This is personal; and it is mostly a rant. So if you don’t like ‘personal or rants better get off my blog now and do something sensible like read a book or plant your garden. I rarely succumb but this minute I so need this that you aren’t going to believe it.

Let me get the part of this post that is personal but not a rant:

Just had a confirmation that I have a full professorship at the University of Manchester!

You my friends can start calling me ‘Prof’, like John and our sons have been doing, at your own peril! I am pleased, of course I am. But I still want to be a big-mama blogger and write novels. Now we have it!

This out of the way let me move on to a full blown tantrum fuelled rant!

I am sitting in our apartment in Sofia eating chocolate waffles and this says all! Gone is the ‘slow burn’ diet, gone is the motivation and anger, lack of comprehension and excitement of the fight have moved in. But mainly I am fuming!

Sometime ago I told you that we have a buyer for the apartment I inherited from my parents. This morning I got on a flight to Sofia thinking that I’ll sort out the administrative stuff today and tomorrow and then will be off to the North to finalise the deal; after all we have a preliminary contract and, after it became clear that I don’t need a Bulgarian passport to sell, all I need is a simple document of civil status.

But nothing is simple and straight forward when it comes to bureaucracies: to get this document, I need a Bulgaria passport. In other words, I am back where I started – that I need a Bulgarian passport. Mercifully I knew this couple of days ago so arrived with all documents that I thought I’ll need to get a Bulgarian passport:

• My expired passport (well, true; it expired a very long time ago but still)
• A document for my divorce in Bulgaria;
• British naturalisation document (as if this will help get a Bulgarian passport but John insisted and I have decided to choose my battles).

I already knew that I need a document for permanent address in Bulgaria but assumed that owning an apartment in Sofia and paying taxes for eighteen years will count. How wrong I was!

At the municipality, I was told that:

• To have permanent address I need a Bulgarian passport; and
• To get a Bulgarian passport I need a permanent address.

Can you see the problem? Classic Catch 22!

There is another way which involves me going through a ‘naturalisation’ procedure which lasts between six months and a year and is plain wrong. I never lost my Bulgarian citizenship; why am I going to go through a naturalisation procedure?

So, I have two different problems at the moment:

1)      One is immediate and relates to selling my parents’ apartment; and

2)      One is long term is about other property including our apartment in Sofia (which is in my name).

Of course there is also the small issue of my relationship with Bulgaria; it turns out that my ‘motherland’ is shafting me big time and I am not one for unrequited, sacrificial love. If anything, today I was reminded why don’t do any work here (but work all over the world) and why I will probably never live here again (irrespective of how cheap it may be for us).

As it often happens with me, rationality takes hold at some point; once I put away an embarrassing number of chocolate waffles, I worked out some options that can be explored but I need your help here.

Selling my parents’ apartment

Option 1: Since Bulgaria is member of the EU I can apparently sell it as a British citizen. In this case it is likely that I won’t need the document for civil status I cannot have without a Bulgarian passport. Downside is that John may be involved because they would like to make sure that he is not going to put a matrimonial charge (a ridiculous idea if I ever heard one).

Option 2: The notary arranging the deal may find a way to get around the document of civil status. This is being explored by the buyer.

Option 3: We can’t finalise now and will have to wait till I have a passport. This means that I will have to make allowances for the buyer and lose money (I’ll lose money if I lose the buyer anyway).

Long term property matters

For these I really need a Bulgarian passport; which brings us back to Catch 22.

For the ones who remember the book, and the crazy situation Yossarian was in, you also remember that the message was that Catch 22 situations can’t be resolved and they have to be accepted. This is obviously not an option in my case! This got me thinking.

Catch 22 situations – which a classic lock-ins – can be solved only by eliminating or changing a broader condition. Yossarian got out of the war not because he was mad but because the war ended.

In my case this means that I’ll have one of three possibilities:

• I manage to get a document of permanent address somehow; possibly by bribing someone. For many this may not be a problem but for me this is not an option – I am not very good in doing these things.
• I go through the naturalisation process. This seems unjust to me because I have never lost my citizenship; I have never renounced it. I have always been Bulgarian as well as all else (this brings identity crisis but I’ve lived with it for 23 years).
• I stand up and fight. It seems to me that these are rules that have been left behind since before EU membership times; they are rules that assume people don’t move around and which is an archaic notion. To fight I need a good lawyer and the determination to take a country to the European Court of Human Rights. Please tell me I can’t do it…and watch me!

Finally:

Life can be in the way of bureaucracy and I believe in such cases we should work to change the latter rather than squeeze the former. In the municipality today, the lady asked me how come I didn’t renew my Bulgarian documents in 1999 when everyone else did. I didn’t answer.

Now, I am thinking, that life was in the way:

• In 1999 I had an ectopic pregnancy that almost killed me;
• In 2000 I had IVF which was hard but resulted in…
• …a baby born in 2001.

After that I was raising my child, building a successful academic career, getting blogs off the ground, getting in debt and paying off debt, generally living…And the main thing: I didn’t need a Bulgarian passport.

Here! I’ve said my peace! Now off to you, my friends:

What do you think I should do?

photo credit: timtom.ch via photopin cc

Copyright © The Money Principle

Editor’s note: Starting a business ought to be a major part of any serious wealth building ambition. We already discussed this when we let our readers know what is our goal for the next five years. And while it is true that today many businesses can be started for about $100 initial investment can be an issue. This is why we decided to offer our readers an article about crowdfunding which builds on the idea that it doesn’t really matter whether you raise $50,000 from one source or $1,000 from fifty surces – the outcome is that you have $50,000 to build your business.

Crowdfunding has been a popular form of alternative funding for a few years now, but for the uninitiated, what exactly is it?

In simple terms, crowdfunding is an online platform wherein an almost infinite number of different people can donate capital to a project, receiving some kind of reward in return. All of the platforms such as Kickstarter and Indiegogo work in a similar way. The project creator is able to create a profile, uploading a video, short description and investment target to it, as well as listing rewards potential investors can receive in return for this donation.

Used mainly in creative industries at the moment, crowdsourcing allows entrepreneurs to show their creativity directly to potential investors from the get-go. This informal environment is particularly popular for musicians, who can fund the resources needed for new album recordings and releases by offering fans a variety of weird and wonderful rewards in return for differing levels of investment, anywhere from £10 to £5,000 and upwards. The reward element is important, as it allows investors to receive a small return very soon after pledging their cash.

Projects that “tell a story” are usually the most successful, as donors are more likely to empathise with their cause and feel compelled to pledge to it.

Most platforms need the project to reach its funding target before the money is taken from the investors, and commission of around five per cent is commonplace too.

Main benefits of crowdfunding

Other than the dosh itself, the other main benefit of this method of raising capital is that the entrepreneur immediately receives access to a large network of people who are actively engaged with their project. Investors in the most part become brand ambassadors, telling everyone they know about the project. Opportunities for investors to lend their expertise to a cause are also commonplace.

A successful crowdfunding project is also incredibly news worthy, so a well-timed press release once a target has been reached will allow an entrepreneur to show the world the people believe in their idea, and they should too. This could encourage extra investment from others too, and may create a sales spike as others can see that the product or service offered is something that others care about.

How to make the most of crowdfunding

Tany Prive, co-founder of the American crowdfunding site Rock The Post, spoke to Forbes about the reasons why projects are a success. He said:

“There are three main reasons why people unconnected to a project or business would support it:

1. They connect to the greater purpose of the campaign
2. They connect to a physical aspect of the campaign like the rewards

3. They connect to the creative display of the campaign’s presentation.”

Anyone undergoing a crowdfuning campaign then should look to cover a minimum of one but ideally all of these points. While overnight-success stories can happen, it is not the norm, so hard work is needed to market and promote a campaign once live too.

Anyone considering it should take a good look at past successful campaigns to see what made them so investable.

Giving a campaign a professional look is also vital. Get copy subedited, fine tune the quality of videos and imagery and ensure the whole campaign has a cohesive message to give it an increased chance of success.

Crowdfunding platform options

Here are some of the most highly recommended sites in the UK’s crowdfunding platform market:

Kickstarter – One of the first success stories in the crowdfunding market, Kickstarter is particularly popular with musicians.

Indiegogo – Works in a similar manner to Kickstarter, with less restrictions on the kinds of campaigns offered.

Quirky – A favourite of designers and engineers

Crowdcube – This is slightly different from other platforms as it offers investors some equity in return for their investment too.

Peoplefund.it – Created by the team behind Hugh Fearnley-Whittingstall’s River Cottage, this is the best option for grass roots community projects.

This article was brought to you in collaboration with company registration specialists The Formations Company.
photo credit: Manymade via photopin cc

Copyright © The Money Principle

Not me!

Yes, my friends, this is about three colours of mastery. Last Sunday was my karate grading and I had to miss it because I was in Krakow. Because waiting for three months when I am ready would have been much more than I could content with, my master decided that I’ll have my grading on my own, in front of the whole class, last Wednesday.

So, there I was standing and everyone’s eyes on me doing basic forms one and basic form three. I love the forms; they calm you down and you have to be completely focused and present. Otherwise you get it wrong and the power of the movement becomes this limp attempt at choreography.

This done, I had to do the one step sparring and wrist grips with my master who happens to be fifth dan black belt. Oh dear, talking pressure. Anyway, by the end of all this I have managed to make several mistakes: my grading performance was not one of my better ones.

After that I stayed for the second training session; it was mainly sparring. For my sins, in the five months I’ve been doing karate I’ve managed to become the favourite sparring partner of several black belts – they say that I don’t run away but I fight.

Last Wednesday I fought but…my grading mistakes were weighing on my mind. In karate, or even in a street fight as I remember, you lose your concentration and you get hit. By the end of the session I had taken quite a few accidental blows that I would usually block. All good fun; as I say I may have been ‘black and blue’ but you should have seen the black belts as well.

Oh, and now I am orange belt in Soo Bahk Do karate.

As to the ‘stand up and fight’ attitude it is a habit of a life time spanning most areas of my life.

Now let me tell you about some of the blog articles I’ve enjoyed reading during the last week.

Michelle over at Making Sense of Cents asked an interesting and contentious questions about the choice between keeping an emergency fund or paying off debt. I find this one fascination because it tangles different aspects of our lives. For instance, is we tap into our feelings and longing for security keeping a rather large emergency fund will win. But reason should tell us that the debt in many cases is the emergency and that a modest emergency fund suffices. We have gone to a ‘dam system’ where spare cash goes into an intermediary account (emergency fund) and then is moved to investments – this way we maintain a constant level of cash for emergencies. This level is calculated for our circumstances though.

Are retirement savings are frustrating or gratifying asks an article on the Well Heeled Blog. I don’t know how you feel about it but I think it can be both – it is gratifying when one sees their retirement savings grow or at least keep their value. But when inflation, low interest rates and weak stock market performance bite it can get pretty frustrating. We know: one of the pension funds we’ve been building has been doing absolutely nothing for about twenty years. Which makes me reconsider the whole ‘retirement savings’ thing. There probably is a better way.

My faithful readers may have noticed that I have a lot of completely useless knowledge; I tend to collect facts that may be entertaining but have no other use. Naturally, when I saw an article about the body parts that celebrities have insured on the Frugal Guru Guide I was there, attention at full sharpness. Oh my! Madonna probably has spent on her breasts more than the $2 million they are insured for. And wtf is the matter with Tom Jones’ chest hair? Ha, got you there; if you want to know more go read the post.

Now, this one is easy. What to know how to make extra money? Go and read the summary of post on that on Barbara Friedberg’s site. Wealth of information there (pun intended).

Today is Father’s Day after all; and it doesn’t matter what I think about the commercialisation of our relationships – from love between couples to the love of our children – I have to recognise it. Particularly when there is real gem of a post on Len Penzo: nine money tips every dad should teach his children. Read it even if it is the only thing you read today!

I love it when one a personal finance blog there is something that goes against established wisdom. Everywhere we hear how we should invest in retirement and the earlier the better. Well, on the Money Crashers there is a post discussing seven legitimate reasons to delay retirement saving. Even more pleasingly investing in one’s career and education are two of the reasons mentioned.

Mr. Money Mustache published an article arguing that cycling is the safest for of transportation. A well researched article as usual; and as usual it is brimming with passion. Well, it may be safe statistically but I can still get killed – competing for the cycling lanes with double-decker buses is as far away from my idea of safety and fun as…well, very far. Also, in the Netherlands cyclists are the most dangerous form of transportation on the roads; and pavements…

Mochimac gets back to this old chestnut and asks why are people happiest when they earn $75,000 per year (about £50,000). Great posts and I suspect the answer is in the last point: happiness is a matter of comparison and the self reported ‘state of mind’ will tend to be reported mostly at the mean (or average earnings). Though there are exceptions and these are the people we have to pay attention to. But whenever the matter of happiness arises I remember my Danish PhD student who told me that the Danes may be the happiest nation on the planet but it is because the suicides cannot fill in the questionnaire.

Now, how has The Money Principle been doing?

During the last week we were included in the following personal finance carnivals:

Carnival of MoneyPros at This That and the MBA
Carn. of Financial Camaraderie at Master the Art of Saving
Carnival of Financial Planning at Money Soldiers
Yakezie Carnival at See Debt Run

Also, just in case you haven’t noticed, TMP has mover 90 places up on the Money Crashers Top PF Blogs; ok, I know that a lot of this is because of this unstable Compete Ranking thing but still feels good.

Let me get back to the useless knowledge I was telling you about. For some time now I have been wondering how much strippers earn. It is not because I am considering a career change – a bit late for this option – but because I know that drug dealers, academics and bloggers have one thing in common: they all work for below minimum wage for a long time and then very few get to the ‘rich pickings. Now I know (don’t ask):

An average stripper makes between $23 (£14) and $61 (£39) per hour.

This is all for today and will speak soon.

photo credit: Flavio~ via photopin cc

Copyright © The Money Principle

The last few years haven’t brought much cheer for homeowners. After a big plunge in home values during the financial crisis, early climbs for property prices have stagnated. Lending is still being restricted and first-time buyers especially are still finding it difficult to get their feet on the first rung of the ladder. So the news that home insurance premiums have been falling is surprising – yet welcome – news.

After analysing more than 3.5 million home insurance quotes provided to consumers, MoneySupermarket.com has revealed that the cost of home insurance has fallen by 13 per cent since 2010. This is due to increased competition in the marketplace driving down costs. The average annual home insurance premium is now £136, the lowest MoneySupermarket has seen since it began keeping record in March 2010, despite high inflation in the wider economy.

Hannah Jones, home insurance expert at MoneySupermarket, said: “Competition among providers is continuing to drive down the cost of home insurance policies and it’s important that consumers take advantage of this. Those who become complacent by sticking with existing policies will miss out if they don’t take advantage of shopping around.”

Kingston-upon-Thames saw the biggest fall in premiums from winter 2011 to winter 2012, with a 13.8 per cent drop in the price of a quote. Harrogate and Halifax were not far behind, with both seeing a 12.9 per cent fall.

Reducing the cost of your home insurance

To really take advantage of the great deals that are around at the moment, there are many things you can do to drive down the cost of your premiums. Remember that insurance companies make a judgement on the cost of cover based on the risk insuring your property presents to them – if you can indicate to them that your home presents less risk, you’ll enjoy lower quotes.

Invest in your home 

Small investments around the house can make your home much more secure and reduce the risk attached to your home. For example, deadbolts and window locks will improve the security of your home, as will a burglar alarm. Just getting an alarm fitted can be a visual deterrent, and is a tangible sign for the insurance company that the home is better protected. Larger investments will also have an impact; installing double-glazed windows and doors will beef-up the security of your property, while there’s the added bonus that they will improve your energy efficiency greatly, lowering your energy bills.

Reduce your vulnerability 

Another way to reduce your home insurance premiums is by not making claims, and while buying new lock for doors and windows will help, you can also make some simple life changes to reduce the vulnerability of your home. This includes closing all windows when you leave the house or when you’re upstairs and unable to hear activity on the lower floor – even if the property is stuffy and needs airing. Also, make sure ladders and garden tools which could be used to gain access to your property are secured in an outbuilding, while cutting back hedges and low-hanging tree branches will make your home less enticing to thieves – burglars enjoy having some cover from prying eyes as they attempt to gain access properties. While making these changes will not directly reduce your insurance premiums, not making claims will.

Look carefully at your cover 

Not all insurance policies are the same; as with most services, you tend to get what you pay for. Looking more closely at the policy you have may reveal extra cover you don’t need, or lack of cover for something you do want. While there is a balancing act to be achieved with the price of the premiums against the size of the excess on the policy, you should look at extra cover and really think about whether it is needed, and whether paying for this separately may be wiser.

Take home emergency cover, for example. It is designed to provide peace of mind should disaster strike in the home – a burst pipe, a broken boiler or a breakdown of your electrical wiring system can throw your home life into chaos, and getting a tradesman out at short notice can be very pricey. If you’re not the type of person who always has savings to fall back on, an incident like this occurring at the wrong time of the month can put you in a predicament: either go without necessities or go into debt to pay for the work to be done. Neither is ideal, and it is here where many people are thankful for their home emergency cover.

Many insurance policies actually factor home emergency cover into the agreement as standard, but is this the right way to go? As mentioned above, the costs involved in emergency incidents are high, and this means that the claiming on your home insurance policy for them will push you whole premium up – paying for home emergency cover separately means it will be unaffected. If you want to pay a little extra for the peace of mind that comes with home emergency cover, then shop around with specialist providers such as UIA as well as speaking to your current insurer about your options.

Copyright © The Money Principle

Editor’s note: Tonight Alex takes us to the Job Centre; from the archaic computer systems to the apprehension and boredom of the people involved. He may not be successful in finding the ‘funny side’ of all that but the irony should not be lost on us.

The Job Centre, it’s no laughing matter. And no one is saying it is, except for that of a recent television comedy sketch show called ‘The Job Lot’, which as it turns out is less funny than the place is in reality.

I visit the Job Centre a few times a month, providing evidence for jobs I’ve applied for to an advisor once a fortnight with addition of more in-depth interviews whenever I’m beckoned to attend. Said interviews are indeed just as numb and ill-inspired as can be imagined. Of course, I know it’s not supposed to be like a trip to the funfair, but in my mind of many narratives I find amusement in the shaping of the characters in the building – From the cringing faces of un-eager claimants walking in and out, to the stories behind the staff themselves, mostly as bored in their facial expressions as the lifeless, grey furniture that surrounds them. Though I should be fair, they’ve installed quirkily shaped red and blue designer futons for the waiting areas. Maybe someone working for the DWP had a momentary sense of humour… I didn’t think so, either.

As for the computer systems I’m left quite stunned – The software and hardware provided to the staff is poor and seems very old. Your data is stored on what looks like a menu screen from a 1980ies arcade game, if you can envisage that, and the opening and closing of applications sometimes leads to crashing or an unresponsive page. It baffles me as I observe them being used, but then it must all be for budgeting reasons, and perhaps the system is pretty effective as it is. As the saying goes “If it ain’t broke, don’t fix it”, yet it seems pretty temperamental and awkward to me. It makes me feel mildly sympathetic for those who have to work with such computers, but then that notion doesn’t last for too long.

Another stab at their technology is at the job-search booths. These are like small ATM-type machines that let you browse through available jobs by relevance, date or distance from your local area. Unfortunately they do not produce any cash, and I tried once one hazy morning, but what’s more unfortunate is that I find if you search by local area, which is surely a popular method of searching, it gets confused and displays jobs available in London, Glasgow and so on. This is not useful as I live in South Manchester, and I’m not looking for a full time position in commuting, even if full ‘training’ is available (please excuse my puns).

Anyhow, back in November and December I had that awful problem with my claim being wrongly suspended, more through clerical error and system failure than anything I was responsible for. Since then I have had no real complaints, and I realise that the advisors are trying to do an honest and useful job, and they mostly do. But the experience of ‘signing on’ at the Job Centre is an empty one, like it is at any official government building, with the staff seeming to be just about able to tolerate one another. It must be hard working there, which is ironic, with a lurking atmosphere of resentful boredom slowly sweeping across the room from work desk to work desk. It hardly acts as a good advert for employment, but then my idea for clowns, jugglers and mime-artists to greet you as you enter would probably be too distracting.

I realise that the solemn sensations you get when attending such a place is the only way it can function properly from day to day, although I think they could at least revamp their technology to something more user friendly and updated. So as I look to my next appointment I sigh, but when I’m there I smile like I’m wearing a mask to cover up any reluctancy. As for the advisors, they adorn their own faces with apparent nonchalance for anything but policies and procedures as if their personalities have been surgically removed. Don’t get me wrong, I’m sure they are very friendly and fun people after work hours.

Thinking about it, it could make for a hilarious comedy series though, couldn’t it? Oh, wait…

photo credit: Emma L Brown via photopin cc

Copyright © The Money Principle

It’s all well and good investing in a new boiler that will not only help towards better energy efficiency but also help to reduce your monthly heating bill, but if you don’t keep it maintained and serviced, its longevity and efficency won’t be as good as it could be. New boilers aren’t cheap and there’s little point investing in one if you’re not going to ensure its upkeep.

Of course, an annual service and maintenance during the year cost, and if it breaks down, that can be costly too. This is where boiler cover comes in and with plenty of boiler insurance information available online, you can ensure you make an informed decision on which price plan to choose. With plenty of options from British Gas, varying in cover to suit all budgets, you can guarantee there’s a plan to suit your needs and your bank balance, while also gaining the peace of mind that your boiler needs are covered, whatever the circumstances.

You could opt for:

• Boiler and controls breakdown (£4p/m) which provides cover for repairs, parts and labour should your boiler or its controls fail.
• Central heating breakdown (£6p/m) which also covers repairs to your central heating system as well as the boiler and controls cover.
• Homecare100 (£9p/m) includes an annual boiler service on top of any repairs it may need should it break down.
• Homecare200 (£11p/m) is the same as Homecare100, except includes repairs to your central heating system too.
• Homecare300 (£13.49p/m) provides cover for your plumbing and drains as well, so that if anything should go wrong with your pipes, you’re covered.
• Homecare400 (£15.98p/m) is the full monty. Boiler repairs, an annual boiler service, your central heating, your pipes and your home electrics will all be looked after with this monthly bundle.

Ranging from £4 to £15.98 a month, there is a cover package to suit everyone’s pocket. Don’t just upgrade your boiler system; make sure it’s looked after during its lifetime, too.

Copyright © The Money Principle

When I was a ‘wealth drifter’ – you know, when I didn’t know how much I earn, how much we spend and how are we going to live in a month’s time – asking myself how much I am worth was about my values, standing and reputation. In other words, I was more concerned about social and cultural capital then the wealth that is the foundation around which these weave.

Things changed and I have morphed from a ‘wealth drifter’ into a ‘money management ninja’: I know all my numbers, we paid off all our consumer debt in record time and money management forms the core of The Money Principle. Then I also realised that as good Marxist it is my sacred duty to reconcile labour and capital, the source of exploitation and all evil. Since I have labour anyway the missing part is capital.

Now, when I ask myself how much I am worth it is about capital – hard, cold, pure cash and assets. Every couple of months I update the data in TMP Net Wealth Calculator: a satisfying exercise overall since our net worth has been growing steadily for the last three years. In fact, starting in January 2011 our net worth has increased by £173,000 ($271,000) – this includes paying off all our debt, increasing the value of the house by re-building the bathrooms, decorating the kitchen and another room and contributing to our pension schemes.

Should feel good, right! I am not going to insult my readers with misplaced modesty and over-criticism – it feels great. Still, every time I do check our net worth, there is a pang of disappointment and annoyance.

Our net worth is increasing, true; but it can increase so much faster and more efficiently were its structure better.

What are the structural problems of our wealth?

Before I go on and tell you how I see the four main problems with our wealth let me make some observations.

• Observation 1: About half of our net wealth is in non-income generating property (houses, apartments and land) and possessions.
• Observation 2: Another 45% of our wealth is in our pension funds.
• Observation 3: We have very few investments (apart from our pension funds).
• Observation 4: We still have low level of liquidity.

From these observations I worked out three key structural problems. These are:

• Problem 1: Our money is not working for us because it is mostly tied up in non-income generating property.
• Problem 2: Following from this, growth of wealth is possible mainly through ‘selling labour’. This has natural limits in the cost of labour and time and the steep growth we need to be able to achieve our financial goal is problematic.
• Problem 3: Our low level of liquidity means that we can’t act quickly on exceptional investment opportunities.

Good analysis; what are you going to do about it?

This analysis made me realise that our issue is not with how much our wealth is, but with the structure of this wealth. We are remedying the problems identified above by:

• Selling some of the property; and
• Building liquidity fast.

This is our focus until March 2014.

Finally….

In personal finance, it is very tempting to focus on relatively straight forward measures like net wealth: it is easy to work out, it is specific and ‘if you measure it you can manage it’. We tend to miss, however, that ‘how much’ is an important question but not one sufficient for action. If you want to know how to increase your net worth you should also look at the structure of your wealth.

Can you see any problems with the structure of your wealth?

photo credit: Shoes on Wires via photopin cc

Copyright © The Money Principle

Payday loan providers are providing people with quick access to relatively small amounts of cash in order to cover short-term financial need, yet they are driving many people into a cycle of debt that is exceedingly hard to break free from.

A payday loan may seem like an attractive option for people who struggle to get credit from traditional lenders, yet accepting this type of loan is often a decision that changes the borrower’s life profoundly. Struggling to make ends meet under a mountain of debt is sadly a way of life for many thousands of people in Europe, and it is stopping people from living the lives they really want. Asking for debt help from an experienced debt specialist could open up a world of possibilities you never thought possible; it could be the first step to making your dreams come true.

Why Do People Get Themselves into So Much Debt

People who use a payday loan for a short-term, one-off expense will often benefit from the service – as long as they pay off the loan on the agreed date. However, problems start to mount when borrowers decide to defer the loan. Sadly, people take out these loans to supplement their income, and when it’s time to repay, they take out further payday loans.

This cycle of debt does not only lead to a barrage of distressing phones calls, letters of demand and aggressive knocks on the door, it puts property and possessions at risk of repossession. Thankfully, enlisting the services of a payday loan debt management specialist could be the first step to freeing yourself from the chains of financial restraint. The money you save on interest payments and debt repayments have been enough to allow you to fully realise your dreams.

The Life-Changing Possibilities a Life Free from Payday Loan Debt Offers

It is not until someone actually breaks free of debt that they fully appreciate what is possible in life.

1. Enjoy a Holiday of a Lifetime

Aren’t you fed up with spending every single year at home? There is a huge world out there, just waiting to be explored. Removing your debt burden could give you the cash needed to take that international trip you’ve always dreamt of.

2. Get on the Property Ladder

A considerable monthly commitment to debt repayments greatly reduces your disposable income, and that will scare off potential mortgage-providers. Falling behind with debt repayments also affects your ability to acquire credit; making your dream of becoming a property-owner a very distant one. Paying off your debt not only improves your credit-worthiness, it also gives you extra money in your pocket every month – money that can be used to save for a mortgage deposit.

3. Buy the Car of Your Dreams

Falling behind with debt will seriously affect your ability to get credit for a car purchase. Instead of struggling with your old banger, the money you save by repaying your payday loan debts could be used for car loan repayments. And the better your credit rating, the cheaper your repayments will be!

4. Improve Your Employment Prospects

Many employers in the financial, retail and banking sectors will carry out credit checks before offering employment. Paying off your loans and staying up-to-date with your existing credit will ensure that potential employers don’t view you as an employment risk.

5. Start Your Own Business

Your ability to become a company director can be affected by County Court Judgements (CCJs) and bankruptcy. However, breaking free from debt will not only allow you to register your very own company, it could make you an improved lending risk – giving you access to essential start-up funds for your new business.

If you’re struggling under the weight of too many payday loans, you should know that there is help with debt available, and access to that help is as simple as picking up the phone. A debt specialist will investigate your situation, deal with your creditors on your behalf and negotiate realistic repayment schedules wherever possible. Stop living half a life, break free from the chains of payday loan debt and live the life you always imagined.

Editor’s Note: This article was brought to you in collaboration with 1st Point Debt Solutions: a company that offers debt management solutions to help you resolve your debt problems.  If you require help on your payday loan debt, please visit – http://www.1stpointdebtsolutions.co.uk

photo credit: StockMonkeys.com via photopin cc

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Our regular readers will remember that we have property in Bulgaria which we need to sell – an apartment, a summer garden with little house and some agricultural land.  It belonged to Maria’s parents.  And her sister’s as well of course.

Now we have buyers for all three!

The big sticking point has been that since Maria has been in the UK for over 20 years and has British citizenship, renewing her Bulgarian passport has proved to be so not worth while that she let it lapse.

But to oil the administrative waters, it is better for her to get a Bulgarian passport, even if only for these property transactions.  It appears that local notaries were not aware of changes in legislation which meant that she should be able to transact on her British passport anyway but try telling that to the jobs-worth clerk at the counter!

So Maria will go over next week to get a passport, grab some sun and eat delicious tomatoes.  Yum yum.  And travel to north Bulgaria to seal the deal with the purchaser of the apartment.

We have our own apartment in Sofia and a bank account locally so the funds from selling the apartment plus the land etc can be deposited there – where it will earn a handsome 5% interest or so. Eat yer heart out, Mr ISA!  We need to do some work on our apartment – the windows in particular require attention – but there should be about £25k left over after that.

What should we do with this?  We could ‘repatriate’ the funds here and add them to our Nutmeg account, which will grow hopefully a bit faster.  Or should we leave it in Bulgaria and even send more money over to take advantage of the higher interest there.  Hmm.

Since the UK is not – and I think will never be – in the Euro, this means looking for a good way to exchange currencies.  On the Bulgarian side, their currency board has held the Leva (the Bulgarian currency) constant against the Euro so we can change between Euro and Leva with very little cost.   Exchanging money from sterling directly into Leva would be more costly.

But how much will it cost to send Euros to Bulgaria or vice versa?  Which service to use?

We found one called HiFX which seems to fit the bill.  It’s been around since 1998.  Last year it transacted over £9 billlion and is used by the Post Office among others.

I registered on their website at http://www.hifx.co.uk .  I wanted to see just what charges would be made sending, say, a few hundred £, a few thousand £ or more each way.  It is important because not only do banks charge for the ‘administration’ they also have quite a large spread.

A spread is the difference between the cost of buying a currency and the amount for which you can sell back.  Don’t be hoodwinked by stories of a few ‘pips’ (few 1/100^ths of a percent).  This is for foreign exchange traders who are gambling.  That’s the advantage of playing with millions of course but with those platforms, you can trade but you can only withdraw money in the same currency that you started with!  That’s not what we want.

This table compares the costs along with those of our bank.  The exchange rates are just for this afternoon of course – any other time they will change so they are illustrative.  In fact the actual rate I would have got had I sent money today would not be exactly the same – these numbers change all the time.

For pretty nearly everything apart from Euros, dollars and a few others, NatWest charges not £10 but £22.  If you are sending any sizeable sum of money, that pales into insignificance anyway compared to their buy/sell rates.    All high street banks are the same and we are generally quite happy with the NatWest – they were very helpful in our time of greatest need – but it really is a no-brainer.

So how does it work?  On the HiFX site, it seems pretty simple.  You set the recipient account and currency and ensure that sufficient money is paid in.  The exact exchange rate will vary slightly from that quoted and the money is sent the next day.  Bingo.  I couldn’t initiate a sausage chez NatWest.  It would have taken a visit to the branch to do anything which would be good for the exercise of course except the local branch is only a few hundred yards away.

In sum, you can save a lot of money using HiFX.  We will be using it as and when necessary, particularly to move larger amounts of money.

How do you move money around?

Copyright © The Money Principle

A synagogue in Karakow

Today is Monday but I bet you have already noticed that; except that I am sitting here in my dressing gown, writing a ‘Principled Money Posts’ edition rather than being out and about, seeing student and writing stuff no one really reads even if they cite it. No, I have not made the jump yet, and I am still in my ‘day job’. It is just that I arrived home very late last night and there was no way that I could manage to write an article for TMP; not one that anyone would like to read at any rate.

This time I went to Krakow (Cracow) in Poland where I was invited to talk about peer review in science systems to a group of people from research funding organisations. Usually when travelling I try to fit in more than work: life is for living after all. This time my hosts took us for a walk in the Jewish part of town.

Today, this is a buzzing ‘going out’ place where the average age of people on the street is about 24 (Krakow has 200,000 university students); it is mingle of short skirts, killer high heels, designer jeans, laughter and drinks.

Walking around the place I felt the sadness of history. It is not ‘lovely’ but has character; it is large but given that Auschwitz is about 60 kilometres away  and that the reason Krakow was not destroyed during WWII is that it was the German army headquarters I kept wondering how many Jewish people were left living there; for that matter, how many Jewish people live there now.

We saw the synagogues and these are many. But just like when travelling through Bosnia, these made me think: ‘Too many churches but where is God!’

Krakow is still well worth visiting though!

Did I mention that two weeks ago I started the ‘slow burn’ eating plan  also known as the ‘lowcarb diet’; the difference being that ‘slow burn’ is not about aesthetics but running. Yes, I did. It feels good, some of the fat around my middle is going, I have more (and constant) energy and it is easy to keep to is when travelling. In fact, yesterday I did refuse a chocolate cake which is certainly a first.

Now let me tell you about the stimulating articles around the blogosphere I’ve enjoyed reading during the last couple of weeks.

Lately, I have been emphasising the importance of using’ the right tools for the job’ for money management. Hence, I could not have missed Jai’s article on budget spreadsheets if I tried to: I am sensitive to the topic and the article makes some really great points. The comments are also worth seeing .

When I first saw an article on UberSteward asking whether money is important to God I had the answer without going beyond the title: no it isn’t. The reasoning is simple: if you are omnipotent you don’t need exchange and certainly don’t need universal means of exchange (which is what money is). Have to say that I don’t agree with the argument even after I read the article but it did make me think; which is not something one can say about many PF posts.

Along similar vein, a post by Pauline over at Reach Financial Independence also excited my curiosity. Her post about the fantasy of money being irrelevant raises some important questions: could one be so wealthy that money doesn’t really matter? Well possibly, but for most this will never happen. So I fully agree with Pauline that instead of shielding our children from finance – or even teach them the wrong things about it – we have to get serious about PF education. And make it fun!

Gosh, it seems that I am a relationship killer. Or this is what the research cited in  an article by The First Million is the Hardest can be interpreted to mean. I am so glad that this is research is by economists who have been known the mess up because they tend to count things without much consideration for meaning. This sends the wrong message (if you are a successful woman you will die alone and get eaten by your cat/dog) and guess what? We have a self fulfilling prophecy.  Guys, whether a relationship is a happy one or not depends mainly on whether the team is good or not! As to successful women…well, we can carry our lot. After all, everyone has their Golgotha.

Mochimac  over at SaveSpendSplurge got onto the debate about women and earning as well. Of course, being a woman, she has a somewhat different angle and gets to a different conclusion: damn right we can have career and family. My experience, and observations, show that we have to re-negotiate the ‘couple’s contract’ though. I have a career (couple, actually), I have family and I feel cherished every hour of each day!

Finally, please have a look at this article: it is intelligent and beautifully written. We need more of both of these in the personal finance niche.

Now, how has TMP been doing?

The  TMP was included in the following personal finance carnivals:

Finance Carn. for Young Adults at The Happy Homeowner
Carnival of Retirement at Hurricanes, Panties
Yakezie Carnival at Growing Money Smart
Carnival of MoneyPros at Master the Art of Saving

Also, if you have missed my post about retirement on Reach Financial Independence go over and read it now: it got a very warm welcome and is certainly one of my better articles. Well, talking good guest articles and retirement, you may as well also see my article published on Budgets are Sexy last December.

Finally, don’t miss this juicy give away; it is an iPad mini after all.

This is all for now, my friends; speak soon.

Copyright © The Money Principle

If you are like most small business and use your van for business purposes then you want to make sure that you have the best possible insurance. This not only protects you and other road users but also makes sure that you are protecting your business.

Commercial Van insurance is what you want to be looking at to make sure that you have best possible van cover.

There are many companies that can give you commercial van insurance quote and a quick search online will bring you back plenty of quotes. It’s always advisable to gets quotes from many different companies to ensure that you are getting the best possible commercial van insurance deal.

The quotes that you receive back will primarily depend on the size of your vehicle, the model and age of your van, and the total value of the vehicle. It will also take into consideration your previous driving history and what extras you want to also include as part of your commercial van insurance policy. There are in general three types of vans that take out commercial van insurance are transit vans, escort vans and also courier vans.

Also, there are many different types of policies that you can choose from when taking out your commercial van insurance policy however the three main types fall under the categories of Fully Comprehensive cover, Third Party fire and theft Insurance and Third Party Commercial Van Insurance.

You will find that Fully Comprehensive one is going to be the commercial van insurance that comes back generally as the most expensive however it is also going to be the policy that covers you for everything and is going to make sure that you are insured “completely”.

There other two Third Party fire and theft Insurance and Third Party Commercial Van Insurance and they will still cover you to some extent but with some exclusions and in the event of an accident where you are at fault you may be asked to make an initial payment and this doesn’t always cover you for all costs. Therefore ideally to ensure that you and your business are protected fully you should always aim to have fully comprehensive commercial van insurance.

Always read the small print before taking out any insurance policy you need to be exactly sure what you are covered for and what will happen to you and your van should you have an accident. You ideally want to make sure that your business can continue even if your van is damaged so you may need to make sure that they will offer you a hire replacement should you need it and that any tools and equipment are covered in the van so that you can continue your business in any eventuality and ensure that you do not lose any revenue.

photo credit: i k o via photopin cc

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Editor’s note: Buying a house may be a dream for many but it is far from idyllic and unproblematic. In This article Duncan shares some top tips to get you through, without breaking your banks account. If you ask which is my favorite it has to be ‘buy the worst house on the best street’.

Let’s face it: buying a house can be the cause of an almighty thumping headache that just won’t budge. Although an element of stress is inevitable, there are a whole host of things you can do to make the experience as seamless as possible. To save you from a downward spiral of despair, here are some top tips on buying a house that could even save some pennies along the way.

Top Tip #1: Get the estate agents on side

Buying and selling a house is far from simple. There is a long process involved before you even view a property – from valuations to photos and agreeing the particulars. If you understand this process, you’ll be able to build rapport with your estate agent to make the next phase: the offer, acceptance, solicitors and sale, a whole lot more bearable. As an exemplary buyer, you’re much more likely to get the best from the estate agents in return.

Top Tip #2: Buy the worst house on the best street

We’ve heard it so many times before: it’s all about location, location, location. Like it or not, it’s true. To afford a home in a good area, go for the worst house on the best street. It’s in your power to make improvements, whereas factors such as crime rates, proximity to good schools and transport links are out of your control. Of course, you should be realistic too: if the property is a structural nightmare, avoid at all costs.

Top Tip #3: Be vocal

You’ve found a house you love, but have some niggling questions. Why has it been on the market for so long? Are there any parking problems? Why did the neighbour scowl as you waited to be let in?  Don’t be shy and retiring: voice your concerns as soon as possible. A few words now will reduce the risk of unwanted and potentially costly problems down the line.

Top Tip #4: View at varying times of day

Going on more than one viewing is an obvious must-do – no major decision on buying a property can be made without multiple visits. But it pays to go one step further: seeing your potential new home at different times of the day can be a lifesaver. Daylight viewings are important, but visiting at tea time or in the evening can identify noisy neighbour problems, or highlight those shady characters insistent on lurking outside.

Top Tip #5: Be a shrewd business person

If you’re buying to let, approach your purchase from a business perspective – even taking the time to draw up a business plan. While buy to let properties can be a great long term investment, they have the potential to leach your finances too. You’ll need a sound return on investment – so your earnings from your property in Primrose Hill, or your St John’s Wood rent, should always exceed your outgoings. Don’t forget, that’s more than just the mortgage – it includes maintenance costs and other associated payments too.

Author’s bio: Duncan Cumming has been writing for over five years. Although he has a marketing and sales background, he likes to write interesting articles about areas he has lived and worked in, including London.

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