Making Money

Posts about making money from a 60-plus perspective. This includes sideline earning opportunities of all types.

Can You Still Make Money from Buy to Let?

Can You Still Make Money from Buy to Let?

, , 9 Comments

In the past buy-to-let seemed a relatively easy way to make money.

So long as you had the capital – or were able to borrow it – you could buy a house, put tenants in it, and collect a steady income from rental payments, along with potentially a lump-sum profit if you sold up at a higher price later on.

In recent years, though, tax and regulatory changes have made buy to let less appealing – to a point where many wonder if there is still money to be made this way. So in my post today I want to address this question.

Let’s start, though, by looking at the upside…

The Attractions of Buy to Let

As stated above, property investors get a double benefit. They enjoy rental income from tenants for as long as they own the property, and also have the potential to make a substantial lump sum profit when the time comes to sell.

A further attraction of buy to let is that your tenants effectively pay off your mortgage for you. So if, for example, you are buying a £400,000 property, you might ‘only’ need to find a deposit of £100,000. As long as your tenants’ rental payments cover your mortgage repayments (with a bit to spare), after 25 years or so the mortgage will be paid off. You will then fully own a second property, having originally paid only a quarter of the full property price. And that doesn’t even allow for the prospect of capital growth. If your property eventually sells for £600,000, you’ll have made an additional £200,000 capital gain.

  • Of course, you don’t have to borrow to fund your buy-to-let. If you already have the capital you need, investing in a buy-to-let property will provide you with a steady income while the capital value of your property (hopefully) appreciates over time.

Buy to let can also be a good way of diversifying your investment portfolio. Rental income is relatively stable, especially if you have a number of properties and tenants. And property values aren’t directly related to the state of the stock market. So while property doesn’t provide a method for hedging your stock market investments directly, it can certainly help spread the risk.

Of course, property prices took a knock in the 2008 credit crunch and subsequent recession, and more recently were affected by the pandemic (though prices generally are on an upward trajectory again now). In the longer term, though, prices have been on a strongly upward trend since the 1970s. On average, house prices have grown faster in the UK than they have in any other European country.

There’s every indication that prices will go on rising in the coming years as well. The UK currently has a serious shortage of housing, caused by various factors. To start with, the UK population is growing rapidly. This inevitably means demand for housing will go on rising, thereby driving up the price of property. According to the Office of National Statistics there will be an annual shortfall of housing in the UK of over 100,000 properties each year for the next decade. This could mean a shortfall of one million properties by 2025 if current trends continue.

Various factors have combined to boost rental demand, including immigration, more people living alone, people moving around the country for work reasons, and rising house prices stopping first-time buyers getting onto the housing ladder. The latter is obviously challenging for young people, but it’s great news for landlords whose buy-to-let properties are being let extremely quickly, while their rental income keeps increasing. All of the above means that residential property can represent a profitable and attractive investment option.

What Are The Drawbacks?

One obvious drawback for anyone wanting to invest directly in property is that it’s expensive! And if you can only afford a single property, you are taking the risk of putting all your eggs in one basket. To mention just a few things…

  • There may be periods when you don’t have tenants (voids, to use estate agent jargon). At these times your property will be costing you money rather than making it for you.
  • Bad tenants are all too real and can be a nightmare for landlords. If they don’t pay their rent, it will take time and money to evict them. And that’s not to mention the costly damage to your property a malicious – or just careless – tenant can cause.
  • There will be maintenance and repair bills to pay. If something expensive goes wrong – the roof or the central heating boiler, say – the cost of the necessary work may wipe out several months of profits for you.

In general, being a landlord – at least, a responsible one – is a hands-on role. While you can outsource some aspects of managing your property to an agency (for a fee) you will still have to keep a watchful eye on your property and tenants to ensure that your investment is protected.

A further drawback is that property isn’t a liquid asset. Yes, putting your money in bricks and mortar gives you a degree of security – but if you need to access your capital urgently this may be difficult or impossible. Even if you’re able to find a buyer quickly, if the timing is bad you could end up selling at the bottom of the market and making only a small net profit or even a loss.

And there’s more bad news for buy-to-let investors. As I said earlier, legal changes over the last couple of years have made the whole buy-to-let process more costly and burdensome. For one thing, from April 2016 anyone buying a residential buy-to-let property (or second home) has had to pay an extra 3% in Stamp Duty. In some quarters this has been dubbed the Landlord Tax.

Another major legal change has affected landlords who use mortgage loans to purchase buy-to-let properties. Before April 2017 landlords were allowed to deduct all of the interest they paid on buy-to-let mortgages from their taxable income. In effect, that meant they paid tax on their net profit from rentals rather than their turnover. The government decided to change the rules, however, arguing they gave buy-to-let landlords an unfair advantage over ordinary homeowners. So from April 2017 landlords were only allowed to claim relief on 75% of their mortgage interest. From April 2018 that dropped to 50%, and it kept falling by 25% a year until it reached 0% in 2020. It was then replaced by a less attractive tax credit equivalent to 20% of mortgage interest (which was particularly disadvantageous to higher rate taxpayers). All of this has meant that borrowing money to fund a buy-to-let has undoubtedly become less attractive (and profitable) than it used to be..

Other changes affecting landlords have come in too. For example, from April 2018 all new tenancies and renewals have had to be rated ‘E’ or better on their Energy Performance Certificates, with fines of up to £5,000 for landlords who don’t comply. Most recently built homes should qualify for this rating, but landlords of older, less energy-efficient properties may have to spend large sums bringing them up to scratch. And, of course, this all adds to the administrative burden for landlords, even if it is ultimately helping to save the planet!

One effect of all this has been that some smaller landlords have decided that buy-to-let is no longer worth the effort for them, and they are selling up and moving out of the sector.

So Is There Still Money to be Made?

My answer to this is a qualified yes.

There is definitely still money in buy to let, but it is no longer the ‘one-way bet’ it might once have appeared. You should therefore research opportunities carefully and adopt a highly professional and businesslike approach to the whole process.

A key consideration here is ‘yield’. This is the net amount (rental minus costs) you can expect to make from a buy-to-let property per year, as a percentage of the purchase price. Yield can be compared with the interest rate paid on a savings account. By this means you can assess how profitable a buy-to-let opportunity is and whether it makes sense as an investment vehicle. Clearly, if the yield is less than you could get by leaving your money in the bank, there is not much point in investing this way.

The website Totally Money recently analysed data from nearly half a million properties across England, Scotland and Wales, to calculate the buy-to-let yield for each postcode. The results were eye-opening to say the least. They found that buy-to-lets in the top 25 postcode areas were still delivering excellent returns. At the top was Liverpool, where landlords can enjoy 10% yields. Falkirk (9.51%) and Glasgow (8.71%), both in Scotland, came second and third respectively. Even postcodes at the lower end of the top 25, such as Lancaster and Aberdeen, were returning respectable yields of over 7%. All of these are clearly far better rates of return than you could get from a savings account, and you will have an asset that is hopefully increasing in value as well (see below).

Location is therefore a key consideration for any potential buy-to-let investment and must be researched thoroughly. In addition, the best area for your investment will depend on whether you intend to put your money into flats for professionals, student accommodation, family homes, etc. At the risk of stating the obvious, there needs to be solid demand in the area from would-be tenants for the type of rental property you intend to buy.

  • Of course, while it’s very important, yield/income potential isn’t the only consideration for property investors. In the longer term you will likely be hoping for capital growth as well – so ideally you should be looking to invest in properties in up-and-coming areas rather than those in long-term decline.

Getting Started

Having weighed up the pros and cons, if you do decide that buy-to-let is right for you, here are some top tips to get you started…

  • Speak to a professional independent financial adviser to discuss your plans. They will help you decide how much to invest and the level of return you should realistically be aiming for.
  • You should also speak to a mortgage broker to find out what deals are available and ideally get approval in principle for a mortgage. This means you will be well placed to make an offer as soon as you find a suitable property.
  • If there is a particular area you are considering, visit several times to get a feel for the place. That applies especially if it’s a location you’re not already familiar with. Check out the housing stock, public transport, car parking, shopping and schools, hospitals, and so on. Try to speak to other landlords in the area and local letting agents to get an idea of the size and nature of the rental market and the sorts of rentals that may be achievable. Always remember that the bottom line for any buy-to-let investor is return on capital or yield.
  • Once you find a potential property (with or without existing tenants) research it carefully as well. Obviously before buying you will need to do all the usual searches and a structural survey. As with all property sales, you can expect this process to take several months to complete.
  • Arrange insurance for your buy-to-let. Along with the usual buildings insurance, you should almost certainly have landlord insurance to protect you from financial losses associated with renting out a property. This will typically cover such things as fixtures and fittings, public and landlord’s liability, subsidence, replacement of windows, locks and keys, and so forth. It will also normally cover malicious damage caused by tenants, along with rent arrears and legal expenses (though the last two may not necessarily be included as standard). You can compare landlord insurance here.
  • To find tenants you can either go through an agency or do this yourself. Obviously going through an agency will add to your costs but can save you a lot of hassle, especially if you haven’t the time (or inclination) to be too hands-on.
  • Even if you pick your own tenants – and perhaps already know them personally – draw up a legally-binding contract. That means everyone knows where they stand from the start and can help to avoid potential unpleasantness later on.
  • Review your buy-to-let mortgage arrangements regularly and be prepared to switch to a better deal when your current one expires.
  • Ensure that your rental income is declared in a tax-efficient way and set against any allowable expenses. A good accountant will be able to help with this.
  • Your accountant will also be able to advise you about the pros and cons of running your buy-to-let through a limited company. This comes with additional costs (and paperwork) but for landlords of multiple properties in particular the tax benefits can be significant – not least because you can claim all the interest paid on your buy-to-let mortgage/s against income rather than just 20%.
  • And finally, once your first buy-to-let is up and running successfully, consider adding more. Multiple properties will give you a bigger income and will also reduce the risk inherent in putting all your eggs in one basket (as discussed earlier).

In Conclusion

If you’re considering buy to let, I hope this article will have helped you make up your mind. There is undoubtedly still money to be made this way, but you do need to choose your location and property carefully, and approach the whole process in a professional and businesslike way. That applies from the initial planning stage right through to the day-to-day – and year-by-year – management of your property.

As ever, if you have any comments or questions about this post, please do leave them below. I would also be very interested to hear from any readers who have invested in buy-to-let themselves, along with any tips (or warnings!) they would like to share.

Disclosure: this is a sponsored post.

If you enjoyed this post, please link to it on your own blog or social media:
Pick My Postcode review

Win Free Cash Prizes With Pick My Postcode!

, 10 Comments

Today I’m highlighting a fun and free way you may be able to boost your income in 2021. And all you have to do is check the website in question once a day to see if your postcode is a winner!

The website in question is called Pick My Postcode. They offer multiple chances to win every day – and back when they were called Free Postcode Lottery, I was lucky enough to win the main draw prize!

All you have to do to get started is visit the Pick My Postcode site and register with your email address and postcode.

The PMP Draws

Pick My Postcode have five draw categories, as follows:

  1. Main Draw  Each day one postcode is picked at random for this draw, which has the biggest prizes. The main daily prize – which I was lucky enough to win – can be over £1,000. When I had my own win, the prize was £1,200, though as one other person in my postcode area also claimed, the prize was split between us. So I got £600 plus a small bonus (explained below) – not a life-changing amount, but certainly a day-changing one 😀
  2. Video Draw – To see the winning postcode in this draw, you first have to watch a short video. Though to be honest I find that you just have to watch the ad that plays first and the winning postcode is then displayed – you don’t have to watch the whole of the video unless you want to. This draw pays a minimum of £50, with the prize rolling over to the next day if not claimed. I have seen up to £400 on offer in this draw.
  3. Survey Draw – To see if you have won this draw, you first have to complete a very short survey (generally just one question). As with the Video Draw there is a minimum prize of £50 and it rolls over to the next day if unclaimed. When I checked today there was a £300 prize, so it must have rolled over for a few days previously.
  4. Stackpot – The Stackpot lists a variable number of postcodes with £10 prizes for those claiming them. When I checked this morning there were 14 prizes up for grabs and one that had already been claimed (it is first come, first served with the Stackpot).
  5. Bonus Draw – With the Bonus Draw there is a daily £5 prize, £10 prize and £20 prize. To be eligible you need to have built up a Bonus (see below) equal in value to the prize in question by visiting the site regularly. So to qualify for the £20 Bonus Draw, you need to have accumulated a Bonus worth at least £20 yourself.

All lottery prizes are tax-free, of course, in accordance with UK gambling laws.

Flash Draw and Bonus

Pick My Postcode also offers two additional ways to win prizes.

One is £5 Flash Draws. These appear at random on advertising spaces around the PMP website. They look like the sample image below. They appear to individual visitors at random. I have never seen one myself, but obviously it’s worth keeping an eye out for them. If you spot one, you just have to click to claim (it doesn’t matter about your postcode). The £5 prize is paid by PayPal as usual.

PMP Flash draw

As for the Bonus, this is a sum of money that is added to your prize any time you win (with the exception of the £5 Flash prizes). It accrues over time as you visit the site. It increases by 1p for every new Main Draw, Survey Draw or Video Draw that you check. That may not sound much, but if you return to the site every day it soon adds up. My Bonus is up to £41.90 now!

  • If you wish, you can boost your Bonus even more by referring friends and neighbours and taking up some of the offers that appear on the site.

It’s important to note that you can’t withdraw your Bonus until you win a prize. But even £10 in the Stackpot or £5 in the Bonus Draw will qualify. So if I were to win a £10 Stackpot or Bonus Draw  prize today, I would actually receive £10 plus £41.90 = £51.90. Another good feature is that your Bonus is added to your winnings every time you win a prize – it doesn’t reset to zero after a win.

I am not normally a great one for lotteries, but I make an exception for Pick My Postcode. As I said above, it’s free to enter, there are loads of prizes on offer, and the longer you go on playing, the bigger those prizes can become. And obviously, having previously won over £600 on the Main Draw myself, I know that it’s genuine and would love to win again!

Finally, if you still need further reassurances about the site, check out the reviews on the independent Trust Pilot website (average 4.8/5 stars, with 94% of people rating it ‘Excellent’).

As always, if you have any comments or questions about Pick My Postcode, please do leave them below.

Disclosure: This post includes my referral link. If you click through and sign up for free, I will receive a small commission for introducing you. This will not affect your potential earnings in any way.

If you enjoyed this post, please link to it on your own blog or social media:
My Coronavirus Crisis Experience January 2021 Update

My Coronavirus Crisis Experience: January 2021 Update

, , 6 Comments

Happy New Year! Here’s hoping it’s a better one for all of us than the year just past 🙁

I shall be continuing my monthly coronavirus crisis updates in 2021, at least till we are clearly over the pandemic and something resembling normal life has resumed. Obviously I very much hope that will be sooner rather than later.

Regular readers will know I have been posting these updates since the first lockdown started in the spring of 2020 (you can read my December 2020 update here if you like).

As ever, I will begin by discussing financial matters and then life more generally over the last few weeks.

Financial

I’ll begin as usual with my Nutmeg stocks and shares ISA, as I know many of you like to hear what is happening with this.

As the screenshot below shows, since last month’s update my main portfolio has continued on a generally upward trajectory and is currently valued at £18,886. Last month it stood at £18,008, so it has gone up by over £800 in value since then. Considering national and world events at the moment, I am more than happy with this.

Nutmeg January 2021

As you may recall, about a month ago I put £1,000 into a second Nutmeg pot to try out Nutmeg’s new Smart Alpha option. This pot has risen as high as £1,015 in value and currently stands at £1,007. Here is a screen capture showing performance to date, though obviously it is far too early to draw any conclusions from this.

Nutmeg Smart Alpha

You can see my in-depth Nutmeg review here (including a special offer for PAS readers). As a matter of interest I was recently asked by Nutmeg to contribute an article about my investing journey for their blog. I will add a link to the article here once it is published.

I had some bad financial news last month from Crowdlords, one of the property crowdfunding platforms I invested with. Three years ago I put £3,000 into a development project to build what was originally described as six eco-homes (it has lately been known more prosaically as Kennington Road). An update on the Crowdlords website revealed that due to a ‘perfect storm’ of problems caused directly or indirectly by the pandemic, the development had made a loss and investors would receive no returns. At a stroke I lost £3,000, which was (as you may imagine) a bitter pill to swallow.

I plan to write a more in-depth post about this soon, including lessons learned from the experience. But i will say two things now. One is that property development projects are inherently very risky and you shouldn’t invest in them unless it really is money you can afford to lose in a worst-case scenario. And second, while I don’t blame Crowdlords themselves for the failure of this project, I do think their communications about it could have been a lot better. I also think it would be a nice gesture if they were to offer modest ex-gratia compensation payments from their own profits to investors who have been hit hard (I know some people lost a lot more than I did). Events such as this clearly damage the reputation of property crowdfunding and mean investors are less likely to risk their money this way in future. I know I shall certainly be a lot more cautious now!

  • In fairness to Crowdlords I should add that I have had other investments on their platform which did deliver the promised returns, However, with the loss described above I am certainly down overall with them.

On a brighter note, a couple of the loans I invested in with Kuflink were repaid (with interest) last month, and I duly reinvested the money in other loans.

Kuflink is primarily a platform for investing in bridging loans, and generally these are safer than development projects such as the one mentioned above. There is still a risk of loss, of course, but as your investment is secured by bricks and mortar, it is unlikely you would lose all your money (though delays in repaying loans can and do happen). I have a diversified portfolio of loans with them paying annual interest rates of 6 to 7.5 percent. These days I generally invest a few hundred pounds per loan at most (and quite often under £100). My days of putting four-figure sums into any single property investment are definitely behind me now!

As you may be aware, I recently updated my full Kuflink review. You can read it here if you like. They recently passed the milestone of £100 million loaned, and say that since their launch no investor has lost money on the platform. I’d particularly draw your attention to their revised and more generous cashback offer for new investors. They are now paying cashback on new investments from as little as £500 (it used to be £1,000). And if you are looking to invest larger amounts, you can earn up to a maximum of £4,000 in cashback. That is one of the best cashback offers I have seen anywhere (though admittedly you will need to invest £100,000 or more to receive that!).

Moving on, my two Buy2LetCars investments are still delivering the promised monthly returns without any fuss. As I am semi-retired but don’t yet qualify for the state pension, the £450 or so I receive from them every month represents a major part of my monthly income currently.

As you may remember, investors with Buy2LetCars put up the money to finance a car for a key worker such as a nurse or police officer. They then receive 36 monthly capital repayments followed by a final balancing payment of interest and capital. If you are looking for an income-producing investment with a substantial lump sum payment after three years – and you like the idea of doing a bit of good with your money too – they are well worth checking out (and likewise if you’re a key worker looking for a lease car yourself). If you’d like to learn more, you can read my review of Buy2LetCars here and my more recent article about the company here. And here is a link to Wheels4Sure, their car-leasing website.

Finally, I am still getting a few queries about the low-key matched betting opportunity mentioned in some previous updates. I checked with my contact there and they are still accepting new members, but for reasons related to the pandemic have had to reduce their payouts slightly. New members now receive £50 a month for the first six months, reducing to £25 a month thereafter. Considering that this opportunity is cost-free, risk-free and hands-free, that’s still a pretty good deal, though 🙂

As I said above, this opportunity is based on matched betting, a sideline-earning opportunity I have been pursuing for several years myself. I was asked not to divulge too many details about it publicly, for good reasons I will explain privately to anyone who may be interested (and no, it’s not illegal!). As I said above, it doesn’t require any financial outlay, is entirely hands-off, and will provide a passive income of £50 a month for the first six months and £25 a month thereafter.

No knowledge of betting is required, and you won’t have to place any bets yourself (this is all done by the company’s clever software). You just have to set up a separate bank account for bets to go through, but running the account is entirely financed by the company. Please note though that this opportunity is only open to trustworthy people who haven’t done matched betting before and have no more than two accounts already with online bookmakers. For more info (and to receive a no-obligation invitation) drop me a line including your email address via my Contact Me page.

Personal

December was another strange month in a depressing year.

A week before Christmas I had my 65th birthday. Normally reaching that landmark would be cause for celebration, but inevitably in the circumstances it was low key. I did at least manage to meet up with a couple of old friends for a birthday tea (don’t tell Matt Hancock!). It was great to see them and they did their best to make the occasion feel special. We had some laughs and a very nice cake, but it still wasn’t anything like I might have imagined my 65th. I didn’t even have the small consolation of being able to start claiming my state pension, as I am in the cohort of people for whom the age has just been raised to 66.

Work-wise it has remained very quiet (as you probably know, I’m a semi-retired freelance writer/editor). I’ve had very little paid work since the pandemic started and was grateful to receive further financial support from the government’s SEISS scheme. This time round you had to state that your income had been directly affected by the pandemic. I did agonize a bit over this, as it begged the question of how much money I would have been earning if things were normal. I honestly don’t know the answer to that, but it seems to me that the pandemic and government counter-measures have stopped the economy in its tracks, meaning there is less work around generally. Anyway, I applied and was paid without quibble.

The main good news over the last few weeks has concerned the vaccines. Two are now approved, with the Pfizer vaccine being distributed since before Christmas and the Oxford-AZ version coming on stream this week. One benefit of turning 65 is that I have presumably moved up the pecking order to receive it.

The government appears to be pinning all its hopes on vaccines bringing this pandemic to an end by spring/summer. I hope they are right, as the next couple of months in particular look pretty grim. At the time of writing my area has just moved to Tier 4, which effectively means lockdown. So I will have little/no opportunity to see friends or relatives, no more swimming, no more trips away, and the prospect of sporting ‘lockdown hair’ again. But I am still lucky compared to many, I know.

In my blog post Surviving the Covid Winter I mentioned some plans I had for getting through the winter months. In December I started several of these. In particular, I began a couple of DIY jobs I had been putting off. One of these was redecorating the en suite. Initially I planned just to repaint one wall where the paintwork was fading. But the new paint colour didn’t match the old one, so I am now planning to repaint the rest of the room as well. As is so often the case with DIY, what appeared a small job at first has grown into a much bigger one!

I have also taken my first tentative steps in the world of video gaming (my experience prior to this had been limited to Space Invaders/Asteroids and the games bundled with MS Windows such as Solitaire). With some trepidation I signed up with the games platform Steam and downloaded Coffee Talk to my Windows laptop. This was a game I had read about some time ago and liked the sound of. Here’s a typical scene from it…

coffeetalk

Coffee Talk is actually more like an interactive movie or novel. You take the role of owner/barista at a late-night coffee shop in an alternative Seattle frequented by a mixture of human beings and mythological characters such as elves.

Mostly your customers chat with you and other customers about their lives and problems, while you prepare coffee and other drinks for them. This isn’t especially taxing, though I was quite pleased when one of the regulars, Freya, returned and asked for ‘the usual’ and I remembered what it was. It’s a pleasant enough way of spending a few hours, though I am thinking I might try something a little more ambitious next time 🙂

On the TV side, I finally finished the box-set of Deep Space Nine, which I very much enjoyed and recommend to any sci-fi fans among you. At the recommendation of my sister Annie (also a sci-fi aficionado) I have now purchased the box-set of Babylon Five. This is also set on a space station, though with quite a different vibe from DS9. With five (long) series, six full-length feature films, a spin-off series called Crusade, and various other extras, hopefully this will see me through to the end of the pandemic 😀

And for a change from sci-fi I also bought the box-set of Agatha Raisin, a tongue-in-cheek detective drama starring Ashley Jensen and set in the Cotswolds. I wasn’t sure about this at first, but after the first couple of episodes I thought it hit its stride, and I recommend it for a bit of amusing escapism with some gorgeous countryside settings. It’s only a shame that all three series are quite short.

Finally, as a Christmas present for myself I bought the DVD of Roger Waters’ Us + Them concert. This is an epic production, featuring a group of hugely talented musicians and some awesome visual effects (at one point a giant model of Battersea Power Station descends into the arena, accompanied – of course – by a flying pig).

Roger and his band play a selection of Pink Floyd classics alongside some of Roger’s solo compositions, all of which are excellent as well (The Last Refugee is particularly poignant). In the video below, though, they perform Time, one of my personal favourite Pink Floyd numbers. Check out Jess and Holly (aka Lucius) supplementing their backing vocal duties with some exuberant drumming!

So that’s it for now. I do hope you are staying safe and sane in these challenging times. Be kind to yourself and to others, and hopefully things will improve before too long. As ever, if you have any comments or questions, please do share them below.

If you enjoyed this post, please link to it on your own blog or social media:
Top 20 Posts 2020

My Top 20 Posts of 2020

, , 8 Comments

As is customary for bloggers at this time of year, here are the top twenty posts on Pounds and Sense in 2020, based on comments, page-views and social media shares. They are in no particular order. I have excluded any posts that are no longer relevant.

I hope you will enjoy revisiting these posts, or seeing them for the first time if you are new to PAS. Don’t forget, you can always subscribe using the box on the right to be notified of new posts as soon as they appear.

All posts in the list below should open in a new tab/window when you click on the link concerned.

1. Ten Reasons Over-50s May Need an Independent Financial Adviser

2. How to Make Money From Your Old Tech

3. Save Money on Your Mortgage With Dashly

4. Twenty Ways to Make Extra Money From Home During Lockdown

5. Nutmeg Review: My Experiences With This Robo-Adviser Investment Platform

6. Why I Switched my Santander 123 Account to 123 Lite

7. How to Make Money From Affiliate Marketing

8. How to Get a Better Night’s Sleep

9. Should You Use Equity Release to Unlock the Value of Your Home?

10. What Are the Best Video Calling Tools for Older People?

11. Why I am (Still) Not a Fan of Premium Bonds

12. Get a Free Share Worth Up to £100 with Trading 212

13. Managing Your Finances and Tackling Debt – A Q & A With MoneyNerd

14. Booking a Holiday With Airbnb

15. Ten Things I Have Learned About Self-Employment Over 30 Years

16. Kuflink: My Review of This P2P Property Investment Platform

17. Looking After Your Mental Health in the Coronavirus Crisis

18. How Over-75s Can Claim Pension Credit to Keep Their Free TV Licence

19. Can You Still Make Money from Matched Betting?

20. Surviving the Covid Winter

I’ll be taking a break from blogging over the festive period (though I’ll still be around on Twitter and Facebook). I’ll therefore close by wishing you a happy, Covid-free Christmas, and for all of us a far better new year 🙂

If you have any comments or questions, of course, feel free to leave them below as usual.

If you enjoyed this post, please link to it on your own blog or social media:
If you enjoyed this post, please link to it on your own blog or social media:
Moneynerd interview

Managing Your Finances and Tackling Debt – a Q & A with MoneyNerd

, , , 6 Comments

Today I have a Q and A for you with my fellow money bloggers at MoneyNerd.

MoneyNerd is a UK personal finance blog that aims to help people learn to manage their finances and tackle debt. I asked a number of questions about personal finance and debt, and added my own thoughts as well. Our answers are also being shared separately on the MoneyNerd blog. I hope you find them interesting and informative.

What’s your number 1 financial tip?

MN: It’s hard to give advice that would apply for everyone, because everyone’s finances are different. But I would suggest ‘write it down’, as a fairly universal and important financial tip. Start with your financial goals, then write down the steps you’ll take to get there according to your budget. A lot of people have good financial intentions, but without having clear goals on paper, it’s easy to get led astray.

PAS: Agreed. I would also say, keep on top of your money. Know what’s going in and what’s going out every month, and budget accordingly. Always be on the lookout for ways you can maximize your income and minimize your expenditure. And try to put some money aside for the proverbial rainy day. Everyone should really have at least three months’ worth of income set aside in case of emergencies. Sorry, that’s at least three tips, I know!

What do you think are the main causes people find themselves in financial difficulty?

MN: I think financial difficulties are mainly caused by unforeseen life-events, such as bereavement, unemployment, and relationship breakdowns. These kinds of bumps-in-the-road can severely throw people off course, particularly if their financial situation was fragile in the first place. Unfortunately, all three of these examples have sky-rocketed due to the pandemic, and many people in the UK will be facing financial difficulties over the coming year.

PAS: Not much I can add to that. Although sometimes failing to monitor your income and expenditure closely enough can lead to debts mounting up before you realise it.

What personal finance tools do you currently use to track and manage your money?

MN: I’m quite old-school and still use spreadsheets for a lot of money-related things! There are some good apps out there though – Money Dashboard is a particularly good one.

PAS: I am the same and use spreadsheets a lot. I started with Microsoft Excel, but these days mainly use Google Sheets. As regards personal finance tools, I like Snoop [referral link], a relatively new app that helps you keep track of your finances and suggests easy ways you can make savings.

Any tips for people coming to financial management later in their lives?

MN: It might be a little harder to undo old habits and reinstate new ones if you’re approaching financial management from an older perspective. So start by setting simple goals, and work at them consistently. It’s probably worth taking a little time to assess what’s important to you right now, too: what range of outgoings does your money need to cover in later life that you didn’t need to consider before?

PAS: I am 64 and have friends in their seventies and eighties, so I have seen the sorts of problems older people can face. In particular, so many aspects of our personal finances are dealt with online now, from banking to applying for state benefits. The pandemic has probably accelerated this trend.

Many older people struggle with the technology and it’s often not as intuitive as it should be, especially for those whose eyesight isn’t as good as it once was. So I would say to any older people, try not to get left behind by technology, and ask younger friends and relatives for help when needed. Last year a group of us clubbed together and bought a friend (a retired builder) a Chromebook for his 80th birthday. He had never engaged with computers or the internet before and I must admit I was expecting him to struggle at first. However, he took to it like a duck to water, and was soon ordering tools and components online from a local builders merchant. So even old dogs can definitely learn new tricks!

2021 is going to be tough for many. Do you have any advice on how to keep things under control?

MN: I’d start with the obvious – plan as much as possible, in order to save as much as possible. This is so that when those ‘bumps-in-the-road’ come along, you have some kind of safety net, however small. Unfortunately, however, I imagine a lot of people will do everything right this year and still fall into difficulty. As and when that happens I would say be proactive in reaching out and seeking help. There are plenty of free services and helplines to reach out to, before matters spiral.

PAS: Yes, definitely. As I said earlier, everyone should have a financial safety net to tide them over when life throws you a curveball.

In my earlier career I worked as a debt counsellor at a citizens advice bureau, so I know that there is lots of help out there if you ask for it. And friends and family can be a good source of practical and emotional support too. Just don’t bury your head in the sand and pretend to everyone that nothing is wrong.

What would be your top tip for someone who is worried about a debt (or debts) they can’t repay?

MN: I have two tips: the first is don’t panic, the second is be proactive. If you can’t afford the repayments for a loan or credit card, contact the company and explain your situation. If you’re struggling to meet the repayment amounts, you may also need to look at whether a debt solution is appropriate for you. Having unaffordable debt can be a scary place in which to find yourself, but by taking action you can dissipate some of that anxiety by feeling you are doing something about the problem.

PAS: Yep. It’s worth bearing in mind also that if you have a debt you can’t repay, it’s not just your problem, it’s a problem for whomever you owe the money to as well. It is therefore in their best interests to work with you to find a method for paying down the debt.

What are some good ways of boosting your income?

MN: Ask yourself: do I own anything I could rent? A parking spot, a vehicle, a garden shed, even a room in your house if you own it. Then ask yourself: do I own anything I could sell? Old clothes, a bicycle, old furniture, anything in storage. Then finally, ask yourself what you could do with your spare time: dog-walking, Uber-driving, delivering takeaways/parcels, painting and decorating,completing online surveys, match betting, free-lancing, etc. I have a whole blog post which goes into this very topic in more detail: Making Money – Tips and Tricks.

PAS: Lots of great ideas there. Like MoneyNerd, I also have a section of my blog devoted to ideas for boosting your income. I like online surveys, with Prolific Academic (a website needing people to take part in academic research) a particular favourite. And I do matched betting as well, though not as much as I used to, as I’ve been restricted (or gubbed as we say in MB’ing) by many of the leading bookmakers!

What is the best way you can help a friend or family member who has debt problems?

MN: Honestly, I don’t think there’s a one-size fits all here. Everyone and everyone’s debt problems are different. But that seems like a cop-out! So I think showing genuine, non-judgemental support, and ensuring they have all the right resources (StepChange, CitizensAdvice, etc.) to hand are two good places to start.

PAS: I agree with this. But based on personal experience with a friend a few years ago, I would also advise thinking hard before lending them money, as this seldom solves the problem and may simply exacerbate it. With my friend, who lived alone, I found that acting as a lender to him changed the nature of our friendship, and not for the better. I also felt that by constantly bailing him out, I was allowing him to avoid addressing his money management issues. Eventually we had a difficult telephone conversation when he asked me to lend him money again and I refused. He took it better than I expected and our friendship actually returned to something more normal after that. He got his finances under better control, although I did on a couple of occasions afterwards send him supermarket vouchers to ensure he had enough to get food. I didn’t expect to be repaid for these, obviously!

If you had a sudden, unexpected windfall of £5,000, what would you do with it?

MN: Firstly I’d pay off any loans or outstanding credit card debts. Then I’d take my family out for a nice meal, and put what’s left-over into a tax-free ISA.

PAS: Paying off debts would be my first priority as well, though I am fortunate not to have any at the moment. I would put most of the rest in my Nutmeg stocks and shares ISA, and some in my Kuflink property loan investment account (from which I have had good results over the last three years) to provide a bit of diversification. Going out for a nice meal with family and friends sounds good too, although as I live in a Tier 3 area I might have to wait a while for that!

What was your best-ever financial decision, and what was your worst?!

MN: My best financial decision was investing in a tech based stocks and shares ISA which has done really well over the last 5 years, although don’t know if I’d recommend the same investing approach in the current economic climate.

On the other hand my worst financial decision was living in London for 10 years where rent and cost of living is exorbitant.

PAS: My best financial decision was probably paying off the mortgage when I had a windfall a few years ago. At a stroke one large item of monthly expenditure was gone, giving me greater financial flexibility as well as saving me a lot in future interest payments.

My worst decision was investing too much in property crowdfunding a few years ago when it was still new and exciting. I had money to invest at the time and liked the idea of owning stakes in a portfolio of properties across the UK. Some of my investments worked out but others didn’t, and I am currently sitting on a number I can’t access because the properties in question can’t be sold for one reason or another. The money is still there in bricks and mortar but I have no idea when or how I will be able to access it. That said, I do still believe in the property crowdfunding concept, but I do it a lot more selectively now.

About MoneyNerd

MoneyNerd.co.uk is a personal finance blog that was set up with one aim in mind: to help people learn how to manage their finances and tackle debt. The blog includes a variety of straight-talking articles that cover personal finance topics from credit card guides to mental well-being tips. These can help you understand exactly how financial products work, as well as what your rights are when dealing with debt. We want to offer authentic and truthful information that can help you deal with your situation, whatever that may be.

MoneyNerd

Many thanks again to MoneyNerd for their insights. Please do check out the MoneyNerd site for much more information about tackling debt and getting your finances under control.

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

If you enjoyed this post, please link to it on your own blog or social media:
Make money as a consultant (part two)

Make Money From Your Skills and Knowledge as a Consultant (Part 2)

0 Comments

In my previous article I talked about setting up as a consultant and how this can be a great way to capitalize on your work-related skills and experiences.

I discussed the range of opportunities for self-employed consultants and how to research the market and establish a strong personal brand. This time, I’ll be focusing specifically on how to market your consultancy business.

I’ll start with a time-honoured method…

Using a Mailshot

This is the traditional approach to marketing a service to businesses and still has many attractions. You will need to compile a list of potential clients you wish to target, perhaps using business directories and/or the internet. It is then a matter of putting together a package including a letter and maybe a brochure as well, along with any other enclosures you deem appropriate. A reply-paid envelope, for example, will often boost response rates.

The more modern approach is to use email. This has various advantages, the most important being that it is quicker and cheaper. Email marketing is typically used for establishing initial contact with a prospective client, to be followed up with written information and/or a phone call if any interest is expressed.

This method does have the drawback that you may not be able to find email addresses for all the businesses you want to target. In addition, many business people are inundated with emails, and other things being equal are less likely to read them than messages that arrive in the post (and if they have spam filters, they may not see your email at all). Nonetheless, when you are starting out, an email campaign has much to recommend it, and there is nothing to stop you following up with a mailshot and/or phone call later.

The Seminar Method

This can be a great way of making money as a trainer, and it can also help you land consultancy clients. Right now, due to anti-Covid measures, it is difficult to apply in the traditional way. Sooner or later, however, normal times will return and these measures will be relaxed. So I will set out the bare bones of the seminar method here.

The idea is that you arrange seminars or training sessions in your specialist subject, typically lasting a day or half-day. You book a room in a hotel or conference centre for this purpose and advertise your seminar through emails and/or mailshots sent to likely prospects.

A reasonable target for your first seminar would be 10 to 20 clients. You would need to pay the hotel a room hire fee of £50 to £100, and there would also be some publicity and promotional costs. An initial budget of around £400 would probably cover all of this.

If your clients pay £100 each, with the numbers mentioned you would be looking at a gross return of £1000 to £2000. Assuming – as mentioned above – you spent £400 on setting up and running the seminar, that would leave you £600 to £1600 clear profit.

That’s not a bad return in itself, but the big attraction is that if some clients are impressed by your expertise, there is every chance they will want to engage you for other services as well, from in-house training to mentoring and consultancy. If this becomes an ongoing arrangement you will have a source of regular income, and may be able to charge a monthly retainer for your services as well.

The seminar method is an under-used approach among trainers and consultants, yet it has huge money-making potential. While it would be difficult to apply at the present time, you could certainly adapt it to the online world (see below). For example, you could set up an online seminar using video-conferencing software such as Zoom or GoToMeeting. You could even create a web-based course in your specialist subject using a service such as Teachable.

Either way, in addition to whatever fees you charge, you would be building a pool of potential clients for your consultancy service as well.

Online Marketing

The internet is, of course, a massive boon for entrepreneurs. Used the right way, you can attract a never-ending stream of clients and potential clients by this means.

As I said last time, your website is an essential tool for this. If you take the time to create a good-looking site with quality content, in time you can expect to start attracting search-engine traffic. In other words, people looking for a consultant or trainer in your niche will see your site listed high in their search results and hopefully click through to find out more.

It will take a bit of time for your site to be listed in the search engines, and longer still for it to achieve a high ranking for your target keywords. You can, however, assist this process by using search engine optimization (SEO). This is a huge topic in itself, and I recommend looking online for more information. Search Engine Journal is a good place to start.

Here, though, are a few basic SEO tactics you can use to start boosting your rankings…

  • Share links to your site on social media such as Facebook, Twitter and Instagram.
  • Comment on blogs and websites relevant to your field of expertise, with links back to your site. You could offer guest posts to the owners of these sites as well.
  • Add a blog to your website, in which you talk about relevant issues and share helpful tips.
  • Join online forums and put a link to your site in your signature text (not all forums allow this, though, so check their guidelines first). Put a link in your email signature as well.

You could also consider self-publishing a short ebook on your specialism and give it away free from your site and/or sell it cheaply as an Amazon Kindle ebook. Again, link from your ebook back to your website. Not only will this assist with your search engine ranking, it may also bring you some clients directly.

SEO can work well over time, but if you want to get up and running faster you could consider paid advertising. One method that can bring results very quickly is Google Adwords. These are the small ‘Ads by Google’ that appear in search engine results and on related websites.

The method generally used to charge for these ads is ‘pay per click’ (PPC). In other words, you pay a set sum to Google every time someone clicks on one of your ads. You can choose the keywords that trigger your ads, and set a maximum you are willing to pay for them. The more you bid, the more prominently your ads will be displayed.

Google Adwords is a powerful tool for bringing targeted prospects to your website. For more information and to sign up, visit www.google.com/adwords.

Finally, there are websites where you can advertise your services and connect with potential clients. Job auction sites such as Guru and Upwork are one possibility, with many thousands of projects posted by would-be clients. You are unlikely to be able to earn top rates via these platforms, however. There is a lot of competition, and as they are international you will be up against people in low-wage economies whose overheads (and fee expectations) may be much lower than yours. If you are looking to gain experience and testimonials they may be worth trying, but they shouldn’t be your first port of call.

A better bet may be sites aimed specifically at connecting consultants with potential clients. One of the more established websites in this field is The Consultant Hub. Joining costs several hundred pounds (tax deductible, of course), but for that you get access to thousands of unadvertised consultancy opportunities, an individual profile page on the website, membership of a private online forum, and access to training and networking events.

More Top Tips

Finally, here are a few more tips for building your training and consultancy business…

  • Prepare a short pitch that answers the common question, ‘What Do You Do?’ Try to have a core message that can be summed up in one sentence, e.g. ‘I help small business professionals promote their products and services to people who need them.’
  • Keep up to date with your specialist subject. Join the relevant professional organization/s, read the latest books and journals, and subscribe to authoritative blogs and websites in your niche.
  • At the end of any training or consultancy session, ask for feedback. Not only will this give you valuable information on areas where you can improve, positive comments may be useful for testimonials (with the client’s permission, of course).
  • Listen carefully to what clients tell you about their businesses and any areas where they are having problems. This is priceless market research, and may suggest new services you can offer in future.
  • Build links with consultants and small businesses with expertise in areas related to yours. For example, if your specialism is copywriting, you might want to link up with a graphic design agency. As well as helping your clients by introducing them to other professionals with skills they need, you may be able to negotiate referral fees.
  • Keep in regular touch with clients, and let them know about any new services you may be offering. Typically 80% of your business will come from repeat clients, so be sure you stay on their radar for the next time they need someone with your particular expertise.

In Conclusion

Selling your skills and knowledge as a mentor, trainer or consultant can be both enjoyable and lucrative. You can work from home, and full-time or part-time as you prefer. This can also be an ideal opportunity for older people who may be looking to reduce their working hours while still earning a decent income.

The work is varied and interesting, and you will have the satisfaction of sharing your skills and experience with people and businesses who can benefit from them. And with many companies relying increasingly on freelancers to help keep overheads low, there has seldom been a better time to get into this field.

Good luck, and happy consulting!

Disclosure: this article includes some affiliate links. If you click through these and make a purchase, I will receive a commission for introducing you. This will not affect the service you receive or the price you pay.

If you enjoyed this post, please link to it on your own blog or social media:
Make Money as a Consultant

Make Money From Your Skills and Knowledge as a Consultant (Part 1)

0 Comments

In this two-part article I’ll be looking at a method almost anyone can use to make money, by selling their skills and knowledge as a mentor, trainer or consultant.

I say almost anyone, because clearly you need some skills and knowledge other people would be willing to pay you for. There is a huge range of possibilities, however, and if you have worked in any skilled, professional or managerial position, you almost certainly have knowledge and abilities you could sell – possibly after some polishing up first!

You can offer your services to private individuals (I’ll look at this in a moment) but by far the biggest and most lucrative potential market is businesses (including public sector organizations such as the NHS). They have budgets for training and consultancy, and generally pay well if you can deliver the services their managers and employees require.

To give you a flavour, here are just a few areas for which mentors, trainers and consultants are much in demand…

  • Health and Safety
  • Equal Opportunities
  • Marketing
  • Business Law
  • Salesmanship
  • Accounts and Financial Management
  • Planning
  • Copywriting
  • Computers
  • Leadership
  • Communication
  • Graphic Design
  • Social Media

One big advantage of working with businesses is that if all goes well, you are likely to be invited back in future, either to follow up your initial session or to train other staff. Also, one type of job can lead to another. For example, you might run a course for a client initially, and then be asked to provide ongoing mentoring or consultancy services.

Although businesses are your most likely clients, in some fields you could work with private individuals as well (or alternatively).

One example is computers. Many people struggle with mastering their home computers, and are willing to pay for help and instruction. If you can combine this with basic repairs and maintenance, you have the basis for a steady part-time or even full-time business. Admittedly it is unlikely to pay as well as working for business clients, but may suit some people better.

Business Basics

If you are going to offer any sort of training or consultancy service, even part-time, you will be regarded by the authorities as running a business. That means you will need to contact the tax authorities (HMRC in the UK) and let them know what you are doing.

You will also need to keep accurate financial records showing all money earned and any allowable expenses (stationery, advertising, phone bills, and so on). You or (more likely) your accountant will use these records in due course to produce annual accounts, which will determine how much tax you have to pay.

  • My personal advice would be to speak to an accountant early on and get his/her advice on how best to keep your books (financial records). This can save you a lot of hassle  – and expense – later.

I don’t have space here to go into detail about the nuts and bolts of setting up in business, but there are many books on this subject available. You might also want to take a part-time college course if any are on offer in your area.

As always, the internet is a great source of information as well. Startups and the government’s business website are two very useful resources, but there are plenty of others. Just enter “Starting your own business” in any search engine to find more.

Marketing Yourself

Marketing is the key to making money in this field, so in the remainder of this post I will concentrate on this subject.

Contrary to what is sometimes believed, marketing isn’t the same as advertising. It is an approach or even a philosophy for doing business.

The marketing method involves finding out what potential clients need, and then setting out to meet those needs. This is important, as what you believe potential clients need may not always correspond with the reality.

Advertising (trying to persuade potential clients you can meet their needs) is therefore one aspect of marketing, but it’s far from the whole story. The first stage of marketing is market research, so let’s start there…

Market Research

If you’re planning to set up as a freelance trainer/consultant, it’s important to spend some time researching your chosen field to discover what exactly potential buyers might be looking for.

This will help ensure you pitch your offer correctly, and may also uncover additional niches you want to target. So it is well worth spending a bit of time on your preliminary research rather than jumping straight in.

There are various ways of doing market research, many of which can be performed from your desk or a library. One is researching what other people working in this field – your potential competitors, in other words – are offering.

This is easy to do on the internet. Put yourself in the position of a would-be client and do the sort of search query you might expect them to use: “leadership training”, for example. That should bring up a range of websites belonging to training and consultancy providers. Spend some time studying what these folk are offering and how they promote themselves. You might also want to make a note of how much they charge, if this information is given.

It’s also good to research what potential clients actually want. This isn’t quite so easy, but one way is to look on job auction sites such as People Per Hour and Guru. Businesses use these sites to post details of services they require, which freelancers then bid on. Look for companies advertising for help in your chosen niche, and see how they describe their requirements and the sort of assistance they are seeking.

It is also well worth contacting at least a few potential clients directly. If you have friends or former colleagues in business, for example, tell them what you are planning to do and ask for any advice they can offer. Most will be delighted to help, and you will also be alerting them to the fact that before long you will be available for work in this field.

  • Another method I have seen used successfully is to mailshot a range of potential clients with a market research questionnaire, and promise to make a donation to a specified charity for every one that is returned. This will obviously cost you a bit of money, but the information you get back will be valuable to you, and the contacts you make potentially even more so.

Through your market research you should be able to establish the type of client that may be the best fit for your skills, the services they need, and how best to present yourself to them as a potential provider.

Your Business Image

You are now almost ready to start promoting your services to potential clients, but one other thing you should give some thought to is your business image.

As a freelance mentor, trainer or consultant, it is vital that you present an impression of competence and professionalism. This applies even – or especially – if you are working from home.

Aside from obvious matters such as dress and appearance, you will need to ensure that this image precedes you in any advertising materials you produce. At the very least, you will need to have an attractive letterhead, and possibly a logo as well. If you want to keep your expenditure to a minimum, any printer will have someone who can do this sort of thing, but for the best possible results it’s best to engage a professional graphic designer.

The other thing necessary for anyone working in this field nowadays is a website. You can get a specialist website designer to create this for you, but if you have some computer skills it is quite possible to create a professional-looking site yourself, maybe using the popular WordPress platform. You could use the free WordPress.com service or (even better) set up your own self-hosted WordPress site using a service such as Bluehost (which I use – affiliate link). Either way, you’ll be able to choose from a wide range of themes and plugins to customize your site and ensure it presents your service in exactly the way you want.

When planning your website, you can take inspiration from sites created by other trainers and consultants, but there is nothing wrong with keeping it simple and straightforward at first. The main things you must have include information about yourself and your background, the services you offer, and any testimonials. Contact information is clearly essential, and if appropriate you might also include examples of your work (if your specialism is copywriting or graphic design, for example).

You could also put some information about pricing, although my advice would be to avoid giving chapter and verse about this. You don’t want to put people off if they think you are too expensive, or too cheap for that matter. In addition, it’s best to allow yourself some room for negotiation with individual clients.

With all this in place, you should be in a position to start contacting potential clients. I will discuss this in detail in my next post!

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

If you enjoyed this post, please link to it on your own blog or social media:
Self-employment

Ten Things I Have Learned About Self-Employment Over 30 Years

2 Comments

Yes, it’s true. I’ve been self-employed for over 30 years now (barring a short barren spell 20 years ago when I took a temporary job at the University of Wolverhampton to help make ends meet).

I worked primarily as a freelance writer, but also as a freelance proofreader and editor. As regular readers will know I am semi-retired these days, though still available for small to medium-sized projects that I can fit in around my other commitments 🙂

Inevitably over the last 30 years I’ve learned a few things about self-employment, so I thought today I’d share some of them here. I hope this will be helpful to anyone who may be contemplating going down this route.

1. You Need an Accountant

This is actually my top tip to anyone starting out in self-employment. Tax is complicated (Shock! Horror!) and there really is no substitute for getting advice from a professional in the field.

Yes, you can do your own book-keeping (and there is no shortage of clever software to help with this). But an accountant will do so much more. They will help you set up your record-keeping system, answer any queries you may have, draw up and submit annual accounts for you, and help if (for example) HMRC raise any queries about your tax return. True, an accountant will cost you a few hundred pounds a year, but I have never for one second resented this. It is money well spent for the peace of mind it gives you alone.

  • Just one example. Some years ago I was offered a five-figure sum by a publisher in exchange for all rights in some online courses I had created. It seemed a good deal, but before signing on the dotted line thought I should run it past my accountant first. He pointed out that with one or two minor changes to the wording of the contract – which the publishers were happy to make – the fee would be regarded by HMRC as a capital gain rather than taxable income. As I had no other taxable gains that year I was able to keep the entire sum I was paid. Without my accountant’s advice, I could easily have ended up paying thousands of pounds in unnecessary tax.

So get an accountant before you do anything else – you know it makes sense. See also my recent blog post that goes into more detail about why you need one.

2. Controlling Workflow is Crucial

One thing you will soon discover if you take the road of self-employment is that it’s a very short distance from having too little work to too much (and back again). In a conventional job you will have colleagues to share the load, and a manager to complain to if it all gets too much. As a self-employed person, managing your workload is all down to you.

There is no doubt this can be stressful at times. One minute you are worrying about not having enough work to pay the bills. The next you are agonizing over how to keep all your clients happy and meet their deadlines without spreading yourself too thinly and burning yourself out.

There is no easy answer to this; it’s just one of those things all self-employed people have to manage as best they can. One thing I have found helpful, though, is building a network of trusted people in the same field as me. Then when I am feeling swamped I can ask if they would be interested in taking over some work from me – and vice versa, if they are very busy they may pass some of their excess work my way. This can be very helpful in smoothing out your workflow, although you need to be sure that anyone you recommend to a client will do a good job for them.

3. Business Is About People

Obviously to run a successful self-employed business, you need to be competent (and ideally better than that) at whatever it is you do.

Beyond that, however, business is about building and nurturing relationships. This is especially important in terms of getting repeat business, which for most self-employed people is crucial to maintaining a steady workflow (see above).

For any given job, there will be plenty of other people who could do it just as well as you (maybe even better). So you need to come across as someone who is pleasant and trustworthy as well as capable of doing the work. Once you have built a good working relationship with a client, chances are they will keep coming back to you in future, and recommend you to their friends or colleagues as well.

You don’t have to become best mates with everyone you work for, but making the effort to connect with them and build a good relationship will undoubtedly pay off many times over.

4. You Need to Network

However good you are at your work, no client is going to beat a path to your door. You need to network

Obviously social media like Twitter and Facebook can be a big help here. But it’s good to put yourself about in the flesh too. If you are a freelance writer, for example, join your local writers’ circle, go on writers’ courses and conferences, volunteer to give talks, apply for residencies, and run classes in adult education. All of this will help raise your profile, and make it more likely that potential clients will get in touch with you.

And also under this heading I’d add, build up your network of useful contacts. These can come from all sorts of places: business colleagues and former colleagues, suppliers, clients, people you meet on courses, people you connect with via social media, and so on. Many of the new opportunities that have come my way over the years did so as a result of networking.

5. Don’t Rely Solely on the Internet

The internet is a wonderful thing, and there are lots of great resources on it for the self-employed. It can also be great for marketing your services. However, there was no internet at all when I was starting out, and it didn’t hold me back!

I find that young people especially tend to rely heavily on the internet and sometimes forget about other, more traditional media. If I was starting out as a freelance today, one thing I would certainly do is approach potential clients directly by letter and even by phone call. This can be a lot more effective than sending an email, which will probably end up in their spam folder anyway.

I would also scour job ads in newspapers and magazines, looking for businesses who are hiring in related fields to my own specialism. They might well be in need of freelance assistance as well, and a speculative application could turn up a regular source of work. Again, this is a strategy that has worked well for me in the past.

6. You Must Be Reliable

This is one of the most important qualities any client wants. He/she wants to be confident that you will deliver your product or service by the agreed deadline. If the deadline passes and you haven’t met it, for business clients especially it can create all sorts of problems for them.

If you can see you’re going to have problems meeting a deadline, therefore, DON’T just cross your fingers and hope for the best. Tell your client. Given sufficient notice they may be able to make alternative arrangements. But if you don’t tell them in advance, it may be too late for this. Don’t then expect them to offer you any work in future.

7. You Must Be Accessible

Clients may sometimes need to contact you at short notice, e.g. to check a specification or request a progress update. You don’t have to be always just a phone call away (though that won’t hurt), but it should be possible for a client to contact you by some means and get a reply within 24 hours. Always aim to have your mobile with you, therefore, and check this and your email regularly, preferably at least twice a day.

And if you’re going away on holiday for more than a day or two, it’s a courtesy to let regular clients know, especially if you are in the middle of a job for them!

8. Don’t (Usually) Argue

OK, this one is a bit controversial. If you disagree with a client’s choice, you can say so. But don’t push it. At the end of the day, whoever pays the piper calls the tune.

Here’s an example from my own experience. In my capacity as a newsletter editor I was pitched an idea by a semi-regular contributor. Normally I liked his ideas, but for various reasons I couldn’t use this one, so I turned it down with a polite explanation. I then received a long, aggrieved email telling me quite forcibly that I was wrong and he was right, concluding with words to the effect, ‘I think I know our readership by now.’ As you might guess, I didn’t commission many more articles from him after that…

9. Be Friendly but Professional

As I said above, it’s good to build relationships with clients. Over a period of time you will inevitably get to know one another quite well, and genuine friendships often result.

However, remember that the client is also – in effect – your employer, so it’s important to remain professional in all your dealings with them. Don’t assume that because ‘John’ or ‘Mary’ is your buddy, they won’t mind if you palm them off with inferior work or take other liberties with them.

Another example here (all names changed to protect those concerned). A few years ago one of my regular clients, a guy I’ll call Phil, was looking for an additional freelance writer. I recommended a woman named Clare to him, whom I’d worked with on a couple of projects.

All seemed to go well at first, and then I heard that he had dropped Clare quite suddenly. As I knew Phil pretty well, I asked him what had happened. He was a bit reticent at first, but then he told me, ‘We’re a family company, Nick, and we choose the people we work with very carefully.’

A little more probing finally revealed that he had been on the phone to Clare one day, and she casually dropped the F-bomb into their conversation two or three times. Phil hadn’t said anything to her at the time, but I guess he was a bit shocked by this. Anyway, he decided that he couldn’t work with her any more.

I must admit, I don’t know why Clare did this. Maybe she wanted to show she was “one of the boys”, or maybe she’d just been watching too many Hollywood movies. In any event, it was exactly the wrong tack to take with Phil, who abhors bad language in any form. And so it cost Clare the opportunity of a continuing source of well-paid work.

That’s perhaps an extreme example, but it does illustrate an important point. A good, friendly relationship with a client can be very rewarding for both parties, but you should never let it become an excuse for behaving unprofessionally.

10. Keep Updating Your Skills!

Whatever line of business you’re in, you will need to keep updating your skills and even learning new ones.

That has certainly applied for me. When I set out as a freelance writer/editor, I was using an Amstrad PCW computer/word processor. It had no internal storage, no mouse, and used its own dedicated operating system called Locoscript. It came with a slow and cranky dot matrix printer, and had literally no bells and whistles. It had a key with the word OPTIONS on it, and when you pressed this a message came up on the screen saying NO OPTIONS. That summed it up really!

After a couple of years – maybe a bit longer – I realised I would have to dump my PCW and get a ‘proper’ home computer. This came with a mouse and used an early version of Windows (probably 3.1). I then had to learn a whole new set of skills, which I did largely through trial and error and reading books (the internet not being a thing then).

Over the years since I have had to acquire many more new skills, including how to proofread and edit electronically, how to do basic HTML coding, how to build and update a WordPress website, how to do search engine optimization and use social media to market my services, and much more. I also had to keep up with the latest software so I could deliver the services my clients needed using the software they used themselves.

If you’re in a normal job, your employer will generally arrange training for you when the need arises (and of course pay for it). As a self-employed person, once again, it’s all down to you. You will need to stay up to date with developments in your field and arrange training when necessary (or take time out to teach yourself) and pay your own costs (which are at least allowable against tax). If you don’t do this, you are likely to find yourself left high and dry as the world moves on and your old skills are no longer relevant.

Obviously this applies especially in fields such as mine that require the use of modern electronic technology. But whatever your field – even gardening or window-cleaning – there will inevitably be changes in fashion/tastes, technology, legal requirements, custom and practice, and so forth. It is essential to stay aware of what is going on in your chosen field, update your skills and learn new ones as required.

I do hope you find these tips helpful. If you have any comments or questions – or any other useful tips for people new to self-employment – feel free to add them below as comments.

If you enjoyed this post, please link to it on your own blog or social media:
Bloggers August Giveaway

Win a £100 M&S Hamper in the Bloggers August Giveaway!

, 2 Comments

Autumn is on the way, but before it arrives here’s a chance to make the summer of 2020 even more memorable 😉

Along with a number of my fellow UK bloggers, I am offering one lucky winner the chance to win a £100 hamper of their choice from Marks and Spencer – for example, this Windsor Hamper with Prosecco and red wine (pictured above)..

The competition is being promoted by my blogging colleague Emma Drew and is (of course) free to enter. Full details provided by Emma can be found below. Basically you just have to open the Rafflecopter widget and complete the simple tasks described. Each completed task will then earn you one entry in the giveaway.

The Bloggers

The following bloggers have all teamed together to contribute towards this competition, offering you a fantastic prize.

Please show your support by visiting some of the bloggers taking part just by clicking on the name of the blog below.

What To Watch | Unique Young Mum | Charlotte Musha | Tweet Your Trip | Side Hustle Directory | Koody | Socially Rach | Adventures Of a Riot Grrl | Nishi V | Hawkes At Home | Digital Frogs | Becca Blogs It Out | Jass V | Craft Hustle Directory | Thrifty Chap | Our House Our Home | Money Saving Superhero | The Financial Wilderness | Photographyish | Peggy May | Girls Just Wanna Have Funds | Pounds and Sense | Mum on a Budget | Her Home Biz | Simple Happy Home | The Money Whisperer | Love Panda | Love Dogs | Easy Peasy Gardens | Money Money Money | 360 Mum | A Little Luxury For Me | Mind Over Money Matters | Enjoy England For Less | Alice in Sheffield | Funding Her Freedom | Mama In Progress | A Rose Tinted World | So Nostalgic | Lindy Loves | Francesca’s Growing Patch | WotAWoman Diary | Deborah Stansil | Reinventing Neesha | That Copper Life | Patty Finds Deals | Pink Steel | My Debt Diary | Drewmies | Thrifty Husband

The Prize

Up for giveaway is a £100 M&S hamper of your choice.

With plenty to choose from, you can pick yourself a lovely treat!

Rules and How to Enter

1. There is one top prize of a £100 M&S hamper of the winner’s choosing.
2. There are no runner up prizes
3. Open to UK residents aged 18 and over, excluding all bloggers involved with running the giveaway
4. Closing date for entries is midnight on 31.08.20
5. The same Rafflecopter widget appears on all the blogs involved, but you only need to enter on one blog
6. Entrants must log in to the Rafflecopter widget, and complete one or more of the tasks – each completed task earns one entry in the prize draw
7. Tweeting about the giveaway via the Rafflecopter widget will earn five bonus entries into the prize draw.
8. 1 winner will be chosen at random.
9. The winner will be informed by email within 7 days of the closing date and will need to respond within 28 days with their delivery address, or a replacement winner will be chosen.
10. The winners’ names will be published in the Rafflecopter widget (unless the winner objects to this).
11. The prizes will be dispatched within 14 days of the winner confirming their address.
12. The promoter is www.EmmaDrew.info
13. By participating in this prize draw, entrants confirm they have read, understood and agree to be bound by these terms and conditions

To enter simply complete any or all of the Rafflecopter entry widgets below

a Rafflecopter giveaway

One last small point is that if a winning entry comes from following someone on social media, Emma will check before awarding the prize that the winner is still following the account in question. If they aren’t, they will be disqualified and a new winner drawn. So, please, don’t follow and immediately unfollow, as your entry won’t then count.

Good luck, and I really do hope you win this fabulous prize. But even if you don’t, I hope you enjoy entering and discovering some other amazing UK bloggers!

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

If you enjoyed this post, please link to it on your own blog or social media:
Should You Keep Your Santander 123 Lite Account?

Should You Keep Your Santander 123 Lite Account?

2 Comments

In this post in May 2020 I revealed why I was switching my Santander 123 account to a 123 Lite account.

At that time they were cutting their interest rate from 1.5 to 1 percent and I calculated it was no longer worth paying the £5 a month fee. So I switched to a 123 Lite account costing just £1 a month.

Admittedly with this account you don’t receive any interest, but you do still get cashback on your direct debits at the same rates. I worked out that overall I would be almost £30 a year better off with a 123 Lite account (obviously the exact figure would depend on the direct debits you have)..

Since then Santander has cut the interest rate paid on a standard 123 account again, to just 0.6% from August 2020. That made the decision to switch even more clear-cut for me.

October 2020 Changes

Santander have just announced further changes to their fees and cashback rates. These will apply from 27 October 2020.

The main change is that the fee for a Santander 123 Lite account will be doubling from £1 to £2 a month. Cashback rates for direct debit payments will be changing as well. The main changes are as follows:

  • Water bill cashback will go up from one percent to three percent
  • Communications bill cashback (phones/broadband/TV packages) will be reduced from three percent to one percent.
  • Cashback paid on other household bills (such as gas, electricity, council tax, etc.) will remain unchanged.

The changes are detailed in the table below, which I have copied from the Santander website…

Santander 123 Lite cashback changes

Effect of the Changes

Below I have copied the list of monthly cashback payments from my post in May 2020. Obviously my finances are somewhat different now, but I thought it would be best to use this to provide a clear (and fair) comparison. At this time I still had an ordinary 123 account, so the screen capture below includes interest as well.

Cashback and Interest paid

By my calculation, the cashback due to me under the new regime would be as follows:

  • Water – £0.81 (up £0.54)
  • Gas and Electricity – £2.84 (unchanged)
  • Council Tax – £1.61 (unchanged)
  • Comms (mobile phone and broadband) – £0.37 (down £0.74)

Overall, then, my monthly cashback will fall from £5.83 to £5.63 in October 2020. That’s a drop of 20p a month – disappointing but not exactly devastating.

If you deduct the new £2 a month fee, overall I will be making 5.63 – 2.00 = £3.63 a month or £43.56 a year. On my average £1,800 balance, that works out as a notional interest rate of 2.4%. That may not sound a lot, but it is still far better than most other instant access accounts. Of course, rather than interest the account pays cashback, but in money terms the effect is the same.

  • As a matter of interest, if I were to reduce the average balance in my Santander account to £900 while still earning the same cashback, that would effectively double the rate of return I receive. Perversely, with the Santander Lite account, the lower the average balance you can keep while still servicing your direct debits, the better the percentage return on your capital you will get 🙂

Obviously the numbers are likely to work out differently for you. I do, though, highly recommend taking a few moments to complete a calculation such as the one above using your own cashback figures. Most people are likely to earn less cashback under the new regime, as their water bills (with cashback rising) are likely to be lower than the cost of their phone, internet and TV packages (cashback falling). As in my case, though, it may not make a huge difference overall.

What If You Still Have a Standard 123 Account?

The monthly fee for a regular Santander 123 account will remain at £5 and it will continue to pay 0.6 percent interest, up to a maximum of £20,000.

The cashback terms will change along with 123 Lite accounts, however, meaning most people will receive a bit less cashback after October 27 2020.

Using myself as an example again, if I still had a regular 123 account I would be receiving £5.63 cashback and £0.90 interest per month on my average £1,800 balance (with the 0.6% interest rate that applies from August). That’s a total of £6.53 a month. Subtract the £5 fee from this, and my net returns from the account would be £1.53 a month or £18.36 a year. That’s less than half what I would get with a 123 Lite account, and works out as a return on capital of marginally over 1.00%

Again, if you have a regular 123 account I recommend completing a calculation such as the one above to see if you would be better off with a 123 Lite account. Unless you have a very high average balance (in which case you should probably be investing some and/or putting some in an interest-paying savings account) the 123 Lite account will almost certainly win.

  • To cover the £60 a year charges alone at the current interest rate of 0.6%, you would need to keep an average balance of £10,000 in the account.

If you want to switch from a regular 123 account to 123 Lite, as I mentioned in my earlier article, it is a very simple process. Just log in to your account and select the option to ‘upgrade’. You will have to answer a few quick questions and click to confirm. In a short time – next day in my case – you should receive an email confirming you are now the proud owner of a Santander 123 Lite account. The account will still have the same sort code and account number and the same PIN number, and you will be able to log in via the app or website just as before.

Conclusion

It is clearly disappointing that Santander are doing this, though they say that rising costs have left them with little option.

But even after the October changes, I still find that having a Santander 123 Lite current account makes sense for me and will continue to do so. I may, however, try to reduce the average balance I keep in the account by moving some money to an alternative, interest-paying savings account.

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

If you enjoyed this post, please link to it on your own blog or social media:
«< 3 4 5 6 7 >»