigniting concerns about higher rates in financial markets – CNBC

Are pundits in this game of financial Cluedo right to finger Mr Treasury Bond in the trading den with a cudgel as the villain?

As always – who knows. There are plenty of dodgy-looking drifters riding around stock market town at the moment and occasionally firing their guns into the air, from geopolitical tensions and rising oil prices to high valuations in the US and its trade spat with China.

Any of those other factors – and more, or perhaps nothing specific at all – could have been the trigger for what wasn’t a particularly large correction anyway, especially in America.

Investing nerds like me still debate what caused the huge 1987 crash. We can’t expect a definitive answer to what’s so far been a run of the mill wobble.

Higher rate hate

All that said, I suspect sharply rising Treasury yields are probably having an impact in various ways on the market.

In particular, the commentary from US central bankers that there may be several more rises to come seems to be vexing in some quarters.

Many of the same commentators and traders who chastised the US Federal Reserve for a decade for suppressing rates to record lows now seem happy to put the boot in again when rates are rising.

Given markets move on sentiment in the short-term, this sound and fury can make a difference.

The obvious question is why do rate rises matter, anyway?

After all, a US 10-year government bond is still only yielding a little over 3%. For almost all the post-World War 2 period, that would have been considered bargain basement.

Also, why should UK investors care? We’ve seen a couple of rate rises here, but our yields are still much lower than in the US.

Isn’t everything bigger in America? Why not the yield on the 10-year Treasury bond?

Alas, contrary to some wishful thinking in recent years, we do not live on a financial island in splendid isolation. Warren Buffett calls US government bond yields the gravity of financial markets, and we almost invariably feel the impact here of major developments there.

For example, the relative attractiveness of putting money in a US bank instead of a UK or European bank can move both our bond markets and our currency, by influencing the behaviour of massive and rootless capital flows. Money tends to go to where it’s treated best.

As for rising yields themselves, I’ve had a few queries about this both here and in the archetypal pub.

I’m certainly not a bond expert or a stock market historian – some of our readers are far more knowledgeable about the mechanics of the yield curve than me!

Nevertheless I did make a fair fist of explaining the potential issues arising from the prolonged low interest rate era back in late 2016.

It seemed to me then that Central Banks were ready to start closing the spigots on super-easy money. Politicians, too. I mused that they feared that the core business model of banking risked becoming unprofitable, with unpredictable knock-on affects.

I’m not sure that’s proven out, but the rate rises have certainly started, at least in the US and UK.¹

On the down low

Bond yields rising off the floor may matter to traders and analysts long before they are seen in costlier mortgages or over-indebted ‘zombie’ companies going bust.

As I wrote in my long piece:

A discounted cash flow model puts a discount on the future cash due. This reflects the uncertainty about future profits, as well as inflation and interest rates.

Normally, distant payouts are deeply discounted. But with the risk-free rate so low that doesn’t happen so much.

Why does this matter?

Because uncertain future forecasts have grown in importance compared to near-term cash flows. A discount rate of 2% doesn’t have much impact until you get far out.

This makes the present value of an asset even harder than usual to determine with confidence. Because future cash flows assume greater importance, the valuation is based on more finger-in-the-air guesswork.

It’s a nerdy-sounding but important point that may mean market valuations are wildly off. Even a modest rise in rates could cause a crash in all sorts of assets beyond what we’d expect.

I’ve heard a couple of people ask why technology shares that pay no dividend fell the most in last week’s kerfuffle.

Nobody owns those for income. Surely it should be utilities or ‘dividend stalwarts’ like Unilever and Johnson and Johnson that should be most marked down, if nervous investors believe they can now get the regular cashflows they require from bonds again?

That makes sense, and I do think the relative attractiveness of dividend-paying companies compared to government bonds will shift over time if rates keep rising.

But it’s the change in the discount rate that explains the theoretical shift in the valuation you’d put on say an ASOS or an Amazon, or even a Fevertree. The companies may rapidly start looking more expensive in an analyst’s model, even if nothing has changed in the business itself.²

Anyway, rather than rehash that article again here I’d suggest rereading those two previous pieces for more on how low yields may have distorted things in the past decade. Unwinding such distortions, where they exist, seems bound to have some impact.

Here are the links:

• Understanding the low interest rate era

• The problem with low interest rates

Also, if you tend to read Monevator via email or you don’t check back on the comments much, you will have missed the long thread that followed the latest Weekend Reading.

If you are feeling blue after a kicking that – incredibly enough – at one point had the FTSE 100 back at 1999 levels, you might at least find some comradeship in the thoughts of fellow readers.

(Thanks again for sharing all!)

1. The Federal Reserve further announced in late 2017 that it was beginning to reverse QE – what it calls ‘Policy Normalization’.
2. The more prosaic reason they fell farthest is that people dump pricey growth shares in times of panic!

from Monevator http://monevator.com/what-did-low-us-treasury-yields-ever-do-for-us-anyway/

Furthering Your Career Prospects Beyond University

When considering how best to acquire the skills and knowledge necessary to further their
career, most people think of university. But if you already have a degree to your name, or
simply don’t thrive best in a traditional education environment, you may want to explore other
options.

Alternative education

There are many different ways to broaden your job horizons outside of university. Though
the ideal route is unique for each individual, some popular methods include:

Apprenticeships: This is the combination of long-term study and practical training on-the-job.
The benefit of first-hand experience, specialist guidance, and a steady wage, has seen
apprenticeships boom in popularity, with the government recently announcing an additional £
90 million in funding for the scheme. This should see improvements in the quality and
quantity of places available.

Traineeships: This is a great option if you don’t yet have the experience or qualifications to
enrol in a full apprenticeship. This training course (typically lasting several months) is unpaid,
but you should be reimbursed for expenses, and will leave equipped with the industry basics.

Targeted learning: If you are seeking to hone your skillset, hunting out relevant courses and
training programmes in your particular field could be the answer. Kaplan, for example, offer
further education in accounting and finance. By granting you access to expert resources,
they arm you with the tools necessary to reach your goals, both business and personal.

Entry-level jobs: Many people opt to start at the bottom and work their way up. It’s an ideal
method of learning about your chosen industry from the inside.

Internships: Work experience that can last anywhere from a few days to a whole year, an internship is a brilliant way to try out a role that interests you before you commit to full-time
work or study in that field.

The importance of continued learning

The drive to chase self-improvement is a valuable life skill in and of itself. With technologies, the economy, and business practices constantly evolving, it’s vital you stay up-to-date; equipped with all the latest skills and knowledge. Not only can this lead to great personal satisfaction, it’s the best way to remain employable, opening doors for professional development.

from Finance Girl http://www.financegirl.co.uk/furthering-your-career-prospects-beyond-university/