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.

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.

October Book Review - Surviving 2012

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.

Being an investor .....

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.