Side businesses

Building your side business

Side businesses are important if you want to build wealth. The following article looks at the reasons why people argue that they don't need to work on a side business:

Assets = cash flow

Build wealth by building assets. Build assets by increasing your cashflow. Increase cashflow by reducing outgoings and increasing income. Increase income by getting better paying jobs and building side businesses.

If you ask the average person on the street what the source of their cash is they would reply that it is the income from their job. If you ask a wealthy person where their cash comes from they will list multiple different sources: job income, property rent, bond and fixed asset income, share dividends, profit from capital growth due to the sale of assets, and businesses.

The benefits of multiple income streams

You should never rely on one source of income. You never know when you might lose your main job. So as well as being useful in assisting your wealth building it acts as an insurance policy.

Starting up a side business requires that you have an entrepreneurial mind set when it comes to spotting arbitrage opportunities. 

There are many reasons that people tell themselves to explain why they don't build side businesses and there are responses for all of them:

1) I don't have any ideas

If you want ideas then you need to be open to opportunities. Lots of people have ideas but very few act on them. It's not that you don't have ideas. It's that you don't make a note of them and so forget them. Or else, it's because you fail to act on the ideas.

Your idea doesn't have to change the world. It could be as simple as standing outside a tube station and selling cups of coffee in the morning to those rushing on a commute. Or else it could be coaching or teaching someone a skill that you have. These ideas aren't revolutionary. They're simple, and most people could do it.

2) I don't have the time

Rubbish! You have the time. You just spend it badly. How many hours do you waste a day? None you say? Do you watch TV, do you go on the Internet, are you spending a portion of your day commuting, could you get up earlier?

There are many reasons why people say they don't have the time. Most people simply don't allocate their time efficiently or complete tasks productively. Not got enough time? Then make time.

3) I'm not motivated enough

What do you want - to build wealth and have a real go at becoming rich or simply carry on as you are? How has your current plan gone? Is it working out for you. 

Motivation comes from within. No one can motivate you. You have to be willing to get up and get going. You should constantly ask yourself why you are doing something? If you have a strong reason e.g. to build a better life for my children, then this should be your motivation. Remind yourself of this whenever you question why you should bother doing something.

4) I don't need the extra income 

Why not? If you're not looking to build wealth the unfortunately you're reading the wrong blog and I cannot help you.

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Looking for Arbitrage

Arbitrage is a complex topic area but is relevant to everyone looking to build wealth. The following article outlines the topic of arbitrage and how it is relevant to you:

What is arbitrage?

Arbitrage means to look for an opportunity to exploit. In economic terms it means spotting a price difference for the same product in two different markets.

The reason that I've felt the need to write about arbitrage is that to build wealth you need to become a producer rather than a consumer. As such, you need to investigate and keep a look out for arbitrage opportunities. Virtually all profitable businesses are performing arbitrage in one way or another.

An example of arbitrage

A banking example of arbitrage would be a trader. The trader is working on the foreign exchange trading desk. The trader spots that £1 will buy $2 dollars in one market and £1 will but €2 in another market. In a third market $1 can buy €1.5. So the trader notes the arbitrage opportunity. The trader buys $2 using £1. Then they buy euros using the dollars and ends up with €3. Then the trader sells his euros for GBP (£s) and ends up with £1.5. The trader has grown the initial investment of £1 by 50% just by spotting the arbitrage.

I'm not suggesting that you're going to start to become a foreign exchange trader. However if your goal is to become rich then you need to be seeking out opportunities in every day life. For example, you may be round at a family friends and hear that their daughter is struggling with studies. You could offer to tutor.  Or else, you may really want a particular pair of shoes but have noticed that the price on eBay is three times those in store - perhaps you should try to get your hands on some and sell them online. You've taken advantage of an arbitrage opportunity!

Have you ever felt that you were wasting your time with business ideas?

If this has been the case with you then you need to think about occupying your time with some of your business ideas. I recommend carrying a small pocket notepad and pen for jotting down any business ideas as they occur no matter how ridiculous they might seem.

The next step is the hardest. Actually acting on the arbitrage opportunity. It takes an entrepreneurial mindset to actually capitalise on an opportunity. You need to mentally push yourself into action. 

Summary of arbitrage 

Remember that to spot arbitrage opportunities you need to do two things:

1) Keeping your mind open to opportunity and ideas.

2) Being willing to try things out.

Good luck spotting the arbitrage.

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Expert Tips On Taking Out A Loan

Considerations when taking out a loan

The following post has been contributed and provides an overview of alternative investment products. Please note that the following post may contain affiliate links:

Loans come in many shapes, sizes and forms, but there are still many general tips that apply to the process. It’s not a decision to be taken lightly, and if you find yourself unable to meet payments, you’ll be in big trouble.

Rates have typically been falling this past couple of years, which means loans are more popular than ever before. Some can be paid off quickly, while others can not, but either way, you must be sure before you take the plunge!

So, here’s our expert advice on all things loans - have a read through and see if you missed anything.

Tip 1: Read the fine print In your loan documentation


Look, be honest - nobody does this. Whether it’s your mobile phone contract or the warranty information on a dishwasher, we all skip the fine print.

With something as tricky as a loan, I wouldn’t even dream of it. Some loans appear too good to be true at face value, with any caveats hidden in tiny writing. Found a personal loan with a rate of 5 percent? Great! Well, not so great, as it turns out you need to be a customer with that bank.

You could be caught upfront like this, or you could be caught mid-loan too. What if you get charged for early repayments? This information wasn’t anywhere to be found - except it was, in the fine print. You get the point, I’m sure.

Tip 2: Check if the rates are fixed


If the rates are not fixed, then they can adjust at any time. This means you could end up paying more back than you initially thought. Some loans, like second charge secured loans, can be variable or fixed. Others will always be fixed, like an overdraft repayment.

Fortunately, this information won’t usually be in the fine print, so you won’t have to strain your eyes too much. Be sure to check thoroughly before you borrow anything, though.

Tip 3: Beware steep interest rates


Some loans are easier to borrow than others, as they let you pay back in manageable sums with low interest. And then there are loans like payday loans, where you can end up paying back over 30 percent more than what you borrowed.

It’s a no-brainer really, but you should avoid these steep interest rates. It’s be far easier to just save up each month for that TV or holiday.

Tip 4: Don’t apply for lots of loans

Each time you apply for a loan, it’s noted on your credit report. Applying for too many loans signals to lenders that you’re in financial trouble. And if you aren’t yet, then you will be soon. This makes it likely that not one single lender will touch you, as you’re too much of a financial risk.


Tip 5: Look around and compare different loans

Before you take the first offer that you get handed, shop around and look for the best APR. The annual percentage rate will let you know the ultimate cost of a loan after interest and fees are factored in. The lower the APR, the better the deal.

Also, banks may offer introductory rates for new customers, so consider switching.

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Starting A Business From The Ground Up

How to grow a brand new business

The following post has been contributed and provides an overview of alternative investment products. Please note that the following post may contain affiliate links:

If you have ever considered starting up your own business, you are not alone. In recent years, a number of new startups has increased dramatically. What this shows is that people everywhere are finding the courage to make their dreams a reality. If you think you would like to do the same, then you are in the right place. Starting a business can be an exciting and fascinating venture. Sure, there are a number of risks - but that is all part of the fun. With business, what ultimately wins out is passion and determination. If you are able to carry on even when times are tough, then you are likely to make it work in the long term. The key to a successful business? A solid, unique idea, sold behind a strong brand, with passion and commitment from its employees. Without further ado, then, here is how to start your business from scratch.


Make A Plan for your business

All businesses require a plan if they are to succeed. If you are the sort of person who think that you can wing it and see what happens, you are of course welcome to try. However, you will probably soon find that this approach does not work. Ultimately, those businesses which go on to do well are the ones which are built on a solid foundation. For that foundation to exist, there needs to be a plan. Not only that, it needs to be solid. It should detail exactly what the layout of the company should be. It should describe exactly where the business is expected to go - in the first year, the first five years, and so on. It should outline the marketing campaign and the expected number of employees and their roles. It should have a reasonable plan for sourcing funding, and a clear budget for using that funding. In short, the more detailed your plan is, the better. The best way to approach starting a business is to spend as much time as possible on making your plan airtight. Only then should you continue.


Raise The Finances

Getting hold of the money for your business can be a long process. It is often at this stage that many budding business owners give up. However, no matter how taxing it can be, stick with it. After this point, it all becomes considerably easier. Sourcing the funding for a business can be difficult, but it is easily doable. One of the most popular ways to get the cash is to take out a business loan. These are useful, fast access to large amounts of money. The obvious disadvantage, however, is that you have to pay it back with interest. Fortunately, there are other methods as well. It might be possible for you to appeal to your family and friends, for example. This method is not for everyone, but if it works for you, then it works. Ultimately, you need decent capital behind you if you are to get very far with your business idea.

Learn All You Can About Business

You wouldn’t start a long-term mission without knowing the ins and outs, would you? With business, it is no different. You should make every effort, at this stage, to learn everything you can about the world of business. There are many ways to do this. One of the most effective is also one of the simplest: talking to people. Start developing connections in the business world - and ask them everything there is to know about success and how to get there. The more you obsess, the more likely you will prosper. Another great method for getting in the know is to attend workshops and seminars. Health & safety and employment law seminars will teach you a great deal of what you need to know early on. The more you know, the easier your business will grow.


Find The Right People

Any business needs the right people in order for it to be a success. When you are hiring for your business, there are certain attributes which you should look out for. Above all else, look for people who are passionate and determined. If possible, finding people who also happen to believe in your cause will be a great boon to your business. You may have heard the old tenet that the people you employ are the most important part of your business. Well, it’s true. If you work hard to find the right employees, your business is likely to go far.


Your business will need an office to work from - that much goes without saying. However, what is less obvious is the decision of where that office should be. Choosing the location of your headquarters might not seem like much of a big deal. However, it is - it makes a huge difference to the overall business. When you are choosing your location, bear in mind where your staff are coming from. The last thing you want to do is to force them all to commute great distances to get to work. It is also worth considering whether or not your business’ office will be near any public transport links. All this is worth considering if you want your business to thrive.


Get Marketing

No business survives without the proper marketing. Marketing is no less than finding an adaptable way to sell your business to the masses. To achieve this, it is necessary to build a bold and strong brand for your business. This can be quite a daunting task, but it is essential - and once it is done, your business will soon start to come to life. A strong brand needs to feel like an almost human presence in the marketplace. It should evoke a particular emotional response in the public. This is how you get your business to be a household name which people are talking about. You should hopefully have put aside a fair amount of the budget for your marketing. If you didn’t it might be time to rethink it. Get this aspect right, and your business will enjoy many years of success.

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Student Money: Setup An Online Store

Making money online as a student

The following post has been contributed and provides an overview of alternative investment products. Please note that the following post may contain affiliate links:

As we all know, life as a student can be a bit of a struggle. Tuition fees aren’t cheap, and we rarely get enough to cover the cost of living. If you stay away from home, then current student loans will mean you lead an unhappy life. You’ll have very little to spend on yourself, and end up constantly dipping into your overdraft.

So, the best idea is to start making more money. And, I have a great way for you to do just that. If you set up an online store, then you can sell things to people, and start making a ton of cash. Want to know how to do this? Then have a read of the advice below:

Decide On What To Sell

Naturally, your main concern will be with how you make money. In other words, what products are you going to sell? Or, will you even sell products? You could sell a service. In fact, for students, selling a service might be the better option. People could come to your online store and purchase essay writing guidance, or online tuition from you. I’ve even seen some sites that sell essays for students. That’s right; people pay you to write their essay for them! Regarding products, I think that clothes are the best and easiest thing to sell online. They’re cheap to make, and always in high demand. Of course, these are just a few simple suggestions; there are loads for you to consider.

Create Your Store In Minutes

You might think that creating an entire online store will take a long time. However, that’s not the case. With web building tools, you can have everything sorted in a matter of minutes. There are sites online that let you build an online store from scratch, and personalize it too. The benefit of using web building tools/sites is that you save lots of time and money. Plus, you’re guaranteed to have a store that looks good and functions well. When you’ve built your store, you need to focus on two things; your web traffic, and conversion rate optimization. Both of these things are crucial if you want to make lots of sales, and bring in the money.

Figure Out Delivery Methods

A big part of selling things online is getting the stuff to your customers. If you’re selling a service, then it might be a lot easier for you. I mentioned online tuition in the first point, if you sell this then a quick skype call will sort you out. You can video-chat with customers and tutor them. When selling products, you have to get in touch with a courier service. Find an affordable one, so you save money on delivery costs. Then, whenever someone makes a purchase, you package up what they bought and send it via courier!

An online store is a perfect way for you to earn extra cash as you study. There are so many different things you can sell to people these days. The possibilities are endless, and so much money can be made!

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How to pick a pension fund

Understanding your pension

Pension funds are a tricky topic area. There seems like there are so many different funds to choose from. Sometimes it seems like it's impossible to know where to start. Hopefully the following will be a useful guide to those in a similar situation:

I have written previously on the need for explorers joining a Company pension scheme to get in touch with the pension provider and ensure that they aren't invested in the default fund.

One of the difficulties in sorting out which pension fund to invest in is that there are literally thousands of alternatives. Fortunately this is cut down based on your provider but this could still mean sifting through several hundred.

Once you are aware of all of the funds that your pension provider deals with then you can ask them directly which funds you are able to invest in based on the scheme that your employer negotiated. This is because it is likely that your employer will have negotiated with the pension fund several funds at a discounted rate. You should look to take advantage of the discounted charges.

Passive or active funds?

Let's say that by this stage there are 20 different pension funds available to you. 

Actively managed funds means that there is a fund manager looking after the fund. These are paid professionals and as such actively managed funds will almost always cost more. Realistically a pension is a very long term investment vehicle. Hence the size of the charges as a percentage of the fund can have a dramatic effect on the final size of the pension pot. Therefore you need to search for the term "passive fund" in the fact sheet/ name of the fund. 

Passive funds are designed to match the movement in a broad index. Hence there isn't a particular fund manager in charge who requires fees. This will likely result in a cheaper annual management charge.

Once you've identified all of the passive funds you need to start to look in detail at the fund fact sheet. This sheet tells you what the annual management charge will be, what the fund invests in or which index it tracks, and how the fund has performed in the past.

How much should I look to pay in a pension fund?

As I mentioned the size of the annual management charge is a key determinant in te long term size of your pension pot. I would argue that you don't want to be paying any more than 0.5% (half a percent) per year in order to be invested in the fund. 

Another charge to watch out for is the investment fee. Often times funds will charge a percentage of the total amount invested in order to enter the fund. Ideally this should be zero. Sometimes this can be as high as 5%. Do not touch these funds! You really shouldn't have to pay to invest in a fund.

What index should I be tracking?

The specific index isn't the most important consideration. Most economies and markets will grow given 30-40 years to do so. Your main focus should be to minimise the charges. Pick an index that tracks a market that you consider less risky over the long term but is also likely to grow. The U.K. stock market is a good shout. Emerging markets are going to be slightly riskier but you may feel that they're a good bet over te long term.

What fund performance should I be looking for?

"The past performance is no guide to future performance". You should be conscious that performance in the past is not a reliable predictor of the future. I'm not a big believer in chartism - the ability to predict future index movements based on the past.

However, I think it's important that your fund has been established for a while (at least 10 years) and has demonstrated that the market has grown over that period. Aim for an average of at least 5% growth since the inception of the fund.

Hopefully you'll find the advice useful and trust me that long term the small amount of effort today will have been worth it.

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Minimise UK inheritance tax

Consideration for inheritance tax

Inheritance tax is a real pain for many families. The maximum allowance that is inheritance tax free will rise to £1million. However, given the rapid rise in property prices it is possible that many will find themselves being caught out. The following article outlines some broad ideas to consider in order to minimise the exposure to inheritance tax liabilities:

Tax evasion is illegal. Tax avoidance is good planning.

The following article is exclusive to the UK tax regime as of 2016.

There are multiple methods to reduce the inheritance tax burden on the next generation. 

The seven year inheritance tax rule

Any amount of money/ wealth that you have transferred to the next generation will be free from inheritance tax if you transfer your property at least seven years before your passing. Should you pass away prior to the seven year time limit then depending on how near to the seven years will result in a portion of the property being subject to inheritance tax. The proportion is in line with how near to the seven years you passed. For example, six years will result in less of your property being subject to inheritance tax than two years.

Families looking to minimise their inheritance tax liability should look to encourage the passing on of assets that are no longer required to loved ones at the earliest possible opportunity.

Passing on a business to avoid inheritance tax

There are certain rules surrounding passing on a family business into your loved ones. Depending on the type of business and the length of time that your loved ones are willing to hold onto the business, 50% or even 100% of the business could be free from inheritance tax.

An odd quirk of UK tax law means that a farm is 100% free from inheritance tax so long as the farm continued to be 'farmed' and it's use is not converted away from agriculture.

Passing on pensions

Private pensions that still have a balance are inheritance tax free when passed on to those in your will. This helps to support a strong case for putting money into a pension. Not only are you avoiding income tax today, you are also likely getting a top up from your company match scheme (hopefully!) and the cherry on the cake is that if you die the pot will not be subject to inheritance tax!

AIM to invest

Shares in the AIM market (one of the junior UK stock markets) can be free from inheritance tax when passed onto your children. 

There are various criteria with which to comply in order to qualify. For example the AIM shares should be owned for at least two years. In addition the people who inherit your shares are required to hold the shares for a certain period of time.

Be careful though. AIM shares tend to be growth companies and hence are normally associated with higher risk. Make sure you know what you're doing before you invest in AIM shares to ensure that you don't end up passing onto your children less than you started with!

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Do I need a financial advisor?

What's the point in a financial advisor

Financial advisors are qualified financial professionals. However, I have often wondered whether they are worth the fees and charges that are incurred upon engaging with their services:

I have written of my previous interactions with a mortgage broker and I hope that you were able to infer my thoughts in the subject of financial advisors from that.

In short, I'm not sure what the point is.

Everyone expects to talk to a financial advisor and not to you about your money

Recently I phoned up the pension provider to my company pension. They sounded very surprised that I wasn't the financial advisor to the client and was in fact the client themselves calling. I get the distinct impression that it is incredibly rare for a non-professional to call up pension providers and ask them to change the fund that they're invested in.

Arguments for financial advisors

Some argue that I should have paid a financial advisor in order to make such a financial decision that would impact my future. But I'm wondering what for? 

A financial advisor would tell me to take a test to determine what level of risk I'm willing to take. Funnily enough I know my own mind and can work it out for myself.

A financial advisor would then recommend a particular fund that his Company are associated with in order to earn commission. I don't have to be limited only to the funds that the financial advisor is associated with.

A financial advisor understands which are the best funds to be invested in. I would argue that if a financial advisor were able to predict which the best funds would be then they'd be a multi billionaire by now and would not be wasting their time advising me.

A financial advisor is a qualified individual who understand the risks and rewards associated with investing. I say what's the difficulty? High interest rate means higher charges and more risk. Lower interest means lower charges and lower risk.

Do you need a financial advisor?

Having said all the above I can understand that if you are a complete novice in the world of personal finance then I can understand that you may wish to pay for advice. However, I believe that the fees are quite expensive considering that it is something that most people could figure out if only the committee enough time to it.

Ultimately in terms of a financial advisor I cannot justify a percentage of my capital in order to be told something that I could either work out for myself or else be told something that nobody knows such as "invest in this fund, it should be a good growth fund over a long time horizon" - meaningless!

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How to make money from spread betting

The perils of spreadbetting and CFD trading

Spread betting and CFD trading is becoming ever more popular as confidence returns to the markets. This has resulted in many people seeking out ways to make money from spread betting.

Firstly, apologies. The title of 'How to make money from spread betting' is extremely and deliberately misleading. The purpose is to try to tempt those who think that they can make money from spread betting into reading the article. Hopefully I haven't scared you off just yet!

I have written previously about 'My CFD experiment failure'. This is when at University I thought that I would give CFD (contract for difference) trading a go. This is extremely similar to spread betting. The essential idea is that you place a 'bet' on which way a stock price will turn or a particular index/currency/price will move. In spread betting you agree to pay a certain amount to the 'house'/broker if your bet goes against you. This can mean that if things go drastically wrong then you can find yourself owing a lot more money to the broker than you originally intended. On the flipside of the potential losses is that CFD trading and spread betting has the potential to generate a lot of money if the market goes your way.

Making money from spread betting

So the answer to the question 'How to make money from spread betting' is a simple one. You can't. You will not make money from spread betting in the long run. You will lose money. I repeat. You will lose money.

Several of you are probably thinking "I've tried spread betting or Forex trading and I've made money so Mr.Moneybanks is just wrong". To those people I argue that you have just gotten lucky in the past. If you carry on spread betting or CFD trading then you will lose money in the long run.

You cannot predict the market

Why is it that you believe that you have a divine insight into the way that a particular price will move in the future whilst you are sat at home on a simple laptop staring at a chart. You are betting against some big players: hedge funds, PE firms, and investment banks and yet you believe that you are right and that they are all wrong.

What's worse is that you are paying to have the contract open. You pay for every hour that you are betting until the contract is closed and you have either won the bet or lost. In addition, you will pay fees in order to make the bet in the first place. Finally, and I am repeating myself, you still believe that you are correct in predicting the future of an index movement. If you have that level of insight then play the lottery and guess the numbers correctly. It'll be a hell of a lot cheaper to make a lottery prediction then to bet on the movement of a price.

Spreadbetting is all about supply and demand

Price is determined by market demand and supply. You do not have insight into all the demand and supply in the market. Professional traders may have more of an understanding if they are working for a big institutional investor at they will be using Bloomberg terminals and other newsfeeds sucking up news all day on the prices that they are following, along with sophisticated data analysis tools. You, on the other hand, are at home and have BBC news or CNN at your disposal and yet you have the arrogance to assume that you have more knowledge. Reality check: you don't.

Now you may think that I'm coming on a little strong or being a little bit harsh and for that I apologise. It is this strong because I've lost count of the number of times that I've heard and read about people wasting their money on spread betting and CFD trading. Don't do it. Just don't! Spend your money in any other way - enjoy a mini break, invest it into a bond or an index fund (over the long run) but do not gamble away your savings! You will lose money. to make money from spread betting? You don't. So stop trying!

Do you like what you've read? Tell your friends by sharing it with one of the buttons below. Please post this to Facebook or Tweet it to help your friends and family. Feel free to send me an email (, find me on twitter @millionairer0ad or comment. Whether good or bad, I want to hear from you all.

The secret to wealth

How to build your fortune

The secret to wealth has long been perceived as a mystery through the ages. The following article attempts to break through all the 'noise' and present the key to wealth in simple terms:

Preface - The science of wealth

I wrote in a previous article entitled 'The Science of Wealth' that the easiest way to build wealth is via the equation: A>B = wealth creation. A is income. B is expenditure. Hence personal wealth is created when monthly income is greater than monthly outgoings. Simple. However, I did not go into any detail as to how to do this other than to boost your income and control your spending habits.

The secret to wealth explained

I hate to break it to you but there really is no secret to wealth. I wrote in 'The Biggest Secret of the Rich' series that the rich are mainly rich because they work hard! It really is that simple. However, I did not explain what they are doing when they are hard at work.

Having said all that, let's get straight to the heart of this article. The secret to wealth is the following...

Be a producer and not a consumer

Being a producer means that you create things for society. Think about businesses. The create. Successful businesses produce things that people want to consume. If you want to be rich, successful and wealthy then you need to get into the producer mindset. Create something that the market desires. This doesn't have to be anything breakthrough, monumental or new. It only needs to be something that other people are willing to pay for. For most people being a creator to the market means having a job. To a producer, this means giving something more than just your job. It means having a side business outside of your 9-5 job. If you want to become a producer you need to think about the skills that you have and how you can sell into the market. Maybe you can teach a skill. Maybe you can build software. Maybe you know where to source something that others want. Maybe you can give good advice in a particular area. Maybe you've spotted an arbitrage opportunity. Maybe you have time at the weekend or outside of working hours to do another job or work on a project. The point is...create...produce...don't just rely on your job for income.

Avoid being a consumer. A consumer is someone who takes. A consumer is a spender. A consumer cannot hope to build wealth as they are addicted to feasting on the goods/services created by producers. Of course, you have your basic needs to fulfil: basic physiological needs, safety and security. This doesn't mean that you need to go out and get the latest version of the newest games console. It doesn't mean that you have to have those latest designer clothing. It doesn't mean that you need to pay extra for the whipped cream on you vanilla strawberry caramel macchiato latte supreme grande espresso! Are you getting the picture? Fulfill your needs, not your wants.

Key to wealth conclusions

So there you have it. A simple addition to the rules to building wealth. Become a producer and stop being a consumer. The wealth will follow. Simple.

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Interest free credit - yes please!

The benefits of interest free credit

Interest free credit is normally offered on expensive household items. The following article explains why you should definitely take it even if you have the money to pay for the items in full:

Taking on debt with zero percent (0% interest) interest is an interesting one....

...I've always been one to encourage readers to avoid debt at all costs. Recently I have come to the realisation that not all debt is bad. For example, student loan debt is necessary in order to help boost your long term income as people who hold university degrees tend to get paid more. Alternatively, taking on an affordable mortgage will help you to get onto the property ladder and hopefully own a rapidly appreciating asset (keeping in mind however that your house is not an investment!).

When it comes to buying a home one of things that tends to get forgotten until the end is how are you going to pay for all the items to fill your new home? More than likely virtually all your savings will be depleted having been spent on the property, legal fees, mortgage fees, conveyancing, valuation fees and taxes. There is unlikely to be much money left over for the big purchases such as beds, sofas, table and chairs etc. 

Why you should accept interest free credit

As mentioned in a previous article it is important that you shop around and negotiate for the best deal on these durable goods. Sometimes though, the price just isn't low enough. In addition shops rarely offer any discounts for paying for the furnature up front. Virtually all furnature shops offer interest free credit from anywhere between one year to five years. Take them up on it!!!! 

The reason why it's ok to take on this sort of debt is because it doesn't cost you anything extra. There is no interest charged on the purchase. All that it means is that you delay having to pay the money in one go. This means that the money can stay in your bank account for longer and earn interest (assuming your savings account pays interest!).

Interest free credit example

A quick example:

You're buying a bed for £1,000 and the shop offers you four years interest free credit. This will mean that you will pay the bed off over the next four years and it will cost you £20.83 per month which equates to the £1,000 over the 48 months. You may be of the opinion that you don't want any debt in which case you would argue that you're happy to pay the £1,000 up front. There is no advantage to this at all. All it will mean is that at the end of month one you are £1,000 shorter in your savings whereas the person who took out the interest free credit is only £20.83 worse off.

Use interest free credit if it is offered to you!

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Keeping your pension together

What you should be doing about your retirement today

Retirement is a long way off for many readers however there are steps that you should be thinking about every time you change jobs in order to save time and money when you finally reach retirement age:

In our parents generation the typical job route was to find an employer and stick with them for life. Once you retired then your former employer looked after you indefinitely.

Gone are the days of the defined benefit pension scheme

Sadly those days are gone for a number of reasons:
1) Companies can no longer afford the liability of sustaining all ex employees in their retirement especially now that people are living much longer into old age than in past generations
2) Our generation do not tend to stick to one employer for life. A career nowadays is made up from on average seven different jobs 

The problem of multiple pension pots

The result is that our generation are likely to reach retirement with multiple pension pots from different employers with different pension providers. The difficulty with this situation is that your total pension pot may be difficult to track given the multiple login details required for each pension provider. In addition, once you reach retirement you need to start the process of consolidating all of your various pots - hopefully you haven't lost any of the details over the last 35-40 years of working.

Considering the above I have reached the following conclusion for our generation. Every time you move jobs one of the first items on your agenda other than work and pay is to ensure that you're signed up to the Conpany pension scheme especially if the Company are matchin contributions. You should maximise your contributions up to the point when the Company ceases matching. 

Once you receive your pension information through the post you need to get in touch with your pension provider. Firstly to ensure that you are not invested in the default pension fund but instead are investing in something slightly more aggressive (assuming you have 20 plus years before you retire). Secondly you need to ask the pension provider what steps you need to take in order to consolidate your pensions. This will normally involve filling out a short form that includes details of your previous pension provider and the plan number.Your new pension provider will do the rest in terms of ensuring that the money is transferred.

The entire process is very easy to initiate and takes roughly 20 minutes start to finish (although the actual process of the transfer may take a few weeks - although this occurs in the background). It will save you days of time in the long run and ensure that none of your pension pots are lost along the way to retirement.

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Get the best credit score possible

The importance of credit scores

The following post has been contributed and provides an overview of credit scores and why they are relevant. Please note that the following post may contain affiliate links:

These days, our credit scores factor into our lives more than ever. Whether you’re taking out a mortgage, applying for a business loan, or just buying something on finance, your credit score will be considered. If yours is looking a little worse for wear, all is not lost! There are a range of steps and habits you can use to improve your credit score. Here are just a few.

Image from The Blue Diamond Gallery

Credit card utilisation ratio

First of all, start keeping an eye on your credit card balances. The revolving credit you have, stacked up against the amount you’re actually using, can have a big impact on your credit score. The smaller the percentage, the better your credit will look. You should be aiming for 30% or lower. It may take some time, but set out a plan for paying down your balances, and then keeping them at a low, healthy level. You may not know that you can be stuck with a high utilisation ratio, even if you pay your balances off every month. This is due to card issuers use your statement balance for reports to the bureau. If your issuer will accept multiple payments through the month, I suggest you use them!

Destroying your debt

After you’ve got a better handle on your credit card balances, try your best to eliminate them completely. This is perhaps the most effective and straightforward way you can improve your credit score. Like many people, you might have a number of active credit cards at the moment. There are many factors which dictate your credit score. One of them is the number of cards which have balances. If you’re switching cards around for purchases all the time, it can really lower your credit score. The solution is simple. Gather all your credit card documents together, and pay off all your smaller balances. After that, try to get into the habit of using as few cards as possible. You won’t see a change overnight, but in the long run this will help you out a lot.

Image from Flickr

Some debt isn't such a bad thing

Finally, don’t go crazy wiping off debt from your report. Some people think that all debt is inherently detrimental to your credit score. Believe it or not, there is such a thing as good debt. This is any debt which you’ve paid off as per the agreement, and handled well. Some people spend hours arguing on the phone trying to get debt wiped, only to end up hurting their score! Obviously, if there are bad items on your credit report, you need to make sure they’re removed. The Fair Credit Reporting Act allows you to have full access to your report. You may notice accounts which were paid off a long time ago, or other harmful blemishes. Inaccuracies can be corrected through a quick phone call. Other bad items will disappear over a number of years.

There you have three of the best ways to improve your credit score. I know a bad score can feel like a weight you can’t drop, but almost everyone’s can be improved through smart moves.

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