Is Housing a Good Investment Now?

There are lots of reports that the housing market is making a comeback. Although, the housing market is coming back it still hasn’t fully recovered from the financial crisis. The housing market in general is making a comeback, but some areas are still struggling while others have fully recovered. Whether housing is a good investment depends on whether housing is coming back in your local market.

If you are looking to buy a home to live in rather than as an investment than your criteria for choosing a home will be different than if you are buying for investment. You would look at things such as whether it is a good place to raise your kids rather than just considering the potential investment return. Many people who delayed buying a home are now considering a home purchase. This should help boost the overall housing market.

When deciding to buy a house you will want to consider if buying or renting is the better decision in your market. One way to determine that is buy looking at the buy/rent ratio. To determine the buy/rent ratio you divide the purchase price of a house by the amount it would cost to rent a similar property. If the buy/rent ratio is under 15 than houses are considered cheap in the area and it is a good time to buy. This is only one factor to use when determining whether a house is a good investment and should be used only as a starting point.

Housing may be a good investment now depending on your local market. Of course, even in good markets you can make a bad purchase decision. If you are going to invest in housing you need to do your research.

Expansion Looking to the Future

As a business owner, it’s important to continually improve your business model. If you stand still and stagnate, you could easily fall behind your competitors. Expansion is therefore vital. Even with the current uncertainty surrounding the UK economy, it’s vital to look to the future, rather than simply consolidating your position.

Here are a few tips to help you continue to improve and expand your operation.

Choose the best business savings account

You probably already have a business savings account, but that doesn’t mean you should settle for what you already have. Look at what’s out there on the market. Can you improve your return simply by opting for an account with higher interest rates? For example, looking into the best business savings account from Aldermore will guarantee you a fixed high rate for a period of 6 months to a year and it could be the ideal platform on which to build. Furthermore, Aldermore’s account can be opened in 15minutes, meaning you will start earning interest on the same day of opening.

Keep investing in your company

For the vast majority of SMEs, ‘austerity’ is always a buzz word. However, making savings and cutting back where you can, may often appear to be necessary; but it shouldn’t be forgotten that continued investment is always a catalyst to small business growth. For those small businesses currently operating within the UK, it’s always a challenging marketplace but by continuing to invest in research and product development, or perhaps looking at diversifying to take your company into new markets, these are some of the options which will grow your business.

Unlock money from your existing invoices

With a full order book, profits could potentially give you the funds to continue to expand however, if you’re continually waiting for your customers to pay, this doesn’t always translate to money in the bank at a time when you need it. Opting for a solution such as invoice finance is a solution to cash flow, as the value of your company’s unpaid invoices, allows you to free-up a high percentage of the funds almost immediately, whilst you wait for your customers to pay. Once they do, you’ll receive the rest, minus a small admin fee, from the invoice finance agent. This solution enables you to gain access to regular monies which gives you the option to expand, without overstretching as you’re not borrowing any money you don’t already have. It’s ideal to free up your cashflow.

Promotion

When you expand or diversity your existing operation, it’s vital that you fully promote this and use all the marketing tools to make the consumer aware of your new strategy. You can look at advertising, direct marketing, exhibitions at trade fairs, and online marketing, as well as putting out a press release to the media. How you make people aware of your business in many ways will be determined by the type of customer you’re targeting and your budget.

Always think about your risk portfolio

When expanding into other areas, you always need to be careful. By extending the parameters of your business, you could easily find yourself in financial difficulties which means it is essential to put an adequate risk portfolio in place. This should include ensuring you have full and comprehensive small business insurance in place – whether you need public liability or professional indemnity, having adequate protection is highly advisable, as well as complying with specific legislation relating to your sector.

Ensuring your enterprise expands and evolves whatever the market conditions, is sure to set you in good stead for business success.

Making Money Online

It is possible to make money from the comfort of your home, by trading online. Whilst the internet may be awash with “work from home get rich, quick” schemes which are not always what they appear, and a number of gambling sites; there is a way to build on the savings you have in more of a traditional way. Just online.

Online share trading accounts offer an innovative way to conduct a very traditional transaction. But are they really worth it?

Reasons for trading online

One of the real benefits of online share dealing is that you can find so much information online, and it’s right at your fingertips. Also many online brokers provide extra services including alerts, tips for the day, real time prices, news and analysis. Most importantly they offer speed of execution, with trades being concluded much quicker than dealing with a broker in person or over the phone.

The biggest advantage, however, is that the cost of share dealing is much lower online. For some services you can start without any initial outlay, whilst any fees charges are fairly minimal.

Range of investments

Of course it depends on the online broker, but those offering the best quality packages will provide you with a great range of potential investments. This can include, but are not limited to, the following:

  • Shares quoted on a recognised stock exchange
  • Unit trusts and OEICS
  • Government bonds
  • Corporate bonds
  • Investment trusts
  • Exchange traded funds / commodities

Security

Over the last ten years, the online landscape has changed. Where once there may have been fear over processing personal details online; now it is the norm. Still, when dealing with potentially high levels of money, it can still be a little daunting. It is therefore, essential to choose a reputable online dealing service which offers a secure area and various levels of protection for your funds. This is absolutely essential.

Do the research

When dealing online you are on your own. Once you complete the online transaction, your broker carries out the deal for you. There is no direct communication and advice between you. This puts the pressure on your to make the big decisions on your own. There is no need to see this as a disadvantage however. Whenever you make any share transactions it’s vital that you fully research the market and understand what you’re doing. It should always be this way. Use the online tools available to you and you’ll be fine.

Limiting your losses

When dealing online, it’s also possible to place a stop order loss. This is a function where you establish an automatic sell order if your stock falls below a certain level. This is ideal to stop any losses spiraling out of control. The markets at the moment can be volatile, so it’s worth looking into this option when setting up.

Getting started

Share dealing is a serious business, so don’t take it lightly. Just because you’re dealing with numbers on the screen doesn’t make it any less real.

You can certainly make money online through share dealing, but always proceed with an element of caution. If you’re trading from home, make sure you use an express delivery service too.

Is Your Company Risk Profile Strong Enough?

Understanding the risk profile of your company is so much more than simply documenting the risks that can have an organisation-wide impact. The key aspect in getting your risk profile up to strength is by fully understanding, adequately managing and then mitigating any risks. This can include having appropriate insurance in place, looking into cash flow solutions such as invoice discounting for commercial businesses, but it also ranges to ensuring your employees are fully trained and can immediately spot and deal with potential pitfalls.

Risk Profile Fingerprint

Each risk profile is unique to the specific organisation. The market segment, people, outside influences and strategy should all be taken into account to assess the possible hazards and put in place a risk profile. Analysing all these different issues will enable you to draw up a profile fingerprint as to how and why various risks could occur to your business.

Factors to take into account

When assessing the strength of your risk profile you should always ensure that you do the following:

  • Make sure you manage all risks in the same way – a little investment in staff training will ensure uniformity across the board
  • The default position in relation to risks is that they should be transparent unless there is a key reason why they would have limited exposure – this would apply to situations such as employee fraud. The reason why you should be open with your risk profiling is that it becomes much easier to engage your employees in the process
  • Remember that risk is a constantly evolving process and nothing stands still – the environment and the influencing factors change, as does your company

Insurance that should be in place as part of a strong risk profile

The following types of insurance can be essential elements of a strong risk profile:

  • Public liability – essential to cover the welfare of your clients and the general public, in addition to the consequences of any damage caused to any third party or property by any product or service you provide
  • Professional indemnity – essential to cover your company against any claim made by a client alleging that you were negligent in the advice or services provided
  • Employers’ liability – essential to cover all duties of health and safety towards employees
  • Business interruption – essential to cover any damage to your business caused by fire, flood or any other covered loss or damage which interrupts your business

Invoice finance

Invoice discounting and factoring are specific invoice finance solutions which give you an element of security against any invoices you have issued. Securing payment from your clients once you have issued your invoices can be problematic and can cause cash flow problems which in turn can restrict the expansion of your company. It’s vital that you take this into account as part of your risk profile.

The Complete Idiot’s Guide to Stock Investing – Review

I won a copy of the book, The Complete Idiot’s Guide to Stock Investing, from Donna Freedman at Surviving and Thriving and thought it would be a suitable book to review here. After I started reading the book I realized the author’s really did assume the reader had no knowledge of the book. That is reasonable since it is targeted at the complete idiot but it made the book a little boring for me so I just skimmed through the rest of the book.

It does cover a lot of different topics related to stock investing. It might have been better if they had a less broad but more in depth look at the subject of stock investing. One thing I found strange was the appendix with a list of all the S&P 500 companies which listed about fifteen companies a page. It seemed like that might have just been page filler. This book probably is good for the complete novice when it comes to stock investing but if you have any knowledge at all you will probably want a more advanced book.

Lifestyle change – Planning a family

The following is a guest post by Betsy Falwell.

It was the evening of my last day of maternity leave. For 16 blessed weeks, I’d been given a reprieve from the day to day grind of TV news, instead basking in the glow of my newborn daughter. In the morning, I’d return to the office for the first time in four months. It wasn’t a moment I was anticipating with any sense of excitement. Honestly, the only reason I was going back to work at all was because we were flat out broke. Between our mortgage, hospital bills, and the cost of feeding, clothing, and diapering a tiny human being, we’d run through our savings before our bundle of joy sprouted her first tooth.

That’s when I made a financial resolution: When it was time to expand our family yet again, my decision whether or not to return to work wouldn’t be limited by our financial situation. And then I got to work.

Will The Government Help?

If you live in the United States, you can forget about asking Uncle Sam to help bridge the gap in your finances after the birth of a child. The U.S. is one of the only industrialized nations in the world that does not offer compulsory maternity leave; not only that, the U.S. lacks an official policy for paid maternity leave as well. While women can take up to 12 weeks off following the birth or adoption of a child under the Family Medical Leave Act (FMLA) –  a policy that only applies to women who work for certain companies – they aren’t entitled to receive any compensation during that time. Compare that to:

  • Italy:  five months maternity leave at 100% pay, with the option for an addition six months at 30% of salary; mothers who work full-time are guaranteed a minimum two-hour rest period per day while on the job
  • Australia: 18 weeks paid at the national minimum wage
  • Norway: 42 weeks at 100% compensation, or 52 weeks at 80% compensation; may be split with the father

Refinancing Your Mortgage

Refinancing your home loan – with all the paperwork, appraisals, and meetings with your lender or a mortgage broker – can seem like the last thing you have time for while planning for the arrival of a child. That’s why it pays (literally!) to reduce your payments before you see the two pink lines on your (or your wife’s) home pregnancy test.

For my family, the difference between me working full time and part time wasn’t all that much – maybe a couple hundred dollars a month. That’s where a refinance came in. Using a mortgage calculator, we were able to see just how much we’d be able to save on our monthly loan payments by taking advantage of significantly lower interest rates than when we first purchased our home. The result? A saving of more than $200 a month.

Planning For A Single Income

While I simply wanted to reduce my workload from 45-50 hours a week to part-time status after my daughter was born, I had plenty of friends who wanted to leave the rat race entirely. Others found the added financial burden of a new family member was putting a severe crimp on their finances. Serious changes needed to be made.

While 30- and 15-year fixed mortgages are the most traditional type of home loan, they’re not the only option if you’re looking to refinance. Interest only loans allow you to pay just the interest on your mortgage – without putting a penny to the principal, unless you choose to make extra payments – for a set period of time, usually five to ten years. Likewise, adjustable rate mortgages, or ARMs, also give you flexibility. These loans start out with a low introductory rate – typically below even the best rates you’d find on a fixed mortgage. The introductory periods can be as short as three years, as with a 3/1 ARM, or as long as ten years, as with a 10/1 ARM. Once the introductory period ends, your interest rate will be reevaluated – usually every year – in accordance with market values.

While interest only and ARM mortgages may not be the path to long-term financial stability – what you don’t pay on the front end, you’ll pay on the back end – they can give you extra money right now.

Mortgages, Debt and Better Investments

This year figures show that Americans are paying off a bigger slice of their mortgages, but what does this mean for personal debt and for the economy as a whole? What should we do once we’ve paid of a higher than expected percentage of our mortgage?

In May 2011 it was revealed that Americans have chopped off more than $100 Billion of their annual mortgage bill. This is comparable to the unemployment benefits paid out in a single year. Low interest rates and fears about unemployment are both believed to be key factors behind this feverish drive to pay off the bills.

This repayment should reduce mortgage bills, which in turn should free up more money that should get pumped into the economy. People will turn to lovemoney.com and other similar finance sites to see where they should put this money. It is reckoned that initially Main Street rather than Wall Street should benefit from this. We generally tend to spend our money on consumer goods when we have extra cash. In the case of lower income households, necessities are generally the first point of call.

The situation is the same in other advanced economies. In the UK, The Bank of England (the institution similar to the Federal Reserve) figures show that the population have the highest rate of negative housing equity since 1970.

Once we have some extra cash to invest, it might be a good idea to pay heed to Warren Buffet’s ten investment tips taken from his Letter to Shareholders back in 2008. The good thing about Buffet’s tips is that they are the sort of old fashioned common sense that your grandfather could have given you. Take the basic principle that it’s a business you understand, it has a favourable long-term outlook, a sensible management and a sensible price tag – what could make more sense?
Random Buffet factoid: his biggest investments (in P&G, Wells Fargo, Coke and AmEx) were all founded in the 19c, so don’t get too excited by start ups. Go and look up the rest of his tips yourself – they did him well enough.

Investing in Mortgages

With the current financial climate as it is, investing in property is quite tricky. Despite low housing prices, there is a relative lack of finance around and investors have to put in more of their own money up front than they had to just five years ago.

There are also far fewer deals around on the market, although what the market lacks in quantity, it makes up for in quality with the arrival of Spanish superbank Santander, on our high street. In certain circumstances, now is a great time to invest, even for those without a huge amount of cash, but you’ll need to do some hard research; try a calculator for mortgage payments such as the one from Santander.

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Foreign Real Estate – My Thoughts

So stocks are scarring the average person, because of all the volatility we’ve seen (40% fluctuations a year, anyone?). Bonds are terrible too, as they pay next to nothing.

So the obvious question is, should you invest in real estate? The two choices you have are: American real estate, and an international investment property.

My thoughts on American real estate.

Obama, through previous mortgage incentive programs, has made sure that all those who wanted to buy a house buy it last year. So basically, he collected all the housing demand we would have for a few years, and put that demand all into the time frame of one year (when the mortgage incentive program was still available). So what happens now? Where’s all the housing demand supposed to come from? The sky?

Now with all this talk about a double dip recession, what would happen to American real estate if the economy did indeed slip back into a recession (not that we got out of one, in the first place)? Owning a house is completely discretionary spending. One can put off having kids, move in with family or a friend, etc.

Also, I’m a firm believer in cycles. Real estate cycles tend to last pretty long (13-20 years). This housing bubble that just burst back in 2006? Could take a while before the secular bear market for American real estate is over.

Foreign real estate.

Obviously, one would ideally want to buy bmv property (below-market-value-property). However, the value of real estate in the first place is hard to judge. Back in late 2008-early 2009, the real value of many homes in America was $0, because no one wanted to buy them. So how do you judge an the value of real estate in a foreign nation? Truth is, you really can’t. Real estate is a highly localized investment, and unless you live in the area, you wouldn’t really understand how much the land should be valued at. That is why, as a real estate investor, you have two choices.

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Should We be Alarmed With the Financial Crisis?

In a modern, global economy where making purchasing decisions is as simple as getting cheap insurance quotes online, the financial state of affairs for the last several years has proven difficult for most. Yet, before the mess of the last financial crisis has even begun to pick up the pieces, the economy threatens to buckle once again. So is it time to panic that we’re on the verge of another financial meltdown?

According to the U.S. Bureau of Labor Statistics, projected employment will only increase 10.1% by 2018. This is not enough to keep up with the current rate of population growth, much less make a dent in the unemployment numbers that remain stubbornly stagnant at over 9%.

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