Month: October 2020

stocks
MarketsStock Markets

7 Things People Get Terribly Wrong About Stocks and the Stock Market

stocks

7 Things People Get Terribly Wrong About Stocks and the Stock Market

To the perfect layman, stocks can seem intimidating. The market is so diverse, and financial news can seem like they’re in a completely different language. This also leads to people making their own misinformed opinions about the market. The sad part is that these beliefs are often fueled by a bias people have about business in general.

Some think it’s a scam. Others think that it’s impossible to make steady earnings, or that only big players do so. On the other end of the spectrum, you have those who look at historic figures for the Dow Jones and think that you can’t lose with the stock market and others that think that they can just listen to the news and make trades based on announcements and events. Both of these are wrong and being overly optimistic is just as bad as being overly skeptical. Let’s take a look at some of the things people get wrong about stocks and the stock market.

 

You can Never Lose with Stocks

This is probably one of the strangest myths about stocks. Some people think that they can just hold some stock and that it’ll always bounce back. These people think that selling is an automatic loss and that stocks are meant to be held forever.

What they don’t realize is that they may be losing money in more than one way when doing this. First, they may end up with stocks that are not bouncing back or becoming almost useless due to disruption in the industry or market conditions. But there’s another area where they may be losing and not realizing it.

Let’s say that you invest $2,000 on stock “A” while failing to invest in stock “B”. If the first stock goes from $20 to $15 you might want to hold on to it until it bounces back. And maybe it does and hovers at around the $22 mark. You’re feeling pretty good about yourself.

But what if I told you that stock “B” went from $15 to $30 during that same period? This is indeed a loss, and it’s referred to as an opportunity cost. This is the amount of money you’re losing for having your money tied up in stagnant or underperforming assets while being unable to capitalize on winners. This is why you need to be somewhat fluid and forget the notion that all stocks always bounce back. We have plenty of historical evidence to back that up also.

 

It’s Easy to Tell Winners and Losers Apart

One of the biggest myths about stock market investing is that you can easily tell a winning and losing company apart. But that’s simply not true. Two companies might look completely the same, even issue the same type of press releases, and have similar market valuations. But you can’t try to just judge market sentiment based on price movements. You have to dig deeper.

It is often when an industry is going through a rough period that you will truly be able to separate the two. You can expect to see consolidation, and this is when you might find out that a company is running low on reserves, or that it has really bad debt. This is the type of stuff you’ll need to start worrying about if you’re intending to play the long game. This will also help traders in addition to understanding chart patterns and using technical indicators to understand the truth behind those price fluctuations.

You have to come with the mindset that it’s hard to tell winners from losers. This will push you to do more research and not go based on a false sense of confidence thinking you’ve identified a pattern after seeing a sudden uptick in price.

 

You can Only Make Money when Stocks go Up

This is another myth, and people are often surprised when they learn that you can actually bet against a stock and still make money. This is called selling short, and one of the most important tactics you’ll need to learn when trading.

Selling short is when you agree to borrow stocks from a broker in the expectation that it will be lower at a later time. Let’s say that you decide to sell a few shares of Johnson & Johnson short. You agree to borrow 100 shares at $145. That’s a $14,500 investment. The stock then falls to around $130 3 weeks later. You then can pay back the 100 shares which now cost you $13,000. This means that you made a $1,500 profit minus commission.

While this can be a very powerful strategy, you also have to know that it can go both ways. What this means is that you could end up owing more money if the stock goes in the other direction. What this also means is that the stock market isn’t strictly about “buying low and selling high” as they say. You can make money in any direction the stock market is going.

 

Getting Started is Difficult and Demands a Lot of Money

A lot of people also have the idea that you can only invest in the stock exchange if you have tens of thousands of dollars, but it’s not entirely true. As a matter of fact, it’s possible to start with as little as $500 to $1,000, though some advocate that you start with at least $2,000.

It really depends on what sort of trading you were thinking of doing. If you fell in love with the idea of day trading, then you might be surprised to find out that you need to have at least $25,000 at all times in your account if you intend to do more than 4 trades per day over a 5 day period. However, there’s nothing that stops you from starting with a minimal investment if you intend to buy stocks and hold.

Getting started is also not as difficult as you think. It might seem daunting at first, but once you get a hold of the basics, you realize that the stock market is much simpler than you may think. If you want to get a solid foundation on how to buy stocks, we strongly recommend you check out WealthSimple. They have a piece where they run down how to pick a broker and trading platform and a few strategic tips as well. You’ll learn what you need to look at in a stock when to invest, and a few basic stock market terms.

 

You Gotta Go with Blue Chips

There is also this group that believes that blue chips are the only way to go. We’re not saying you should not invest in them. As a matter, they can be great.

They can be a good source of passive income through dividends, tend to hold their value during tough times, and are great stores of value. However, when market conditions bounce back, these stocks stay right in the middle.

While you want to always have a few blue chips in your portfolio, you also have to invest in stocks that have growth potential. Again, this is where you need to think about opportunity cost. By having all your capital on blue chips, you are missing opportunities on fast-growing stock when you could easily hedge your bets by diversifying.

 

You Should Hold You Money During a Crash

This is somewhat related to the point we made earlier about stocks making money in any direction. The worst times for traders are times of stability, believe or not.

A stock market that has a lot of movement in any direction is what they actually look for. This is where the real opportunities are, whether the market is going up or down. That’s why you have to always pay caution to the wind and not be afraid of major financial downturns. This doesn’t mean that money is lost, it is only changing hands.

This also means that you can also start looking at sectors and stocks that are moving in the other direction. Financial crashes are usually the manifestation of a much deeper problem, and that’s when you need to start looking at who’s providing the solutions.

 

Risky Stocks are Automatically Bad Stocks

It really depends on your strategy again. If your goal is to hold for the long term, then maybe you want to go with safe stocks with moderate potential for growth and loss. This also means that you’ll get moderate returns if any. Some people might prefer to invest based on value, while others prefer to bet on short term movement. Both are very valid strategies and might suit a different type of investor.

With risky stocks, there is so much potential. Yes, you could lose, but there are always ways to mitigate it. The greatest risk comes with greater rewards, so instead of focusing on whether a certain stock is too risky, look at short term price movement armed with the right knowledge and tools to make informed and calculated bets.

These are just some of the things people get wrong about stocks in general. Once you dispel those myths, you can start truly understanding what the stock market is all about and form a realistic idea of it.

ArticlesReal Estate

Homeless Heroes: 87% Of Public Sector Workers CAN’T Afford A Mortgage in the UK

Homeless Heroes: 87% Of Public Sector Workers CAN’T Afford A Mortgage in the UK

With our public sector workers going above and beyond the call of duty over the last six months, property and mortgage experts at OnlineMortgageAdvisor.co.uk wanted to find out if people working in public sector roles could afford a mortgage and where in the UK would be most feasible .

After looking at all average annual salaries for all public sector roles, along with property price averages across the UK, the results were astonishing.

 

London Mortgage Affordability

Across all eight chosen public sector professions (NHS GP Doctor, Firefighter, Police Officer, Social Worker, Secondary School Teacher, Primary School Teacher, NHS Nurse (Registered Nurse), and Military Soldier) none were able to afford a mortgage in London.

Even though the London weighting allowance was added to our front-line heroes, they were still unable to buy a London property.

However, the OnlineMortgageAdvisor team understood that mortgages are usually achieved with a second income. Finding the average London salary of £34,473, they used this to determine the potential for a joint mortgage and still it proved unattainable.

 

UK Mortgage Affordability

Based on their income alone an NHS GP was the only public sector profession that could afford a mortgage within the UK. With an average annual salary of £64,999, an NHS GP could afford to live in seven out of 11 regions in the U.K. such as the West Midlands, East Midlands, North West England, North East England, Wales, Scotland, and finally Yorkshire and The Humber.

Yet, the other seven key workers; Firefighters, Police Officers, Social Workers, Secondary School Teachers, Primary School Teachers, NHS Nurses (Registered Nurses), and Military Soldiers could not afford to live in any of the regions listed.

 

UK Mortgage Affordability with a Partner

The only way our front-line heroes could afford to have a mortgage is by living with a significant other. OnlineMortgageAdvisor took the average UK incomeearning of £29,600.

NHS GP Doctor

The take-home for a NHS GP and their partner would be an average of £94,599 making them the highest income earners for all eight selected public sector workers. Therefore a  NHS GP was able to afford mortgages across these nine regions: East of England, South West of England, West Midlands, East Midlands, North West of England, North East of England, Wales, Scotland, and Yorkshire and The Humber.

Firefighter

After extinguishing blazing fires and rescuing civilians from dangerous situations, our brave firefighters have a potential household earning of £61,308, leaving them able to buy within seven regions across the UK (West Midlands, East Midlands, North West of England, North East of England, Wales, Scotland, and Yorkshire and The Humber).

Police Officer

Keeping our streets safe police officers come in third place with a joint average potential income of £59,594, granting them properties in the West Midlands, East Midlands, North West of England, North East of England, Wales, Scotland, and Yorkshire and The Humber.

Social Worker

Social workers follow closely behind with an average household income of £59,437, permitting them properties in the West Midlands, East Midlands, North West of England, North East of England, Wales, Scotland, and Yorkshire and The Humber.

Secondary School Teacher

Secondary school teachers are the last public sector workers to afford seven regions in the UK, with a joint potential income of £59,244 on average, meaning they can afford properties in the West Midlands, East Midlands, North West of England, North East of England, Wales, Scotland, and Yorkshire and The Humber.

Primary School Teacher

Our early learning educators come in sixth place with a household earning of £56,244. They can subsequently afford a mortgage in the East Midlands, North West of England, North East of England, Wales, Scotland, and Yorkshire and The Humber.

NHS Nurse (Registered Nurse)

After braving the front-line over the past six months, our NHS nurses come second to last with an average household income of £54,706. The extra £4,706 allows NHS nurses to buy in one more region than our military soldiers (East Midlands, North West of England, North East of England, Wales, Scotland, and Yorkshire and The Humber).

Military Soldier

They may be protecting and keeping us safe, but our soldiers are unfortunately at the bottom of the mortgage affordability list with an average earning of £50,139 if applying with a partner, allowing soldiers to only afford properties in the North West of England, North East of England, Wales, Scotland, and Yorkshire and The Humber.

student budget
ArticlesCash Management

How to Manage Your Student Budget

student budget

How to Manage Your Student Budget

What’s the age-old adage? Take care of the pennies and the pounds look after themselves. Well, this is just as important at university as it is anywhere else. 

When at university, you will be operating on a smaller budget than if you’re out of education. A student loan will only last you so long, so see how you can manage your student budget at university. 

 

Save up your vouchers and look for student discounts

Vouchers come in handy more than you can think! While it’s unlikely that you’ll be saving up £2,000 in vouchers over a one year period, you could still find yourself saving a fair bit on quite a few items when you go shopping. 

Tesco have a Clubcard points system which can entitle you to various discounts and perks, so signing up for a Clubcard is a good way of saving money and a good way of being able to offset potential costs against your points.

Some companies offer various student discounts and will have a lot of vouchers geared towards helping students that need to save money. Music streaming services like Spotify, Apple Music and TIDAL all have student programmes that will save you money in the long run, all you need is proof of being a student. 

 

Use your NUS Card

Your student NUS Card exists to help you out on the high street. Many students find themselves in need of a good deal here and there and an NUS Card is a great way of doing that. 

An NUS Card is mainly used as a form of identification for students and is essential for far more than just finding good deals in Nando’s! An NUS Card is also used for students that are looking for student council tax exemption as well. 

While you will need to pay an initial fee of £13, it’s worth it in the long run! On those rare occasions, you and your friends decide to go out for a meal, you will see 20-25% wiped off your overall bill. 

 

Look into transport options

Student Railcards are the best way for students to get around. 

For a lot of students, travelling to and from university or to certain campuses or even visiting home can start to tot up for you and can have a very negative impact on your student budget, so the best thing to do is to pick up some kind of subsidised travel service.

For some students, this will mean taking advantage of a travel bursary that is offered by their university, for others it will be about taking advantage of things like the aforementioned student railcard. 

Some universities also have transport systems offered as part of their campus, whether it be a coach service, integrated bus services, train systems that run through the campus itself or even a monetary scheme to help out. You can check out university rankings and see which universities are ranked best in their areas for transport. 

 

Use your university’s gym

Most universities will have their own gym on campus, which will help you to keep in shape. It makes sense to use your university’s gym rather than use a more expensive high street option that will likely cost an awful lot of money. 

It is unlikely that you would be charged for using a university gym and on the off-chance you are charged, it is likely to cost less than a regular high street gym would cost. 

A university gym will also have the added benefit of having a wider array of equipment for you to use as they will likely receive more people at the gym than a regular gym would, who said you couldn’t get ripped when saving money?

 

Avoid the meal deal

We’ve all been there, a long day and you fancy something quick to eat, so you quickly pick up the Tesco meal deal and drop £3 on a sandwich, a packet of crisps and a drink. Though it can be helpful sometimes and a good way of keeping yourself well-fed and hydrated, the deals do add up!

Five days-a-week of meal deals leads to £15-a-week being spent on lunch alone, factored over the course of a month and you’ll see yourself spending a whopping £60 on lunch alone! 

With this in mind, we recommend picking up the ingredients you need for lunch and preparing your own meal at home. This will mean that you will have food left over for dinner or for later lunches and the ingredients together will cost less or about the same as a whole meal deal does, while offering more possibilities. 

gender and savings
ArticlesBankingCash Management

Britain’s Stark Gender Savings Gap: Women Have a Third Less Money Saved Than Men

gender and savings

Britain’s Stark Gender Savings Gap: Women Have a Third Less Money Saved Than Men

New research published today reveals a stark difference in the amount of money British men and women have in savings, exposing a 32% gender savings gap.

The consumer study, by leading discount site VoucherCodes.co.uk, reveals that the average man in Britain has £24,880 in savings – 32% more (£8,038) than the average British woman. The widest gender savings gap is found amongst millennials, with female respondents in that age group reporting 60% less in savings than their male counterparts – a whopping £15.9k. This is followed by Gen Z, with a 47% gender savings gap.

 

Average men’s savings

Average women’s savings

Gender savings gap (£)

Gender savings gap (%)

Millennials

£26,553

£10,633

£15,900

60%

Gen Z

£17,552

£9,343

£8,209

47%

Gen X

£18,000

£11,265

£6,735

37%

Brits

£24,880

£16,842

£8,038

32%

Baby boomers

£29,902

£29,064

£838

3%

 

Gender pay gap making an impact

With the latest government statistics revealing that there is currently a 17.3% gender pay gap in the UK[i], the research also looks at how this directly impacts women’s savings. Just 38% of British women said that their current wage is enough to allow them to save their goal amount each month, much fewer than the 51% of men in Britain who say the same. In addition to having the widest gender savings gap of any generation, millennials also report the largest disparity between the sexes when it comes to whether their wage allows them to save. Just 36% of millennial women say that they are able to put away the cash they want to each month, compared to 55% of men. On the other end of the scale, baby boomers have the smallest disparity of any generation, as 50% of women and 53% of men said that their earnings mean they are able to save their goal amount.

 

Savings depleted by COVID-19

Just over six months after lockdown was introduced in the UK, coronavirus has widened the gender savings gap even further. Whilst, overall, British men and women have reported a similar impact upon their finances, with 24% of men and 26% of women confirming the virus has had a dramatic negative effect on their savings, the true picture is somewhat bleaker. The study reveals that more women than men are relying on previous savings to cover essential costs during the pandemic, depleting their already smaller savings pot. A third of women (35%) admit to dipping into their savings over the last six months, compared to just 15% of men. This figure jumps to more than half for furloughed women (54%), again higher than men on the scheme (40%).

The impact is even more pronounced for furloughed workers. Two thirds of those on furlough (64%) said that the scheme and resulting pay cut has meant that they have not been able to contribute their desired savings each month. Yet again, the data suggests that furloughed women have seen the biggest hit to their financial security as a result of COVID. Over three quarters of women on the scheme (78%) have not been able to save as much money as pre-pandemic, contrasting just half of furloughed men (50%).

 

A brighter outlook?

Looking ahead to a pandemic-free future, the nation remains cautiously optimistic when it comes to predicting whether coronavirus will have a long-lasting impact on their savings. Over half (55%) of British women and 57% of British men think their savings will be able to recover in the long term. Earlier in their savings journey, Gen Z-ers predict a tougher time, with just 42% of women and 50% of men predicting that their savings will make a full recovery. Unsurprisingly, those most worried about the future are women who have been furloughed, with 77% admitting they are concerned that they will never be able to replenish lost savings.

 

Anita Naik, Lifestyle Editor at VoucherCodes.co.uk, comments: “This report is really eye opening, exposing how far we as a nation need to come to achieve financial equality. It’s especially concerning to see that young women and those who have been enrolled on the furlough scheme during COVID-19 have been most affected, as this represents such a large number of women in the UK.

“To help reduce the amount you rely on your savings, budgeting is the most effective way to ensure that all essential costs are covered. Citizens Advice offer a free and easy to use budgeting tool on their website that works for any budgeting needs. When shopping, make a habit to always check for deals that could shave valuable cash off your purchase. If you shop online a lot, install a handy browser extension such as DealFinder by VoucherCodes – a free Chrome extension that automatically finds the best discounts as you shop, so that you never miss out on a deal.“

property
ArticlesFundsReal Estate

Adding Value to Your Investment Property This Autumn

property

Adding Value to Your Investment Property This Autumn

Property investment can be a great way to provide a nest egg for you and your family or a method by which you can turn a quick profit with some relatively simple steps.

Property will always be bought and sold and whilst the market takes dips and dives, it generally puts itself right over time. If you can find the right property, the perfect blend of price and scope for improvement, you may want to make the investment.

The property market tends to be weighted with first-time buyers looking to get on the ladder and first-time buyers accounted for 51% of the United Kingdom’s buying market last year. Those buyers are usually looking for a home that needs little work; meaning investors with means to turn a low-cost property into the buyer-friendly finished article can make a handsome profit.

So which areas should you be focusing on if you are an investor? We have picked several key elements in which a little investment goes a long way.

 

Bathroom and Kitchen

Of course, the bathroom and kitchen are two elements you can make an investment in to increase the value of a property. Ideal Home Magazine suggests you can add as much as 5% on to the existing property price with a new bathroom, although that may be a smaller increase with a first-time buyer property. The important consideration you have to make is balancing design against cost – it is easy to let your creativity run wild when installing a new kitchen for example, but remember to remain functional, at the lower end of the price spectrum and not get too ambitious. At the end of the day, you need to find the right balance between a striking new kitchen and cost-effectiveness.

Heating

The kitchen and bathroom have a ‘wow’ factor, something that might impress a buyer as they enter the property. A far less visually appealing element to think about is the heating system, and in particular, the boiler. It is likely that a first-time buyer has stretched themselves in terms of deposit and will not want hidden costs or work that needs carrying out immediately, so a new boiler might add peace of mind, and a little more value to your investment.

The benefits are not just short-term stability for the buyer. In HomeServe’s guide to installing a new boiler, they point out that you can improve a home’s energy efficiency with a fresh appliance, even if the old one has not broken down. That is another key selling point, as bills will be lower for the potential buyer, another aspect you can use to move your property quickly.

 

Garden

If your investment property has a garden, consider giving it a bit of a makeover. When you sell a house, you sell a dream, especially to those first-time buyers. If the garden is overgrown and needing attention, it could cost you thousands of pounds, according to the Express, by giving the buyer the mindset that there is room for negotiation. For little cost, you can tidy up the outdoor space and make it attractive. When buyers look around homes, they picture themselves living there and a nice garden will conjure up images of balmy summer evenings with a barbeque on. That will not be the case if the grass is long and the furniture grotty and crumbling.

 

Install a New Front Door

Selling a house is all about first impressions, and so is retaining the price point you have set. If a potential buyer turns up at the kerb to find a shabby front door with peeling paint, it sets the wrong tone for the rest of the viewing.

By putting in a new front door, or even just refreshing the old one, you make the house look fresh and new from the outside, setting the scene for the rest of the viewing. A striking colour can also help lodge your property in the mind of the buyer, especially if they have seen several properties in one day. Also, if the area you invest in has some level of crime, installing a secure front door with a new locking system might give buyers some peace of mind.

deliveroo
ArticlesMarkets

How Much Is the Online Food Industry Worth?

deliveroo

How Much Is the Online Food Industry Worth?

If you’ve ordered your groceries or takeout online this year, you’ve contributed to the massive wealth of the online food industry. Currently, the global online market is worth $111.32 billion, and the industry is only growing. Food delivery services are expanding, and more grocery stores offer online ordering now than ever before. From caviar to beer, you can satisfy even the wildest cravings with the touch of a button. 

What exactly led to this surge in net worth, and how will the events of 2020 affect the industry in the coming years?

 

A Brief History

Food delivery is nothing new. The first pizza delivery occurred way back in 1889 in Naples, Italy. Then, in World War II, chefs and volunteers delivered meals to citizens seeking cover from bomb threats. In the 1950s, soldiers returning from war popularized pizza delivery in the States and, 10 years later, food trucks entered the scene. 

However, online ordering didn’t make its debut until the early 2000s when GrubHub and major pizza chains began creating mobile applications. By 2015, online ordering began to overtake mobile ordering and, two years later, DoorDash university startups began implementing robot delivery. Meal kit delivery services like Blue Apron also launched during this time. 

 

A Growing Industry 

Since then, online ordering has become commonplace. Now, amid a global pandemic, food delivery is enjoying a major moment in the spotlight. 

To avoid the grocery store — and the subsequent risk of contracting the coronavirus — millions of people are ordering their groceries online. During March, 31% of U.S. households used online grocery ordering, with 10.3 million of them using this service for the first time. Thus, this relatively new form of online ordering is becoming a major contributor to the wealth of the online food industry. 

Digital foodservice orders are also experiencing a boom as many restaurants had to close their doors to dine-in customers during the pandemic. In May, these online orders increased by 138%, and now, new users represent nearly half of third-party food delivery apps. Of course, the global economic slowdown has slowed the overall growth rate of the online food industry. However, it will likely experience a major rebound next year. 

 

The Future of Online Food

According to surveys, 43% of individuals using online grocery services are very likely to continue doing so. Moreover, 30% of households who didn’t use these services in March would likely try it over the next few months. Likewise, experts expect those who tried online food delivery during the pandemic to continue using mobile applications and online ordering even after restaurants re-open. 

Still, more than 50% of Americans are cooking at home more than they were before the pandemic. Thus, restaurants will have to continue diversifying their services to offer DIY meal kits and experimental food bundles if they want to attract these newfound chefs. If more businesses rise to the challenge, the online food industry will likely expand and exceed even the most optimistic future predictions.

FinanceWealth Management

World Mental Health Day: Does More Money Correlate With More Happiness?

World Mental Health Day: Does More Money Correlate With More Happiness?

It’s an age-old question, does money really bring happiness? While many joys can’t purchased, money can give access to things that can lead to happiness.

Many of us strive to do better in our careers to obtain a higher salary, which we assume will lead to a more comfortable lifestyle – but do higher salaries actually equal happiness?

We firstly mined and then cross-matched ONS data from Average Weekly Earnings by Industry and National Well-being to understand if there were correlations between income and happiness. The infographic showing the results can be seen below:

info

Industries with Correlations Between Average Weekly Salary and Happiness

Happiness was calculated by asking adults aged 16 and over to rate on a scale of 0 to 10 where 0 was not at all and 10 was completely happy, how happy they were feeling.

The top-scoring industries with high correlations between happiness and average weekly earnings were as follows:

  1. Retail Trade and Repairs – 92.01%
  2. Accommodation and Food Service Activities – 88.91%
  3. Education – 88.59%
  4. Administrative and Support Service Activities – 87.4%
  5. Manufacturing – Engineering and Allied Industries – 86.3%

These industries showed strong correlations between earnings and happiness. This means that as earnings increase, happiness tends to as well.

The industries with the lowest correlations were:

  1. Mining and Quarrying – 22.15%
  2. Professional, Scientific & Technical Activities – 26.18%
  3. Manufacturing – Chemicals and Man-made Fibres – 33.22%
  4. Real Estate Activities – 33.68%
  5. Financial & Insurance Activities – 34.30%

While specific data as to why this happiness was so low or high was not provided, we can speculate. Many careers, such as mining and quarrying, can be highly stressful and demanding roles. Although these industries can often pay a decent salary, the satisfaction levels may not increase due to this as the intensity of these roles can often lead to strain regardless of the weekly earnings. The impact on the health of an individual working in mining and quarrying would be a good example of this.

This does not imply that industries with the highest correlations are not stressful roles, rather any unhappiness can be lessened with the benefit of a higher salary. Overall, skill, trade and administrative based jobs see higher correlations with happiness and weekly salaries.

Industries with Correlations Between Average Weekly Earnings and Anxiety

Anxiety was scored in the same way to happiness, by asking adults aged 16 and over to rate on a scale of 0 to 10 where 0 was not at all and 10 was completely anxious, how anxious they were feeling

The top-scoring industries with a correlation between anxiety and average weekly earnings were as follows:

  1. Retail Trade and Repairs – 74.52%
  2. Manufacturing-Other – 72.07%
  3. Manufacturing – Engineering and Allied Industries – 70.67%
  4. Education – 68.51%
  5. Accommodation and Food Service Activities – 68.04%

Although these are not as strong as the 80%+ correlations that are shown against happiness and average weekly earnings, there is still something to be taken from these results.

Happiness is strongest with average weekly earnings in retail and trade repairs, but this is also the highest correlation with anxiety. Most of the industries that reflect happiness, also reflect more anxiety.

Anxiety is not to be mistaken with unhappiness and you can have both alongside each other. We can hypothesise from these results that as wages increase, job responsibility increases and can cause more anxiety in the role.

Interestingly, health and social work scored the lowest correlation with anxiety at 53.40%. This industry is infamous for having high stress and anxiety levels but these results may show that anxiety does not increase with weekly wages.

 

Those That Reported as Living Comfortably or Completely Satisfied with Income Reported Higher Levels of Anxiety.

Respondent income was scored on the same scoring system as happiness (so is subjective to how happy they are about their level of income instead of actual income which is scored objectively in ‘average weekly earnings’) and was broken up into:

  • Completely satisfied
  • Mostly satisfied
  • Somewhat satisfied
  • Neither satisfied nor dissatisfied
  • Somewhat dissatisfied
  • Mostly dissatisfied
  • Completely dissatisfied

Managing financially also followed the same scoring system and was broken up into:

  • Living comfortably
  • Doing alright
  • Just about getting by
  • Finding it quite difficult
  • Finding it very difficult

Those who ranked themselves as ‘completely satisfied’ with their income showed a correlation with higher levels of anxiety at 65.68%.

Those who reported as ‘living comfortably’ reported an 89.97% correlation with anxiety.

With this, we can see that the higher the earnings, most likely from roles with higher responsibility and stress levels, the higher the anxiety.

Again, this does not correlate with happiness but we can conclude that for 65-80% of those who live comfortably or are completely satisfied with their income, the higher their levels of anxiety.

 

Correlation Between Bonuses and Happiness

Many companies throughout the UK provide bonuses to boost staff productivity and morale, however, it appears these bonuses may not be providing increasing feelings of happiness.

When workers were surveyed regarding if bonuses correlated with happiness, the correlation percentages were small and relatively inconclusive.

The industry with the highest correlation between bonuses and happiness was the construction industry, despite being the top scorer, showed at only 41%.

This could be interpreted in a few ways. Perhaps the bonus sums are not high enough to justify a change in attitude or income satisfaction may be high enough that some extra will not bring elation.

It could also be that performance-based bonuses can cause more stress in the workplace as employees push themselves to meet targets to achieve these. The outcome may not justify the means.

 

Income Satisfaction and Happiness

You may be forgiven in believing industries who previously reported a correlation between higher weekly and happiness would also report a high correlation with satisfaction with income and happiness.

Higher earnings do not necessarily equal income satisfaction. Those on more modest incomes can still report higher levels of income satisfaction and happiness.

The industries that had the largest correlations between income satisfaction and happiness are:

  1. Retail Trade and Repairs – 87.81%
  2. Administrative and Support Service Activities – 87.74%
  3. Education – 85.71%
  4. Accommodation and Food Service Service Activities – 84.87%
  5. Health and Social Work – 81.98%

The industries that had the lowest correlations between income satisfaction and happiness are:

  1. Mining and Quarrying – 9.28%
  2. Professional, Scientific & Technical Activities – 24.15%
  3. Manufacturing – Chemicals and Man-made Fibres – 29.18%
  4. Financial & Insurance Activities – 29.46%
  5. Real Estate Activities – 29.95%

Changes in income have very little correlation on happiness for mining and quarrying, likely because of the perceived poorer working conditions that remain regardless of income changes and the impact on the health of the worker.

Overall, retail trade and repairs show to have the highest correlations between income satisfaction and average weekly earnings, as well as income satisfaction and happiness but also showed high correlations with anxiety.

We can conclude from this, money can equal happiness but only in certain industries, as long as we are also willing to take on higher levels of anxiety.

savings and investment
ArticlesCash ManagementWealth Management

Spending and Investments Top List of Life’s Most Difficult Decisions

savings and investment

Spending and Investments Top List of Life’s Most Difficult Decisions

New research has revealed the nation’s hardest decisions, with financial quandaries and how to invest your money topping the list of the most difficult decisions that Brits struggle to make.

The study, commissioned by Barclays Plan & Invest in partnership with researchers at UCL, set out to explore the challenges faced when making decisions – from the every-day choices of what to wear or eat, to the more important, longer-term decisions.

The extensive research revealed that financial concerns consistently rank top of the list when it comes to the hardest decisions, including choosing where to buy a house (32 per cent), how to invest your money (25 per cent) and how to spend your hard earned savings (25 per cent). The only non-financial decision to make the top five was choosing a partner, with nearly one quarter struggling to make up their minds when picking their other half.

 

The top 5 toughest decisions Brits face:
  1. Where to buy a house
  2. Whether or not to change jobs
  3. How to invest your money
  4. Choosing to spend some of your savings for a major purchase (house, car etc)
  5. Choosing a partner

Dr Bastien Blain, Research Associate at UCL, who co-authored the study, comments: “Our research has revealed that we are consistently bombarded with choice, often creating a sense of decision fatigue. This cognitive fatigue makes us more impulsive and therefore prone to choosing small, immediate rewards over larger, delayed ones. This may well explain why financial decisions are consistently ranked the hardest, as they require the most attention.” 

 

Nature or nurture?

The research also revealed a gender-divide when it comes to decision making. According to the study, women appear to be better decision makers when it comes to monetary matters, as nearly one third of men struggle to decide how to invest their money compared to just 21 per cent of women. This might be down to the power of female intuition, as the majority of women (43 per cent) reported that they base their decisions on gut instinct.

These findings are somewhat surprising, as women are often considered to be less confident when it comes to investing, with men taking up the lion’s share of the investment market. However, it does at least align with a historical difference in stocks and shares performance, with the average women’s investment portfolio on the Barclays Smart Investor platform beating that of their male counterparts over a three year period (April 2012-June 2016)*. The annual return on investments for men was, on average, a marginal 0.14 per cent above the performance of the FTSE 100, while for women it was 1.94 per cent higher.

 

Relieving the pressure

With one in four Brits struggling to make investment decisions, these findings highlight the need to give people the right tools and advice to plan for their financial future.

Plan & Invest, a new digital advice service from Barclays, has been designed to support people who don’t have the confidence or time to invest on their own. Customers will complete an in-depth questionnaire on their goals, timeline and risk appetite and Barclays will then use the latest technology to combine these findings with their expert team’s pick of investments, to create a personalised plan that can follow over 10,000 potential investment paths.

Robert Smith, Head of Behavioural Finance at Barclays Wealth Management and Investments, offers some insight into the research findings: “It comes as no surprise that financial, and particularly investment, decisions rank so highly as some of life’s tougher choices. It’s easy to be overwhelmed by the sheer number of investments on offer or be put off by the amount of  jargon – particularly if you’re new to investing. When deciding where to invest, some may instinctively choose to invest in the market closest to them, or may be swayed by what is trending in the news. However, creating a diversified portfolio, focused on an individual’s personal goals and attitudes is the most advisable strategy when investing.

“But for those who don’t have the confidence to make their own investment decisions, it’s worth considering a digital advice service, such as Barclays Plan & Invest, where you can get experts to create a personalised investment plan and make all of the difficult investment decisions on your behalf.”

ArticlesCash Management

Are You Financially Prepared For A Baby?

Are You Financially Prepared For A Baby?

Any parent will tell you that the moment you hold your little one in your arms, your priorities change. Having a baby is one of life’s most beautiful and joyous occasions, but it is also one of the most life-changing events with a substantial price-tag attached. Research shows that your little bundle of joy will cost, on average, £231,843 – a frightening figure for many soon-to-be parents. And with the spiralling costs of childcare and education, this figure is expected to rise.

Life with a newborn is a world away from a child-free life. The first month alone can put a strain on your finances; from nappies and clothing to feeding equipment, toys and furniture. Many parents say that they weren’t prepared for the initial costs, and when paired with tiredness and fatigue, this can put a lot of pressure on the relationships around you. That’s why it is important to budget well and manage your assets before the pitter-patter of tiny feet.

 

Take Control

To help ease this financial pressure, you should consider setting up a regular bank account with easy access to savings as soon as possible. We recommend choosing an account with no minimum balance to give you maximum control and flexibility over your finances. It is also a good idea to choose an account with the ability to set up standing orders and direct debits, so you can manage your money well without the fear ‘baby brain’ forcing you to forget a payment.

And while your baby may be a long way off adulthood, it’s always good to plan for the future. As such, you should consider setting up a trust fund once your baby arrives. This legal arrangement will ensure your assets are held safely for the beneficiary until they are of an age to manage their money responsibly. A trust fund can be of great support to your child; it can help ease the burden of university fees or help them get on the housing ladder when the time comes.

 

Make a Will

We recommend making a Will as soon as possible after your baby is born. Not only does this ensure that your assets are passed down to your offspring, but more importantly, a valid Will means you have full control over who cares for your child (if they are below the age of 18) in the event of your passing. It also allows you to decide who should look after your child’s inheritance until they are old enough to manage their money themselves.

It is also possible to make a Will even before your baby is born. Without knowing their name, you can leave your estate to your child. And if you have more than one, you can stipulate that you divide your estate equally between children.

At Turner Little, we have years of experience in delivering professional and specialist advice to those who need it most. We work closely with you to put a bespoke plan in place so you can to manage your money well. This includes helping you to financially prepare for your baby’s arrival, as well as managing your child’s finances as they grow, giving them the best possible start in life. To find out more about how we can help you prepare for the future, get in touch with us today.

budgeting
Private BankingWealth Management

7 Expert Budgeting Hacks From A Wealth Consultant

budgeting

7 Expert Budgeting Hacks From A Wealth Consultant

COVID restrictions have had a significant impact on people’s ability to work and earn a living, with millions of workers having been furloughed or, even worse, losing their jobs. Many people have had to adapt their way of living now that finances are under considerable strain. We all need to do more to tighten our belts by introducing what might seem small, cost-saving measures on their own, but as a collective, they go a long way and make a significant impact.

Lucky for us, The Wealth Consultant expert, Alex MacEwen provides us with his 7 budgeting hacks that work for all budget types.

 

1. Make a budget personal to each month

Understanding your monthly budget can help you gain control over your money. It allows you to prioritise your spending, track your goals, and help you realise when you need to stop spending. Owning your expenditure and knowing how much you have available to spend each month, can make planning more realistic. If you keep this in mind, finances in January won’t be so stretched. Following your budget means having planned expenses in the festive season with the appropriate allowances. The same should be applied for the summer holiday season.

 

2. Manage housing costs

One of the most significant expenses for people is housing. If you’re a homeowner, your mortgage might be your greatest fixed expense. Although the base rate of interest is at an all-time low, it’s worth keeping an eye on the latest re-mortgage deals and interest rates. You can save thousands of pounds over the life of your mortgage by shopping around.

If you’re renting, now might be the time to downsize, resize or move to another area. According to the Association of Residential Letting Agents (ARLA), landlords are dramatically reducing the rent on larger properties to secure long-term tenants to weather the drop in demand from overseas corporate clients. It costs nothing to enquire, and you might be surprised at what you can negotiate on if you are prepared to take a two or three-year contract.

 

3. Change eating habits

We all need a little downtime, but if you’re watching your expenditure, you should consider dining in. Eating at home means precisely that, but it doesn’t mean you can’t go out for a pre-dinner drink.

There’s no doubt it’s cheaper to cook and eat at home, but sometimes the planning and budgeting can take the pleasure out of eating. Create a meal plan. There are apps available to download that make light work of budgeting, so you can decide what you want to eat and shop accordingly. Many supermarkets are offering deals, discounts when buying in bulk, and many have offers on luxury products designed to increase sales at the weekends. Remember these deals do not save money if you end up throwing the food away. Invest in a freezer alongside creating your meal plan, so you can reap the rewards in the long term.

 

4. Reduce your utility bills

Our utility bills are an area of your budget that you probably overlook, often because it’s too time-consuming or difficult to swap companies if you want to change. Ofgem, the government regulator for gas and electricity, has detailed information on how to switch energy suppliers and shop for a better deal. And while you’re shopping around, it’s worth bearing in mind that it’s not always the well-known utility providers who offer the best deals, so consider using internet-based providers as well as the classics. Price comparison websites are paid to represent the companies that appear on their sites – but the discounts they offer are genuine. They still do not take account of independent utility providers or brokers, so shopping around is a wise financial move.

To help things along during winter, keep an eye on heating bills. Most utility providers will install a smart meter for free when you enter an 18-month contract with them. The smart meter has a separate display unit that shows you how much money has been spent over an hour or day, enabling you to keep track of costs.

 

5. Seek advice from a professional

If in doubt, call in the professionals. Our free of charge digital introduction service is the perfect opportunity for you to review your current money situation and make goals towards achieving future wealth.

 

6. Look into an automatic savings plan

An automatic saving plan is a stress-free way to save money. Once you have worked out a budget to suit your lifestyle, set up a standing order into a savings account or consider a bond or fixed-term savings plan. The automatic element of doing this eliminates the temptation to overspend on items you don’t need, and you will be surprised at how effortless saving can be.

 

7. Include your debt obligations in your budget

Alongside your budget, make a list of your debts and continuously refer to it, especially as you pay your bills. Listing your debt obligations helps you to understand where you stand financially and gives you the chance to create a strategy to maintain your lifestyle. Just knowing the facts is a step to creating long-lasting wealth.