Van insurance for young drivers: How to get the best deal

So you’re under 24 years old and you need to get insurance to cover you to drive a van. Well, the bad news is that, like car insurance, if you are lucky enough to be young in years you are sadly also deemed to be a bit too inexperienced to be a safe bet for many insurance companies.  As a result, your premiums are likely to be higher than those for older drivers.

The good news is that there are ways you can help to get those insurance premiums down and make insuring a van for young drivers more affordable. Here we’ll explore some tips to help you to make your van insurance premium more affordable until you reach the ripe old age of 25!

Make use of telematics

First on the list is to consider how to prove that, although young, you can drive responsibly and safely. Here’s where a bit of technology can help in the shape of a little black box, which, when fitted to your vehicle, will monitor how you drive.  

Many insurance companies offer reduced premiums to young drivers who fit a black box to their van. This allows the younger generation to step out from under the usual statistical data labelling (of being very inexperienced as a driver) and to get insurance based on how they actually drive.  

Because black box technology or Telematics, to give it its proper title, is such a new technology, there are understandably a few worries about its use, so here’s a handy guide to what it will do and, more importantly, what it won’t do for you.

However, this may still not be enough to bring down the insurance premiums to an affordable level, especially at first, and if you are a very new and inexperienced driver. So what other options can you consider to try to reduce the amount you’ll have to pay to insure a young driver for a van? If you are lucky enough to be able to choose your van then this can be an area to reduce those costly premiums.  

Choose a van from a lower insurance group

Vans, like cars, fit into groups for insurance purposes. Criteria such as their engine size, cost of parts as well as repairs, how fast they can go, their weight and how good their security is all play a part in deciding which group the vehicle belongs in. Parkers have a guide to the cheapest vans, both small and large, based on their insurance groups.

By picking a van from a lower insurance group you can reduce the cost of your insurance premiums; however you have to offset this by making sure that you get the right van for the job too. There’s no sense in buying an underpowered van if you are a delivery van driver in the hillier parts of the country or finding that you have to do twice as many trips because you can’t fit everything you need in because the van you bought is too small.

Fit additional security

You can also consider adding extra security devices to your van, such as a tracking device or immobiliser, although it is worth taking advice from your insurers on this as only some modifications are recognised and some may even increase the cost of your insurance.

In this article, Auto Express tackle the various types of security modifications you can fit to your van that will not only help to keep both your van and its contents safe but may help to reduce the cost of your insurance.

Shop around for the best insurance deal

Finally, as with all types of insurance, it’s worth shopping around for the lowest deals. Taking the time to compare van insurance through a comparison website such as Compare Van Insurance can help you to find the best insurance quote for your young van driver.

As with everything in life, there are no shortcuts and if something looks too good to be true you can bet your life that it probably is. Here’s a list of things to look out for and things that you should avoid doing to try to reduce those high premiums.

• Don’t be tempted to under insure your van just to get a cheaper quote. It’s not worth it in the long run and might even get you in trouble with the law. If you have to make a claim in the future and all is not as it should be, you may well find that you are not actually covered at all.
• Avoid going for a larger voluntary excess if you don’t have the means to pay this, should you need to make a claim. Voluntary excesses can be a good way to bring down your premiums as long as you have the money to back you up if you actually need to use it.
• Under no circumstances should you use ‘fronting’ as a tactic to get lower van insurance for a young driver. Whilst it may seem like an innocent and legitimate way for an older driver, usually a parent, to act as the main driver of a vehicle for the purposes of reducing the costs, it is likely to get you into hot water since the insurance company may refuse to pay out in any claim. At worst, it could land you all with a criminal record. Take a look at this guide from the RAC on fronting.

from Finance Girl http://www.financegirl.co.uk/van-insurance-for-young-drivers-how-to-get-the-best-deal/

What Are the Top 5 Resume Trends for 2018?

Writing a resume can feel like a drag. You may feel tempted to just go through the motions because it’s boring and tedious. However, you must stay on top of your resume-writing game as trends are constantly shifting. Crafting a killer resume will increase your likelihood of landing your dream job. Here are some tips from Beacon Resources for writing a game-changing resume this year.

1. Target Your Resume

Big corporations don’t have time to read through every single application they receive. They use tracking systems, also known as bots, instead. In order to get picked up by a bot and increase your chances of getting human eyes on your resume, include some skills and keywords from the job posting.

2. Put the Juicy Parts at the Top

The most crucial portion of your resume is the top one-third of it. While you may traditionally put your mailing address in this section, consider putting your LinkedIn web address instead. Additionally, use a summary statement instead of an objective statement to properly market yourself for the position.

3. Use a Refreshing Design

The design of your resume matters. Here are a few things to consider:

• Use a simple and clean template
• Make sure it looks sleek
• Use bold, italics, and capital letters sparingly
• Include a variety of paragraphs and bullet points

You want it to stand out without being too much of an eyesore.

4. Be Selective

hile your instinct may be to crowd your resume with all your experiences, don’t do this. You don’t need to list all the internships and entry-level positions you’ve had. Los Angeles recruiters only want to see the most relevant roles.

5. Emphasize Your Achievement

Don’t fill your resume with your previous responsibilities. Highlight your successes instead. Use relevant numbers and specific details to showcase how you can benefit the company for which you’re applying.

Beacon Resources is one of the top finance staffing agencies in Los Angeles. Submit your resume to us for help in your job search.

from Finance Girl http://www.financegirl.co.uk/what-are-the-top-5-resume-trends-for-2018/

Martin Lewis: Should you buy your holiday euros/dollars now or wait?

The pound is still in the doldrums. A few years ago before the EU referendum vote a pound bought €1.43 – since its dropped significantly and hasn’t recovered much. Last summer it bought €1.14, and today it’s hovering around the €1.12 mark. Against the dollar, the rate is just $1.32 – around a decade ago it bought roughly $2.00. It’s similar with most other currencies.

from Martin Lewis' Blog https://blog.moneysavingexpert.com/2018/07/martin-lewis--should-i-buy-currency-now-or-wait-/

Weekend reading: Thrifty business

What caught my eye this week.

A few years ago the Financial Times published an article about students and money that caught fire and went viral.

I can’t even remember whether the gist was eat fewer avocados or mount the barricades and challenge the system. But I did notice it seemed to lead to a change in editorial tone.

Perhaps it was a coincidence or a staff change, but the personal finance section (which I’ve been reading since I was a 20-something myself) definitely took a lurch to the sympathetic. A cynic might say the FT was chasing new traffic it hadn’t known was there. I suspect it realized even its uniquely affluent young readership felt under the cosh.

Now, I know not every Monevator reader of a certain age has made that leap.

However personally I do believe – financially-speaking – that it’s tougher now for most aspirational young people than for many decades.

No, not tougher than it was for a miner’s son wanting to follow his father down the pit in the Valleys in the early 1980s – nobody is claiming that.

But far harder for an averagely studious young person to achieve averagely good grades and get a middle-of-the-road job and end up with a house and 2.4 kids on anything like an average street in an average town.

And at the end of the day, for most people for right or wrong that’s what it’s all about (including virtually all those older folk who say “let them eat rent!”)

Money saving experts

Anyway, all that’s a long-winded way of saying that the FT’s Millennial Thrift special this week has lots of tips on saving money, many with a digital dint.

Some even work if you’re an old lag like me. Especially as there’s a London slant.

Go check out all the tips at the Financial Times [search result], and if you’ve got any that aren’t mentioned then feel free to add them in the comments below.

(Let’s only have a couple of obligatory sarcastic Viz knock-off tips please! )

As to whether saving £8 on a movie ticket or getting a cheap pizza is a sustainable solution to homes priced at 20-times local earnings… well that’s a debate for another day.

Oh yes: Come on England!

From Monevator

Investing for beginners: Uncompensated risk – Monevator

From the archive-ator: Thoughts on a very British housing crisis at Northern Rock – Monevator

News

Note: Some links are Google search results – in PC/desktop view these enable you to click through to read the piece without being a paid subscriber.¹

‘Bleak and crippling year’ for UK High Street: Store sales fall for fifth month in a row – ThisIsMoney

Britons may be able to claim billions more in PPI compensation – ThisIsMoney

Brace for a lost decade in US stocks, warns Morningstar – MarketWatch

Report: UK single-breadwinner families need 27% boost in income – Guardian

How the UK’s middle class savers are being dragged into a 55% pension tax trap – ThisIsMoney

Poorer parents contribute more than expected to plug student finance gap – Save the Student

Bank of England warns on the impact to GDP of a full-blown US-led trade war [PDF] – BOE

Products and services

Buy-to-let lenders offering workarounds on tough affordability rules – ThisIsMoney

National Counties lifts rate on its top easy-access Classic Saver 4 to 1.35% – NCBS

Vanguard to enable free trading of most ETFs on its US platform [I’m not sure about UK?] – ETF.com

Ratesetter’s free £100 bonus offer ends this month [Affiliate link] – Ratesetter

Marriage tax break could save £900, but one million couples are missing out – ThisIsMoney

Mini bond investors given hope by ombudsman ruling [Search result] – FT

Remember Thriva, the fancy blood test and app combo? It now enables you to add various personalized tests to your subscription, from testosterone to thyroid function. You get 50% off your first test (and I get £10) if you try via this link – Thriva

How much does a garden cost? £27,000 on average, apparently – ThisIsMoney

In pictures: Homes with air conditioning – Guardian

Comment and opinion

The privilege of knowledge – Of Dollars and Data

ETF industry has reached maturation without maturing – Bloomberg

Supply and demand: One reason it’s harder to beat the markets than you think – Peter Lazaroff

The (evolution) of the investing pyramid [PDF] – Meb Faber

Help! My child’s pension has hit the Lifetime Allowance roadblock [Search result] – FT

Trade war bark: Hold tight or nasty bite? – Investing Caffeine

P2P lending: A review of the market – Young FI Guy

Vanguard should offer a “total fund”, with everything in it – Morningstar

The ideal scenario in retirement: Conservative returns, steady income – Financial Samurai

Made $650m? Here’s how to keep it better than Johnny Depp (reportedly) – The Big Picture

Wealth is what you don’t see – Fervent Finance

Is volatility risk? – Behavioural Investment

Larry Swedroe: Dividend policy and stock returns [Research precis] – ETF.com

The new glide path [Using momentum to reduce sequence of returns risk, research, nerdy] – Flirting with Models

Kindle book bargains

Weapons of Math Destruction: How Big Data Increases Inequality and Threatens Democracy by Cathy O’Neil – £1.99 on Kindle

Einstein: His Life and Universe by Walter Isaacson – £0.99 on Kindle

Made to Stick: Why some ideas take hold and others come unstuck by Chip and Dan Heath – £1.99 on Kindle

The Honourable Company: History of the English East India Company by John Keay – £1.99 on Kindle

Moon Over Soho: The Second Rivers of London novel by Ben Aaronovitch – £0.99 on Kindle

Brexit

Theresa May’s struggle to protect trading links with EU after Brexit [Search result] – FT

Airbus chief: Government has no clue how to execute Brexit without harm – Guardian

Martin Wolf: The irremediable folly of a ‘no deal’ Brexit [Search result] – FT

Ongoing Brexit cost calculator [Nearly £47 billion so far] – Brexit cost calculator

Off our beat

Fitness trackers prove England taking penalties isn’t good for your heart – via Twitter

You decide: Would you let a car determine who dies? – ABC News

For the first time more than 200,000 flights are tracked in one day – via Twitter

Red-hot planet: All-time heat records set across the globe – Washington Post

I’ve only just discovered this silly word pronunciation ‘guide’ – YouTube

And finally…

“If wealth is defined as funded contentment, then we need to know what we’re supposed to be funding.”
– Brian Portnoy, The Geometry of Wealth: How To Shape A Life Of Money And Meaning

Like these links? Subscribe to get them every Friday!

1. 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/weekend-reading-thrifty-business/

How to Find Your Full Credit Report and How it Affects Your Loan

Credit reports are used by a number of financial organisations and companies, from personal loan providers to private investors. They provide them with a comprehensive overview of your credit history/relationship, and this helps to inform their decision with regards to deciding who they lend money to. As such, you may well want to access your credit report to check your rating and see how you may be able to improve it. Here is some useful information in relation to this.

How to Find Your Credit Report

Accessing your credit report is actually a fairly simple process. There are three main credit reference agencies (CRAs) which compile all the information relating to your credit history. These are Experian, Equifax and Callcredit, and each will have their own report on your credit history. These reports can differ slightly, so it may be worth getting a report from each to get a more comprehensive overview of your credit history.

There are a few methods to obtain your credit report from the CRAs; firstly you can sign up to a subscription service with Experian and Equifax who offer in-depth analysis on your credit file and tips on how you can improve your credit score.

These organisations are also legally obliged to provide you with a copy of your report for £2 (which can be done by contacting them), either as a written copy or online.

There are also free services out there that give your credit report for free, such as Noddle and Clearscore.

How it May Affect Your Loan

Credit reports are one of the main methods that all lenders use when deciding whether to lend you money. As such, they could have a bearing on whether you will be given access to credit or not. Those with a stellar credit report may find it easier to get a loan than those with a less favourable credit history.

Those with a poor credit history (such as those who have had their home repossessed or failed to meet repayments) may find it much more difficult to access credit. As such, it is advisable that you take steps to keep your credit report as unblemished as possible.

How to Improve it

For those with a slightly poorer credit report, there are still plenty of ways to improve it. Focusing on getting rid of unpaid debts could be a good start, and paying more than the minimum repayment on a regular basis signals to a lender that you are responsible with debt management.

If you’ve never had credit before, then it may also be difficult for you to access credit. Taking out a credit card and repaying the amount you have spent on it at the end of the month could be a step towards giving you an improved credit rating.

It is important to take your credit file seriously, as it may significantly affect your chances of accessing credit in the future. Be sure to check your report thoroughly, and take all necessary steps to improve it should you need to.

from Finance Girl http://www.financegirl.co.uk/how-to-find-your-full-credit-report-and-how-it-affects-your-loan/

Tips for Travelling on a Budget

Travelling the world is one of the best ways to soak up culture and broaden the mind. It’s little wonder therefore that so many of us harbour a healthy dose of wanderlust. In many cases, it’s the cost alone that holds of us back from hitting the road or taking to the skies, so here are some easy but effective ways to reduce travel related outgoings, and help you get that little bit further. 

• Travel out of season: Where possible, you should avoid travelling during school holidays and the height of the summer, as this is when prices are at their peak. Most hotels, airlines, tour operators and suchlike will offer much better value for money during quieter months as a means up drumming up customers. 
• Be strict with your packing: Many of us fall into the trap of overpacking, keen to cover ourselves for every eventuality. To avoid hefty luggage costs, however, you should be strict and only take what you need. 
• Get health insurance: When it comes to health, it’s not worth cutting corners. Getting ill or injured whilst abroad is stressful enough without worrying about how you’re going to cover the cost, so always get insured. After all, being frugal isn’t always about not spending; it’s about spending wisely.  

• Travel with a friend: If possible, it’s always good to travel with a companion. Sure, it means you’ve got someone by your side to share in the memory-making, but it also means you’ve got someone to split the bill with when it comes to the likes of food, travel and accommodation. 
• Stay with locals: Sites like couchsurfing can connect you with locals who have free beds or sofas that they’re willing to rent out. It’s much cheaper than staying in a hotel, and your host may be able to provide you with insider tips about getting the most out of your stay. 
• Eat like locals: The centres of popular towns and cities are rife with tourist-friendly restaurants and cafes. They might be the easy option, but they’re often expensive by comparison to lesser-known places that lie off the beaten track. Hunt out these hidden gems, or better yet, head to a local market and tuck into fresh, authentic, cheap street foods. 
• Don’t over tip: Tipping comes as second nature in the UK and US, but it’s not the custom in many other countries. In fact, some cultures even see it as somewhat crass and insulting. It’s always worth checking with local residents if you’re expected to tip, and if so, how much. 
• Pay with cash: Using tangible cash instead of cards is a good way to plan out a daily budget, and to see exactly how much you’re spending. When using a card, it’s too easy to get carried away, meaning there’s a hefty bill waiting for you when you get home. An extra transaction fee can also often apply when using a card. 

• Utilise public transport: When travelling from city-to-city, or country-to-country, an overnight coach or train will prove much cheaper than flying. It’ll also save you the cost of an extra night’s accommodation. 
• Make the most of free attractions: Always take the time to find museums, galleries and landmarks that offer free entry, rather than simply opting for pricey tourist hotspots. It’s the best way to enjoy the culture of the area without breaking the bank. 

from Finance Girl http://www.financegirl.co.uk/tips-for-travelling-on-a-budget/

Investing for beginners: Uncompensated risk

The relationship between risk and reward is a cornerstone of understanding long-term investing.

As we saw in a previous lesson, the various asset classes – cash, bonds, property, equities and so on – sit on a continuum of rising risk and reward.

• Cash is the least risky asset class – it’s often considered risk-free – but you also expect the lowest return from it.

• Bonds are riskier, and over the long-term their historical returns have been higher than from cash.

• Equities are the riskiest mainstream asset class. They’ve typically delivered the highest returns over the long-term.

Remember that when we say ‘risk’ here, we mean volatility – how much prices move around – although the risk most of us care about more – losing some or all our money – also applies.

Another – non-academic – way to think about risk is it’s the probability of something being worth less than you paid for it at some point in the future.

Cash in a bank never goes down in value. Shares can fall 5% in a day and crash 50% in a matter of months in a bear market, though that’s rare. But over the very long-term the returns from shares can be expected to trounce cash.

Why does this relationship hold? Because it has to.

Why risk taking usually pays in investing

If you think about it, why would anyone invest in a riskier asset class if they only expected to get the same return as from a less risky asset class? (And the latter with better sleep and fewer grey hairs, too.)

The odd person might make misguided bets.

But the market as a whole is considered to be rational and efficient, not an Edward Lear poem.¹

If a riskier asset class appears to offer only the same return as a less risky one, then something has to give. The price of the riskier asset falls until it is cheap enough to offer sufficiently enticing expected returns to make up for its extra volatility.

• Why would you put up with fluctuating bonds prices if you don’t expect higher returns than from cash?

• Why risk the vertiginous death swoons of the stock market if you only expect to earn the same returns as from more stable bonds?

• Zooming into specific shares, why invest in a risky start-up company if you only expect to get the same return as from an established blue chip?

In every case the answer is your expectation of higher returns.

In general the market does a good job of sorting out the pricing of various asset classes at any time to match buyers and sellers at the different risk/reward points.²

We investors can then bolt together portfolios from the different asset classes with the aim of matching our overall risk tolerance.

But here comes the important point. Academics – who came up with all this theory – warn that the relationship of more risk, more reward does not always hold.

In some circumstances you take greater risk, yet you can’t expect the market gods to reward your chutzpah with greater returns.

Academics these lousy bets uncompensated risk.

Uncompensated risk: Just say no

The classic example of uncompensated risk is buying shares in an individual company versus investing in the broad stock market.

Let’s say you expect shares in financial blogging firm Monevator Industries to deliver a 10% annualized return over the next decade.

Suppose you also believe the wider stock market will return 10% a year.

Now, there are many quirky things that can go wrong with Monevator Industries on the way to you earning your 10%.

• It could suffer an industrial accident.
• Its products could go out of fashion.
• Its CEO could buy a new apartment and get distracted from running the business.
• It could go bust.
• At the very least its price is likely to move around a lot to reflect the market’s shifting assessment of these factors.

Of course, the stock market as a whole will also go up and down, too. Its various constituents will have their woes.

But all companies in the market should not suffer the same business disasters at exactly the same time.

If you’ve got all your money in one stock, you’re therefore taking on a lot more risk than the market – including the risk of losing all your money.

But don’t panic! Holding more than one company immediately diversifies your portfolio, and reduces this risk.

And the more additional companies you hold, the more the company-specific risk is diversified away.

Estimates vary, but holding as few as a dozen-to-20 different shares³ gets rid of the bulk of the company-specific risk. By the time you’re up to 50-100 different holdings you’ll have to hunt for the decimal point.

At the extreme you can just buy the whole market via an index tracker fund. Now you have diversified away all the company-specific risk. You’re just left with the risk of holding equities as an asset class.

Why uncompensated risk doesn’t pay

According to that academic relationship between risk and reward, a risk that can be easily diversified away cannot be expected to reward you with higher returns.

Why?

It goes back to supply and demand.

If investors can reduce the risk of investing in any single accident-prone company by holding a bunch of them, then the risk of investing in companies isn’t such a big deal, after all.

Investors therefore won’t demand so much extra expected return to entice them to buy. They’ll take lower returns and diversify.

Because the risk of holding a few individual companies can be easily diversified away like this and not be expected to give you higher returns, it is said to be uncompensated risk.⁴

As a consequences, you should not expect to earn higher returns simply from running a more concentrated portfolio of shares.

Note: I am not saying that you can’t make money investing in a single company’s shares. Clearly you can! You might have put all your money into Amazon shares at a few dollars and now be a multi-millionaire. Similarly, you might have lost everything in failed bank Northern Rock. In efficient market theory you can’t know which will happen in advance. You just know “shit happens”, and that you can diversify away the risk.

Another example is currency risk. This risk of currencies moving against you can be hedged away and the impact nets out over the long-term with a global equity portfolio, so it is considered to be another uncompensated risk.

Active management is a zero sum game that overall reduces returns to investors through fees and other costs. So some argue that it too is also uncompensated risk.

If you buy one fund, you might do better or worse than the market. The more funds you own – the more you diversify – the more that risk goes away.

Eventually this logic takes you back to owning a total equity market index fund, where you expect higher returns compared to a less risky bond fund, but no special extra returns on top.

Key takeaways

• Generally-speaking, you will only get higher returns by taking on greater risk.

• However greater risk cannot always be expected to deliver higher returns.

• Risk that can be easily diversified away is called uncompensated risk.

• The market doesn’t pay you for uncompensated risk.

• Index tracking funds that invest across broad asset classes are an easy way to diversify.

This is one of an occasional series on investing for beginners. You can subscribe to get our articles emailed to you. Why not help a friend get started, too?

Note on comments: This series is for beginners, and any comments should reflect that please, rather than confuse or make irrelevant points. I will moderate hard. Thanks!

1. Sometimes this efficiency breaks down, as behavioural economists such as Nobel Prize winner Robert Shiller have shown. But almost everyone agrees it’s big picture efficient most of the time.
2. Yes, it goes crazy sometimes and seemingly gets it wrong – such as when we see market bubbles. Again, that’s a discussion for another day.
3. Chosen from different sectors. They can’t all be sausage makers or umbrella factories. That’s not diversified.
4. You might expect to do better than the market because you believe you’re a brilliant stock picker, but that’s another – very unlikely – bet altogether!

from Monevator http://monevator.com/investing-for-beginners-uncompensated-risk/