Posts Tagged With: Financial Services

 
 

About my posts

I post mostly about publishing (my current career), money & finance (earlier career). My articles about money & finance reflect my 30-odd years in banking (ended before all the banks went berserk), and are generally intended for the average man/woman in the street. There are more resources for advanced financial info than you can shake a fiver at, and I’m not a financial advisor, so I try to write the things that tend to get missed out.

As far as publishing is concerned, I do the techie side, while Sasha covers the earlier stages in her blog (http://sashafenton.wordpress.com). Changes in writing / publishing are so frequent lately, it’s very hard to keep up, so you’re welcome to pose questions, be it about traditional publishing or self-pub / personal publishing – we do both.

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Money: The Roof over your Head

This is important, but sometimes people either forget, or have never been told, just how to respect the value of their home.

Your home is usually the biggest purchase in your life. A lot of people in Europe get along happily by renting all their lives, but I think that isn’t the norm elsewhere. If you’re into owning your own property, then here are a few thoughts:

  • If you have a mortgaged property, you’re not completely the owner until it’s fully repaid. And, as the small print in UK adverts says, if you don’t keep up repayments, you may lose your property.

  • Therefore, it’s important to make sure you keep up those repayments; it wouldn’t hurt to save up and build a reserve specifically to cover six months repayments, so that in any eventuality, whether losing a job, illness or whatever, you’ll have six months in which to get back on your feet. Let me put that more gently, tactfully: Do it!

  • Saving isn’t always easy, but think about it – if you put away just 10 percent of your (net) income, that doesn’t hurt that much. Maybe not every month, but whenever you can.

    Save your small coins. Get the family to do the same. Make piggy banks out of empty soft drink cans, and all the small coins that you don’t normally use (I’m told some people chuck out their pennies! As an ex-banker, I cringe…). In a years’ time you’ll find that you have a pretty interesting amount of money saved up. I paid for air tickets for wife & me on a holiday, through saving pound coins as well as smaller ones.

  • This next one is really important: don’t take out a second mortgage for anything except to improve or maintain your property. Not for a speedboat, not for a holiday, nor anything. Your mortgage is meant to end while you’re not too old to still enjoy life. Once you’ve retired, you will regret the drain on your income if you still have years to repay a mortgage, and you won’t remember the holiday you used the money on.

  • Another, even bigger, never-never: don’t  ever speculate with your property. Not with the roof over your head. If you have a second, holiday property, fully paid up, repeat fully paid up, that’s different. I’ve seen people using their house as security for a loan to start a business, or to finance stock market investments; sometimes you win, sometimes you don’t. If you don’t, you could lose the wife and family as well as the house…

    A simple gambling rule – don’t play with more than you can afford to lose. Period.

  • Repay that mortgage as soon as possible. If you pay a bit extra each month, you can knock years off your mortgage. A small amount, £10 or £20 helps just fine, especially if the interest rate is high.  If rates are in double figures (it does happen. I’ve seen over 20 percent rates), the effect is much greater. A typical mortgage often allows you to repay about 10 percent extra.

    As a side bonus, this could help if you find yourself strapped for cash at some point, as the bank is likely to let you miss a few months payments as long as you’re within the laid down reduction programme.

  • Here’s an interesting one I never came across until recently; some banks, somewhere in the obligatory small print, allow themselves to attach assets like your mortgaged property to help repay a loan or overdraft if you default. Solution simple – don’t take up a mortgage with the same bank that you use for the rest of your personal and business accounts.

That’s all that comes to mind at the moment. If you have other thoughts that might help other people along, I’d love you to write in. If you have an article in you and you want a home for it, let me know.

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