Tag Archives: Business Ideas

Don’t Ignore Gold

Gold has been a shining star in a dazzling year for the exchange traded product industry. Record inflows into gold exchange traded funds propelled the price of the precious metal to an all-time high last month in a rally fuelled by concerns about the huge cost of emergency responses to the pandemic. What started as a flight to safety has evolved into the means by which investors are trying to salve their wounds with respect to potential future inflation.

Investors have spent $49.1bn buying gold ETFs so far this year, pushing the value of holdings in these vehicles to $239bn. There has been a 26 per cent rise in the gold price so far this year, as investors jump on the bandwagon in anticipation of further gains. Advocates of gold remind sceptical investors that it outperforms fiat currencies over time.

Warren Buffett always mocked those who invested in gold, calling it a way of going long on fear. This year, however, Buffett joined investors including the world’s largest hedge fund, Bridgewater Associates, by buying into the latest gold rush, which helped push prices to a record high this summer.

The pandemic has convinced investors that gold belongs in their portfolios as a hedge against frothy equity markets, rock bottom interest rates, and a fall in economic output. Some large investors want gold as protection against possible deflation caused by an economic slowdown or a converse rise in inflation as governments pump money into the system.

Quote Of The Day

“Life is like riding a bicycle. To keep your balance, you must keep moving”

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 Albert Einstein

Alternative Quote Of The Day

“Money can’t buy you happiness, but it can buy a yacht big enough to pull right alongside it.”

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David Lee Roth


With the extremely messy-looking upcoming US presidential election and no current end in sight for the pandemic, Mr Buffett’s change of mind on gold may not be a bad bet in a world gone mad. Covid cases are on the rise, governments are starting to panic, and economies are facing down the barrel of second lockdowns. All in all, it signals a perfect storm for gold: there is just too much uncertainty in the world to ignore its benefits.   

Gold is always useful as a diversifier for your portfolio. It’s unusual in being an asset that goes up, or at least holds its value when bad things happen (and, if you hadn’t noticed, bad things are happening and more bad things are sharpening their claws just over the horizon), whilst most other assets go down. 

Early last month, a team at Bridgewater (the world’s biggest hedge fund group) put out a short and very bullish report on gold. They point out that we’re in a world where politicians and central bankers are under pressure to print and spend money. When this has happened in the past, gold has enjoyed massive rallies that dwarf its recent run.

Gold’s lack of yield (it pays no income) is less of a problem when financial assets are offering so little. You can’t complain about gold paying 0 per cent when a significant proportion of global bonds actually charge you to own them. It’s clear that there’s a desire to hedge against financial chaos and/or potential runaway inflation out there. And history shows that gold is one of the few assets that does an acceptable job of hedging against those things. At the moment, gold is shining like never before.

Today’s National Day

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NATIONAL CAT DAY!

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Stamp-Duty Stampede

If you want to avoid paying stamp duty on your next property purchase you need to get a move on: there has been a surge in people keen to move. Between 8 July and 8 August, the number of people registering to buy across the country was up by 38 percent on the same period last year, boosted by the stamp duty holiday. Properties are going under offer faster than ever. Currently, one in seven homes are under offer within a week of listing. But things slow down after that. A conveyancing log-jam after lockdown means that even if a sale is agreed quickly, a transaction could take six months to complete, especially if it is in a chain.

People thinking of coming to market need to do so in by early December if they want to have a chance of completing within time to beat the stamp duty deadline. Stamp duty is currently suspended on properties worth up to £500,000, saving buyers as much as £15,000. However, the tax will be reinstated on 31 March 2021. The stamp duty holiday has accelerated the moves of buyers who were looking for larger properties with gardens and space for home offices. But the surge is expected to subside as unemployment rises with the end of the furlough scheme and lenders wind down their forbearance policies this autumn.

With the housing market rising quickly post-lockdown wise buyers may opt not to rush to embrace the stamp-duty holiday. Racing simply to save 1 per cent to 3 per cent on the cost of your next home at a time when house prices are ludicrously high and are up 2 per cent on last month and 3.7 per cent on last year is futile.

Quote Of The Day

“Face reality as it is, not as it was or as you wish it to be”

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 Jack Welch

Alternative Quote Of The Day

“Doctor Doctor, my arm is broken in three places.” Well stay out of those places.”

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Tommy Cooper


Money Statistics

£5.25 was the average discount received by diners from the government Eat Out to Help Out scheme. In the first three weeks of the month-long scheme in August, 64 million discounted meals were served at 84,000 outlets, at a cost to taxpayers of £336m.

$56.14 is how much an American wearing a face mask for a day saves the US in lost GDP by helping obviate the need for more costly lockdown measures. Not bad for something you can buy for about 50 cents.

£7,000 is what it would cost to buy an original 2007 edition of the Star Wars Lego Millennium Falcon, which was available on Amazon this summer. Lego sets — especially Star Wars Lego sets — can become favourites of specialist collectors.

£260,000 is how much a pair of Mahatma Gandhi’s sunglasses sold for at auction last month.

£368,000 is what a sheep has been sold for in Scotland. It is a record sale, beating the previous sheep-record of £230,000 set in 2009. Bidding started at £10,000 for the Double Diamond, a six-month old Texel ram.

$1.1bn is the annual estimated value of seabird droppings worldwide. The unassuming lime can be used as fertiliser and to provide nutrients to coral reefs, to boost fish numbers.

Today’s National Day

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NATIONAL CHOCOLATE DAY!

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A Break In Tax


Here are some totally legitimate tactics that can save you some tax. They are often purpose-made loopholes based on encouraging growth in sectors of the economy, so you can rest safe in the knowledge that you are helping your country too.

Buy An Electric Car

Small businesses that buy electric cars with CO2 emissions of less than 50g per kilometre have, since April 2018, been able to claim a capital allowance worth 100 per cent against the purchase — so the entire cost of the car can be deducted from company profits. Also, the cars can be used for personal journeys free of tax from April this year and incur a benefit-in-kind charge of 1 per cent the following year and 2 per cent the year after.

Max Out Your Allowances

Commonly available tax exemptions mean a couple can achieve a fairly sizeable income without paying tax. For example, the personal income tax allowance is £12,500, which, for two, makes £25,000. The annual CGT exemption for a couple is £24,000, the dividend allowance is £4,000 and savings allowances are £2,000 — although the last of these goes down to £500 for higher-rate taxpayers and is zero for those paying the additional rate. Put together, these make a joint potential tax saving of £55,000. Add the basic-rate bands for each spouse to this, which is two times £37,500, and they could have a combined income well over £130,000 before they start paying higher-rate tax.

Quote Of The Day

“I may not have gone where I intended to go, but I think I have ended up where I needed to be.”

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Douglas Adams

Alternative Quote Of The Day

“Last night, me and my girlfriend watched three DVDs back to back. Luckily, I was the one facing the telly. ”

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Tim Vine


Buy Wine And Classic Cars

Both wine and classic cars attract special tax status as “wasting assets” with a predictable life of less than 50 years. This makes them exempt from capital gains tax (CGT) on any profits. However, HMRC’s definition of a wasting asset is getting tougher. The taxman’s latest manual said the exemption would clearly apply to cheap table wine, which may turn to vinegar within a relatively short period, but it might not apply to fine wines, because some can stay drinkable for far longer than 50 years, and also, sadly, does not apply to port and other fortified wines.

Classic cars are wasting assets only if they are being used as private vehicles, as their value will depreciate as mileage increases. Over 10 years, fine wines have risen in value by 142 per cent — more than jewellery (100 per cent) and watches (63 per cent), and dwarfing the FTSE 100’s 36.2 per cent return. Classic cars — defined by HMRC as any vehicle more than 15 years old and worth more than £15,000 — grew by 334 per cent over the same period. Investors can also turn to furniture, paintings and antiques, known as chattels, which attract extra CGT exemption of £6,000 on top of the standard £12,000.

Today’s National Day

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NATIONAL SPEAK YOUR MIND DAY!

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Flush With Success

A few weeks ago I was wandering through a shopping centre, when my attention was grabbed by the price tag on a mobile phone. It was over £20,000.  I have no idea who pays such a large amount for a soon to be obsolete item (people who haven’t worked very hard for the money, I’d imagine), but it does show there’s a market for an upgraded version of just about anything.

Atlanta Watercloset realised this when they launched their business, which aims to provide ‘exceptionally clean’ portable restrooms (toilets) for outdoor events.  If you’ve been to such an event, you’ll know that the competition provide the bare basics, but little more.  Atlanta Watecloset offer toilets with fresh water sinks, interior lighting, mirrors, coat-hooks, shelves and branded loo roll. The environment around the restrooms can be specially prepared with privacy shields, flowers and pathway lighting. The service is particularly popular at weddings, where nothing can be allowed to spoil the special day.

Whatever the product, some people will always be attracted to an upgrade – a premium offering over and above what’s provided by the standard product. If you find yourself competing fiercely with everyone else in your market, now could be a good time to look at whether there’s a market for an enhanced version of what you do at a premium price.

Quote Of The Day

“Aim higher in case you fall short.”

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Suzanne Collins

Alternative Quote Of The Day

“I went to buy some camouflage trousers the other day but I couldn’t find any.”

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Tommy Cooper


Second Hand Profits

Thanks to the likes of eBay, buying second hand or used goods has never been as popular (or easy), as it is today.  A lot of mainstream retailers are catching on to this now. You’ve been able to buy used books on Amazon for a long time now, but even primarily off-line businesses are getting in on the act.  My favourite retailer, Ikea, have now set up a system to facilitate customers disposing of their second-hand furniture.

At first glance this seems counter-intuitive, but there is a logic to it.  Having the option to buy used (and cheaper) second hand furniture will draw more people to the company website, as well as improving customer goodwill.  And of course, sometimes a customer needs to dispose of an old piece of furniture before they’re able to buy a new one.

Is there someway you could facilitate your customers disposing of the products they no longer need or want, and if there is, would it help or hinder your business?  It’s a question worth asking.

Today’s National Day

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NATIONAL GREASY FOODS DAY!

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Buy-to-let is still popular. Our friends at Belvoir highlight common mistakes to avoid…

Reduced Research

One of the most common mistakes made by landlords new to the industry is lack of research. This includes lack of research about the local rental market, the facts, figures and finances involved, the laws and legislations associated with letting a property, deposit rules or the tax implications of being a landlord. Always fully understand the commitment you’re about to make and your key responsibilities before you invest.

Property Power!

Additionally, some new landlords don’t understand the power of investing in the right type of property. The wrong property in the wrong location can lead to periods of void and reduced capital growth. Be aware of the rental demand in your chosen area, plus understand the sales market too so you can maximise your profit when exiting your investment.

Cutting Corners

Reluctance to spend any money on the property, failing to present the property to its full potential, substandard workmanship or installing inferior fixtures, fittings or appliances are also common mistakes which can lead to reduced rental return or periods of void. Plus, if you don’t show care about the condition of the property, it is likely that the tenant won’t either. Ensure you understand your obligations before you commit and always remember that cutting corners is often a quick way to cut profit potential.

Viewings – Be Careful

There are mistakes that can be made during the viewings process. Being too pushy, being late or making promises you can’t possibly keep will have a negative effect on your relationship with the potential tenant before it even begins. Viewings are an opportunity to showcase your skills as a landlord and the tenant will want to see that you are efficient, effective and fair before they commit to you and your property.

Quote Of The Day

“Our greatest glory is not in never failing, but in rising up every time we fail.”

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Ralph Waldo Emerson

Alternative Quote Of The Day

“Where there’s a will, there’s a relative.”

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Ricky Gervais

Insufficient Information Box Stories

Failing to find out about your potential tenant’s financial status and their prior rental history can be a mistake with far-reaching implications. Bad tenants can lead to late payments, non-payments, disputes and lengthy eviction processes. Always carry out the necessary tenant credit checks, plus obtain references from their employers and previous landlord if they have rented before.

Behind Closed Doors

Never leave your tenants to their own devices for the duration of the tenancy. While it’s important to respect their privacy it’s also essential to protect your property. Regular inspections at a pre-arranged time to suit both parties are vital in order for you to assess the condition of the property and ensure that the tenant is living within the rules of the tenancy agreement. Without these vital visits it will be impossible for you to know what’s going on behind closed doors (including ongoing damage or subletting) and you may get a nasty surprise when you re-enter the property once the tenancy ends.

Misjudging Maintenance

Never leave minor repairs or maintenance to escalate. It can lead to withheld rental payments, an unhappy tenant and an unhappy working relationship, plus it’s surprising how quickly a small maintenance issue can become a big problem if left unresolved. Commonly ignored issues which can escalate at speed include blocked guttering or drains, missing roof tiles, the appearance of mould growth or leaking plumbing. Not only will unresolved maintenance affect your relationship with the tenant, it will also have negative implications for your property’s infrastructure and of course your wallet.

Business Blunder

Understand your target tenant and always remember that letting a property and being a landlord is a business venture. It’s surprising how many new landlords fail to realise this and invest in properties with their own tastes or needs in mind. Keeping a property neutral and basic will mean items and decor are easy to replace or repair if they get damaged, plus presenting a property in this way will also allow a tenant to imagine themselves living there. Remember too that your relationship with the tenant should be a professional one. Becoming over-friendly can lead to difficulties if issues arise or dispute management is needed.

Where’s The Exit?

Before investing you should ideally know why you’re buying the property, how long you’re going to keep it and how you’re going to execute its exit. Whether you’re looking for a high short-term monthly rental return or long-term capital growth, it’s useful to plan and prepare appropriately at the beginning of your investment journey.

What To Do: To find your nearest Belvoir office, visit their website at

https://www.belvoir.co.uk/

Today’s National Day

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NATIONAL CLEAN SLATE DAY!

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