Today I have a guest post for you from my colleague Richard Winstone (not pictured above). Richard has just launched a new, diary-style blog called Financially Fat about his quest to achieve ‘financial fitness’.
I thought Financially Fat could be of interest to many Pounds and Sense readers, so I invited Richard to create a guest post about it. He was happy to oblige, so here is his article.
Hi everyone. I’m Richard Winstone and I write a blog called Financially Fat.
I want to start this post by thanking Nick for allowing me to guest blog on Pounds and Sense. I appreciate the feedback he has given on my blog and am really proud to have this opportunity to showcase Financially Fat to the Pounds and Sense community.
What is Financially Fat?
“If financial fitness is the aim, then I am Financially Fat.” This is the tag-line of the Financially Fat blog.
Being financially fat isn’t supposed to paint the image of a fat, wealthy man. It’s meant to imply that my finances are out of shape, which they are.
I’ve decided to take a no-holds-barred approach to financial honesty in my blog: the good, the bad and the ugly. So, in the second post I wrote down my complete financial position. I left nothing to the imagination and fully revealed my “financial nakedness”. I did this because I wanted my readers to know that I’m not another rich guy giving quick tips to save a few quid (not that there’s anything wrong with that), but that I’m actually financially struggling and that I’m taking action to improve my financial fitness.
Financially Fit is written as a diary, in which every Friday I comment on how I did with the previous week’s targets and set new targets for the following week. There are also a couple of sections of me rambling about my thoughts from the previous week, which I hope are insightful but may just be the ramblings of a mad man 😉
The purpose of the blog is two-fold. First, I want to chronicle my journey from being financially fat to being financially fit. I think this is easier to do weekly while I’m on the journey rather than try to remember what I did after (I hope) I’ve become financially fit. And second, I’m hoping to provide a step-by-step guide for others to follow to help improve their financial fitness. I write and post my blog to the over50smoney.com website and email it out to our over50smoney community each week.
So, below is a quick summary of how my blogging journey has gone so far, now that I’m five weeks in…
This is another introductory post, but it goes into much more detail. I start by detailing what I hope to gain from Financially Fat and then move on to set out my starting financial position, including my salary, savings, debts, shares, assets and anything else I could think of. It’s a complete works of my financial position, which I’ve committed to reviewing monthly in a similar format so I can see how my financial position improves month-to-month (the next review is this Friday and I’m nervous!).
Right, Week 2 is when it starts getting more interesting and where the format of the blog really starts to become clear. I started this post by highlighting three things I did that were bad for my finances over the previous week, which were:
Moving home (kind of unavoidable)
Working from Costa far too often
Dining out
I then came up with the idea of setting targets for the following week to address things that I’ve done wrong in the previous week, with the hope that I’ll eventually move away from bad habits that cost me way too much money. This seems to be working to be honest, at the moment I’m down to working from Costa only once or twice a week and usually only for a couple of hours each time rather than full days.
Continuing the development of the blog format, Week 3 is where I started titling the blog posts a little more nicely, and where I started summing up my financial savings from following the targets on my previous week.
In this post, I point out how working from Costa only once a week instead of five times a week can save me around £50 per week, over £200 per month! I also discuss setting yourself targets as you follow the blog. Reading it is (I hope) interesting, but for the blog to be useful you need to follow the thought processes I go through and make sure you’re applying them to your own life. So, if you have a small, seemingly inexpensive habit that you do frequently, then I recommend reviewing how much that habit has actually cost you over a month and see how much you could save by cutting down.
In Week 4 I discussed the target of reviewing my standing orders and direct debits. After just one review, which took about 45 minutes, I was able to save just under £600 per year! Which is insane. I continued to review into the following week but was only able to save an additional £1 per month by changing my gym membership.
This is also the week I formalised my “Ramblings” as an introduction to the blog, I hope you enjoy reading them and please feel free to email me any time to comment, ask questions or provide suggestions (I’ve been getting some great tips from readers!).
By this point, I’ve started getting really into the money-saving game. I’m also discussing things like increasing income to ensure I’m not reliant only on my salary.
But, as the title indicates, I talk about tackling my biggest challenge yet, which is currently destroying my finances – smoking! I know, it’s a horrible habit and I’m obviously very aware of the negative health affects as well as the impact it’s having on my bank balance. So, I’ve set out a five-week plan to quit (which I can say I’m currently doing okay on, but it has only been four days).
Cutting out smoking could save me around £2,400 per year, which means from the Financially Fat blog I would have saved around £3,200 a year in disposable income just in the first five weeks, and there’s still so much more work to do!
Follow the Financially Fat Blog
That’s it for the summary of my first six blog posts. I hope you will click through and give them a read as there’s a lot more information in there and some interesting views, I like to think.
If you’re interested in following my blog, please head over to over50smoney.com and sign-up for our newsletters. Or, if you’d rather not receive emails, you could just follow us on Facebook. I write and post every Friday and put links on our Facebook page, so please consider liking and following this. Thank you 🙂
I want to thank Nick again for letting me write this short summary of Financially Fat. I really hope you find it as useful as I am. If you have any questions or comments, or just fancy a chat about finances, please feel free to reach out to me directly at richard@over50smoney.com. I sometimes take a few days to reply, but I promise I get back to every email I receive.
I’m Richard Winstone and I am Financially Fat.
Many thanks to Richard Winstone (pictured, right) for this article. I hope you will take a moment to check out Financially Fat.
I particularly admire the honesty with which Richard sets out his financial position. I try to be honest about my finances on PAS as well, but not in nearly as systematic a way as he is doing!
If you are also ‘financially fat’ (as Richard defines it) I hope you may find the info and advice on the new blog inspires you in your own quest to achieve financial fitness.
As always, if you have any comments or questions about this post (for me or for Richard), please do share them below.
If you enjoyed this post, please link to it on your own blog or social media:
Today I have a (sponsored) guest post for you from my friends at Just Free Stuff.
They reveal some great ways you can get your hands on free and discounted baby products. Even though I know many PAS readers are beyond the age of having babies, many will have children (or grandchildren) who are now parents themselves. We all know having children is costly, so any help with saving money is always appreciated!
Over to Just Free Stuff then…
Looking for freebies is a growing trend in the UK and it’s easy to understand why.
Young mothers especially need help finding where and how to get the best baby free samples or other baby free stuff such as coupons, information, and so on. So, having been there ourselves, we decided to create this mini-guide, hoping you will enjoy it.
What Do We Mean by Free Baby Stuff?
Free baby stuff may include promo offers (e.g. get one and receive the second for free), money-off coupons, free samples or even information on where to go and buy baby products cheaply. The Internet is full of websites and blogs on this subject and it can become quite confusing. So we wrote this to give you a place to start.
Our Top Three Baby Freebie Sites
There are all sorts of freebie offers out there, some better than others, so we thought we should provide a short list of sites that include only the best. We will keep this updated when new offers arise, but right now you can check out our top three below.
Offer Oasis – This well-established website offers free samples and discount coupons. It also provides lots of valuable information on subjects related to the early months or years of a baby’s life, most-used products, etc. It also gives a helping hand through its online community of parents who discuss and advise or simply share their experiences, from which you can gain much free knowledge. Cherry on top: membership of this site is totally FREE.
Amazon Family – Amazon Prime members get access to this programme that offers a range of benefits to parents of babies and young children. They offer up to 20% discounts on most common baby products such as nappies and baby food, as well as up to 15% discounts on repeat deliveries. You do have to join Amazon Prime to get access to Amazon Family, but this brings many benefits in itself, including free, next-day delivery of many items.
Just Free Stuff – What could be the third option but our very own website? We post offers we find available in our BabyFree Samples category. You might want to come back and check out the newest additions to the list as they always appear on the top.
Why Do Companies Give Away Free Baby Stuff?
Free samples or promo offers for current or new products are a popular marketing strategy. Companies keep using them as they are known to be very effective. Why? Businesses need to create a loyal customer base. For this, they need customers to keep buying their products and not switch to competitors. So offering some products in special promos is a reward to customers for their loyalty and (hopefully) keeps them engaged with and enthusiastic about the company.
Also, new products are being developed every day and companies need customers to try them. So why not give away small quantities for free? A customer might think twice before spending money to try out a new product, as they may feel safer with products they have always used. But trying for free is something almost anyone would do. That is why there are always so many free samples and promo offers out there, and why there always will be. So do keep going back to check out the latest ones.
Many thanks to Free Stuff UK for sharing their tips and advice today. If you have any comments or questions – or other tips for saving money on baby products – please do share them below as usual.
Disclosure: this is a sponsored post for which I am receiving a fee.
If you enjoyed this post, please link to it on your own blog or social media:
Today I am pleased to bring you a guest post by Paul Green from Over50smoney. Paul is the founder and CEO of this popular website, which acts as a consumer champion for the over-50s.
Paul also has his own blog on Over50smoney, in which he mixes financial tips and guides with some personal pieces on subjects including sourdough bread making and growing his own fruit and vegetables!
In the article below (shared from his blog) Paul sets out some great tips for saving money that may particularly appeal to older people (though relevant to younger ones as well).
Over to Paul then…
My career has been spent helping people and businesses save money. With a business it makes sense to run operations efficiently as this enables investment to grow the business in the future. For individuals, saving money on everyday purchases is just the same. It enables you to save for the future. You can then spend the money you save however you like. This could be on holidays and enjoying life or maybe longer-term savings for your retirement. The choice is yours.
In this blog post I wanted to share five easy ways of saving money on everyday things that have worked for me. If you have other great tips that people over 50 could benefit from, please do share then below.
Don’t Take Out an Expensive Mobile Phone Contract
The smart phone has become a big part of most peoples lives. And this isn’t only the case for younger people. At Over50smoney about 80 percent of our website users visit the site with their mobile phones. However, those of us who wait in eager anticipation of upgrade time on our phone contracts are probably wasting hundreds of pounds. This used to include me until I realised how much money I was throwing away needlessly.
Let’s start by looking at why the standard type of pay monthly phone deal doesn’t make sense. The table below compares the latest Apple top of the range phone on a 24 month contact on the Vodaphone network against buying the phone upfront and getting the same data and minutes deal from Vodaphone on a SIM only deal. Taking out a phone contract is essentially the same as buying your mobile phone on Hire Purchase (HP). You have to pay for this. In the example below you are out of pocket to the tune of £250 over the course of a two-year deal.
You could also make buying your own phone and SIM even cheaper. If you shop around, you could get a significantly cheaper SIM deal depending on your needs. Keeping the same amount of data but giving up 5G capability can save money, but do you really use all your data anyway?
Comparison of a 24-month phone contract to buying your own phone
Phone contract
Get separately
Savings
Apple IPhone 12 Pro Max
£75 per month for 24 months = £1,800
Phone £1,099
Data £20 per month for 24 months = £480
Upfront payment
£29
£0
Total cost over 24 months
£1,829
£1,579
£250
*Data from Carphone Warehouse, Vodaphone and Apple, correct as at 31 May 2021
There are also cheaper SIM providers than the main networks so it’s worth considering providers like ID Mobile that uses the 3 network. The point is, if you buy your phone, you have more flexibility on the SIM deal you use.
Not everyone has a thousand pounds to buy a new top of the range phone outright. And in my opinion, this wouldn’t be the best option if you wanted to maximise savings on your smart phone anyway. Have a think about these ways of getting a good phone for less.
If you have a phone coming to the end of a contract why not keep it for another year? The build quality in modern phones is high, so unless you already have a problem with the phone, it’s likely to last for an additional year or two. It’s been a while since there were any real breakthroughs in phone design, so the extra benefits of upgrading are likely to be limited to things like a slightly more sophisticated camera. A friend of mine recently decided to keep his Samsung when he came to the end of his 24-month contract. He had been paying £65 per month during the contract term with O2. He wanted to stay with O2 so based on his usage he decided to move to an O2 SIM only deal and now pays £20 per month. As he stayed with the same provider, he didn’t even need to get a new SIM card. He now enjoys the same phone he really likes for £45 per month less than he was paying during the contract term.
If you want a new phone, it’s definitely worth looking at buying second hand. You can do this online or in many of the high street phone retailers. A quick Google search will show you several companies that specialise in selling high quality second-hand phones including WeSellTek [sponsored]. These will be wiped clean of previous owners’ data, refurbished and sanitized. You can get models that are currently being sold new for hundreds of pounds less. However, the biggest savings are usually on models that are just out of date. Given the pace at which the main manufacturers release new phones this probably means the phones are only a couple of years old and will have all the features and capabilities you want.
I’m not going to cover the pros and cons of moving to pay-as-you-go deals here. If you use your phone infrequently or usually have access to Wi-Fi this is something you could consider as additional cost savings are possible.
Double Savings With Amazon
Being someone who likes to shop local where I can, buying grocery items from Amazon initially went against the grain. However, financially it can make really good sense.
I first noticed this with a couple of items. We love coffee and a few years ago invested in a great, beans to cup, machine. This means we use a lot of coffee beans at home. Likewise, my wife makes amazing risotto. This is a staple on our menu once a week. Which means we also use a lot of arborio rice. Of course, we can pick up coffee beans and arborio rice from the supermarket, but they come in fairly small packets and we go through these pretty quickly. I discovered both coffee beans and arborio rice were available in big 1 kg sized packs from Amazon and that the price per KG is less buying these bigger packets than the smaller ones we used to get in store.
However, on top of the saving for buying bigger packets, if you use something regularly Amazon can give you additional savings. If you buy using Subscribe & Save you can control how often Amazon sends you a product. And, if you used less than normal it’s easy to delay an order so your cupboards don’t get too full. For most grocery items Subscribe and Save seems to offer a 10% price reduction initially that can increase to 15% with repeat orders over time. For some products the saving is lower, with a 5% initial reduction increasing to 10% over time.
So, I am now converted to getting some of my groceries from Amazon. The value is really good with both cheaper prices for bigger quantities and a Subscribe and Save discount on top of that. I also like the additional benefit of the products being delivered which means you don’t have to remember to put them on your shopping list and then carry them home!
Big Savings With Groupon
As the over-50s community is now well and truly online, I wanted to look at another couple of routes to savings when buying online. First up, Groupon.
Groupon has been around since 2008 and is based on the American love of coupons. The site works in the same way as cutting coupons out of a newspaper. You select an offer from the site, and read the small print so you understand things like the time period the offer is available for and how to claim it. Traditionally you had to print a voucher from Groupon, though nowadays that isn’t generally the case.
Groupon is easy to sign up for. You need an email address. It’s the most useful if you download the app to your phone or tablet as you can use the settings to get offer alerts close by when you are out. Groupon guarantees sellers a minimum number of customers. This means that they can create offers for the platform to drive sales when they need them. Groupon claim the typical discount on an offer on their site is the range of a 30-40% discount, although I have seen discounts stated as high as 90% and as low as 5%. Groupon earn a commission every time a customer takes an offer.
Groupon organises offers into different categories, making it easier to find what you want. The offers are updated all the time so if you can’t find what you want its worth coming back again. Different people I know use Groupon in different ways. For example, I have a friend who before the pandemic only bought toilet roll in bulk from Groupon (today, I have seen an offer of 120 rolls of Cusheen quilted luxury aloe vera toilet tissues for £17.50!). I’ve not typically used the site for “basics” but have found offers for services near where I live to be really useful. Again, before the pandemic when my wife and I went out with friends regularly, Groupon was a good source of mid-week deals on food in local pubs and restaurants.
So you understand why I like local deals on Groupon, these three are a selection from the recommendations near me as I write this post:
40% off a two-course meal for four people in a local fish restaurant. The price includes a glass of wine each and is reduced from £84 to £50. The offer is for Tuesdays, Wednesdays and Thursdays only, unless you book at least four weeks in advance when it also applies to Fridays;
60% off a spa day at a local hotel Mondays to Fridays or 56% off for Saturdays and Sundays. The offer for two people includes use of the spa facilities and hotel pool, Rasul mud treatment and lunch served with a glass of Prosecco. Mondays to Fridays the price is reduced from £201.90 to £79 or Saturdays and Sundays from £205.90 to £89. As it’s my wife’s birthday in couple of weeks this is an offer I may consider as it’s the type of experience she enjoys at a resort I know she likes;
The most interesting offer for me today is from a local chiropractor. Having hurt my back about a month ago lifting heavy pots in the garden I have put up with ongoing back ache. However, I will now book a visit for a chiropractic consultation and exam, which includes a report of findings and a treatment session. I haven’t been to this practice before, but it is offering a whopping 84% discount with the price reduced from £81 to £12.95. I wouldn’t have booked this at the full price but am happy to pay just under £13 to see if I can sort my ongoing backache out!
I think the two most important tips for using Groupon are to read the small print of the offers, especially availability in terms of dates or locations. Also, you do need to include the cost of postage when assessing an offer for goods. While the postage amount is specified on the site, for low value goods this can outweigh the savings from the offer.
Cashback Sites Offer Great Deals
I’ve written about cashback sites before and there is a range of content on the Over50smoney website about them. For example, they are mentioned on the short video here Revolutionise your finances – Part 2 (over50smoney.com).
You need to join a cashback site and because of the way they work this takes a little longer than signing up to Groupon. The two best cashback sites in the UK are TopCashback and Quidco. Both are well established, reputable businesses and free to join. Once you have signed up you can search the cashback offers available. If you select an offer, you will receive your goods or services and the appropriate cashback amount will be credited to your account. This can take a few weeks. Once the money is in your cashback account you will be able to transfer it into your bank account so long as you stay within the conditions of the site you are using. Transfers are usually straightforward. According to TopCashback members earn an average of £345 cashback a year. Retailers pay cashback sites a bonus based on volumes of sales. Cashback sites also earn revenue from sponsored adverts and promotions on their sites.
Cashback offers typically range from a few pounds for everyday products to hundreds of pounds for expensive items or ongoing services like energy or broadband deals. The important thing to remember with cashback sites is that while the offers can represent really good value for money you need to make sure you don’t get swayed just by the cashback amount. High cashback amounts can seem compelling but may be associated with high-cost products. You should be aware that many businesses use cashback sites to drive volumes when their prices may not be competitive. Always take a look online and see if the product or service you are thinking about is cheaper elsewhere when you include the cashback discount. If you have done your research and are confident that the cashback offer you have seen is a good overall deal, representing best value for money, it makes sense to purchase this way.
Both TopCashback and Quidco have a wide range of offers split into different categories including clothing, electricals, insurance, travel and so on. There are many offers in each category, so normally there will be a fair amount of choice if you want to make a purchase.
At the time of writing the following deals were available on TopCashback:
£210 off iPhone contracts with Tesco Mobile
£200 off energy with Scottish Power
Up to 8% discount on purchases from Marks & Spencer (different reductions depending on products purchased)
Up to 7% discount on purchases from ao.com (different reductions depending on products purchased)
3% discount on Lego
If you would buy online directly from a retailer it always makes sense to see if there is a discount available from a cashback site. For example, why send flowers from Marks & Spencer directly when you can save 8% buy buying through TopCashback?
Always Use the 30-Day Rule
As someone who used to be a spontaneous shopper, buying things I liked when I was out, the 30-Day Rule has been a godsend for me.
The 30-Day Rule goes like this:
If there is something you would like to buy, think about it for 30 days. If after that time you still want it, go and get it.
Putting this discipline in place stops you buying things you don’t really need or want. The ultimate waste of money is buying things you never use!
I think all of us have bought things on the spur of the moment because they seemed like a good idea, but ultimately, we didn’t really use them. Recently, I was talking to friends who were moving house. Their weakness was kitchen gadgets! They had cupboards full of things they were planning to give away before they moved. They had bought soup-makers, salad spinners, air fryers, rice cookers, etc, etc, that had seemed like a good idea but were ultimately only impulse buys. Bought, used once, and then forgotten about!
For me the 30-Day Rule has stopped this. Waiting 30 days gives me time to reflect on whether I really want something. I no longer waste money on things that I don’t use or enjoy.
Paul Green, 1 June 2021
Many thanks to Paul for an eye-opening guest post. I shall definitely be checking out Groupon more often in future! Do check out his blog on Over50smoney and the Over50smoney website itself.
I do strongly agree with Paul about the savings to be made through buying your mobile and SIM card separately. And there are some amazing deals out there right now. Personally I pay EE just £6 a month for a SIM-only deal with unlimited texts, unlimited voice calls and 5 GB a month of data. Okay, 5 GB might not be enough if you are out and about all day, but personally I’m nearly always within wifi range and don’t need that amount of data or anything like it.
Older people might also want to look into getting a big button mobile phone. These can be great for those whose eyesight isn’t what it once was and/or those with arthritis or similar who struggle to use the small buttons on modern mobiles. Click here for more information on big button mobile phones.
I am old enough to remember the days when mobile phone calls were so expensive you only made them when you really had to and kept calls as short as possible. How times have changed!
Release the Equity from Your Property
While 50 won’t cut it, the great news for homeowners over 55 is that you can use your property value while still retaining full ownership. So, if you’re not planning to move out any time soon and dream of retirement at home, then opting for a lifetime mortgage will provide you with up to 65% of your property value in tax-free cash.
You can receive your home equity as a lump sum, put it in a drawdown facility to release as you wish, or opt for a monthly salary lasting up to 25 years. What’s best is that the money can be used in any way you desire, and no repayments are necessary during your life.
Be warned that equity release can impact one’s access to means-tested benefits. Luckily, homeowners are required by Equity Release Council regulations to use a financial adviser to help with sound decision making throughout the process.
Today I am pleased to bring you a guest post from Haydn Martin, a UK blogger whose website is called Perpetual Prudence.
Haydn explores ideas relating to retail investing and other personal finance topics on his way to finding the solution to Lifetime Investing…
In his guest post today he discusses the risks of investing in ‘safe’ assets.
Over to Haydn, then…
Risk might be the most important consideration when making investment decisions (like what to invest your ISA allowance in). Get it wrong and you could be retiring on a pittance, running out of money during retirement, or even worse – asking friends/family for handouts. Risk must be taken seriously and properly dealt with, especially when you’re living off your investment portfolio.
It seems strange, then, that risk is so poorly understood by so many.
One aspect of risk that is particularly neglected is the chance of a truly disastrous event crushing the value of the asset in question. The chance of these catastrophic events is ‘unthinkable’ and so not really taken into account by people when making investment decisions.
This is the wrong approach. In this piece, I will be talking about some of the hidden risks of the ‘safest’ asset classes and their implications for the investor.
Cash
What could go wrong with pilling up cold, hard cash under your mattress? This, surely, I hear you claim, entails no risks at all?
As you might have guessed, not quite. First, there are the practical considerations. If you actually store large amounts of cash somewhere in your house, that cash will promptly disappear if you get burgled, if your house burns down, or if your partner changes their mind about this whole marriage thing and does a runner (with the money). If at some other secure location, it can always be pinched. Cash held at a bank is dependent on the fortunes of said bank. As 2008 showed, this might not be the safest place in the world. The government will cover you up to £85,000, sure, but for those of you lucky enough to have more than this, you’re relying on the prudence of bankers.
Aside from the physical, one must also consider the monetary. Inflation, that cruel mistress, is the biggest threat to holders of pound sterling. It may be practically non-existent these days, but casting your mind back to the 70s will remind you of the real damage inflation can inflict on your purchasing power. If inflation is higher than the rate of interest you earn on your cash (that pile under the mattress is earning 0%) then you’re losing money in real terms. You’re actually getting poorer without realising it.
Government Bonds
Taking this cash and dumping it into government bonds may seem like a sensible thing to do, then. The government is probably less likely to fail than banks. These bonds earn some kind of interest to help combat inflation, too. Happy days.
Unfortunately, most of these rates of interest are dependent on the whims of the Governor of the Bank of England, not directly linked to interest rates. If the govna’ wants to maintain low interest rates to stimulate the economy after, say, a global pandemic has put a halt to business activity, they may maintain low interest rates, even with substantial inflation. This means that your bonds will be earning a negative real return. What’s also nasty about these bonds is the fact that their value fluctuates with inflation and interest rates. This means that you don’t actually receive the yield to maturity unless you hold the bond…to maturity. Otherwise, your yield may be substantially lower.
The government acknowledges this problem with bonds and issues index-linked versions to counteract this inflation risk. These bonds return some percentage above inflation, supposedly ensuring that you maintain your purchasing power (and then some). This, however, relies on the fact that the government calculates the rate of inflation correctly. How confident are you in the competence of the government? There is also the chance that the government defaults on their outstanding debt. This is unlikely under a fiat system (because they can always just print more money), but it remains a risk nonetheless. Reckless monetary policy can lead to veeeery high inflation, which is difficult to stop (just look at Argentina for a contemporary example). In this instance, your bonds would be worth precisely 0.
Shares
It would seem then, that relying entirely on the government may not be the best idea. What about companies?
The apparently safest form of investing in shares is investing in whole markets (or parts of markets) using index funds or ETFs. The highest level of diversification one can get is by investing in every market, using a global ETF/index fund. One of the main risks here is fake diversification. A lot of these global trackers should actually be called ‘US & Friends’. For example, if we look at the Vanguard FTSE Global All Cap Index Fund, we see that the US makes up nearly 60% of the fund. If the US performs badly, these trackers will too. There is also the chance that the company doing the tracking goes bust, meaning you will lose some of your investment. This is a pretty unlikely scenario, but it’s a possibility nonetheless.
An alternative approach is to keep your hard-earned money inside the UK, by investing in a basket of British companies. This leaves you rather exposed to the fortunes of the UK. If we prosper in the next 20-50 years, it will probably be a good move. If not, UK companies might not do so well. You are already likely to be heavily exposed to the UK via your job or some other way (like owning a house here), so it may be a good idea to diversify internationally a bit.
Many assets have this problem, come to think of it. If you plan on moving to the French Riviera in ten years’ time, you are going to want some exposure to French assets before you move. Let’s say France does really well in this time period but the UK does not. France is now more expensive, which is fine for French people because they have been getting richer, too. It’s not so fine for you, for whom France is getting more and more expensive. There is also the exchange rate risk to consider. You don’t want to convert your fortune into Euro only to find that it’s not worth all that much.
Just a closing remark on shares. It’s not clear that they will rise over and above inflation, even over long periods of time. The market is a complex system. The 7% return that everyone seems to be claiming the market naturally drifts towards is not guaranteed in practice.
Asset Management
What about just letting someone do your investing for you? Professionals with years of experience and good track records? That’s safe, right?
When you use these managers, you are putting your fortune into their hands. It’s really hard to judge if these are competent hands or not. These funds can dazzle you with past performance and a good sales pitch, but that is not a good indicator of strong future performance. Take the recent Archegos Capital Management blow-up as a warning (it was the largest trading loss in history). You just never really know what these managers are doing and what risks they’re taking.
Other Assets
Seeing these risks, some prefer to shun the financial world in its entirety and invest in real stuff. Stuff they can see and touch that has a good track record of maintaining value. Things that have historically been valued highly – watches, cars, wine, oil, gold, silver, etc. – could be a good bet. The problem here is that the value of these items is very much dependent on tastes at the time you come to sell. The green initiative could accelerate, crushing the value of cars and oil, for example. Or the demand for watches may just simply die off for no particular reason. I see this as unlikely – things that have historically been highly valued don’t tend to lose their allure overnight without some kind of devaluing mechanism – but it’s possible all the same. The point is, these things are valued pretty much out of thin air.
Some assets are not valued out of thin air. Those that generate cash-flow can have their values reasonably estimated. A small business, for example. Or a property that you rent out. The risks here are specific to each individual case.
Summing Up
Everyone is an investor. You can’t escape it. Everything that can be valued fluctuates in real value. Every day you are making investment decisions, so you might as well know what you’re getting yourself into (or make sure your financial adviser does!).
A big part of this awareness is knowing about the risks of investments, especially the disastrous, not-often-mentioned risks discussed in this post. Nothing is risk-free. Everything can go to 0 and you can lose all your money as a result, making for a pretty grim retirement. It’s just something you have to live with. You have to be a bit paranoid when composing your portfolio or you could get burnt, and burnt badly.
Of course, risk should not be the only factor when making investment decisions. Your specific circumstances (your goals, your age, your income, etc.) must also be taken into account. But risk should be, in my view, the primary consideration. To thrive, first you must survive.
Thank you to Haydn for an interesting and thought-provoking article. Please do check out his excellent blog at Perpetual Prudence as well.
I do very much agree with Haydn that every investment (or savings option) carries some risk. It is therefore essential to be aware of the downside/worst-case-scenario with any investment, while setting this against the potential rewards. Taking excessive risks is clearly to be avoided, but being too risk-averse – and therefore missing out on profitable investment opportunities – can be counter-productive as well. That applies especially to younger people, who may have 30 or 40 years before they retire.
It is also, in my view, crucial to avoid the mistake of putting all your eggs in one investment basket. As regular readers will know, I am a big fan of diversifying your portfolio as widely as possible – across different investment types, asset classes, platforms and risk levels. That way, if one or two investments do go south, hopefully they will be more than compensated by others that succeed.
It is also important to remember that investing is a long-term game. You should generally have at least a five-year time-horizon, to allow for the inevitable ups and downs in markets to even out.
As ever, if you have any comments or questions on this post – for me or for Haydn – please do post them below.
Disclaimer: Everybody’s needs and circumstances are different, and nothing in this post should therefore be construed as personal financial advice. Everyone should perform their own ‘due diligence’ before investing and seek advice from a qualified financial adviser if in any doubt how best to proceed. All investment carries a risk of loss.
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Today I am pleased to bring you a guest post from Cora Harrison, a UK blogger and vlogger (video blogger) whose website is called The Mini Millionaire.
Cora says she loves to explore new ways of making money, both online and offline. She has a particular interest in online selling (and reselling) and there are many posts on this subject on her blog.
In her guest post today she reveals how anyone with an interest in creating arts and crafts can boost their profits – potentially many times over – by selling their work online.
Over to Cora, then…
If you love creating arts and crafts products, you can of course sell them at local markets or craft fairs. If you are looking to sell more and make (much) more money, however, you should definitely consider selling online as well.
There are various ways you can display and sell your work online. Here are some of the most popular.
Your Own Website
Selling arts and crafts on your own website is probably the single best way to sell your hand-made items online.
Having your own website will allow you to contact customers directly, grow your brand, and avoid the fees charged by third-party platforms like Etsy and eBay. In addition, you will not be competing directly with other craftspeople selling similar items to the same pool of customers on the platform.
For this to work, however, you will need to create an attractive, professional-looking website. You will then need to drive traffic to it, using techniques such as search engine optimization (SEO) and perhaps paid advertising. You can use online website building tools such as Wix or Shopify to create your site or hire a professional website designer.
Selling on Etsy
Etsy is an online marketplace dedicated to hand-crafted items. It is known for vintage, unique and custom-made items. It is easy to use, so you can set up your store and sell your crafts online in no time. Many would-be buyers of hand-made products look on Etsy before going anywhere else. Customers can pay by various methods, including PayPal and Google Pay.
On the minus side, many other artists and craftspeople also use the platform. This means it can be hard to sell common items. In addition Etsy charge about 5% of the sales value as a transaction fee every time you make a sale. You also pay about $0.20 for each item you sell. PayPal (the most popular payment method on the platform) also charge a fee for processing payments. All of these fees and charges will eat into your profits.
Facebook Marketplace
Facebook Marketplace is a prime location for selling hand-made crafts products locally. Given that Facebook has a massive user base, you can reach many potential buyers in your area by posting your items there. Posting items is free and you can add up to 42 images of your product in every sales post. The post will also include a description of the product, your location, and the price of the item.
While there is no limit to the number of posts you can make in a day, Facebook may limit posting to avoid spamming the page with similar ads. You have the option of sharing posts on your wall so that your friends may see the posts you have shared in local buying and selling groups. Potential customers will message you for more information and selling terms. The Marketplace is available on the web-based version of Facebook and as an app.
Selling on eBay
eBay is of course primarily an auction marketplace where sellers post items and sell them to the highest bidder. However, you can also create fixed-price listings. It is therefore a good platform to sell hand-made crafts online. The platform uses PayPal as the payment provider for all transactions. Both eBay and PayPal have various fees that you will encounter.
You will also be required to pay a final value fee. The fee is applied at the end of the transaction after making a sale. The fee is a percentage of the purchase price. There are also shipping and handling fees. Shipping fees are based on the method chosen by the buyer unless for domestic shipping, where the fee is calculated from the cheapest shipping method.
You will pay the final value fee whether or not the client pays for the item. If the sale is unpaid, you can cancel the sale or report it as unpaid. Note that eBay will give you credit for this rather than a cash refund.
Why Selling Online is Beneficial
There are several reasons you should consider selling your hand-made crafts online compared with selling in person at craft fairs and so on (though you can of course do both).
First, as stated above, online selling exposes you to a much larger audience than in the case of a market stall. You can sell your items to potential buyers across the country – and further afield – with ease.
In an online store, there are no opening time restrictions. The store runs around the clock and customers can place orders at any time of the day or night, as opposed to a local venue with set opening hours. In addition, you can operate the business from anywhere and target potential buyers who are far away from your location.
An online store also requires less time and effort. Once you have set up your online store and posted your hand-made items, they will be seen whether you are online or not. This allows you to sell your crafts even if you are otherwise engaged.
An online store also has lower running costs than an off-line one. There are no utility bills, rent or other premises costs to pay. You can run your online store from your kitchen, living room or bedroom. All you need is a laptop or desktop computer with an internet connection.
Effectively Selling Your Items Online
The Quality of Photos Matters
Just like in an off-line store, in an online store your hand-made crafts need to look good to appeal to customers. It is therefore vital that you take clear, sharp photos of your items. You can take them from different angles to give the customer an all-round view.
A modern smartphone should produce good-quality images in ambient light, but place your items on a white surface to give them a professional look. You can also use image-editing software to make the image ‘pop’.
Give Your Items a Perfect Description
Since you will not be there to explain the features of your product in person, it is important to provide a good description alongside your image. Ensure that the customer gets a mental image of the item without getting too sales-y. Most platforms have a character limit within which you can write a description. Use this opportunity to explain all the features that might be of interest to a potential buyer.
Keep Checking Your Site Regularly
Keep checking the platform where you have posted the item regularly for customer queries or orders. If the account is linked to your email address, you can have ‘push notifications’ set on your phone so that you know when there is activity relating to your item. The ability to respond quickly to queries will boost your reputation and prevent you from losing customers.
You may wish to post on more than one platform to increase your exposure. Try to estimate the return versus the cost of placing ads on multiple platforms. Having many items listed rather than just a handful will increase your overall selling rates as well, so aim to build up your inventory as quickly as possible.
Good luck, and I wish you every success selling your hand-made arts and crafts online!
Many thanks to Cora Harrison (pictured, right) for some great tips and ideas.
Selling arts and craffs (online or off-) isn’t something I have ever tried myself, but I know it will interest many of my readers, so I was delighted to receive Cora’s article.
Obviously, you need some artistic talent to do this, but you definitely don’t need to be Leonardo (da Vinci, I mean, not DiCaprio). For example, using inexpensive software you can create attractive printables, which could sell well on Etsy and similar websites. You can read my blog post on this subject here.
But if you really don’t feel that selling arts and crafts online is your thing, you can still make good money selling and reselling products of all sorts online, from DVDs and collectables to Lego bricks! Check out Cora’s Mini Millionaire site for much more information about this..
As always, if you have any questions about this article, for Cora or myself, please do post them below.
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Today I am pleased to bring you a guest post from my colleague Will Pointing from GreatDealsMadeEasy.com.
In his article below, Will sets out his top tips for saving money on many of your home utilities.
Over to Will then…
Many people stay with their utility providers for years and years without changing, on the principle that ‘loyalty pays’.
Sadly, this only really applies with lifelong friends and the Cafe Nero loyalty app (where you get a free coffee after buying eight!). With yearly price rises on most home utilities, it’s a good idea to review them annually (at least) and save yourself £100s in the process.
As a general rule, new customers get the best deals. Below are some tips on how to uncover the golden deals that are right for you…
Broadband – prices increase to £152/year when you remain with them
A survey by Which? magazine found that 71% of respondents stayed with their ISP (Internet Service Provider) for over three years. Most providers offer the best deals on broadband for 12-18-month contracts, meaning after that period prices shoot up significantly.
Tips: Look for what is included in your deal and whether you really need it. Do you need all those TV channels when you have Netflix? Do you need calls included when you have a mobile phone?
Mobile phone – prices increases to £264/year when you stay with them
It so easy to forget when you have paid off your mobile handset (the companies rarely remind you if you have) and then stay on an inflated monthly rate for years. Phone companies create these fashionable adverts to try and convince you to get the latest phone, when actually buying a SIM-only deal until you really need a handset upgrade is the cheapest way. If you want a new SIM-only deal or a new handset, check out comparison sites like my one here.
Tips: Out of contract? Switch to a SIM-only deal. If not, ensure you are on the right tariff for you and you are not paying for unnecessary data (use free wifi when you can to save on using your data).
Water – average bill is £415 a year
Water UK estimate that the average water and sewerage bill is £415 a year or £34.58 a month. It is recommended to get a water meter installed, so the cost is as accurate as possible.
Tips: Water saving tips include having a shower not a bath, washing up manually, and putting a full load of clothes into the washing machine. Many modern machines also have an ‘Eco’ mode, which uses less water and electricity.
Heating and power – cost around £1,254 a year
Using comparison sites to evaluate different energy suppliers and tariffs is perhaps the simplest, most valuable money-saving action you can take. You can often save hundreds of pounds a year by doing this, especially if you haven’t switched for a while (or ever). Again, many customers continue on a high rate for years without asking the question, ‘Is this the best deal for me?’ I suggest using websites like Compare The Market, Money Saving Expert and Go Compare.
Tips: After getting the best possible deal, I recommend submitting regular meter readings to your supplier, so you are not overpaying. And turn off your lights as much as possible!
GreatDealsMadeEasy.com is the website to help you save money online the easy way. Whether you’re looking to cut back on your broadband bill, save on a holiday abroad or come up with a side hustle, Great Deals Made Easy will help you find useful tips and top deals. Expect great articles, interviews, reviews and advice. It’s written by digital marketing expert Will Pointing. Expect to find out how you can save money every month, the easy way!
Many thanks to Will for some great money-saving tips. Do check out his website at GreatDealsMadeEasy.com as well.
My own top tip would be to check out deals from cashback websites when changing utility suppliers. Sites such as Quidco and Top Cashback are especially worth a look when swapping energy companies. I talked about this recently in my blog post about How to Save Money with Cashback Sites.
On various occasions I have pocketed £70 or more in cashback when switching my gas and electricity providers. You can do this directly by signing up with an energy company via the cashback site (check first on a price comparison site that they are offering a competitive deal, obviously). Alternatively, many comparison services are also listed on cashback sites – so by clicking through to the comparison site and then switching via them, you can get cashback – and a good deal – this way.
And speaking of energy suppliers, you can also save money by getting a smart meter installed. These are currently being fitted free of charge by the energy companies. They help you monitor your energy usage and discover ways you can save money. In addition, a growing number of energy suppliers now reserve their best tariffs for people with smart meters. Check out my blog post Should You Get a Smart Meter Installed?
As always, if you have any comments or questions about this article, for me or for Will, please do post them below.
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Today I have a guest post for you from James Mackay, a certified financial planner and regular reader of Pounds and Sense 🙂
In his article below, James addresses an issue that will be real and pressing for many readers of this blog – how to prepare for retirement and enter it successfully.
Over to James then…
If you’re starting to think about your retirement, these are three important questions that you need to ask.
1. Have You Had Enough?
It’s Sunday evening and you’re winding down after a busy weekend with friends and family. As you sit back in your favourite chair and think about the week ahead, you can’t quite get comfortable.
The thought of going back to work on Monday morning makes you feel a bit uneasy. In fact, the thought of doing it for another 5–10 years makes you feel sick!
If you’ve ever experienced this, you might be approaching the point where you’ve had enough (that’s a technical term).
The question you need to ask yourself is whether the pain of going to work outweighs the benefit. If you find yourself in this situation; where you’re emotionally, physically and mentally drained and no longer excited to perform at the highest level, it’s time to do something about it.
Having had enough doesn’t mean that it’s necessarily time to retire. It simply means that you need to change the status quo.
Maybe you’ve had enough of your current role, but you’ve got more to give in another capacity. Your years of wisdom could be very valuable in a different guise. Perhaps you’ve had enough of having a boss and are ready to go it alone. With the years of experience, it’s no surprise that over 50s are the best entrepreneurs. Or maybe you’re happy to carry on but just want a little bit more flexibility around what you do and when you do it.
These are all useful options to explore, particularly if you haven’t got enough to hang your boots up yet. Sometimes, the benefit of working for “just one more year” can make a real difference to your financial situation.
2. Do You Have Enough?
If you’ve had enough, and are ready to move onto pastures new, the next question is do you have enough?
Whenever I ask this question, people start telling me how much they’ve got saved up. But they’ve got it all wrong. It’s like trying to build a house without the seeing the floor plans. You need to start with the end goal and work back from there.
Working out if you have enough requires knowing:
Your monthly number – this is how much a comfortable lifestyle is going to cost.
The gap – this is the difference between the two, and where your savings come in. Broadly speaking, if you’ve got 20x the gap in savings, you should be fine. Any less and you might not be quite there yet.
But, there’s more to retirement planning than just simply figuring out your ‘number’. Finding your purpose in retirement sounds wishy-washy, but without a clear purpose you’re likely to be one of the 25% of retirees who return to work.
3. Will You Have Enough to Do?
You need to ask yourself what you are going to do when you wake up on that Monday morning, free from the ties of work, and how are you going to fill your time.
If for the last 40 years you’ve been busy being busy – chances are you’re going to get pretty bored sitting around the house for 40 hours a week. I’ve seen many successful individuals retire, only to get bored and return to work within five years. The newly-found free time that retirement provides can be overwhelming for some.
Retirement is about having enough money to sleep at night and enough purpose to get up in the morning. It’s not just about the numbers, it’s about how you’re going to spend your time. Purpose will drive you in retirement, money will fund you. Try not to get those two mixed up.
The bottom line is this… retirement is the biggest transition you’re ever going to make. It’s not the sort of thing you do regularly and not the sort of thing you want to get wrong. By asking yourself these three questions, you’ll improve your chances of achieving a successful retirement.
Byline: James Mackay is a Certified Financial Planner at Frazer James. He has helped hundreds of clients to achieve financial independence and retire with confidence, clarity and purpose.
Many thanks to James (pictured above) for a valuable and thought-provoking post. As a semi-retired 63-year-old myself, I can identify with all of the points he raises.
Actually I think there is a strong case for phasing your retirement if possible, maybe reducing the number of days per week you work initially and/or moving to a less pressured role. This can make retirement feel more like going on an interesting journey rather than driving over a cliff!
I also think there’s a good case for continuing to do some work you enjoy during the early years of retirement at least, to boost your income, provide social interaction, and keep your mental and physical faculties sharp. Of course, voluntary work can do this as well (apart from boosting your income, which may or may not matter to you).
If you have any comments or questions about this article – for me or for James – as always, do feel free to post them below.
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Today I have a guest post for you by a fellow money blogger who goes by the name of The Reverend.
I’ve wanted to publish a post about video gaming for older people for a while but faced the obstacle of knowing very little about it (my experience of video games doesn’t go much beyond Space Invaders). Still, I know a growing number of older people are interested in this subject, and there are undoubted benefits, not least in terms of sharpening (or preserving) your wits and reflexes.
Anyway, that explains why I was delighted when The Reverend – a London-based video gaming enthusiast (and talented writer and blogger) – volunteered to write an introduction to the subject for Pounds and Sense. Without further ado, here it is…
I turn 40 this year and am not sure if I’m classed as an ‘older’ gamer or not, but one thing is sure, I can see myself gaming forever, regardless of whether I’m ‘too old’ or not. Its important that you do the things you want to, whether it is writing a book, going to the cinema or even playing video games.
The World of Video Game Consoles
When you think of Video Games, what companies do you think of? The gamers of today will be playing on a Switch, or a Samsung, maybe a Steambox. When I grew up there was Atari, Spectrum or Commodore. This then moved onto NES and Master Systems before going to SuperNES and Megadrive. Everyone remembers Sega and Sonic the Hedgehog. Sega no longer make games consoles, but Nintendo have had recent successes with the DS (in various versions) and the more recent Switch.
One thing you might be surprised by is that many people nowadays are also playing video games on mobile phones and tablets.
Games for Older Gamers
I’d like to start by saying that games are for everyone – your age doesn’t stop you from enjoying the latest titles. We are also at a point where the block-buster video games are making more money than the block-buster movies! It is worth thinking about what you’d like from a game.
Gaming Hardware
To play games you have a few options, but the main choices are:
Most people do have a mobile phone, so this is a good way to start gaming. The Apple App Store and Google Play Store have hundreds of ‘free’ games you can download and try out. It’s a good way to judge whether you’d like a particular type of game – and if the game isn’t for you, you can delete the app and you’ve spent no money.
If you are looking to get a games console it’s best to go to a shop and try one out. Although the controllers all look fairly similar, you might find that the grip to ‘hold’ the controller isn’t comfortable or (for example) you aren’t able to see the smaller screens of the Nintendo 2DS. Most game stores will be happy to talk through the options with you, let you try things out, and maybe even suggest some games based on your interests. These people know their games inside out, so do ask for help!
A gaming home computer can set you back thousands if you want to play the latest games in the highest image quality. If you already have a home computer then a chat with your local game store will help identify which game you’ll be able to play without having to spend any more money.
Gaming Options
What do you like to do to relax? Do you enjoy reading books, watching movies, or sitting down with the Sudoku page of the newspaper? No matter what you enjoy doing, there is a game to suit you.
Love A Good Story?
If you enjoy in-depth story-lines in books, TV or film, then you may enjoy an RPG (or Role-Playing Game). Like books, there are plenty of genres for RPG games. I enjoy the Post-Nuclear-Alternative-Timeline story of the Fallout series of games. These are set in a future where technology didn’t move to the microprocessor and stayed with transistor valves. Imagine 1950s Americana with lasers! Death, destruction, cannibalism, nuclear bombs and drugs – not something you’ll be able to share with younger family members! The Fallout series of games are available on the PlayStation 4, Xbox One, and the PC.
At the other end of the spectrum there is Cat Quest. Of course, not every game has to be about lasers and robots. Imagine a medieval adventure game but feline themed! It is also a PEGI 3 rated game and this means it is suitable for all ages – no swearing or nudity in your cat-adventure – so you can play along with nieces/nephews or grandchildren. Cat Quest is available on the PlayStation 4 and the Nintendo Switch.
The premise is that you collect Pokémon. You do this by exploring the real world and when you are notified a Pokémon is in the area, you throw a Poké-ball at it to try to catch it. To make the game more interesting you have Points-Of-Interest called ‘Poké-Stops’ and ‘Poké-Gym’. The Poké-Stops help you lure special Pokémon for you to catch, and the Poké-Gym allow you to battle other players to take control of the ‘Gym’.
Part of the success of Pokémon Go is that it is a ‘Freemium’ game available on both iOS and Android, so most smart mobile phones will be able to play it. The fact it is Freemium means that the game is free to download; however, there are In-App Purchases (IAPs) that will allow you to progress faster.
LIKE Life Simulations?
The big name in this genre is The Sims. This is a game where you control a person and all aspects of their life. Imagine the board-game The Game of Life but with interactive graphics and almost infinite possibilities. You can choose the life you want, build the house you want, get the job you want, have children, get married, cook dinner and live out all sorts of dreams that perhaps you didn’t manage in your real life! The Sims is available on PlayStation 4, Xbox One, and PC. There is a basic version also available for the Nintendo DS.
If you want to try running a hospital then there is Two Point Hospital for the PC (pictured above), with console versions appearing in time for Christmas. Maybe you want to become your own dictator – Tropico 5 is on the PlayStation 4 and XBox. Has your life-long dream been to drive a big rig? Then check out Truck Driver, also for the Xbox and PlayStation 4. You can even be a goat in the obviously named Goat Simulator!
There are a number of farming-simulations which don’t focus on the farming and do have a story-line. Available for the PlayStation 4, Xbox and Switch is Stardew Valley. You can also get this on the various App Stores as well as for the PC. There are quests in the game and these are designed to help you get more money so you can develop your farm. [Nick writes: My teenage nephews are keen Stardew Valley players – my brother-in-law once told me he wished they were half as keen on helping with the real garden as opposed to tending their virtual ones!].
ENJOY Building?
The classic building game is Minecraft. It’s available across pretty much any platform or device you can imagine. There is a ‘story mode’ for Minecraft but it also gives you a complete open-world building experience for you to create anything you want. The graphics may remind you of a much earlier generation of gaming, but don’t be fooled – this is a serious game that has a massive number of followers.
If you enjoy solving the Sudoku in the paper every day, did you know you can play these for free on your mobile phone? Go to your App Store and search for ‘Free Sudoku’. There are plenty of versions out there for you to choose from. Just make sure you don’t need to share your camera/photos/contact list/etc with the app – they don’t need this data.
Another well-known series of brain training games is from Dr Kawashima. These games are designed to challenge your brain and keep you thinking. They are only available for the Nintendo 3DS, but the series has been running for over 10 years.
Recommendations
Think about what you want from your gaming. If you want to play with family members then get whatever console they have. There is no point having a PlayStation if the people you want to play with have xBoxes.
If you want to just play something quickly while you have a spare five minutes then check out the free games on the app stores for your mobile phone – there are plenty of games like Candy Crush which you can start/stop with no impact to the game-play. If you want to do some more serious gaming on the move then the Nintendo Switch has a large portable display AND can connect to your TV at home.
Remember you don’t have to buy your games machine brand new. The current RRP of the Nintendo Switch is £279.99; however, you can find it much cheaper if you are willing to buy second hand. You could buy from eBay or Facebook selling groups. Another option is to buy it 2nd hand from CEX, where you will get 12 months’ warranty but you will probably pay more than the eBay price.
I have a PlayStation 4 and an iPhone. The iPhone covers my ‘casual’ gaming when I have a spare 5-10 minutes while I’m out and about. On my phone I have Tetris, Countdown, Scrabble, and Candy Crush. My PlayStation has first-person shooters like Call of Duty, RPGs from the Fallout Series, historical stealth exploration from the Assassin’s Creed series, and various games I can play with my nieces and nephews. They enjoy playing Lego Avengers with me, but I must say I’m much better than they are! (well, that’s what they tell me, but they might just be saving my feelings!)
Final Thoughts
Gaming is for everyone. Whatever you are interested in, there will be a video game for you. Don’t be ashamed if you want to go on a Cat Quest, or you are interested in running your own farm. You might even want to build in the Minecraft world and see where your creativity takes you.
If you have friends/family who play video games then ask them for advice. Most gamers are happy to talk games, explain what they are playing and make suggestions of what you may want to play. It doesn’t have to be only Fortnite and flossing!
Many video games have online/social components and this means you should be careful with any personal information and not give away too much. Treat these networks/messages/etc the same you would with any other online activity. Microsoft has some good advice that is worth following. Stay safe, as you would with any online activity.
Video games can help keep you active, keep your brain engaged, make new friends and keep you connected with your family, especially the younger generation. With all this available to you, why wouldn’t you want to get into gaming?
Many thanks to The Reverend for an eye-opening article. If you’ve been considering trying video gaming – or even if you haven’t – I hope this article might inspire you to get started.
As The Reverend says, gaming can be great for keeping mentally and physically sharp, and engaging with friends and family. You could start with games on your mobile or your computer, and maybe move on to consoles if you really get the bug.
As for me, I’ve decided to make a start in video gaming and have downloaded a couple of games to my smartphone. I’m already looking forward to planting, tending and expanding my first farm 🙂
Do check out The Reverend’s excellent blog at https://thereverend.co.uk. As well as some great posts about saving money and making money, there are enjoyable and informative posts about travel, food and entertainment as well.
As always, if you have any comments or questions about this article, for me or The Reverend, please do post them below. And if you are an older video gamer yourself, I’d love to hear any advice, tips or recommendations you may have!
Disclosure: This post includes Amazon affiliate links. If you click through and make a purchase, I will receive a modest commission. This will not affect the price you pay or the product/service you receive.
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Today I have a guest post for you by my fellow money blogger Simon from Financial Expert.
In his post, Simon examines the pros and cons of investing in active versus passive funds. This is (of course) a subject of much debate among both pundits and investors. I will share a few thoughts of my own about it at the end.
Over to Simon, then…
For people who are enjoying their retirement or approaching it, choosing the right investments is clearly crucial.
With less time to correct mistakes, a bad investment choice is likely to have a major impact on quality of life in retirement. Many older people therefore struggle to make decisions given the number of investment choices available.
But before picking any particular trust or fund, all investors must first navigate a fork in the road. They must decide whether to follow an active or passive investment strategy.
Active Versus Passive
A fund manager following an active strategy has the discretion to hand-pick shares that they believe represent a superior investment opportunity. They do so in an attempt to deliver a return higher than the market average – for example, the return on the FTSE 100 index of large companies listed on the London Stock Exchange.
Funds that follow a passive strategy, on the other hand, use a mechanical approach of buying most of the shares which form indexes such as the FTSE 100. The objective of replicating the index is to provide a return which mirrors it as closely as possible.
Of these two approaches, which is the more successful? There are many arguments on each side of the debate. Below, I pull out the key pros and cons to help you decide.
In Support of Active Investing
Detailed research is valuable in opaque markets
In emerging markets and other less developed economies, quality financial information is a scarce resource. For example, emerging-market companies are less covered by investment analysts, and the quality of their financial reporting may be lower.
This creates a research deficiency which can be exploited by any active fund with a research team. Any insights generated by the boffins can be used to guide trades and improve the performance of the fund.
This is one of the key reasons why investors opt for active funds over passive funds in the emerging market equities asset class.
Moreover, the higher returns of high-risk markets such as emerging markets helps to cover the premium fees charged by active funds.
Absolute return strategies
Active funds are free to engage in investment strategies which seek to provide a positive absolute return regardless of whether the market is rising or falling.
They can do so by either short selling a company, by switching between asset classes, or by investing for relative value. Relative value investing is where fund managers seek out under-priced securities. They buy under-priced securities and sell over-priced peers. In theory this strategy will deliver a profit regardless of the overall direction of the market, as long as the pricing anomaly corrects itself over time.
These funds seek to provide a lower level of volatility compared to an ordinary equity investment, and similar returns over the long term.
However, the recent performance of large absolute return funds has been underwhelming. In the three years to the end of November 2018, the flagship absolute return fund managed by Standard Aberdeen’s has returned only -6.6% compared to 42% for an average investment trust.
In fact, only 12 of 102 similar funds reported a positive return over the same period. This implies that while active strategies might work on paper, they are difficult to execute in practice, particularly when so much money is chasing the same strategy.
The Drawback of Active Investing
Active managers are losers… most of the time
The track record of active funds highlights their biggest drawback: after fees, active funds tend to under-perform the market average.
Fund managers and research staff are expensive. This translates into higher annual ongoing charges. The higher the fees, the higher the bar is lifted on the returns needed to meet investor expectations.
Simple logic can provide a hint at why active funds disappoint:
Worldwide, the lion’s share of assets are still owned by active funds.
By definition, only half of the market participants can perform ‘better than the average’.
Of the winning half, some of these winners will have significantly outperformed, while many will have only incrementally outperformed.
Because of the premium fees they charge, any active fund that beats the benchmark only slightly will still come out as a loser after fees are taken into account.
Therefore we can conclude that theoretically, only a small proportion of fund managers (those that beat the benchmark by a good margin) can deliver the return that investors expect.
The second issue that plagues active managers is the difficulty of repeating the performance in subsequent years.
A fund manager may have enjoyed a particularly strong year because of sheer luck alone. Perhaps the fund happened to simply be in the right asset at the right time. This doesn’t guarantee that the fund will enjoy remarkable success in the future.
The temporary and unrepeatable nature of fund success explains why the fraction of fund managers that fail to meet their benchmark rises to the ‘Nine out of Ten’ statistic reported by the Financial Times when their performance is measured over a long time frame.
In Support of Passive Investing
Passive strategies deliver what they promise
Followers of passive investment strategies understand this logic and are prepared to accept an ‘average’ market return, in exchange for the assurance that they will not under-perform it.
Passive funds, which create portfolios which closely resemble the indexes they track, carry much lower fees as no research analysts or star fund managers are needed on the payroll.
With fees as low as 0.06%*, trackers give investors the best chance to achieve as close to the ‘average market return’ as possible. As stated above, this will beat active funds, which typically trail behind the same benchmark.
* Vanguard FTSE 100 Index Trust
The Drawback of Passive Investing
An unhealthy concentration
Indexes are created mechanically by companies such as FTSE and Standard & Poor’s. Each company in the index is weighted by its size, among other factors.
This formulaic approach has the unintended side effect of creating unhealthy levels of concentration.
Vanguard’s Emerging Market Stock fund is a good example. 31% of the fund value is invested in a single country; China. In contrast; India, Brazil and Russia take up just 8%, 8% and 4% of the fund respectively.
Indexes can also be skewed by industry. Financial companies form 24% of the same fund. This vastly outstrips banking’s share of the global economy. Even in the UK, which of course contains London, a global financial capital, banking and finance only contribute 6.9% of economic output.
The result of these distortions is that ‘diversified’ passive investors can find themselves exposed to country-specific, sector-specific or even company-specific risks. They may have no clue that such a large proportion of their portfolio is invested in such specific areas, given the global nature of the fund.
Therefore, while passive funds appear to give retirees the best opportunity to achieve average market returns over the long term, investors should be wary. Any potential index fund should be reviewed to discover whether they have an unintended concentration in a particular region or sector.
Many thanks to Simon for an illuminating article on an important topic for all investors.
Anyone who is considering investing in funds or trusts needs to bear in mind the distinction between passive and active management . For new investors, low-cost passive tracker funds, such as those run by Vanguard and mentioned by Simon above, could certainly be worth considering. But bear in mind the point Simon raises about the risk of unintentionally creating unhealthy levels of concentration in a single country, sector or even company.
Personally I have some money in tracker funds, but quite a lot more in funds that are actively managed. This is partly due to the fact that having no living dependants I can afford to take a slightly more adventurous approach in pursuit of better returns. Nonetheless, I do of course aim to diversify my investments as widely as possible, so that a downturn in one particular market or sector doesn’t impact too badly on the value of my overall portfolio.
I would also comment that most investment funds and trusts incorporate quite a bit of diversification already due to the range of investments they hold. Although they do of course come with a degree of risk, other things being equal this is likely to be a lot less than investing in individual company shares. And for older investors, careful risk management is key to ensuring a comfortable retirement, no matter how long this may prove to be 🙂
As always, if you have any comments or questions on this article, for me or for Simon, please do post them below.
Disclaimer: Nothing in this article should be construed as individual financial advice. All investments carry a risk of loss. Be sure to do your own ‘due diligence’ before making any investment and consult a qualified independent financial adviser if in any doubt how best to proceed.
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Today I have a guest article for you from my fellow UK blogger Neil Welsh.
Neil has a special interest (and expertise) in diabetes. In this article he talks about prediabetes, a common condition that can lead on to Type 2 diabetes if no action is taken.
Older people – such as many readers of my blog – are particularly prone to this condition. If it develops into full-blown diabetes, it can have life-changing (and potentially life-limiting) consequences. It’s therefore very important to be aware about it and to take action if required. I have a special interest in prediabetes myself, for reasons I will discuss at the end of the article.
Over to Neil then…
Prediabetes is no joke. If left untreated it can develop into full Type 2 diabetes in as little as 3-5 years and lead to complications such as nerve damage, heart disease, increased risk of stroke and potential blindness and amputations.
The tricky part is that it’s not easy to know if you are actually prediabetic or not. According to Diabetes UK, an estimated seven million people in the UK have prediabetes: an under-diagnosed condition that makes them up to 15 times more likely to develop Type 2 diabetes.
So what are the warning signs and how do you know if you do have prediabetes?
There are four commonly accepted indicators of prediabetes which are:
– Increased thirst
– Frequent urination
– Fatigue
– Blurred vision
Now, on their own, these are not particularly great indicators. I frequently display a number of these symptoms on a regular basis! So, realistically, these indicators need to be considered in conjunction with other risk factors. You are more likely to develop prediabetes if you have any of these risk factors:
– Being overweight
– Being inactive
– Having high blood pressure
– Having high cholesterol
– Having a family history of prediabetes
– Being of South Asian, African-Caribbean or Black African descent.
– Being over 40 years old
The only way to know for sure if you are prediabetic is to have a blood test. This can either be carried out by your medical professional or using a home test kit.
One of the most effective tests is the HbA1c test. HbA1c refers to glycated haemoglobin. This blood test shows how much glucose (sugar) in your body sticks to your red blood cells. The result tells you your average blood sugar level for the past 2-3 months. If your body is not using sugar properly it builds up in your blood and sticks to the cells.
The longer you have had high blood sugar levels, the higher your HbA1C will be. Less than around 40mmol/mol (6%) is considered normal, 40-47mmol/mol (6.0-6.4%) is considered prediabetic, with anything over 48mmol/mol (6.4%) indicating diabetes. It’s different from an FPG (Fasted Plasma Glucose finger-prick test), which is a snapshot of your blood sugar levels at a particular time, on a particular day.
So what should you do if you are concerned that you might have prediabetes? The number one thing is to act now. Take it seriously and avoid the medical complications that may be around
the corner. Prediabetes is totally reversible. Type 2 diabetes is considered reversible only to the extent that you will be in remission and drug free, but the threat of the condition returning will be constant. The sooner you act on prediabetes, the simpler the reversal process will be.
If you are diagnosed with prediabetes or if you are just concerned that it might be on the horizon then the course of action is the same: make changes to your diet and lifestyle.These changes do not have to be dramatic; in fact, you are statistically better off if they are not. An old Chinese proverb says that it is better to take many small steps in the right direction than to take a great leap forwards only to stumble backwards…and in the case of prediabetes this could not be more true.
Making small changes that are appropriate for you and where you are in your journey is the key to success. Work out where you are now and where you want to be and then take small, consistent
steps in the right direction. It could just save your life!
Neil
About the Author: Neil Welsh specialises in helping people reverse prediabetes. He focuses on working with clients to make changes which product remarkable results. Click here to download Neil’s free Prediabetes Reversal Blueprint, a guide to helping you know what to eat and how to live to stop prediabetes.
Many thanks to Neil for an eye-opening article on an important subject that older people (especially) need to be aware about.
I was actually diagnosed prediabetic myself two years ago. How it happened is that on a routine check-up the doctor found I had hypertension (high blood pressure). As I gather is standard in these circumstances, he prescribed various tests to get to the root of the problem. One of these was an ECG – which came out fine – but another was a blood test. My HbA1C result (referred to above by Neil) was in the region defined as prediabetic.
My doctor was actually pretty dismissive about this. He said, “Prediabetes isn’t something we treat.” That wasn’t good enough for me, though, so I researched the topic and read a number of books about it, including the excellent Reverse Your Diabetes by Dr David Cavan. As a result of all this, I made various changes to my diet and lifestyle, in particular cutting down on carbs. To cut a long story short, when I was tested again earlier this year, my blood test results were back in the normal range. My doctor (I have changed to a different one now) said, ‘Whatever you’re doing, keep on doing it!’
I should also add that, probably as a result of losing some excess weight through my diet and exercise regime, my blood pressure has has gone down as well, and I am no longer on any medication for this. Win, win!
Anyway, I hope you will read and note the advice from Neil and download his free Prediabetes Reversal Blueprint. You may also want to check out his Habits for Life programme. By taking action now, you really can reduce the risk of developing full-blown diabetes further down the line. And even if you are already diagnosed with T2 diabetes, both Neil and I believe it is possible to improve your blood sugar control through diet and lifestyle changes and potentially reduce the amount of medication you have to take.
As always, if you have any comments or questions about this post, for me or for Neil, please do leave them below.
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tic a way as he is doing!
