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Everything is For Sale, Including Debt

Everything is For Sale, Including Debt

As the saying goes, “Everything is for sale, you just have to come up with the right amount to make the purchase” and if you think about it you’ll realise that this is actually true. I’m not just talking about those scenarios where sentiment and desire seem to defy economic logic and trump real market value here. I’m talking about sales which go on without the majority of us even knowing about them. Debt is a very big seller in the world right now, yet it all happens within the darker corners of what’s otherwise plain view as most people choose to turn a blind eye to it going on.

Debt is being sold all day, every day and its trade never stops for single second. For as long as the world is turning, debt is being bought and sold somewhere around the world if not everywhere, you just don’t know it’s going on.

The basic forms of debt are rather straight-forward in their makeup and can take the shape of something like getting financed by the bank to buy your car, for which you’d make weekly or monthly repayments with added interest of course, so something like your mortgage or bond you have on your house which will take a much longer period of up to 20-30 years to pay off.

More sophisticated forms of trading debt are where the real money is made due to one of the most powerful tools of the financial sector; leverage. If a company offering financial services has been given the green light by the Financial Conduct Authority to operate within many different sub-sectors of the financial sector, they in effect hold the true power of leverage and gearing in their hands to generate insane amount of money, mostly through the business of trading debt.

Why do you think an insurance company is seemingly never satisfied with just doing insurance? They’d much rather offer financial services which span the entire insurance sector and given half the chance they’d expand into other financial services such as housing a resident banking branch or even brokerage for services such as offering the public a CFDs and stocks trading platform. In the case of offering a trading platform, licensed brokers are themselves traders and make use of leverage to make huge profits while charging traders a service fee for each trade or perhaps levying a spread fee instead of a fixed per-trade fee.

What’s ultimately at play here is debt because financial services companies can list the credit they hold on their books as assets, assets which can then be repackaged and sold or used as collateral to fund expansion operations or further investments.

Nothing sells like debt and when you earn interest on the money you have in a savings account (although it must be said that this is very little interest you earn) you are indirectly participating in the trading of debt. The money which you keep in the bank is being loaned out to other clients and some of the interest they pay on that loan is filtered down to you, but you’re really just getting scraps because banks have the authority to use leverage to loan out more money than what they physically have in reserve.

Whenever some investors or businesspeople who’ve been active in other spheres of business finally head on over to the financial sector, they often wonder just why they didn’t make the transition earlier. Because of the way in which our financial sector is set up and operates, often making insane amounts of profits is as easy as getting the right finance leads, which are known to be of high quality since financial services have become a very important if not critical part of our everyday lives.

So, the message for you today is that you should perhaps take the time to think about what exactly you’re spending your money on. You can either buy or sell debt and if you do it cleverly, you can enjoy some big financial rewards.

What is the Cost of Selling my House?

What is the Cost of Selling my House?

If you are thinking about selling your house to raise money to offset your debts, it is important to keep in mind the cost of selling. In addition, you also need to explore several smart ways to save money on the major financial expenses. Otherwise, you will be surprised at how much you selling your home will be an expensive business.

With the many agencies and factors involved in the process of selling a house, it is more than just naming price and finding a buyer who is ready to buy. Even then, when you take time to research and prepare adequately, you will know the costs that are involved and how to cut down the amount. Here are the main expenses related to selling your house and ways of reducing them:

  • Estate agency fees – This is a major cost when selling your house. Estate agency fees varies depending on the kind of agent that you are working with. A high street agent for example will charge you a commission of up to 3 percent of the selling price.

If for instance, your house is selling for £219,000 and your estate agent is charging you a 2 per cent fees, you might end up giving then about £4,380. Consequently, if your house is worth much more the agency fee will definitely rise.

However, you can save on this fee by opting for a fixed agency fees that you agree upon upfront before instructing them. This way, you are guaranteed of a good return from the sale. Alternatively, you could opt to use an online estate agent that will potentially save you money. It is also the simplest way of reducing the cost of moving.

  • Removal costs – Although you may be keen on negotiating the estate agency fees, you also need to keep in mind the removal costs when calculating your budgets. In addition, depending on your furniture and the distance to your new home, the price could rise from a few hundreds to several thousands of pounds.

You need to take into account whether you want the packing services or not because this is likely to bump up the price.  Thus, you will do well to reduce these costs by shopping around. You can also use comparison sites to see how much it will cost you. If you are not moving a lot of stuff and you are willing to do some legwork, then you will certainly pay less.

  • Solicitor’s fees – While the buyer will foot the charges for the stamp duty, survey as well as searches, you need the services of a licensed conveyancer or a solicitor that will act on your behalf and handle all the legal issues associated with selling your property.

Although you cannot get around this, you should expect to pay between £500 and £1,500. However, this depends on how complicated the sale process will be. You could also reduce the solicitor’s fee by using a solicitor from outside the capital, compare quotes or using price comparison sites to ensure that you get the best deal possible.

Other unexpected costs

The cost of selling your house does not stop at the estate agency fees, removal costs and solicitors fees. Therefore, the law requires you to provide an energy performance certificate (EPG) and provide information about the energy efficiency of the property.

You will do well to use assessors who are accredited to do the required survey. While your estate agency can arrange for one, you are better off organizing it on your own.

If you have large appliances that you are willing to get rid of and you cannot take to the recycling centre on your own, you need to pay a small charge to your local council so that they collect and dispose them on your behalf.

 

Do No Credit Check Loans Exist?

Do No Credit Check Loans Exist?

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Have you noticed that it’s one of the ways that most advertising has? A bold statement to build up the product or service being sold that is at the same time both true and not quite true.

That’s probably the way it is with so-called no credit check instant payday loans. It’s more or less true that there’s no credit check on your ability to repay the loan, yet at the same time, there is strictly speaking no such thing as a no credit check loan.

So, what’s the real answer – do they, or do they not exist?

Credit checking

A credit check offers lenders a way of assessing whether applicants are likely to be able to afford the loan requested and if they are likely to make the agreed repayments without defaulting.

That’s done with reference to your credit history of the way you have managed your borrowing in the past, the extent to which you have made repayments on time or whether there are recorded difficulties – as evidenced by your having been declared bankrupt, have had country court judgments (CCJs) mas against you, have entered any Individual Voluntary Arrangement (IVA) with creditors or have needed to make a Debt Management Plan.

These records of your credit history are kept by the main credit reference agencies in the UK – Equifax, Experian and CallCredit.

Lenders not only choose to conduct credit checks (to safeguard their own interests) but are obliged to do so, in the interests of responsible lending to customers, under the terms of the authorisation and regulation to which lenders are subject by the Financial Conduct Authority (FCA).

Under these strict rules, therefore, there is no such thing as a no credit check loan.

No credit checking

On the contrary, insist many providers of instant payday loans. They make a decision about whether or not you qualify for such a loan based only on the information you provide in your application – a “snapshot”, if you like, of your current financial standing, but without any formal check with the credit reference agencies.

This is a process known as a “soft search” or “quotation search” which leaves no trace on your credit history file.

This is an important consideration since every application you make for credit is noted on your credit file. If the application is rejected, this too is noted and is likely to have a negative impact on your overall credit “score” and subsequent ability to secure credit or a loan.

By pre-checking your likely ability to be approved for a loan when you make a formal application, therefore, this represents what might properly be called a no credit check instant payday loan.

No credit check/credit check

In this way, both answers might be seen as correct. The soft search or quotation search done by the provider of a payday loan avoids the need for a formal credit check – it is a no credit check solution. When you finally make your application for the loan, however, any lender is obliged to conduct a credit check on the file held on you by the credit reference agencies.

The First Step to Clearing Your Bad Credit Record

The First Step to Clearing Your Bad Credit Record

Given the rate at which consumers are increasingly getting listed with their country’s version of the credit bureau, one would perhaps be justified in truly believing that the rating system in use favours the creditors and is perhaps a little bit biased against the debtors. The regulations for issuing credit appear to be rather lithesome, with creditors often proving to be the instigators of bending those regulations just so that they can add that next debtor to their books.

How many times have you gone through the parameters and minimum requirements of some sort of loan or credit extension you’re trying take advantage of, realised that you actually don’t quite qualify to get the credit you want and yet you take a chance anyway? Upon filing the application, you delight in the fact that against all odds, you got approved for your financing….

A lot of the time (if not all the time), creditors are fully aware of the fact that they are approving and going ahead with the provision of credit to debtors who aren’t good for the repayments and will essentially eventually default on their loans. It’s a practice mostly instituted by the bigger financial institutions such as banks, but the reason behind them doing this is because holding lots of debt on their balance sheets is big business, perhaps even bigger than the actual interest they earn on the loan repayments. Debt can be repackaged and sold on to other creditors or even to debt collectors, but that’s perhaps a topic for another day because of its technical intensity.

What you need to know is that if you haven’t been reckless with your spending as a consumer and you find yourself sitting with an increasingly bad credit record and a growing pool of debt, it probably isn’t your fault that you have so much debt to deal with and that you’re struggling to pay it back.

That’s where you should look as the first step to clearing your bad credit record and getting out of debt and this can be done through simply looking beyond the big lending institutions by way of credit providers. Why do bad credit car financers exist, for example? They exist because they operate in that little pocket of the industry banks resort to as part of their plans to re-structure the loan repayment terms they’ve essentially shoved down clients’ throats by operating at the very edge of the regulatory parameters. If a bank can give you much better interest and repayment rates on a loan you qualify for, there’ll still try to hit you for the most favourable rates they can benefit out of, so chances are you can always go back to your bank and re-negotiate your repayment terms as a means through which to be able to afford paying the debt back.

That won’t repair your credit record as quickly (if at all) as perhaps going to those specialists who do consider lending to consumers with bad credit records on a case-by-case basis though. These bad credit lenders, so to say, will only give you credit if they are confident you can pay them back after assessing your unique financial situation and working out a plan for you to further reduce the debt you currently have.

This shows up as a positive factor with the credit bureau or ratings agency and thus works towards repairing your credit rating.

6 Simple Solutions to Your Payment Problems

6 Simple Solutions to Your Payment Problems

If the title of this article caught your eye, you’ve probably experienced payment problems. As a business owner, you know that payments, whether coming or going, do not always take place easily. Small payment problems can give you a headache while larger ones make your life downright miserable. As you and your company continue working on payment improvement, here are six simple solutions to consider.

More Payment Options

Imagine if your business only accepted cash from customers. You are hopefully chuckling at the thought. Credit and debit cards have been a mainstay for years now but even more options are becoming common. Beyond cards and cash, customers have mobile devices with payment options like Apple Pay and Google Wallet. No-touch mobile payments and direct mobile billing are becoming popular as well. The more payment options you can offer your customers, the more convenient their experience with your company will be. That will fundamentally result in more business.

Automatic Invoicing

As your business grows, invoicing becomes increasingly difficult. A growing customer base and varying levels of services provided can make manual invoicing a nightmare. That is where automatic invoicing comes in. This not only helps your business, but also your customers. They are not left guessing how much they owe, when their payment is due or when their invoice will arrive. This results in a better customer experience and increases the likelihood that you will be paid on time.

Handling Human Error

Mistakes happen. Challenges that you are all too familiar with include missing payment deadlines, paying too much or not paying enough. Human error issues cannot be completely avoided. But, there is a way to help your business handle this problem with more efficiency and less frustration. One software that businesses are benefiting from is automated Bacs payment software. Bacs allows payments to be made and received automatically. It also notifies you of potential issues ahead of time so that you are not left with any unwanted surprises.

Automatic Messages

As you gain more customers, it becomes harder to contact them when there are payment problems. You need a secure and efficient way of reaching your customers in this case. It is important to find a recurring billing system that can notice errors in customer transactions and relay a message to the users. Your customers enjoy being brought up to speed quicker too.

Better Payment Security

The security of transactions for your customers and business is more of a concern now than it has ever been. Every day, new stories surface of security breaches when it comes to customers’ private payment information. Understandably, you do not want to experience something like that. Always make sure that there is a secure connection between your company’s web browser and that of your customers. It is also of vital importance that your process is PCI-compliant so that the credit cards of your customers are not compromised.

More Currencies and Languages

As the world continues to get smaller, transactions between different countries are becoming more common. Eventually, you may have to consider accepting different currencies and assisting your customers in a variety of languages. If you fail to adequately do this, you could lose customers. If you allow customers to pay in their own currency, they will be less apprehensive about using your services. Finding a system that can handle different languages and currencies will help your business continue to expand.

In Summary

The fact that you need more complex solutions to your company’s payment problems is a good sign. It means that you are experiencing the necessary growing pains in becoming more successful. You can have the confidence to know that, in time, you will find adequate solutions to your payment problems. Hopefully some of these solutions may help you work towards a more efficient payment system.

Finance Advice that Could Benefit You in Later Life

Finance Advice that Could Benefit You in Later Life

With the UK economy still in recovery and a volatile stock market, many people are more concerned than ever about securing their financial futures.

Whether you are just starting your career or looking to retire in a few years, there are steps you can take that may pay off down the road.

The following is essential financial advice that could benefit you in later life.

Know Where All Your Money Goes

This starts by making a detailed monthly budget and sticking to it.

There are all kinds of apps and programs available for organising your finances.

Simply making a budget and paying attention to it on a regular basis will cause most people to more carefully evaluate their spending habits.

Many people are amazed to see just how much they spend each month on non-essential items when everything is carefully tracked.

Spend Less Than You Earn

While this may seem obvious, it’s extremely difficult for many people to live by.

Living within your means will translate into avoiding most types of debt, not paying high interest rates, and being able to save consistently until retirement.

Spending less than you earn will be a lot easier after making a budget and knowing exactly how much income you’re bringing in and what expenditures must be paid each month.

Save for Retirement

Whether you’re 23 or 53, you should be considering saving for retirement.

It’s not too early to start, even if you’re in your twenties.

Start an IRA and contribute the maximum amount. Once you’re past 50 the amount you can contribute increases.

It’s important to think about taking advantage of every financial opportunity, especially taking a look at the pension options available in your workplace.

The advice is often to contribute as much as you can to these types of employee based retirement programs – but be sure to be well informed before making a commitment.

Pay off Debt

It should go without saying that it’s smart to carry as little debt as possible.

So which should be a priority, saving or paying off debt?

Mathematically it almost always makes sense to pay off debt before adding to your savings.

This is especially true of high interest debt that can’t be deducted on your taxes. On the other hand, paying a traditional mortgage loan early will only reduce the outstanding principal and the interest.

Paying extra won’t lower your overall monthly payments, which is what happens with most credit cards when you pay down the overall amount.

You should also pay off private student loans before government loans.

Diversifying Investments Can Be Safer

Not having all your eggs in one basket often means your money is safer.

It’s usually recommended to have a variety of assets that includes cash investments, stocks, and bonds. But even within these primary groups diversity can help.

For example, you could include both corporate and government bonds in your portfolio.

There could also be bonds with different maturities and ratings.

Diversifying can also mean investing in real estate or even a hobby such as collecting art.

It’s sometimes a good idea to have tangible investments that don’t rely on the volatility of the stock market.

Make an Appointment with a Financial Advisor

This is often the first step many people take when getting their finances in order.

Knowing what types of debt to carry and which investment plans are right for each individual isn’t always easy to determine.

It’s important to choose an advisor with extensive experience working with a variety of clients, but equally looking for a company that clearly cares about its customers is important.

Social media can be a great way to find financial advisors so look for companies that regularly post useful information and have a big, engaged following. A quick look on Facebook returned Fisher Investments in the UK, a finance company who has over 10,000 followers and post commentary on current economic conditions. You can also look to financial publications, like the Financial Times, who post their top-rated advisor list and timely news articles. It’s information like this that can help finding information when looking for an advisor that fits your financial needs and goals.

You can also look to financial publications, like the Financial Times, who often post top-rated advisor lists and timely news articles. It’s information like this that can help finding information when trying to find a suitable advisor.

Appropriately managing your income can allow you to remove the stresses of debt and pension concerns when you retire, so start making a plan and apply the advice that is most suitable to you, your work and your lifestyle as soon as possible.

Investing Vs. Trading

Investing Vs. Trading

Due in large part to the booming online trading market, people often get confused about whether what they’re doing via their online platform of choice is in fact trading or investing. The lines become blurred a bit when brokers operating an online trading platform offer both of these financial instruments with which to buy and sell securities.

The lines are blurred further when one takes into account the fact that someone using these financial instruments can indeed be both a trader and an investor at the same time, with a single transaction effectively doubling-up as being a trade and an investment at the same time. Fundamentally however, there is a difference between trading and investing and there is a difference between a trader and an investor.

Investing

It’s perhaps pertinent to start off with investing because trading is essentially a spin-off of investing. An investor is fundamentally someone who takes a long term view on putting their money into something from which they expect or predict some growth – growth which will hopefully result in some financial success in the future. So even if you make use of an online brokerage platform from the point of view of an investor, your outlook is generally a long term one, which means you would buy shares in listed companies (stocks), commodities or some sort of stake in a company or venture with plans to only really cash-in properly once some growth has taken place.

Trading

Trading generally takes more of a short-term outlook in that a trader essentially seeks to take advantage of the immediate movement in the markets. The typical instrument offered to traders online is that of Contracts For Differences (CFDs). CFDs are precisely what is written on the tin – a contract you enter into as a result of your prediction of whether or not one or more share prices you’ve selected to bet on are going to increase in value or decrease. CFDs are precisely why there’s been a recent explosion in online trading platforms, quite simply because the brokerage sites don’t really own anything and they don’t produce anything either. So it’s just a matter of going through the requisite compliance processes to qualify as a broker and then make some insane money charging people commission for each trade they make.

Intraday traders are perhaps the most common types of traders, who are naturally drawn to volatile stocks so that they can take advantage of the constant movements of the values of those stocks.

So Which is Better – Investing or Trading?

In my expert opinion as someone who works in the financial industry, I’d honestly proclaim investing to be a better option, but only if it was a question of either-or. Investing is better in my opinion because if you look at the All Share Index of any stock exchange in the world, generally such a portfolio of shares increases in value over time. Your earnings would naturally be slow in this way, but they’d also generally be steady earnings which can be as good as beating inflation at times.

So even if you seek the thrill of the intraday trader and you have a preference for making (or losing) money quickly, your trading efforts should be complemented with a good portfolio of investments. That way, you can benefit from investor-advantages such as earning dividends on certain stocks you hold, while your trading efforts could play off on your investment portfolio to hedge against what would otherwise be serious, fast losses while you’re chasing your next short-term trade.

Ultimately, mixing things up is the way to go, but I seriously wouldn’t recommend for anyone to put all their eggs in the trader’s nest.

The Magic of Compounded Interest

The Magic of Compounded Interest

I often find myself thinking back to my high school days and feeling a bit sorry for those kids who elected not to do maths as a subject. These are the people to whom it’s very hard to explain concepts such as compounded interest and the magic behind what is essentially the best instrument one can use to steadily grow money which they otherwise don’t plan to touch for a long time to come. We all know that merely putting money in the bank via something like a savings account is nothing short of shooting yourself in the foot, quite simply because the interest you earn on money stored in this way falls far behind inflation and, together with the banking fees you’ll be subjected to, it ultimately works exactly the same as spending some of that money each month.

That’s why there’s some magic to compounded interest, but naturally the magic only works if you are indeed planning to leave that money in the bank for a considerable amount of time to come. For this compounded interest magic to work, you’d have to leave your money in the bank without touching it, otherwise the exponential formula used to work out the compounding interest you earn basically resets to your starting point.

Exponential Catalyst

I simply cannot emphasise this enough – if you have some money lying around which you don’t know what to do with, talk to your bank about the options you have for a savings pocket which offers compounded interest. As insiders working in the financial industry, we’re often prohibited from engaging in investments which allow us to profit from what is deemed to be an unfair advantage over regular consumers, but I think they missed one investment avenue in compiling the list of what is prohibited. We’re fully allowed to take advantage of compounding interest and that’s exactly what I’ve chosen to do myself.

The terms (and the exponential formula) used naturally differ from bank to bank, but basically if you understand the basic principles of an exponent, you’d be crazy not to want to take advantage of compounding interest. Basically if you just look at an exponent in its simplest form, you’ll realise that at some point along the way, each monthly (or annual) iteration of the formula means that your money grows at an ever increasing rate.

Think of it as a dam into which you decide to throw a certain volume of water. Based on this initial amount of water you’ve decided to pour into the dam, for as long as you don’t draw any water, someone comes with a little bit more water to pour into that dam. Each time they come with more water, the amount increases incrementally, with the new amount to be added calculated according to the amount of water currently in the dam and not the amount of water you originally poured in when you started out.

Essentially, an exponent grows infinitely as it gets closer and closer to infinity, but infinity is well infinite, so basically your money grows forever by an ever growing percentage each time, until you decide it’s time to draw on it of course.

The best living example of the power and magic of compounded interest is its very widely touted ability to double your initially invested money in no more than a period of seven years. Judging by how quickly time tends to fly that’s not a long time at all to double your money and there’s perhaps no other way of achieving the same effect with the limited risk associated with compounded interested.