A Day In The Life Of....

Be Prepared......

2012-02-01T23:45:00.000-08:00

As an investor January 2012 has proved to be an interesting start to the year.

Gold closed in December at $1563.15. Everywhere I was reading the gold bubble was over and we were in a bear market. January saw gold close at $1733. Now at the start of February gold is at $1748, definitely going up not down as many predicted. If you followed my suggestions and bought some gold you would be sat on a nice little profit. I don't believe the rally is over yet so there may still be plenty of opportunity to increase your commodities (Gold, Silver and Copper).

Interest Rates - The Feds chairman, Ben Bernanke said US interest rates were likely to stay at zero for a long time. Many analysts have interpreted this to mean rates won't rise until 2014 at the earliest. He also hinted at QE3. In the UK the Bank of England (BoE) kept interest rates at the record low of 0.50%

In the UK the Office for National Statistics confirmed what we have all known for many months. The economy is shrinking and we are on our way to a double dip recession. BoE minutes show members are already thinking of new QE measures to try and reduce the impact. Although, in my opinion QE has done stuff all so far except cause inflation and line the pockets of bankers. Isn’t it time for Governor Mervyn King and his merry men and women to try and find another way of trying to boost the economy?

Retail - we have lost several well known brands from the high street. RBS much to the amazement of Barclays bank and other supporters pulled the plug on Peacocks, a profitable business and forced them into administration with the loss of thousands of jobs. A buyer was found for the Bon Marche division but that has resulted in 160 stores being closed and hundreds of jobs lost. La Senza, Blacks Leisure and Millets are some of the other casualties of the new year. With UK businesses closing at a rate of 1100+ a week will there be anywhere left to shop in the near future?

Europe - Greece is again in the headlines as it asks for more debt to be written off and cheaper loans in the hope that by 2020 it will be able to reduce its debt to 120% of GDP. The annual meeting of the wealthiest business leaders and politicians at Davos, Switzerland brought to light one thing, there are no decisions being taken on Greece or other countries. Their attitude is to sit back and wait and see. Hoping Greece will leave the Euro. The attention on Greece has given other European countries a bit of breathing space to work on their debt problems out of the public eye.

9 European countries had their credit ratings downgraded which will mean more expensive borrowing in the future when they try to raise more funding.

France introduced a financial tax ‘as a shock move’ says Sarkozy in an attempt to force other EU countries to do the same. A move Britain is frantically fighting as it would mean around £45bn loss of income to the Chancellor who needs every penny he can get his hands on at the moment to try and balance the finances.

Balance – Austerity measures is the catch phrase of the decade. But austerity measures do nothing to increase sales, productivity, exports and confidence all necessary to have a growing economy. As we head towards a worldwide depression we are looking for a bold leader to come forward and kick some sense into our fumbling politicians.

You First -More than ever it is now imperative for people to stop relying on bankrupt governments to fund them. If you are lucky enough to still have a job start putting your financial plan in place by reducing any debt you have and start increasing your investments. If you don't have a job, create one. Turn a hobby into a business, start a network marketing business, just don't rely on the government to look after you. It can’t as it doesn’t have any money. The best person to look after you and your family is you. So it’s time to start putting you first.

In my book 'Surviving 2012' I discuss how to reduce debt, build assets and create cashflow. All the skills you will need to get through what is going to be another very turbulent year. In bad times there are many opportunities waiting to be seized and despite all the doom and gloom 2012 has many opportunities available for those willing to grab them.

In January, I started mentoring some new students. These are students who can see unlimited potential for their future. These same students have increased their cashflow and net worth within the first couple of weeks of starting the program. If you want more information on my program contact me on info@karennewton.co.uk . Don’t let another month pass you by.

Why Home is Best ...

2012-01-21T01:25:00.000-08:00

Why is there still so much stigma associated with working from home?

I hear all sorts of comments about lack of professionalism if you don’t have a high street presence, a factory outlet with your business name blazoned around the four walls; an office where you can meet customers and suppliers; it will stop people taking you seriously. These are just some of the so called ‘expert’ advice offered every day to people wanting to start new businesses.

Being self-employed was not something I had planned to do. My husband had quit his job over a dispute with management. This was on a Thursday by the following Tuesday the word was out that he had left the company. Our home phone started ringing with his old clients asking him to continue working just for them. Our first business was up and running from home by the end of the day. My husband was dealing direct with the clients and I was dealing with the admin, marketing and infra-structure. From our spare bedroom we grew our business to eventually employ 19 staff. Customers weren’t concerned with where we ran our business from they wanted the skills, knowledge and service our business could offer. Within 18 months we had 85% market share. Not bad for a little business run from a spare bedroom.

Today, I still run my businesses from home and love being home based. There are numerous benefits:

• I’m an early riser often up at 4:00am. I don’t want to be worrying about getting ready to go to work and disturbing my family in the process. Instead I pull on my dressing gown, go down stairs and get a few hours work done before my family wake up.
• Flexibility is really important. I can work around my daughter’s school days and when she is on holiday so am I.
• When the weather is fine I work in my lifestyle garden. When it’s wet I’m indoors.
• No worry about opening an office or making sure I have staff coverage.
• I don’t employ staff anymore instead I use the services of self-employed people who want to run their own businesses from their own homes enjoying the benefits that I do.
• I have a network of successful business people working with me. As we are all home based the relationship is different to employer/employee or business owner/contractor. We get together more as partners/friends and discuss work in progress and ideas for our businesses over a cup of coffee.
• Lower overheads means my businesses are more profitable
• My productivity is better as I’m not commuting to work or tied up in management meetings and staff meetings.
• My outsourced work is of a better quality as it’s done by home based self-employed people whose next job is dependant on satisfied customers.
• Technology has made it much easier to work from anywhere all I need is my laptop and mobile phone and my office goes everywhere with me so I can utilise my spare time better.

So, no matter what you are currently doing, think can it be done by a home based self-employed person easier. I’m sure it could. Home based businesses are definitely the biggest growth area today and for the foreseeable future.

What's going wrong?......

2012-01-17T20:16:00.000-08:00

We are currently faced with the worst economic situation in a generation. In the UK, the National Statistics Offices says businesses are closing at a rate of over 1100 a day. That figure doesn’t tell you how many people have lost their jobs and are now dependant on the ever decreasing value of benefits for their survival or that the number of people unemployed is expected to reach 3 million this year or that money is scarce.
As businesses release their Christmas retail sales figures it is apparent that people just aren’t spending and more businesses are giving notice they will be filing for administration over the next couple of weeks. Walk down any high street and they are quickly becoming ghost towns with numerous shops shut and very few shoppers.
It is basic economics if you want to be in business you need to have customers. If you don’t have customers then you can’t sell your product or service and you don’t have a business.
So, I have to ask the question that when so many livelihoods are at risk with so many businesses fighting for so few pounds and with so many businesses failing everyday why do we have such lousy customer service?
Yesterday, I was in a shop waiting to purchase an item. There was a queue with 5 people in front of me waiting to be served. Why was there a queue? Because the shop assistants were so busy having a talk about personal matters they weren’t serving the customer. I dropped my items on the counter and walked out without making the purchase. I wonder how long it will be before that business becomes another ‘business closed’ statistic.
I am currently in the process of renovating a property and the work has not been progressing as it should. So I called a site meeting for 10:00am on Monday morning. Of the 4 businesses I expected at the meeting only 1 turned up. Needless to say, I am currently looking for 3 new businesses for my project. The sacked businesses forgot one important rule. The customer always comes first.
During December I went with a friend to John Lewis department store in Cardiff. To be honest it is a very long time (years) since I have shopped at a John Lewis store. I was impressed with how in every department a sales assistant came up to me and asked was there anything they could help me with. I left the shop with several purchases. The store provided me with good customer service and I’ve been back a couple more times and made more purchases. Interestingly, John Lewis is one of the few companies to post improved like for like sales during the Christmas period. I wonder why?
So I say to businesses think about your attitude to customers and if you employ staff train them to start putting the customer first. It doesn’t cost anything to give a prospective customer a friendly welcome; be polite when serving a customer and thank them for their custom. The most important person in any business is the customer. If you don’t have a customer buying your product or service then you don’t have a business. Good customer service could make all the difference between the success or failure of your business.

The Panic is Starting...

2011-11-25T06:14:00.000-08:00

The panic is starting .......No, I'm not talking about doing your online Christmas shopping. Although if you haven't yet started it probably is time to start panicking. What I'm referring to is the imminent problems in Europe and a worldwide depression.

Every day in the news we hear more countries in Europe are facing financial difficulties. How many people have forgotten about Greece which has been shoved to the background because of the new stories emerging? Their problems haven't suddenly gone away they just aren't newsworthy at the moment. In a couple of weeks when they are again due to run out of money they'll be thrust back into the limelight again.

The countries currently in the headlines are:

Germany - once thought to be the savious of Europe and the Euro have found themselves out of favour with investors and this week failed to sell their full 6bn euro bonds. They could only sell 3.6bn euros and that was for much higher interest rates than expected. With opportunities to resolve the European turmoil squandered and rumours circulating that Germany is printing deutchemarks in readiness for the fall of the euro it is no wonder there was a lack of confidence in buying German Bonds.

France - also squandered an opportunity to tackle the european crisis. Their banks more than any other country have large exposure to sovereign debt. Any default or break up of the euro would leave them vunerable to collapse. Rating agencies are looking carefully and France and their AAA rating is at risk. So France's attempts to sell French bonds was met with a luke warm market and interest rates were much higher than previous sales.

Other countries - in the headlings this week are Austria, Belgium and Latvia who all have banks in financial difficulties who are likely to need bailouts. Latvia nationalised it's bank but that hasn't helped stop the run on the bank in question

Europe is heading for recession and bar a miracle is probably already in recession and that will impact on Britain and other countries worldwide.

Today the FSA announced that banks need to have emergency plans in place inreadiness for the collapse of the euro. They went on further to say the euro could collapse within weeks. European banks are frantically trying to sell off assets so they have cash in hand to deal with the crisis.

And what about us as investors? Well, Britain is still a relatively good place to do business. Opportunities exist if you go looking for them. It is very much going to be every person providing for themselves and not relying on others to do it for them. Keep building those assets and you will have a better chance of surviving 2012.

Section 8 or Section 21 Notice to Evict

2011-11-20T00:44:00.000-08:00

A frequently asked question about evicting tenants is whether to use Section 8 notice or Section 21 notice.

As a landlord for 11 years I used to say go with Section 8 for speed especially when dealing with rent arrears. But over recent years these types of evictions have become more frequently defended and can often cost the landlord large solicitor bills. I now recommend Section 21 in every instance.

Last year, I had a tenant who had totally wrecked a lovely five bedroom house. They were also not paying their rent and so for speed of eviction I decided on a Section 8 notice under grounds 8,10 and 11. On the day of the court hearing the tenants turned up with their lawyers who asked for additional time to put a defence together. The judge told them off for not entering a defence at the correct time but still gave them the extra time to put a defence together. A new hearing date was set a couple of months later.

At the next hearing they claimed the wrecked house was my fault. I was able to prove that the house had been in excellent condition when let to them (I had an independent inventory completed at the time of letting) but it was decided that the matter would need to go to trial. The trial set for several months later. I had to pay up front some court costs.( All the while, the tenant was not paying any rent.) I was looking at legal costs of around £20,000 to go to trial and if I lost the case I would also have had to pay the tenants legal costs which would easily have taken my costs to £40,000 +. The tenant had legal aid to take this matter to court.

At the time of serving Section 8 notice on the tenants, I also served Section 21 notice. I immediately applied for an eviction order under Section 21. As a result of the eviction order I then had a bargining chip to get the tenants to withdraw their action in return for my withdrawing the eviction order thus saving me the costs of going to trial. I was back to stage one with still no rent coming in and I was now out of pocket nearly £3,000 in legal fees.

I then served another Section 21 notice on the tenant and applied for their eviction. It was granted.

Following this experience, I would recommend to any landlord to use Section 21 notice everytime to evict a tenant. Provided it has been served correctly you must be given possession of the property. The judge normally gives possession within 14 days of the order being granted. If a defence is entered the judge can decided to give the tenant extra time of around 28 days to leave the property.

Your can get a solicitor to do the paperwork for you and serve the notice. To save costs and because Solicitors can be slow and don't always get the paperwork right, I tend to do all the work myself.

It should be remember that under Section 21 you do not give a reason for evicting the tenant. You are only applying to the court for an order asking the court to give you back possession of the property.

If you have outstanding rent you can make a claim through MCOL and if payment isn't received you can get a CCJ and apply for attachment of earnings.

A step-by-step guide to evicting tenants under Section 21 is available for £5.99. Please contact the writer at rknpublishing@uwclub.net.

Yuk! It's School Time Again

2011-11-06T03:00:00.000-08:00

After two weeks of half term holidays it is back to school again tomorrow. The daily grind of up at 6:00am begins again. But this second half term will be different. The clocks have gone back to GMT time and it will be dark when I collect my daughter from school.

When we are on British Summer Time (BST) our after school activities include walking the dog along the canal to a local playing field where he gets a run; bike rides around the boating lake or up to the Open Hearth Pub; Walks around Tredegar House Park. The activities only last half an hour or so but it is wind down time for all of us. For me it's the end of a busy day and my chance to get out of the house. For my husband it marks the time to switch off the phone which rings non-stop everyday and relax with the family. For my daughter it's a break before starting homework. For the dog it's his chance to be let off the lead and have a free run. Sadly, due to the darkness, these activities become reserved for fine weekends only until it starts getting light again..

The other thing I dislike about school is the whole school system. Don't get me wrong, school is important as our daughter needs to learn the basics reading, writing and arithmetic but unfortunately school is aimed at producing the next generation of employees and not the next generation of entrepreneurs or investors. Although only 12 years old our daughter already has a long list of business opportunities she wants to develop. Some will be consigned to the waste bin within a year or two but most have real potential to be outstanding businesses of the future. Her knowledge of investing is growing and will I've no doubt, exceed mine within a few years. (Especially now we have Junior ISA's which allow her to become her own investor). To me school holidays are the time when we work on the skills she will need to run a business or become an investor or both. While having fun we manage to plan, organise, research our trips. Play games that encourage investment and creativity such as monopoly and cashflow. All the while her business list ideas gets longer and her knowledge becomes greater.

For us school holidays are such and important time. As a family we decide what we will be doing each day of the week for the duration of the holidays with contingencies if the weather isn't appropriate for the planned activity. We schedule a morning a week for dealing with work after that it is total activities. These holidays we managed along with our bike rides and walks, mini golf at Celtic Manor; Halloween Party; Cinema; Guy Fawkes party; Visits to Fleet Air Arm Museuem; Haynes Motor Museum and Cadbury World. Two home movie nights and numerous games of Cashflow; Monopoly; Frustration; Articulate and Charades. And our ladies trips to the beauty salon and hairdresser. And while they seem simple enough activities they are building entrepreneurial skills which we hope will support her in her future career whatever it might be.

And so we are back to the school routine tomorrow. The count down to the Christmas holidays has began. Six weeks and we're back on holiday again. Six weeks and we are back into the realm of business, investment learning and fun again.

National Adoption Week

2011-10-31T22:19:00.000-07:00

65,000 Children in care in the UK. 65,000 is too many children in care. Of these 65,000 kids, 3600 are babies and only 60 were adopted last year. National Adoption Week is the once a year chance to highlight the plight of these kids who really just want someone to care for them and love them.

The worst part of all this is that often it is not the lack of people wanting to foster or adopt these kids it is the very system that is suppose to protect them that is really letting them down. The result of which is that many of these children spend their informative years in care and then go on to become tomorrows criminals.

I remember six years ago, my husband, Ron and I were having dinner with some friends. It was National Adoption Week and the publicity had made them think about fostering a child. Ron and I said we had always thought about adoption but as we had travelled so much it never seemed an appropriate time to adopt. We now considered ourselves too old to which they replied there is no age limit anymore. The next day we contacted our local council for information.

It took 5 months to get the first appointment with a Social Worker from the Council and another year to go through the screening process before finally being approved to adopt. We just needed the official notification of approval. That took another 3 months to come through. After receiving the notification another few months went by during which time we heard nothing from anyone. We received no information about kids available for adoption and no communication from our Social Worker or Council. So we notified our Council we wanted to go on the National Register. This went down like a ton of bricks. 'We like you to wait 12 months before going on the register' was the reply. We were now 2 years into the adoption process and not getting any younger so we insisted we be put on the National Register. We never went on the register as surprisingly a couple of days later a child was available for us to consider adopting. She was 8 years old. She lived in North England. We said yes and a few days later the Social Workers representing her came down to see us. Yes, we thought, things are starting to move now.

It took the North England Social Workers six months to decide if we should be put forward to a matching panel to consider if the now 9 year old girl should be allowed to move in with us. Once she had moved in it was another 15 months before we were given their support to file for the adoption to be made final. This was only after we contacted NSPCC for a Child Advocate to represent our daughter. (another story to be told at another time)

Our 12 year old daughter is an absolute delight. She is witty and intelligent. Has a very caring and loving nature. She has wound around her little finger not just us but all our friends, family and even the teachers at her school who all describe her as adorable. She has her demons though not only from her past before she was taken into care but from the trauma of being in care. Moved between Foster Carers(most of whom do a wonderful job) and having numerous Social Workers, this comes out in the nightmares she endures. Once a nightly event they now rarely occur. Something we like to think is because we are providing the love and stability she needs.

It is National Adoption Week and I am sure there are many loving and caring families able to provide a nuturing home for one or more of the 65,000 kids who find themselves in care if only the system and the workers within the system will give them a fair chance.

http://www.giveachildahome.co.uk/

October Book Review - Surviving 2012

2011-10-19T22:07:00.000-07:00

Four years ago in 2007, in unprecedented scenes, Northern Rock had a run on it's branches which saw Northern Rock Bank become nationalised. It was the forerunner to the 2008 Credit Crunch. Now four years later banks are still in financial difficulty. The almost daily notification of downgrades in credit worthiness of banks comes as no surprise. Countries which printed or borrowed endless money used to bail out their banks are themselves on the brink of bankruptcy. The implementation of severe austerity measures as countries try and reduce their debt and GDP ratios has only contributed to high inflation, high unemployment and low economic growth. The world is on the brink of a depression unlike anything we have ever seen. Worse than the 1930's Great Depression. Governments don't know how to solve the problems. They keep fighting with the same old tools that got us into the situation we currently find ourselves in. Instead of improving things it makes them worse. We are facing an enormous disaster and very few people are aware it is coming.

In my fifth book, Surviving 2012, due for release in January 2012, I discuss ways of improving your financial education and preparing for the biggest economic disaster of our lifetime. If you are looking for a know it all answers for everything type of book then this is not for you. This book has been written as a basic financial book for beginners giving some fundamental information that could can help you survive 2012 and beyond. The greatest financial disaster of a lifetime is almost upon us. Those with financial education will make it through the coming storm, not unscathed, but in a better position than those not prepared for it.

As the financial world we know changes forever a great transfer of wealth is beginning and Surviving 2012 can help you share in it.

Surviving 2012 by Karen Newton due for release in January 2012.

September Book Review

2011-09-23T20:56:00.000-07:00

Unfair Advantage - The Power of Financial Education by Robert Kiyosaki

If you follow my tweets @newydd105 you will know by now I am a big fan of Robert Kiyosaki. I was introduced by a friend to his books in 1999 and have read every book written since. Unfair Advantage has all I have come to expect from Robert and more.

It covers the traditional information such as building assets; defining what is an asset and liability; gives examples of the investments that Robert has completed and how you can do the same. It also has updated information on the different types of investor which was originally covered in 'Cashflow Quadrant' the second book in Robert's Rich Dad, Poor Dad series.

In my own life I have treated the different investor levels as my personal version of a promotion each time I have moved up from one level to the next. The rewards have been greater investor knowledge, more confidence, better lifestyle and increased cashflow and net worth. The expansion of investor levels in 'Unfair Advantage' has given me more challenges to expand my personal growth and financial understanding over the coming years.

Each book contains historical information which helps put into perspective where we stand economically today. 'Unfair Advantage' looks at the current topic of bank bailouts. It was fascinating reading about the number of bank bailouts that have taken place since 1971. Each time the bailouts are bigger and bigger but really only became public knowledge following the credit crunch of 2008. As I write this we are on the verge of yet more bailouts which could eclipse those of 2008.

In my tweets and blogs I have advised of the coming financial storm. the storm is brewing and it is a storm so great and powerful it will make the Great Depression of the 1930's seem inconsequential. The aftermath of the storm will affect millions of people. 'Unfair Advantage' is your chance to learn how to get some protection against the disaster about to engulf all our lives.

Unfair Advantage - The Power of Financial Education by Robert Kiyosaki is available in paperback or as a kindle download. The kindle version is available using the link on the right of this page. If you don't own a kindle, free apps are available for computers, ipads and ipods from Amazon books using the same link.

Action Man Needed!!

2011-09-07T21:33:00.000-07:00

Three weeks ago I had a flood in one of my rental properties caused by faulty workmanship done under a Government Grant Scheme.

An Engineer was required to assess the damage and do an official report. He was quickly on the scene, within a couple of hours, a 12+ page report was completed. He informed me that the installation had just run out of the installers guarantee but was still covered under the scheme's guarantee. It should take a couple of days for his report to go through the appropriate channels and work would then commence to make the house habitable again.

Three weeks later, nothing has happened except I've run up my telephone bill with daily calls and being passed from one organisation to the other each refusing to accept responsibility and do any work. The gist of the problem being that EAGA, the company running the scheme for the government lost the contract in March and say they don't have any funding available to honour the guarantee. The new company, NEST, who took over the management contract in April insist EAGA has been paid and therefore it is not their responsibility.

Yesterday, I decided on a new tact. Find a person who could apply pressure in the right place.

My first call was to Torfaen Council. ( A few years ago they had approached me to start using grant funding. Their problem that all this money had been put in place for landlords to upgrade their properties but no landlords were using the funding. As I was the largest private landlord in Torfaen they wanted to show they were supporting landlords and encouraging the use of the grants.) While the female operator empathised she could only give me NEST's phone number.

My second call was to NEST and again I was told EAGA were responsible and I should try being more forceful with them. As if I haven't given them a hard time over the last 3 weeks. The female operator empathised and suggested I contact my MP.

My third call was to the Welsh Assembly where I was finally put through to David. Off came my business woman hat and on went the helpless female hat. David listened to my sob story. 'Well, the buck stops here' he said. 'I'll ring you back within 2 hours'.

Two hours went by - nothing. Three hours - nothing. Four hours - nothing. Five hours later and my phone is ringing non stop. NEST, EAGA, British Gas, the installation company all eager to get my property rentable again.

In 3 weeks David is the first male I have spoken to apart from the Engineer. Although he didn't manage the two hours timeframe he got action within a day. Is he good at his job? I don't know but how refreshing to talk to someone who would take action and not try fobbing me off.

The Storm is Brewing

2011-08-06T02:39:00.000-07:00

As the largest world economy, whether we like it or not, what happens in America has a large impact on the rest of the world. Last week one of the Chinese Credit Rating Agencies downgraded the US and a couple of hours ago Standards and Poor also downdgrade the US credit rating. Just over thirty years ago America was a nation of credit today is has the largest debt in the world. But why should you worry?

Immediately, you may not notice much but gradually as the impact of the downgrade filters through there will be some noticable impact. We are entering the era of the largest number of people retiring the world has seen. That is the baby boomers born post second world war. As they start retiring they will find their pension pots worth much less than they expected. Any money they do have left will buy even less of an anuity than they expected leaving them with less and less to live on in their retirment years.

Increases in interest rates will trickle through putting up the cost of borrowing up filtering through to your loans, mortgages, credit cards etc. Businesses will find it more difficult to trade as they have no alternative but to increase their costs. Life in general will become more expensive.

In times of recession most governments normally increase their debt enabling them to pump more money into the economy and keep the country working. Central Banks reduce the base interest rates to encourage consumers to spend more and gradually work the country out of recession. This time however, we have already been in recession caused by the credit crunch. The government has an unsustainable debt level that needs to be reduced quickly and is already having an effect on the economy. Central Bank has rates at their lowest levels and has maintained that level for 29 months. Neither has worked and the country continues to decline. What do they have left in their armoury? Little or nothing is the answer.

What can you do to protect yourself? There is no doubt that we are in the eye of the storm. It started with the credit crunch triggered by the banks over borrowing and being unable to sustain the repayments. Now we have governments over borrowing and also unable to sustain it. The second part of the storm will be even greater, deeper and harder felt by consumers. To help reduce the impact try the following:

1. Reduce bad debt - credit cards, personal loans and hire purchase which are considered bad debt should be reduced and if possible paid off as quickly as possible. This will free up cash and reduce your exposure to increased borrowing rates likely to filter through over the coming months.

2. Buy income producing assets. - many people are confused about assets. Robert Kiyosaki has the best description of an asset. It is something that puts money in your pocket. So whether you work or not the money keeps coming in. For me income producing assets are rental property; dividends from defensive shares; interest from a lending portfolio and investment in businesses.

3. Gold and Silver- we've all seen Gold hit new highs this past week. As the economy becomes more volatile and depressed both Gold and Silver are likely to continue rising over coming year. Based on the value of Gold in the 1980's and calculating it's price in todays money it should be around $2200 an ounce. Gold is still undervalued at $1660 and a good buy. If you can't afford Gold then Silver is another undervalued commodity and offers good investment opportunities. I recently heard that around 5% of your wealth should be held in Gold and Silver. How much are you worth and how much are you holding? Central Banks have bought large quantities of Gold in the first half of this year. Far more than they bought during the whole of last year. What do they know that you and I don't?

4. Education - Financial Education should probably be number one on the list. The world economy is changing at a greater pace than ever before and those not prepared to invest in their education are going to miss out on the best opportunities to protect or save what they have. For a very small amount of money, around £5 - £10 there are some very good books available that will keep you up to date with changing forces. £10 spent today on improving your education could save you £20,000 £50,000 or £100,000 in the future and could even make you millions. Some of what I learned 10 years ago no longer applies. But if I didn't keep learning I wouldn't keep up with the changes and would probably have lost everything in the credit crunch instead of making more money.

Time is running out to protect your wealth. Time is coming is when there will be limitless opportunities to increase you wealth. The Storm is Brewing are you ready for it?

Warning - Northern Rock Mortgagees

2011-07-21T08:56:00.000-07:00

If you hold a Northern Rock Mortgage beware you could be about to lose your house.

We all remember the scene in 2007 when there was a run on the Northern Rock Bank. Queues of people waiting around the country to get into the bank and withdraw their money. It was at this time the government stepped in and nationalised the bank.

As a property investor. my husband, had a large portfolio of mortgages with Northern Rock at the time, he has since reduced the number of mortgages held with them but still retains a substantial portfolio mortgaged to Northern Rock.

Since we have had the lib/con government the bank has been split into two separate divisions. One holding all the customers deposits and one holding all the mortgages. An organisation UKAR is now responsible for managing the Northern Rock mortgage portfolio under the new name of N-RAM.

In June we received a letter from N-RAM stating they wanted to revalue our portfolio and have a meeting to discuss our exit strategy. The meeting subsequently took place with our accountant present. Through probing questions from our accountant it was admitted that N-RAM want the portfolio revalued, if property prices have dropped since the last valuation - basically we all know they have dropped since 2007 - and LTV is higher than the terms and conditions of the mortgage agreement then N-RAM are claiming breach of contract and will be forcing the sale of the properties.

I don't know how many mortgages held by N-RAM would fall into that category but imagine what that is going to do to the housing market having all these properties repossessed and sold off on the market. I can see house prices plummeting and giving N-RAM more opportunity to dispose of all the mortgages it holds in a very short time frame.

What a Crazy Investment Week ....

2011-06-23T02:47:00.000-07:00

The past 7 days have been one of my busiest weeks in a long long time. I am very much an advocate of working as little as possible each day. It's one of the perks of building up my investments and focusing on cashflow, the ability to work when I want to work. Something went drastically wrong last week!

So here is a brief summary of my investment week. (It is probably a good time to state that I am not offering financial advice. I am not regulated by the FSA and so cannot offer any advice. I purely write about my experience and urge you to do your own research or get financial advice from people authorised to give it.)

Property - lots of viewings and several new tenants has seen my portfolio hit the maximum on occupancy. In other words my properties are full with the exception of one where the tenant moves out today. I opted a few weeks ago to give this property to a RSL to manage. I wait to see if they live up to all the hype they have given me and how quickly they can tenant it. Phone is still running hot and I have topped up my waiting lists.

Shares - I have been investing heavily in shares. UK shares have fallen for 7 consecutive weeks making this the longest downturn in the market since the credit crunch meltdown in 2008. Today has continued with the downward trend. Worries around the Greek debt has the markets trembling as they prepare for the economic fallout if Greece defaults. Banks are particularly exposed to the default as they hold (by law) a percentage of their capital in sovereign debt. The continued downward trend has created some very cheap prices to buy into companies.

My strategy is two fold. I buy for dividends and I buy for capital growth. On the dividend side I had 3 companies in my portfolio going ex-dividend this month. The cheaper shares has allowed my to buy extra stock and hence boost my income for July and August when the dividends are paid. It's times like this I remember the words of the great Warren Buffett 'you want to be fearful when others are greedy and greedy when others are fearful'. At the moment sharemarket investors are fearful and this is my opportunity to be greedy and buy my shares at a discount price. Remember, I am only buying into companies that I have researched, seem solid companies and whose shares appear undervalued by my criteria.

My second strategy is capital growth where I buy penny stocks which I sell once they have doubled in value or once I feel they have hit their high. Surprisingly, most of my penny stocks have held their price or risen in value during this down time. Two stocks have fallen due to their link with oil. So I took the opportunity to purchase more as the companies still look fundamentally sound.

Bonds - I sold off the last of my bonds. I have been slowly selling them for several weeks as the returns have been dwindling. Finally, offloaded the last of them. I'm sure there will come a time when bonds are giving good returns again but now is not the time.

P2P - I have been involved in this type of investing for around 20 years. Mainly in New Zealand but since coming back to the UK the opportunities have been very restrictive until companies such as Zopa.com went online 6 years ago filling the void created by the banks failure to lend. P2P (Peer-to-Peer Lending) has grown significantly with Zopa now having 2% of the market and other companies coming online with niche markets and their own spin on ways to borrow money or you to lend as an investor. Ratesetter; Thincats; Yes and Funding Circle are just a few. I've used some of the money from Bonds to increase the amount held in these accounts and again this will increase the monthly cashflow over the coming months.

Gold and Silver - I've increased my holdings in both these commodities. Interestingly while US dollars prices for gold and silver have declined recently due to exchange rates UK stirling continues to increase in value. Gold bought at the beginning of the week has increased and now stands around £950 per troy ounce. I wouldn't be at all surprised to see gold reach £1000 per troy ounce during the second half of this year.

And finally Woodlands- I had a good look at some woodlands with the view to purchasing some for the income from the timber and capital increase in the land. Income from Woodlands is tax free. Capital Gain on the timber is also tax free. You do however pay capital gains on the increase in the land.

So there you have what has been a very busy investment week for me. Until the problems over Greece are sorted I expect the volatility in the investment world to continue and this might just be the start of what could be long days and busy weeks for a few months to come.

Always An Investor, Sometimes a Gambler, Not A Trader

2011-06-11T11:09:00.000-07:00

Yesterday I had a conversation with my lovely friend Helyn about share trading. Helyn and I met a few years ago at a property seminar, since then, to her credit, Helyn has invested a lot of time building up her financial knowledge and using the knowledge to start building her wealth. We are both suppose to be attending a share seminar in London next weekend but due to a family situation I have had to cancel. Following our chat I thought it a good opportunity to clarify my definition of a trader and why I class myself as an investor.

What's a Trader?
A simple definition for me is that a trader is someone who will buy shares with the intention of selling quickly to realise a profit. Depending on what the sharemarket is doing they may buy a share and sell it a couple of hours later for a profit. They may hold the share for a longer period but are always looking for the best time to sell it and get a profit. If the shareprice drops all efforts will be made to reduce the loss, get the money out and get back into buying again.

Being a trader is very time consuming, you need to spend incredible time reading, research, following every move the share makes. Guage the right time to enter the market and the equally important time to exit. While they hold the shares they need to keep an eye on streaming prices and be alert as to how the price of the share is moving.

Being a trader is very intensive and can be quite stressful.

What is an Investor?
For me, being an investor is all about buying assets that generate income. When I buy shares, like a trader, I will research the share thoroughly to ensure I am buying into a good company but for me the emphasis is on dividend yield and holding the share as long as possible so the income continues to come in regardless of the share price. I am continually looking for good dividend yield with a preference of 7% or higher and company stability to ensure the dividends continue regardless of the economic conditions. When I find a good share to buy I am likely to hold it for years as long as it continues to provide a good dividend. I was disappointed recently when one of the long standing high dividend paying companies in my portfolio was subject to a takeover and will subsequently be delisted. I am now on the lookout for another company to replace it in my portfolio.

For me the best part of being an investor is the freedom I enjoy. Because I hold shares for such a long time, unlike a trader, I spend very little time in the office. Each morning I check the price of the shares and any news that might affect it. Normally, that takes about half an hour. I'm then finished for the day.

As an investor I hold different types of assets; shares, property, bonds, gilts, lending etc. they all have one thing in common. They provide a regular income. They build my cashflow and the cashflow continues to come in regardless of whether I work or not.

Where the Gambler come in.
Although I buy shares with income in mind, I also buy shares in what I consider to be up and coming companies. These type of investments I look at are referred to as penny shares. Again I will research a company to check that it is a valid company but this time I am looking to see how likely I think the company is to deliver on its promises and increase the value of the company. I am looking for the value of the shares to at least double in value but will stick with a share if I think it will go higher. Sometimes I achieve those objectives and sometimes I lose money because the share did not perform as expected. This is where the Gambler comes in. Some of the purchases I have made have been sucessful. For instance I purchased shares in a gold mining company for 4p and eventually after a couple of years sold those shares for 46p. A nice healthy profit. With an oil exploration company I bought shares for 2p sold at 7p. The shares then dropped in price and I bought back in at 4p and again the shares are now at 7p. If they keep going up I may sell at 8p or again hold them for longer. I've also had my losses. I bought into a company at 12p and the shares within a few hours dropped to 8p and have sat there ever since. With penny shares there are likely to be more losses than gains hence I refer to these shares as gambling.

So for me there is a big difference between a trader, an investor and a gambler. I am always an investor, sometimes a gambler but not a trader.

Being an investor .....

2011-06-01T03:43:00.000-07:00

1999 was a new beginning. It began quite simply with a colleague suggesting I read a book. The book has now gone down in history as one of the great financial books of its time. 'Rich Dad, Poor Dad,' by Robert Kiyosaki. I read the book, promptly went out and got the second one in the series. I was hooked. My husband wasn't convinced.

About a month later the same colleague asked if we would like see Robert Kiyosaki in Auckland, NZ in January 2000. The answer was a resounding yes. At the end of the seminar my husband suggested we buy the third book in the series. The five and a half hours trip from home from Auckland flew by as we discussed all the possible opportunities we had gained from the seminar. We took a couple of days off work and read book three from cover to cover twice. Our life as investors was about to begin or so we thought.

New Zealand has a high home ownership population and we decided the best thing for us was to move to Australia and start our new lives as investors. Unfortunately, it wasn't meant to be and within a week we were on our way to the UK following the death of several family members.

Our plans were on hold for about a year while we dealt with the family tragedies. We didn't lose sight of what we wanted to do and by 2001 we bought our first house. Run down and needing repairs. We lived in it for 3 years but always with the intention that it was going to be a rental property. In September 2001, on my husbands birthday we bought another property at auction. Two houses within 3 months. From there we set ourselves the target of doubling our portfolio every year. A strategy we kept going until Northern Rock (one of our major lenders) got into trouble in September 2007, at which stage we had 60 properties and we ground to a halt. The next two years were spent, trying in vain, to raise financing to purchase more properties.

Late August 2009, we were invited to another Robert Kiyosaki seminar. We again bought some more books, sat down and read them together and hatched the next plan of attack. At this stage we had a healthy property portfolio but little else in investments. So we decided now was the time to start building other income producing assets. Remembering the advice from the books. An asset is something that puts money in your pocket. Just keep building the asset column.

We had for twenty odd years dabbled in shares but never in a major way. That was about to change. We devised a two level share strategy. We would buy shares that produced a good dividend yield preferably over 7%. We would also invest in penny shares with the aim to double our money. Sell the shares and put half back into high dividend yield and the other half back into penny shares. We are still operating that strategy with good results.

We also set ourselves a goal of doubling our income from investments other than property every year. 2010 was a real learning curve as we tried different strategies until we found one that worked well for us. We didn't quite make our goal of doubling income that year. But the goal has already been achieved in 2011 and we expect it to be one of our best years for a long time.

We've continued our learning and our investments are now very diversified. We still hold our property portfolio, we have our penny shares and our high yield dividend shares. We operate a lending portfolio where we provide loans to other people through a third party and receive monthly interest in return. We hold gold, silver, copper and other commodities all of which provide capital growth.

We've worked hard to become investors in the real sense of the word. Every day we do something to increase our wealth and our income. We always remember Robert Kiyosaki's advice. The definition of an asset is something that puts money in your pocket. Keep building the asset column.

Property - The best time to buy is now

2011-04-18T09:45:00.000-07:00

Don't buy property its about to crash - I've been hearing this from the so called experts for the last five years. But guess what? if the naysayers keep this up for long enough then there will come a time when they will be proven right. That could be tomorrow, a month from now or 10 years from now. Despite the worst recession in a lifetime, or at least since 1930, property prices have held their values fairly well. Has property crashed? No. Has it moved downwards slightly? Then the answer is yes. But let's put this in context.

Everything that we invest in moves in cycles. That is it has ups and downs. If you drew a circle on a piece of paper and hold it in front of you at the top is the high. At the bottom the low. Over a period of time any investment will complete a circle (cycle) of highs and lows. But interestingly the low in each investment is normally higher than the previous low. The highs tend to go higher. This applies to property, commodities, shares etc.

Today and every day for the past five years I've been hearing that property prices are going to crash. But what is meant by a crash? If you think property prices will go back to where there were twenty years ago then I'm afraid you will be very disappointed. Inflation and wage rises over the last twenty years will ensure prices don't go that low.

Let me give you an example: A few months ago I was out for a drive with my step-father, who is now in his 80's. We passed a house with a for sale sign. He told me he used to own the house many many years ago. He had bought it for £2000 and sold it for £4000. He thought he had done really well doubling his money. Later I checked the for sale price on the internet and the property was listed for £269,000. Since my step-father bought and sold the property there have been several recessions and investment cycles. Even now house prices have reduced a little as a result of the credit crunch but I would consider it extremely unlikely that the price of the property listed for £269,000 would reduce to just £2000.

History shows us that despite house prices moving up and down on average houses will double in value every ten years. We know that everything moves in cycles and we are heading towards the bottom of the current cycle in the property market. However, if you can get mortgage financing then the best time to buy is now.

No matter what investments you hold, nobody can predict the top or bottom of the investment cycles. The best most investors do is to read the 'change' signals and hope to get into the investment just after it hits the bottom and out of the investment when it has just hit the top of the cycle. An investor then rides the market until they see the signals for the next shift upwards or downwards.

The property market has been in a downward movement for about four years. Indications are that we are nearing the bottom of the property market and may already have started the move towards the next boom market. If we have reached the bottom then buying the house my step-father used to own for £269,000 would be a shrewd investment and you would then be in a good position to ride the next boom. If we haven't reached the bottom then if you bought the property and lost a few thousand in value the losses would soon be wiped out as house prices start increasing again. Either way I believe now is the best time to buy property. If history repeats itself, and it usually does, in ten or fifteen years time the house will be worth over £500,000. Would you be happier waiting for it to reach that level or buy it now while it is worth £269,000.

I know what I would be doing. I'd be buying now at today's prices

Bond Scheme Runs Out of Money

2011-04-01T03:15:00.000-07:00

As a landlord, when letting a property I take the risk that I will have a good tenant, capable of looking after the property, paying his/her rent on time and being a good neighbour. Unfortunately, no matter how many checks I do I often can't tell until the tenant is in the property how good they are going to be.

To protect against damage and rent arrears Landlords ask for Bonds. I know that for a lot of tenants the cost of a bond is something they cannot afford and so over the years Bond Schemes have started to help tenants get into properties. Schemes, such as, Solas Bond Scheme run here in Wales by the Welsh Assembly has been around for many years and is an organisation I have used for several years.

It concerned me last year when they started revoking guarantees on existing tenancies. Claims submitted to them at the end of last year were ignored. It took months of emails and phonecalls to get the paperwork through to make the claim.

Since January, I have been making weekly phonecalls on progress with claims. After many excuses the claims were finally approved but not paid. So for the past few weeks I have been chasing every week for payment.

Today, I received a phonecall, only after threatening legal action, advising they have run out of money and can't make the payment until the new financial year.

What credibility does an organisation have if it can't pay it's claims.

Will I be taking on Solas Bond Scheme applicants again? No
Will I recommend them to another landlord? No

Who needs Landlords?

2010-03-12T08:40:00.000-08:00

Better late than never, I have just caught up on the news concerning the Wilsons. A husband and wife team who gave up teaching maths to become landlords in Ashford. They have a property portfolio of around 700 properties. The article I read, states they suffered badly during the recession and were only saved from being made bankrupt by Bank of England reducing interest rates. It goes on to say about get rich quick schemes and bad business decisions. The tone of the article came across as anti Landlords as did most of the comments made by readers. Yet I saw very little comment made about the number of tenants who failed to pay their rents causing the Wilsons to be in their predicament in the first place or the invaluable role they played in providing accomodation to people who don't own their own homes.

In comparison, my own BTL portfolio is quite small at around 60 properties. Before the recession I experienced very little rent arrears with only one or two of my tenants being in arrears. That changed during the recession to 95% of my tenants having rent arrears. So I can empathise with the Wilsons. Was it my fault that the recession hit so many of my tenants causing the defaults? That certainly isn't bad business practice on my part it came down to bad practices from banks causing the worst recession since the 1930's. The Wilson's didn't create the recession. They didn't cause their tenants to default on rent payments. They didn't cause their tenants to lose jobs. They are the victims of the current financial situation caused not by them but by greedy bankers and governments who failed to take action when it was needed. Yes, they benefited from the Bank of England reducing rates but I'm sure that like me they have many lenders who haven't reduced rates but instead continued to put rates up blaming the economy for increases.

In my town the local council advise they have a shortfall of 6000 properties. My 60 properties are a pittance compared to the actual number of properties needed for homeless families in this area. I like to think I am providing a service and helping families have a decent home to live in which the local council can't provide. Across the country it is a similar situation. Governments and Councils just don't provide sufficient housing to meet demand.

Who needs Landlords? The whole country does. Without us there would be far more homeless families. So give us a break. We aren't the villans in this country. We provide a much needed service. Yes, we make some money out of it. We also lose a lot of money from tenants non payment of rent and greedy lenders. We take the risks and we live with the consequences but doesn't that apply to anyone in business?

Lenders Greed

2010-01-27T03:08:00.000-08:00

As a buy-to-let property investor I have enjoyed relatively low interest rates during the past year by the majority of my lenders with the exception of GMAC loans. Despite record low Bank of England mortgage rates, low Libor Rates and generally low money rates the GMAC loans have continued to increase.

Loans managed through the Skipton Office or on sold to Building Societies have repeatedly increased during the last 12 months. Just this week I have had loans managed by Derbyshire Building Society and Amber Home Loans increase by more that £100 per month. Each letter states that 'e are experiencing exceptional circumstances'making the cost of borrowing more expensive. Certainly I agree that we are experiencing exceptional circumstancesof greed by lenders who have over exerted themselves and have no idea of managing budgets.

Imagine what would happen if tomorrow I turned around to my tenants and told them I had to increase their rents by £100 a month effective immediately? I've no doubt I would lose most of my tenants.

With it still difficult to get BTL lending in the UK it would be nice to see some sort of restriction on these unscrupulous lenders who are just out to line their pockets.

What Green Shoots?

2010-01-27T02:48:00.000-08:00

Yesterday's official figures indicated that the UK economy was finally out of recession. Growth was at 0.1% but could be revised down once the final are released by the National Statistics Office next month. If the 'normal' revision takes place then we will find ourselves at zero growth or back into the negative.

Am I the only one who sees the so called growth as a normal increase in spending due to the lead up to Christmas and Post Christmas sales? The CBI have been saying businesses had a bumper Christmas compared to last year not because sales we up but because there was less competition due to the number of high profile business such as Woolworths which had ceased trading.

Unemployment figures last week showed a decrease by seven thousand people. Again it is normal for businesses to take on temporary staff to cope with Christmas demand. Are we likely to see unemployment go up again when the next set of figures are released?

I hesitate to say we are out of recession and I expect worse to come as I see no evidence of green shoots just a lot of politicians wearing green coloured glasses.

Mercedes F1 Launch

2010-01-25T06:20:00.000-08:00

This morning in Stuttgard Mercedes GP F1 launched their new car or rather I should say relaunched last years Brawn GP in the new silver arrows livery. But for me the highlight is the return of Michael Schumacher to Formula 1.

As a fan of Michael Schumacher's from his first drive in an F1 car with Jordan I was saddened when he retired in 2006. For me Formula 1 has never been the same and his talent has been sorely missed. To say I am excited at his return is an understatement. For the first time since 2006 the F1 season can't start soon enough.

Saturday 23rd January 2010 - Karting at Llandow

2010-01-24T04:23:00.000-08:00

This was a trip that had been planned for a long time but cancelled numerous times due to the heavy snowfalls we had seen over the past six weeks. So it was with relief that we opened the bedroom curtains on Saturday morning and saw bright blue skies and snow free gardens. Karting was on.

Its ten years since my husband quit karting and I haven't missed the weekly grind of nights spent building engines, weekends of travelling around the country practicing and racing or the continual hunt for sponsorship. It has been so pleasant to relax with friends and family over late night dinners, go to the cinema or just enjoy other activities together as a family. So my major concern was will my husband get the bug and want to start racing again.

Saturday's trip had been planned with some friends, Rhys and his two boys, who have just discovered karting. It is also an opportunity for our ten year old daughter to have a try at karting and see if she has the motor racing bug or not.

The day doesn't start too well with our daughter waking up with some viral infection. Her temperature is up and she is vomiting. 'Do you want to stay home?' I ask.

'No way' is the reply, 'I want to go and even if I don't drive I want to support the others'.

Llandow is an old air base and the runways have been modified for racing. It offers owner/driver racing and corporate karting. The routine is simple kids go out for one session, corporate have a session and then adult owner/drivers get their chance to shine. Very informal, everyone is friendly and helpful.

We arrive at lunchtime. I was up very early Saturday morning baking bread and cakes and making a picnic but it's not appreciated and everyone is more concerned with karting than eating. So much so that there is no time for eating during the day and the picnic is saved for our evening meal which we finally eat at home in the warmth of our kitchen.

As for the karting, Ron, Rhys and the two boys have a fantastic time. Debbie & I spend the day freezing cold trying to smile and be as encouraging as possible. Our daughter spends the day in the club rooms being sick. A great family day out!

Did my husband Ron get the karting bug again? Don't know he's full of aches and pains this morning and very non commital.

Does our daughter have the racing bug? Don't know she didn't get a run in a kart too busy being ill

Will we do karting again? Probably