Saturday 28 April 2012

The Compound Effect

If you are only ever going to read one book then 'The Compound Effect' by Darren Hardy should be near the top of your list.

Darren was the guest speaker at a function I was scheduled to attend in March.  Unfortunately, last minute family emergency meant I was unable to go. But, earlier this month I got the opportunity to watch a video of the event.  Darren's speech was funny, entertaining and motivational.  So much so, I searched online for his book 'The Compound Effect'. I enjoyed it so much it has become my book of the month.

The Compound Effect discusses how little actions or choices made today can have a large impact on your future.  You may not notice immediately but in 1 year, 5 years or even 10 years down the track you can see the results of the choices made today.  As someone who uses compounding interest principal in my day to day investments I particularly liked the analogy between having a magic penny that doubles in value every day or being given £3million in cash.  Very much like the story I tell of the Fairy Godmother and the magic train.

Paul J Meyer, has had a big influence in Darren Hardy's life which is noticeable throughout the book.  I also use the teachings of Mr Meyer and particularly like his Effective Personal Productivity programme.  However, reading The Compound Effect, I realised how much I have procrastinated in some areas of my life.  A look at the waist line in the mirror confirming as much as did the dust burning on the treadmill motor as I used it for the first time in several months.

The Compound Effect has provided a much needed wake-up call.  While, I have been successful with investing and creating an envious lifestyle I have let procrastination settle in forsaking the skills and disciplines that have provided my successes to date.  The past week has been spent reviewing my goals, aspirations and a new energy or 'Big Mo' as Darren calls it has been reawakened.

I now eagerly await a copy of Darren Hardy's other book 'Design Your Best Year Ever'.  I'm sure it will be as inspirational as The Compound Effect.  

Wednesday 1 February 2012

Be Prepared......

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.

Saturday 21 January 2012

Why Home is Best ...

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.

Tuesday 17 January 2012

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

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.

Friday 25 November 2011

The Panic is Starting...

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.

Sunday 20 November 2011

Section 8 or Section 21 Notice to Evict

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.

Sunday 6 November 2011

Yuk! It's School Time Again

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.