The state of the nation.

Do you remember the audi advert that talked about spending twenty million dollars developing the new A4 (I think it was that one, and wait to be corrected)?  The punchline was

“that was when twenty million dollars was a lot of money”…

I loved it.

Unfortunately, that’s why we’re going to need a period of high inflation, it’s the only way to make the recent expenses seem manageable.

As Tom Dobell said recently, “[we need to] inflate [the debt] away”.

So, I’ll be taking inflation really seriously.

Uncategorized credit crunch, inflation

Last week, my new company start-up was covered in the local press.  It’s very exciting to see that the journalist understood what I’m trying to build and she expressed it really well in her article.  Thanks are due to Eddie Mair, John Humphries and John Prescott for years of training me how to answer questions in a telephone interview.

Also, Parsonage was advertised in print for the first time last week.  A huge “THANK YOU” to Dave Lee at Blue Icon Productions, and Claire Shiels Marketing for their efforts.

I shall now attempt to attach Lymm Life magazine and the advert to this post.

(drum roll, please)

Here’s the magazine

News Equity Release, Lymm Life, Tin Box Service

I’m starting this as a new category…not as much detail as a case study, just an insight into what I do every day. Today I’ve been doing mostly research for cases I’m working on…

Adam and Anita (*) are old enough to be retired, even though they’re not retired. They’ve got a business that’s struggling, they need some money to get through this recession and a few other things. They’ve come to me because they’ve worked out that raising some money on their family home is the best solution.

They don’t want to pay any interest, so that means a “lifetime mortgage” will fit the bill. Obviously, there’s a lot I’ve not included here because it’s boring, but it does rule out the less drastic solutions (like, a normal mortgage/business loan etc).

The trouble is that surveyors are tending to lop at least ten percent off the value of any property they see, which will give us a problem if that happens to Adam and Anita.

I’ve been tearing my hair out trying to get them a good rate, even though they want quite a lot of cash. It would be easy to get them an expensive deal, but they’ll pay for the rest of their lives, so a bit of extra time now is worth it.

I’ve found a bit of a work-around. One provider currently has a “free valuation” so, we get to try before we buy. If the surveyor goes crazy with the valuation, we can walk away. Hopefully, the credit imprint won’t cause too much of a problem.

That’s 239 words and it’s taken me half my day!

Bob and Belinda (*) are fed up with the investments they took out in 2006.

Now, there is at least one reason why most people would be slightly unhappy at this stage (FT-SE etc is down a bit, in case you just landed from Mars), but Bob and Belinda have another reason for unhappiness: Monitoring the investments is proving as much fun as … well, as much fun as trying to correspond with an insurance company.

They’ve been doing it themselves, you see.

They have worked out that what they have isn’t coping very well and I offered them a plan to improve things. It was simple, a combination of four lovely funds (no, I won’t name them here) but then spent hours trying to find one investment product that will fit them all in it.

To be fair, my wish list was to combine some rather famous flagship funds AND demand that the investment product I use can provide a regular income for them at a later stage AND demand that they can pay into the investment regularly AND that the product can manage the tax-free status of the …. oh, you get the picture.

Anyway, I’ve got a solution. I hope they like it, I’m seeing them tomorrow.

Please do comment on this, but do resist any temptation to criticise people’s objectives.

(*) Not their names!

Equity Release, Lifetime Mortgage, What's on my desk right now Adam ;, Anita;, Belinda;, Bob ;, insurance;, investment product;, less drastic solutions;

Yep I have finally gone and done it and set up my own business called Parsonage. check it out

You can also find us on Google Business

News New company, Parsonage, Parsonage-Group

Hi, welcome to today’s post.  These tips aren’t “rocket science”. But they do work.

One

If you don’t have surplus income, you really need to work hard – because you might suffer even more than most if your income suddenly stopped or reduced a lot.

Try to shave a little off all your spending, buy a brand or two down, cut back anywhere you can…pretend your income has already stopped.  It will work.  All that effort will create a small surplus…

Two

If you have a surplus at the end of the month, first use it to reduce your debts.

Three

Store cards and credit cards are usually the most expensive, if so – start with those.  Loans and finance agreements often don’t accommodate being paid off in small chunks, request a “settlement figure” from them, so that you know exactly how much you owe.

Then, target them – one at a time – to pay them off.

Four

BUT! Think carefully before you use your only emergency fund to reduce a mortgage.  That could leave you with no emergency money, and a lender unwilling to lend it back to you!

Five

I haven’t mentioned getting a cheaper mortgage?

It can still work, if you owe a fairly small percentage of what your house is worth now, if your mortgage is less than roughly four times your income and if you have few “other” debts.  There are still mortgage deals to be done for you (watch the fees!).

But – for many mortals, the “fairly small percentage” might be tricky. 
If your house value has dropped by 10%, that means that the 75% of the value that you owed this time last year, is now 85% (alright, 83.3%).

Six

Set aside an evening or an afternoon to have a look at your spending on gas/electric/phones/internet.

Try the Money Saving Expert website for some extensive guidance about those.

Seven

Look at your outgoings, and decide what would have to be paid, even if your income stopped.  See what that adds up to each month.

Use your monthly surplus to aim for at least three months worth of those essential spends, ideally six months or more.

Eight

Once you’ve done all that, perhaps the time is right to spend some money, even while you stick with the economy drive (and the cheap tea bags!).

Remember that you’re commissioning building work, or getting some training, or a new car, house, TV, at a time when your suppliers are likely to welcome the work.  You may be well looked after, and you may strike a better deal than doing any of those things when the economy is booming.

I think that this is a good objective to bear in mind during the recession, but only after you’ve cleared debts and made provision for emergencies.

Nine

Think about the risks of your job during the recession.  Can you do anything about those risks?.

Ten

Think about your work goals, too.  Many people work without a plan.  Even if you do have a plan, make sure it’s your work plan, not your employer’s.

Sure you have to do theirs, too, but now IS a good time to think about what you want from your work, even if you can ONLY plan at the moment.

Also, if you lose your job, it will help you to have thought about what you want beforehand.

Building Wealth budgeting, credit crunch, finance agreements;, financial healthcheck, gas/electric/phones/internet;, money saving, recession, TV;

I like this.  I hope you do too.

http://www.economist.com/printedition/displayStory.cfm?Story_ID=12798307

Merry Christmas from State of the Nation

Building Wealth Christmas;

Here’s an example of why you should not take the first offer when you draw your pension.

Names have been changed to protect the innocent.

Mr A decided to draw his pension.  Read more…

Case Studies annuity, open market option, retire, retirement

As I take the plunge myself, and become an un-shackled financial planner (I mean starting up in business), I’ve been wondering…What it is about financial advisers that makes us all think we can do better than what the already cluttered market place has to offer?

Just imagine if this was common in all jobs? Teachers leaving their schools to set up new schools, new refuse collection services springing up everywhere as the binmen (forgive me if that’s un p.c.) all leave their yellow trucks. Read more…

Getting Good Financial Advice advice, commission, impartial, proposition

You might have noticed a bit of a drop-off in share values lately?

If you’ve got a pension, it’s probably worth less than it was a year ago.  So why bother paying any more in? Or, if you’re young enough, why bother starting one?

Forget, for a minute, that “pensions” usually seem to be over-priced contracts, of more benefit to the pension provider than to you.

For example, consider the sentence Read more…

Building Wealth pension, property, retirement, savings