My Short Break in Llandudno

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I recently enjoyed a three-night break in the North Wales coastal resort of Llandudno.

I have been to Llandudno a few times. I started going about 10 years ago when my partner, Jayne, was still alive. She fancied the idea of staying in a traditional British seaside resort. Llandudno certainly ticks all the boxes there, with its sweeping promenade, long pier, and Punch and Judy show by the beach 🙂

I have stayed in various hotels and B&Bs in Llandudno, but on this occasion I returned to The Merrion Hotel (pictured below), a place I have stayed twice before.

Merrion Hotel

The Merrion is located overlooking the popular North Shore Beach, just a two-minute walk from the pier. It’s also convenient for the town centre and many of the local tourist attractions. I was happy to be able to park my car there for the duration of the holiday and go everywhere on foot (or the open-top tourist bus – see below).

I have embedded a map of the area below (courtesy of Google maps

The Hotel

The Merrion is a traditional seaside hotel. It is family owned and run, and I have always found the service there friendly and helpful. On this occasion I was allocated a third-floor room with a lovely view across the beach and sea. Thankfully the hotel has lifts, incidentally.

My room wasn’t huge, but quite large enough for a short stay. There was a good-sized bathroom (with bath and shower attachment) and a flat-screen TV. I was staying on a bed and breakfast basis, so there were tea-making facilities but nothing else.

The Merrion has a restaurant downstairs where breakfast is served. This is mainly buffet-style, though tea or coffee and toast (if you want it) are brought to your table. As well as fruit and/or cereal, you can have a cooked breakfast including eggs (fried, poached or scrambled), bacon, sausages, mushrooms, hash browns, black pudding, baked beans, grilled tomatoes, and so on. Smoked kippers are also available on request.

You also have have the option of eating in the restaurant in the evening if you wish (in fact I did for all three nights). The menu changes each day and you pay a set fee for one, two or three courses (plus coffee).

I thought the food generally was excellent, and there was a good range of choice, including meat, fish and vegetarian/vegan options. The service was also excellent from the team of young waiters and waitresses, many of whom were from eastern Europe..

There is a bar and ballroom at the back of the hotel. Live entertainment is on offer here most evenings. This is generally provided by a solo singer, and clearly targeted at the Merrion’s core audience of seniors. It wasn’t really my cup of tea, but maybe it will be in another ten or twenty years’ time 😀

The Merrion has free wifi, which worked perfectly during my stay (not always the case in my experience).

I should also mention that the hotel is well prepared for visitors with disabilities. All public areas are wheelchair accessible, and mobility scooters and other aids can be hired via reception.

The location is obviously not the quietest. If you want that, you are probably better off at a hotel such as The Clontarf (where I’ve also stayed) on the quieter West Beach. Personally, though, I enjoyed listening to the buzz of visitors and the sound of the Punch and Judy drifting over. It all goes pretty quiet at night, and I didn’t have any problem sleeping.

Financials

As Pounds and Sense is primarily a money blog, I should say a few words about this.

I paid £450 for my three-night stay (including breakfasts) at The Merrion, which I thought was reasonable bearing in mind the location and facilities on offer. I didn’t have to pay a deposit and paid the entire fee on arrival. You can cancel up to two days before and not owe anything.

As regards evening meals, The Merrion charge a fixed fee of £27 for three courses, or you can pay lower prices for two courses or a single course (all including coffee and a mint as well). It’s obviously good to have this flexibility, even though I must confess to having three courses every night!

You can check current prices and availability on the Booking.com website. You can book this way (which I did) or directly with the hotel. The latter method may or may not work out cheaper.

Things to Do

I shan’t give you a blow-by-blow account of what I did while I was there. However, I will highlight a few of my favourite attractions in and around Llandudno.

The Pier

Llandudno Pier is the longest pier in Wales at 700 metres, and the fifth longest in England and Wales. It is free to visit and has all the usual seaside attractions, many of which are aimed more at younger visitors. It is pleasant to walk along, though, with wonderful views of the Llandudno seafront (see cover photo). At the end of the pier you can get a drink and a snack at any of several bars and cafes.

Llandudno Pier

Cable Car

The Llandudno Cable Car runs from Happy Valley, an attractive public park overlooking the pier, to the top of the Great Orme. It is the longest passenger cable car system in Britain. The distance to the summit is just over a mile and the whole journey takes about nine minutes. There are stunning views along the way, including both of Llandudno’s beaches, the Great Orme and the Little Orme, the town of Llandudno, and further away the mountains of Snowdonia and the island of Anglesey.

On the day I went the wind was starting to get up and sandbags were put in the cars to stop them swaying too much. Later in the afternoon the ride was stopped. If you hope to go on the Cable Car, be aware that this may happen – and if you get a calm day, take advantage of it!

Llandudno Cable Car

Great Orme Tramway

The Great Orme Tramway offers an alternative method to the Cable Car for getting to the top of the Great Orme (and one that is less susceptible to the weather). It is is Britain’s only cable-hauled public road tramway and opened in July 1902. You have to change trams at the Halfway Station and continue your journey to the summit. You will be travelling in the original Victorian tramcars, which have been lovingly restored over the years.

Great Orme tramway

At the top of the Orme you can visit the Summit Complex, which has a variety of shops, bars and cafes. It’s a bit too commercialized for my taste, and I prefer the Visitor Centre (behind the Tramway station) which has displays about the natural history of the Great Orme and a small gift shop. There are also, of course, amazing views from the summit in all directions.

Great Orme Mines

The Great Orme Mines are said to be the oldest metal mines open to the public in the world. Excavations are ongoing, but visitors can explore several levels of the 3,500-year-old tunnels. The shop offers a selection of interesting and attractive rocks, minerals and fossils.

The Mines are about half-way up the Great Orme. One (relatively effortless) way of getting there is to go up on the Tramway and break your journey at the Halfway Station. It is just a short, signposted walk to the Mines from here.

Boat-Trips on the Sea-Jay

The Sea-Jay (pictured below) offers trips from Llandudno’s south beach. They have short (25-minute) trips around the Great Orme throughout the day, and longer (one-hour) trips that take in both the Great Orme and the Little Orme. I highly recommend the longer trip, which took place at 11 am every day during my visit. It’s not massively expensive (£8 when I went) and you may be lucky (as I was) and see grey seals at the foot of the Little Orme.

The Sea Jay llandudno

If you enjoy boat trips, there are also various others from Conwy (see below).

Conwy

The medieval walled town of Conwy is just a few miles down the road from Llandudno and well worth a visit while you are there.

One option (which I took this time) is to buy a one-day ticket on the open-top tourist bus which runs between Llandudno and Conwy, starting by the pier. This ‘hop on, hop off’ bus is a great way of getting your bearings if you are new to the area, and you get the benefit of an interesting running commentary as well. There is also a discount for over 60s!

The biggest and best-known attraction in the town is Conwy Castle, and I went there myself on this occasion. It is remarkably well preserved, and if you go up the spiral staircases to the tops of the towers (you need to be reasonably fit for this), you can enjoy some amazing views of the town and estuary (see photo below).

Conwy view from castle

Two other places I recommend visiting in Conwy if you are interested in history are Plas Mawr, a large Elizabethan town house owned by CADW, and Aberconwy House, a somewhat smaller 14th century merchant’s house owned by the National Trust.

Final Thoughts

As you may gather, I enjoyed my short break in Llandudno staying at The Merrion Hotel, and am happy to recommend both the town and the hotel for a short break. Llandudno is a traditional British seaside resort, and none the worse for that. It’s a good place to chill out, but there are lots of interesting things to see and do as well. And it is very well set up for older visitors, as evidenced by the large number who go there!

As always, if you have any comments or questions about this post, please do leave them below.

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Review: SuperLucky Secrets by Di Coke

Review: SuperLucky Secrets by Di Coke

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Today I am reviewing a book (and Kindle e-book) called SuperLucky Secrets. It’s by my fellow UK blogger Di Coke, also known as SuperLucky Di.

SuperLucky Secrets is a guide to ‘comping’ – in other words, entering consumer competitions in the hope of winning cash and prizes.

Di is a highly successful comper, having won over £300,000 worth of prizes, including a Volkswagen Beetle, £7,500 cash and an all-expenses-paid trip to Brazil. She also regularly talks about comping on TV and radio, including BBC Breakfast, ITV Weekend and The Morning Show.

I am grateful to Di for offering me a review copy of the brand new (2019) edition of SuperLucky Secrets.

The book’s sub-title is 100 Tips for Winning Competitions, Contests and Sweepstakes. I must admit I was slightly concerned that it would be a book of 100 comping tips in more or less random order. Thankfully that isn’t the case, though. This is a well-organized and comprehensive guide to the art (or science) of comping.

The printed copy of SuperLucky Secrets that I received has 195 pages, plus some pages (e.g. the index at the back) that aren’t numbered. The book is organized in nine main chapters, as follows:.

  • The Basics
  • Get Organized
  • Tips for Finding Competitions
  • Tips for Entering Competitions
  • Tips for Winning Competitions
  • Tools of the Trade
  • Finding Your Wins
  • Tips for Staying Motivated
  • Don’t Even Think About It! [Mistakes to avoid, in other words]

There is also a glossary, a list of useful resources, and an alphabetical index.

I thought SuperLucky Secrets was very well written and edited (or self-edited). As a semi-retired professional writer and editor myself, things like typos and spelling or grammatical mistakes tend to leap out at me. I didn’t notice any in this book, so much respect to Di for that. In my experience it’s rare to read a self-published book that is written and produced to such a high standard. As my eyes aren’t what they once were, I was pleased to see a clear, sensible-sized typeface used as well!

Within each chapter there are a number of sections, each corresponding to one of the 100 tips referred to in the sub-title. In the chapter titled The Basics, for example, there are sections headed Get Online, Write a Wish List, Put in the Effort, Be Super Social, Always Read the Rules, and Believe You’ll Win.

The book takes you through everything you need to know to get started in a hobby that is enjoyable and intellectually stimulating, and that can generate a steady stream of cash and prizes as well.

Di doesn’t, however, pretend that all of this will just fall into your hands. You will need to be well organized and patient (especially at first), as you will be facing plenty of competition from other compers, and it also takes time for contests to be judged and winners notified.

As Di says in her Introduction, ‘Be patient. Some people think they can start comping on Monday and have prizes arriving by Friday!’ And she adds, ‘A brand new comper will take a while to get into the swing of things, but don’t give up if you’re not winning.’

As someone who used to enter competitions years ago, I thought there might be more emphasis on slogan contests, but Di says these have largely gone out of fashion among promoters now. There are still a few and Di highly recommends entering them, as this is one type of competition where you really can use skill to improve your chances of success. She shares some good tips on creating slogans, including some clever (and amusing) winning slogans of her own.

Di also recommends seeking out less well publicized competitions and ones where you have to buy some sort of qualifier, as this will greatly reduce the number of entries yours will have to compete against. And she sets out a range of online tools and resources (mostly free) that can help you find and enter more competitions and boost your chances of winning them.

Overall, if comping is a pastime that appeals to you and you would like to learn more, I highly recommend SuperLucky Secrets, especially in this brand new 2019 edition.

You might also like to check out Di’s blog at https://superlucky.me. You can sign up for her free email newsletter for compers via her blog.

As always, if you have any questions or comments about SuperLucky Secrets, please do post them below.

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How to Start Video Gaming as an Older Person

How to Start Video Gaming as an Older Person

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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

SEGA logo

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.

Catquest

Enjoy Exploring the Real World?

Perhaps you aren’t an actual gamer and you just want something to make your Real World exploration a bit more interactive. Although released three years ago, Pokémon Go remains a popular game. You may have heard of Pokémon and even the phenomenon that is Pokémon Go. The BBC News has even covered a guy who has 11 phones on his bike so that he can catch more Pokémon.

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.

Pokemon Go

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.

Two Point Hospital

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.

Minecraft

More serious is that people do stream their gaming and some of these streamers earn millions of pounds just streaming their games while they play. I bet you didn’t realise that playing video games can actually give you a source of income!

KEEN TO TRAIN YOUR Brain?

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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Review: How to Make Money using Your Mobile by Kathy Cakebread

Review: How to Make Money Using Your Mobile by Kathy Cakebread

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Today I am reviewing a Kindle e-book by my fellow UK money blogger Kathy Cakebread titled How to Make Money Using Your Mobile. Kathy was kind enough to offer me a free review copy.

As you may gather from the name, this e-book is aimed at anyone who would like to boost their income using their mobile phone, generally by installing and using certain apps.

According to Amazon How to Make Money Using Your Mobile has 96 pages, though in practice of course that will depend on the device you are reading on and the font size selected.

My first impression was that it was well written and attractively presented. That being said, I was a little disappointed that there is no table of contents at the front. That makes it harder to navigate than it ought to be.

The book lists money-making apps in six categories as follows:

  • Survey Apps
  • Make Money Through Receipts
  • Get Paid to Shop
  • Make Money Doing What You’re Good At
  • Earn Money Through Cashback
  • Ways That Influencers Can Make Money

46 apps are described in total: 24 in survey apps, 4 in receipts apps, 9 in get paid to shop, 4 in make money doing what you’re good at, 3 in cashback apps, and 2 in influencers.

Within each category a number of apps/opportunities are presented. Kathy uses a standard format throughout for this, which is sensible. She starts with a phone screen capture of the app in question followed by a one- to three-paragraph description. Here’s a typical example…

Example 1

The description is followed by a list of pros and cons for the app in question, and (in most cases) a download link. Again, here is an example:

In some cases the download link takes you to the website for the app, but in others it takes you to to the Apple (iOS) App Store. It is a pity there aren’t also links to the Google Play Store for Android users (like myself). This means the book is probably best suited for iPhone users. Android users can benefit from it as well, but they may have to search for the relevant app themselves in the Google Play Store.

On the plus side, I was amazed by the number of sideline-earning apps Kathy has identified. Some, of course, I knew about already, but many I didn’t. I can see I will be busy for some time checking out all these money-making resources!

I like the concise, well-written descriptions, which tell you everything you need to decide whether an app may be of interest. The list of pros and cons is also invaluable. Kathy appears to have tried all these apps herself (which would be a full-time job, I’d have thought) and she shares her advice and experiences using every app, good and not so good!

As the book’s subtitle, Get a side income for extra treats for you and your family, indicates, you won’t make a fortune from these apps or even (probably) enough for a full-time living. But you can definitely earn a valuable sideline income. Some pay in cash – usually via PayPal – while others pay you in Amazon (or other store) gift vouchers. (Personally, I’m a big fan of MobileXpression, which I wrote about in this blog post. It keeps on churning out £20 Amazon vouchers for me every few weeks, for doing no more than keeping the app installed on my phone.)

As indicated earlier, I did think the book could be better organised. In particular, I would like to have seen a table of contents at the front, with the content organised under proper chapter headings and hyperlinked. That would make it much easier to use as a reference resource. It would also be good if the apps described in each chapter were arranged in alphabetical order rather than (I assume) randomly.

Overall, though, How to Make Money Using Your Mobile is a great little e-book, and anyone hoping to boost their income is bound to find something of interest – and value – in it. At the current modest asking price of £2.99 (or free on Kindle Unlimited) it would make a good value addition to your sideline-earning library.

As well as How to Make Money Using Your Mobile, you might like to check out Kathy Cakebread’s Glitz and Glamour Makeup blog, which also has a section devoted to money-making tips.

As always, if you have any comments or questions about this post, please do leave them below.

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Active Investing Versus Passive Investing

Guest Post: Active Investing Versus Passive Investing

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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.

The Financial Times reported in 2015 that ‘Nine out of ten active funds fail to beat their benchmark.‘

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.

About the Author: Simon writes for Financial-Expert.co.uk, an investing website with an educational focus. Recent posts include How to Invest in Property and How to Invest in Shares.

 

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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How to save money on prescriptions

How to Save Money on Prescriptions

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The full cost of an NHS prescription in England is now £9. If you need regular medications, that can quickly add up to a substantial sum.

The good news, however, is that many people are entitled to free prescriptions, and others have methods open to them to save money.

Before I go into that, though, I should point out that all NHS prescriptions are now free in Scotland, Wales and Northern Ireland. So if you are lucky enough to live in one of these countries, you won’t normally be required to pay for your prescriptions.

Who Is Eligible for Free Prescriptions in England?

Here is a list of everyone eligible for free prescriptions in England, taken from the NHS website:

You can get free NHS prescriptions if, at the time the prescription is dispensed, you:

  • are 60 or over
  • are under 16
  • are 16 to 18 and in full-time education
  • are pregnant or have had a baby in the previous 12 months and have a valid maternity exemption certificate (MatEx)
  • have a specified medical condition (see below) and have a valid medical exemption certificate (MedEx)
  • have a continuing physical disability that prevents you going out without help from another person and have a valid MedEx
  • hold a valid war pension exemption certificate and the prescription is for your accepted disability
  • are an NHS inpatient

The medical conditions which qualify you for free prescriptions include cancer, diabetes (unless treated by diet only) and hyperthyroidism. For the full list, see this web page from the NHS Business Services Authority. If this applies to you, you will need to complete an application form FP92A from your GP, who will also sign it to confirm that you have the qualifying condition stated. Certificates are valid for five years, and once you have one you will be eligible for free prescriptions for any condition, not just the one through which you qualified.

You’re also entitled to free prescriptions if you or your partner (including civil partner) receive, or you’re under the age of 20 and the dependant of someone receiving:

  • Income Support
  • income-based Jobseeker’s Allowance
  • income-related Employment and Support Allowance
  • Pension Credit Guarantee Credit
  • Universal Credit and meet the criteria

Finally, you will qualify for free prescriptions if you’re entitled to or named on:

  • a valid NHS tax credit exemption certificate – if you do not have a certificate, you can show your award notice; you qualify if you get Child Tax Credits, Working Tax Credits with a disability element (or both), and have income for tax credit purposes of £15,276 or less
  • a valid NHS certificate for full help with health costs (HC2)

People named on an NHS certificate for partial help with health costs (HC3) may also get help with prescription costs.

What If You Don’t Qualify for Free Prescriptions?

If you don’t qualify for free prescriptions on any of the grounds set out above, there are still some things you can do to reduce the cost of your prescriptions.

One is to buy a Prescription Prepayment Certificate (PPC). These are available for three months or a year and entitle you to free NHS prescriptions for all conditions during this time.

At the time of writing a three-month PPC costs £29.10 and a year’s costs £104. In general, if you need more than one prescription a month and have to pay for it, a PPC will work out cheaper.

If you have a long-term condition, a one-year certificate will usually represent the best value. A person getting two prescriptions a month would save more than £100 a year by this means compared with paying for individual prescriptions. The simplest way to get a Prescription Prepayment Certificate is to apply via the NHS Prescriptions website.

Finally, it’s worth bearing in mind that some medications, especially for minor conditions, are available over the counter without a prescription. This can often work out cheaper than paying a prescription charge.

As always, if you have any comments or questions about this post, please do leave them below.

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