Month: March 2021

Tech company investment
ArticlesInfrastructure and Project FinanceMarkets

Why Investment in Small UK Technology Companies Could Provide Sustainable Returns

Tech company investment

By Andrew Aldridge, Partner at Deepbridge Capital

The UK is widely regarded as one of the greatest places to start an innovative tech company. This shouldn’t come as any surprise given the world-class academia we have to offer, the legacy of innovation and, importantly, the funding opportunities available to entrepreneurs. Of course, we also have a language advantage for global businesses which shouldn’t be underestimated.

There can be a temptation to look to the USA and the glamour of Silicon Valley, and indeed this may be where some companies ultimately end up in order to achieve their ‘Unicorn goals,’ but that doesn’t tell the whole story.

At Deepbridge Capital, we are fortunate to work internationally and all of the aforementioned points are regularly raised as reasons for growth-focused tech companies wanting to be involved in the UK ecosystem, as well as the other sector-focused appeals of the UK.

For example, for medtech companies, the rubber stamp of having the globally-recognised NHS trialing or adopting a device can be of massive significance. Such a testimony opens doors with healthcare providers elsewhere and the scalability that offers.

To a similar degree, fintech can find a natural home in the UK, as a global financial hub, with initiatives such as the FCA Sandbox providing a test bed which can empower fintech innovators to prove concept and showcase innovation.

I could continue by looking at legal tech, biotech, agritech and many more. Indeed, the UK has developed a number of ‘hubs’ across the country to provide opportunities for collaboration and innovation in specific fields of tech. Often these hubs are associated with academia and other influential partners. Outside of the ‘golden triangle’ of London, Oxford and Cambridge, examples of such hubs, include Liverpool as a gaming and virtual reality hub (indeed our investee company vTime is at the forefront of this); Manchester as a digital hub but also the home of graphene (again, we have helped a great company in this sector, Flex-G, create a Manchester base); Edinburgh and Bristol as digital innovation hubs, and numerous less well known areas such as west Wales (working with the likes of the University of Aberystwyth) focussing on agritech.

Naturally, our excitement in all of this is centred on the investment opportunity. As highlighted earlier, the funding ecosystem in the UK is a big reason for the success of tech companies here. This is particularly true in what is often the most difficult funding stage, being the first commercialisation funding or early Series A funding.

The first funding a company received is usually self-funding, or the attraction of funding from friends, family or a supportive business angel. This is usually based on a ‘good idea’ and goodwill towards the founder. This funding tends to be relatively small ticket and, in reality, is an investment ‘punt.’

When you then get to later funding rounds, later Series A and Series B, tech companies are usually expected to have significant recurring revenues and there is no shortage of funding opportunities both here in the UK and elsewhere.

In both of these examples, the UK has a strong track record of funding, but where the UK really excels is at the stage ranging from ‘seed’ funding to early Series A. At this point, a tech company is likely to be beyond the cheque-size which can be offered purely on goodwill, but is unlikely to have the revenues to support interest from the VC, PE and institutional funds looking for a de-risked opportunity.

Historically, this funding gap has been described as the ‘chasm of death,’ as it is often where a company will choke due to lack of funding. However, this is an area where the UK has a significant competitive advantage on international peers; the Enterprise Investment Scheme.

The Enterprise Investment Scheme (EIS) provides the incentive to investors to support growth-focused companies through unparalleled potential tax reliefs. Over recent years, between £1.5bn and £2bn of funding each year has been availed to growth-focused companies under EIS. Founders and investors globally regularly remind us of their jealousy of the UK in this regard – it is important that UK investors and financial advisers are aware of this global envy and the fortunate position they are in.

The tax reliefs offered under EIS provide a degree of risk mitigation for investors, with early-stage investments naturally being high risk, but it is critical that investing at this stage is undertaken with due care and in conjunction with a sector-experienced investment manager.

This stage of investing has great growth opportunities and taking a company from proof of concept through to a significant annual rate of return, can be a significant value inflection journey. At this point of investing, we are looking for companies which have used their initial funding to prove concept and develop initial market traction, with our funding then empowering the commercial growth to subsequently attract large-scale co-funding for corporate growth and then an exit for investors.

There has never been more technology innovation around us and in a digital world it is natural that this is where investment opportunities will lie. If investors are looking for growth, then UK tech is a great place to be and arguably the growth point is exactly where EIS funding is applicable.

We have already seen the shift of tech companies becoming the world’s largest, so it is not a surprise that tech is at the heart of most investment portfolios. However, the long-term growth opportunities often lie at an earlier stage and the UK is a great place to empower this, thanks in part to EIS. And, why wouldn’t investors want tax reliefs, CGT free growth and potential loss relief?

Cryptocurrency
ArticlesCommoditiesMarketsStock Markets

How To Get Your Hands On Cryptocurrency

Cryptocurrency

All you have to do is check out the news to realise that cryptocurrency is growing in popularity. As it continues its ascent, it’ll only become more and more in demand, meaning that those who want to get their hands on it may face an increasingly uphill battle.

Fortunately, you don’t have to fight anyone off to get yourself involved with the cryptocurrency market. There are tons of ways to jump into the market and make your mark with something like Bitcoin or Ethereum.

For a list of the best avenues to explore, you’ll want to check out the five suggestions outlined below.

 

Buying

The first thing you might think to do when trying to get hold of cryptocurrency is to buy it. However, how good of an idea this is generally depends on what a currency is worth at the time.

It’s not uncommon for them to be incredibly expensive nowadays, especially when talking about Bitcoin. Given the growing presence of cryptocurrency, the prices keep reaching new heights, which isn’t ideal for someone looking to get involved with this for the first time.

If you are going to buy, you’ll probably want to start by getting cheaper currencies through a crypto exchange. Anything that’s not Bitcoin ought to be relatively easy to acquire, although depending on the exchange service you use, it might take a few weeks for the purchase to be verified.

 

Airdrops

As cryptocurrency continues to amass interest, more and more projects are surfacing that expand and enhance the market. Getting involved with these projects in the early days is an excellent way for you to start building up your online wallet, as you earn tokens for doing some of the simplest tasks.

Merely downloading an app or following certain social media accounts can net you this reward because you’re helping the project gain notoriety. You’re ensuring that there’s a community around it before it hits the market, which is essential for its success. So, by doing your part, you can earn tokens that can later be traded or sold.

Microtasks, or bounties, are similar to this, although the tasks required of you are a little more advanced. Here, you might be expected to write a testimonial or film a review before earning a reward.

 

Competitions

For a more interesting way to get your hands on cryptocurrency, you can always give competitions a try. These generally involve you playing games for the chance to win something like Bitcoin while also having fun in the process.

Although this might seem too good to be true, it’s a legit and straightforward way of getting free cryptocurrency. If you play with Traders Of Crypto you don’t have to worry about giving away any personal information that may put you at risk. All you’ve gotta do is provide an email address, and then you can start competing.

The games range from trying to be the best trader each month to identifying bugs in code, and they’re sure to make the hunt for cryptocurrency that extra bit more interesting.

 

Crypto Payments

If you have an e-commerce business, one opportunity that’s open to you is accepting cryptocurrency payments when someone makes a purchase. In addition to options like credit card and Paypal, you can also allow users to buy your stock using a variety of cryptocurrency options.

What currency you can accept will largely depend on the platform your e-commerce business uses. Some sites, like Shopify, are incredibly flexible and allow for payments using several hundred different types of cryptocurrency. So, if you’re not fussy about what you get your hands on, this can be a good place to set yourself up.

 

Mining

To those not in the know about cryptocurrency, mining for an online currency might not make a lot of sense. However, what this actually means is that you use your computer to solve complex equations that validate what you’re mining for.

Again, this is an area where Bitcoin can be problematic for a first-timer, as the equipment required to mine this currency is incredibly expensive. You need a lot of high-end tech to be successful with this endeavour, something that you may not be willing to purchase.

Fortunately, other currencies like Ethereum and Monexo don’t have such demands and can easily be done through a more standard computer. Just be aware that mining can use up a lot of power, so the costs to you will differ depending on the price of electricity in your area, as well as the efficiency of your equipment.

It might not always be stable, but it’s clear that cryptocurrency is definitely going to play a significant role in the future. If you want to have a part in that, getting your hands on some of it now through one of these varied ways could prove advantageous.

Retail investor
ArticlesFinance

The Rise of the Retail Investor and Armchair Financial Analyst

Retail investor

A perennial gamechanger ever since its influence reached into households, the internet continues to upend industries, disrupt cultural norms, and challenge the status quo. Name your sector – media, retail, finance, etc. – and the internet age has had a lasting impact.
When it comes to finance, nowhere is this more apparent than the rise of the “retail investor” and the armchair financial analyst. Often one and the same, these individuals are determined to make money in the markets and manage capital gains wealth without going through the traditional channels.
With that said, it would be inaccurate to claim these “average joe” investors and analysts are doing it all by themselves. The power behind the Secretlab chair is the myriad of online firms providing reliable financial advice and services at affordable prices and with minimal commitment.
One-stop-shops for financial services seem to be the most popular starting point. Financial service firms like Strategic Consulting offer a range of products and services that customers can evaluate with their specific situation in mind. Virtually everything can be done digitally, which is a significant selling point to those interested in protecting their finances while uncertain about handing the keys over to a fiduciary firm.
The next step for today’s retail investor is to find a user-friendly brokerage firm. The recent drama involving Gamestop and AMC Theater stocks involved an army of these investors utilizing app-based Robinhood broker services, which melted Wall Street several days before pressure forced company leaders to pull the plug.
As a result, users flocked to existing brokerage firms such as TD Ameritrade and E-Trade. That transition was made possible by the user-friendly updates these old school firms have made in recent years.
Despite the backing of qualified services and the demonstration of informed decision-making, today’s retail investors and armchair analysts continue to be considered second class compared to the more traditionally accepted financial professionals. It’s a slight that isn’t lost on these upstarts, many of whom are ex-industry insiders who – for one reason or another – are now hellbent on upending the status quo they once considered the standard of success.
It’s worth noting that amateur investors and hobbyist financiers are nothing new. Lacking the wherewithal to avoid financial ruin, their reckless investment choices were partially responsible for the infamous stock market crash of 1929. Over decades, the difference is the amount of influence this faction has on the overall health and destiny of the markets.
The role of low-rung investors and financiers was almost entirely sidelined in the decades after the Second World War. It was only with the advent of the internet that their significance and influence regained momentum. Setbacks, such as the 2008 crash and ongoing pandemic-related recession, are the only signs of distress when examining the situation in its entirety.
One thing is for certain: retail investors and armchair analysts are here to stay. It’s just a question of how much sway they’ll have over the markets in the months, years, and decades ahead. If the past is prologue, the influence will ebb and flow.
Build credit
ArticlesFinance

How to Get a Jump Start on Building Credit

Build credit


You may not be entirely happy with where your credit score is. However, there might be a few quick ways for you to bring it up a bit. It depends on why it’s down, but you may have the ability to add as many as 100 points relatively quickly. Let’s take a look.

 

Making Payments

Maybe you went on vacation – to Las Vegas, or anywhere really. Say while you were there, you got one of those Las Vegas loans. If you can make a few small payments, known as micropayments, throughout the month, that can assist with keeping those balances down and can lead to a few additional points on your credit score. Making a few payments throughout the month affects what’s known as credit utilization. After your payment history, this particular factor highly influences your overall credit score.

 

Credit Limits

If you get an increased credit limit on your credit cards, yet your balance remains the same or lower as you pay it down, this instantly lowers your credit utilization, and this can lead to a higher credit score. Call the issuer for your cards and ask if they can raise your limit without performing a hard credit inquiry, as this can temporarily make your score go down a bit. If you’ve had an increase in income or added a few years of positive credit history, you may have a good shot at getting your limit raised. 

 

Pay Your Bills

There isn’t a strategy out there that has the power to improve your credit if you’re late paying even just your utility bills. You see, your payment history is the single largest factor that affects your credit score, and making late payments can actually appear on your credit report for as long as seven years. If you make a payment 30 days or more late, call your creditor as soon as you know you’ll be late. Make payment arrangements, and ask them if they’ll consider not reporting the late payment to the credit bureau. The worst they can do is say no. Then, do all you can to bring the account current as quickly as you can.

 

Dispute Errors

Even if you’re making weekly payments on your credit cards, a mistake on one of the credit reports can pull your score down quickly. By the same token, repairing this can quickly make your credit score go up. Everyone is entitled to a free credit report each year from each one of the credit bureaus. Request these reports and make sure there aren’t any mistakes, such as late payments or even negative info that (due to age) should no longer be listed. Dispute any errors you see and make sure they are removed.  

 

Keep Cards Open

If you’re in a hurry to raise your credit score, you need to know that closing any credit accounts can actually make your mission a bit more difficult. Closing even a single credit card will mean that you lose the credit limit on that particular credit card when taken as a part of your overall credit usage. This can actually bring your score down a bit. Keep your cards open and use them periodically so that the card issuers won’t close them on their own.

Finally, mix things up a bit. If you only have loans or credit cards, think about getting a different type of credit that you don’t already have, if only to raise your score. If you improve your mix of credit – say, having both revolving credit and installment accounts, you’ll be giving your score a boost. 

Invest in yourself
ArticlesWealth Management

Ways To Invest In Yourself That Will Pay Off Big

Invest in yourself

When you think about investing, your mind automatically goes to stocks, bonds, bitcoin, and real estate. Although these are all lucrative investment opportunities, they’re not the only things that deserve your money, time, and resources. Some of the world’s wealthiest people are individuals who took the time to invest in themselves first. They realize that when they prioritize their needs and desires, they’re better positioned to work harder and add more value to other financial ventures. 

You are your biggest asset. From the role you play in your household to the workplace, your health, knowledge, skills, and talents are factors in your ability to succeed. While investing in yourself will require money, time, and resources, it pays off big in the end. Check out these examples listed below. 

 

Get Your Finances In Order

You can’t expect to achieve financial success if you don’t manage your money. A great way to invest in yourself and reap the benefits is to get your finances in order. Sit down and evaluate your income, expenses, and debts. Then create a realistic budget, reduce or eliminate unnecessary spending, develop a savings strategy, pay down your debts, and work to improve your debt. Once you’ve got things in order, you’ll feel a sense of accomplishment. You’re also in a better position to get loans, lines of credit, real estate, or big-ticket items you’ve always wanted without the stress. 

 

Continue to Learn

Knowledge is power. It’s the one thing that can never be taken away from you. Your knowledge can also help you open doors you never imagined possible. Learn what you can regularly. Whether you read a book, subscribe to an informational blog, take professional courses, or enroll in MFT programs in California to advance your career, this education can take you to new heights. Reading could open your eyes to new ideas or perspectives, allowing you to make more informed decisions. Acquiring a professional certification or college degree can increase your salary, boost your chances of landing a job, or help you run your business more effectively. 

 

Get Healthy

One of the best ways to invest in yourself is to get healthy. Your physical and emotional well-being ultimately dictate the quality of your life. If you want to live a long, happy, and prosperous life, you need to prioritize wellness. Not to mention, being healthy saves you money on everything from medical treatments to life insurance. So, eat a well-balanced diet, exercise, and get plenty of sleep. Simplify your life to reduce stress, find healthy ways to cope with unforeseen circumstances, and always find time to do things you enjoy. 

 

Work With a Mentor or Life Coach

Are you having a hard time pushing yourself to the next level? Maybe you’re struggling to figure out what the next level means for you? Whatever the case is, having a mentor or life coach on your side is an excellent investment to make. They can help you map out your future, work on overcoming obstacles, set goals, and even inspire you to preserve when you feel like giving up. 

 

Build A Strong Network

The saying, “You are the company you keep,” is very true. Who you surround yourself with ultimately has an impact on who you are as a person. Your inner circle should consist of like-minded people that inspire you to want to be your best self. They should be supportive, forthcoming with advice, and willing to help whenever they can. Step outside of your comfort zone and start interacting with people personally and professionally to build a network of individuals you can always count on.

Yes, financial investments are one way to generate wealth. However, those that are truly wealthy know the importance of investing in themselves. If you want to reach the next level personally, professionally, and financially, start putting yourself first. The better you are, the easier it is to be an asset to others. 

Accountancy
AccountancyArticlesRegulation

Accountancy Services for Large Businesses: What Leaders Must Look Out For

Accountancy

 

Finding the right accountant to help with your business can be a crucial step in management that you need to look out for. You cannot afford to get the financial details of your company wrong, and the right accountant will be a crucial part of this. The larger your business is, the more important it will be that you are able to meet the needs it generates.

Industry Experience

If possible, try to find an accountant who has some experience of your industry. While any accountant will be able to do the basics, there are some advantages to finding one that specialises in your chosen sector. There are many small quirks that go into different industries, and you need to make sure that you are going to find an accountant who is able to meet the needs presented by yours.

There might be a certain process or supply that you need to have to be able to run your business. To someone who is not familiar with your industry, it might appear to be a superfluous expense that can be cut from the budget when this is not actually the case. An accountant who is familiar with the specific needs of your industry is going to be able to catch small and important expenses such as this and ensure that your finances can accommodate them.

 

Scale

While you might be able to find an accountant who is familiar with your industry, you have to consider whether or not they are comfortable working with a business on your scale. There are many skilled accountants out there, but they might only have experience working with much smaller companies.

Having a larger company under your control means that you are going to automatically be generating far more financial data than a smaller business. Finding either an individual you trust or a company with a good reputation who specialises in corporate accounting services will help to give you some peace of mind that they are going to be able to meet your needs as a business owner and as a wider company.

 

Open Communication

A large company means that you are going to need to look in multiple directions at once. You need to make sure that you have people by your side who are able to come in and correctly coordinate with you to deliver the most efficient results possible. Therefore, it is incredibly important that you find an accountant who is able to communicate effectively.

You might have a busy schedule or a limited time in which you could hold meetings with them. While it is important that you do hold semi-regular meetings with your accountant, you might have to rely on reading reports from them on the occasions where you can’t meet. Therefore, they need to be able to deliver information about your finances in a way that is clear, concise, and easy for you to digest. Find an accountant who understands your needs and can work around them to deliver the results that work best for your partnership.

Finding an accountant or an accountancy team to outsource to can take time and might be more difficult than you initially think. However, with the right attitude and a willingness to work with this key professional instead of merely handing over your documents, you should be able to create a partnership that works for both of you. Handling the accounts of a large company is not easy. You need to make sure that you have found the right individual to work with you and deliver the results you expect from them, no matter what.

Personal finance
ArticlesFinanceSustainable Finance

Answering the Nation’s 10 Most Common Personal Finance Questions

Personal finance

By Annie Charalambous, Content Manager at ETX Capital

The pandemic has drastically impacted our lives and our savings. Research shows that while lower-income households across the UK have had to dip into their savings to stay afloat, higher-income households have grown theirs.

It seems everyone is looking for new income streams and ways to get more bang for their buck – including navigating the often-complex world of savings and investments – and they’re turning to the internet for advice on where to start.

That’s why we’ve filtered through the noise to give you the nation’s top 10 most commonly asked questions around personal finance – and answer them too.

 

Which shares should I buy (49,500 monthly searches) and how? (9,900 monthly searches)

The shares you choose to invest in will depend on various factors, including the level of risk you’re willing to take, the overall market climate, and much more. Before you do buy (or short) any shares, you’ll want to do your homework on both the company and the industry at large.

For example, if you see ABC Manufacturers’ stock price is up this year, before buying in, you may want to look at how their performance stacks up against competitors like XYZ Manufacturers or view their most recent quarterly report.

There are always opportunities in the market to suit every budget and experience level, but much like picking the winning lottery numbers, there is no winning formula for what to invest in, or when.

 

Which companies are in the FTSE100? (40,500 monthly searches)

The FTSE100 is made up of the 100 largest (qualifying*) companies (by market cap – available shares multiplied by current share price) listed on the London Stock Exchange. The index acts as a major indicator of the UK stock market at large. Its 3 largest constituents are Unilever, AstraZeneca, and HSBC.

*To qualify, a company must meet requirements set out by the FTSE Group.

 

What is an ISA? (12,100 monthly searches)

An ISA, or ‘Individual Savings Account’, is a savings account available to anyone in the UK over 16, without taxing the interest earned on it. Considered a lower-risk investment, the drawbacks are that you can only hold one active ISA per year, and you are capped on how much you place in it (currently at £20,000).

There are two kinds of ISAs: a ‘cash ISA’, whereby you pay into it like you would a traditional savings account to earn interest, and a ‘shares ISA’, where your money is invested in stocks and bonds and neither the interest – nor any profit – is taxed. While the latter has more potential for greater returns, being tied to the stock market also means a greater risk of losing money.

 

What are bonds? (8,100 monthly searches)

A bond represents a loan, typically given to a body like a government or large company, by an investor. Governments may opt to issue bonds to raise money, and then agree to buy these bonds back at a later (agreed-upon) ‘maturity’ date. Bonds are considered a low-risk investment and can be a good way to diversify your portfolio with minimal exposure.

 

What is an ETF? (6,600 monthly searches)

ETFs, or ‘Exchange-Traded Funds’, are an asset type similar to index funds, in that they comprise of different stocks – usually representative of a particular sector – and are typically managed by larger companies (Vanguard, iShares, etc.). However, index funds are connected to exchanges and correlate more with that country’s economy and stock market.

 

What is a hedge fund? (5,400 monthly searches)

A hedge fund is an aggregated pool of money from different investors that is managed by an institution or individual. The hedge fund manager closely monitors the investment and is able to react and adjust accordingly (as per their strategy).

 

What is pension drawdown? (5,400 monthly searches)

Pension drawdown occurs when you continue to invest into a pension whilst simultaneously withdrawing money from it, essentially giving yourself a steady ‘income’ out of your own pension pot.

 

What are dividends? (4,400 monthly searches)

Dividends are a portion of a company’s profits that are distributed among its shareholders.

For example, if you buy 10 shares in ABC Manufacturing and they pay an annual dividend of £5 per share, you’ll be eligible for £50 back in your pocket that year – if you’re still holding those shares at the ex-dividend date.

 

What is cryptocurrency? (4,400 monthly searches)

Cryptocurrencies are digital-only currencies held on the blockchain. Unlike regular ‘cash’ currencies, cryptocurrencies aren’t tied to any central bank and are therefore unregulated, volatile, and considered a high-risk investment.

Those are coincidentally the same reasons for the relatively mass adoption over recent years – as more institutions accept and even integrate the likes of Bitcoin, XRP, Ethereum, and countless others, these assets risk becoming a part of the very world they were created to challenge.

Helicopter money
ArticlesBanking

The Economic Crisis, The Role of Central Banks & Whether Helicopter Money Can Save The Day

Helicopter money

Gregory Perdon is co-Chief Investment Officer at Private and commercial Banking, Arbuthnot Latham

The world’s central banks (US Federal Reserve, Bank of England, Bank of Japan and the European Central Bank) play a crucial role in the global economy. Broadly speaking, they serve as both policy maker and lender of last resort and their objective is to help keep their respective economies in balance.  

Central banks monitor carefully the economy and the financial system and pay particular attention to the speed and temperament of growth. What do they want to see? Monetary officials like when the temperature of inflation and the economy is not too cold nor not too hot, think of it like goldilocks, namely ‘just right’. But when growth begins to overheat, that’s often when they jump into action to help cool things down. Equally when crisis hits, central bankers tend to be the first we call upon to help put out any financial fires.

 

How central banks manage the economy?

Well, they don’t really manage the economy; businesses and consumers do that through their buying and selling; banks do so via their lending decisions – but monetary officials still maintain a tremendous amount of influence over the economy.  One way they exert control is by setting interest rates. For example, when central banks lower borrowing costs, businesses and individuals tend to ‘feel richer’ and can divert capital they would have allocated to servicing debt into investments, hiring and spending (or at least in theory).

Central bankers can also allow lenders to increase their leverage levels, meaning banks can lend more money – which can free up the balance sheet to make more profit (assuming there is demand for lending).

Finally, through communicating (what central bankers call forward guidance), they can telegraph to the markets their intentions, enabling businesses, lenders and traders time to prepare and position.

 

Central banks and Quantitative Easing (QE)

What tools are left in the toolbox after interest rates have been cut to zero and capital ratios relaxed? Well when the conventional is exhausted, they go unconventional – and that’s exactly what the Fed did after the global financial crisis in 2008 – they took it to the next level via large scale bond buying programmes, otherwise known as quantitative easing (QE). 

That’s money printing, right?  Wrong, that’s a myth. QE is but a maturity transformation exercise during which the central bank buy bonds (taking them out of circulation) and replace them with cash. 

This floods the market with liquidity, pushing the price of bonds higher and the yield lower (a condition market participants refer to as financial suppression). This can drive investors into other higher yielding assets such as corporate bonds, listed stocks and property – thus creating demand for financial assets which in turn inflates their prices (or at least stabilises them). But it can also lead to the hoarding of cash.

And the Fed didn’t stop there, during the financial crisis and in their coronavirus pandemic response they also bought (and continue to buy) residential mortgage bonds. Are they interested in building a portfolio of properties and/or foreclosing? Of course not, they do this to ensure mortgage rates stay low – which creates a sense of confidence and encourages home ownership by making housing more ‘affordable’. And it has worked, look no further than the housing market data from sales to starts to prices to sentiment, it’s been a healthy market.

 

If central banks aren’t printing money, who is?

It’s the commercial/private banks (and shadow lenders) who perform the alchemy of money creation, not government. Every time a bank issues a new loan, one must think about it like a leveraged deposit. When one bank issues a loan, it becomes the deposit of another financial institution and it’s this multiplier which in essence creates new money. And of course, they also control the destruction of money – when loans are retired and credit contracts. 

But it’s not so simple, there needs to be lending opportunities in the markets and confidence in the system in order for banks to have the appetite to lend and the pricing needs to be perceived by the borrowers as attractive in order for businesses to accept the terms.

 

The role of governments

Coming back to crisis fighting, monetary policies can only take us so far but if we want to go the full distance, we need fiscal support.  Fiscal policy is the domain of governments, elected politicians, those individuals and committees who control taxation and spending.

Government bodies also set regulations and employment laws which can have a significant impact on the daily decisions made by businesses around the country. For example, if a government wants to orchestrate a short-term boom, they can deregulate and slash taxes (but pay the price of potential environmental damage, social unrest and/or higher government debt later).

But what happens when central banks run out of ammo, governments become desperate to foster growth, banks can’t lend and/or businesses don’t want to borrow?

 

Can Helicopter Money save the economy?

If conditions get bad enough, central banks and governments can throw out the rule book, circumvent the private sector, take to helicopters and go ‘all-in’. We have all heard about helicopter money, but what is it? Heli-money is fundamentally different to QE in that there is no exchange of assets. It is merely a one-way forgivable transfer (unlike QE which is a two-way exchange [but not forgiven]). In a stylised example, the government issues bonds which the central banks buy and then cancel, in turn allowing the government to issue cheques that could then be deposited into bank accounts for citizens to spend.

The attraction of implementing Heli-money is high, because it can, in theory, be used by politicians to potentially ‘address’ growing inequality. Helicopter money can appear to help a broader base of family income statements in a very ‘democratic’ fashion whereas QE has appeared to only help those having a big balance sheet. BUT it’s only optical.

 

Helicopter money isn’t the answer to our financial woes

The reason why QE is not a free lunch is because the money ends up back in the form of reserves, and central banks (such as the Fed) end up paying interest on reserves and excess reserves (to preserve the floor in rates), so it’s not really free.

Secondly, once the bonds are paid for and then ‘written-off’, the central bank may have its equity wiped out. Don’t forget a central bank has a balance sheet just like any other financial institution.

Finally, it may just not be legal nor is it clear who decides the size of the ‘one-off offering’ thereby putting the independence of the monetary authority in question. In order to promote financial stability and a well-functioning economy, we need to ensure central banks remain strong, solvent and independent. 

Alternative Investments
ArticlesFinanceTransactional and Investment Banking

Beginner’s Guide to Alternative Investments

Alternative Investments

Alternative investment assets like collectibles, art, cryptocurrency and loans are attracting an increasing number of retail investors by offering low buy-in, high returns and efficient diversification options

Every few years the line between traditional and alternative investment opinions is re-drawn, as many alternative investment options become more and more mainstream. Everything outside the traditional investment options that are typically accessed through traditional financial institutions –  falls into the category of alternative investments. They do not include, what is now considered traditional investment options: ETFs, gold, bonds, pension funds, and others.

Alternatives category may include both physical and virtual assets, spanning real estate, art, fine wines and aged alcohol, rare items, cryptocurrency, loans, private company debt or ownership, and collectibles. There is no limit to collectible investments, as value can be found in designer sneakers, baseball cards, or even Barbie dolls.

Alternative investments can create both long-term appreciation and immediate income streams. One of the most active investor groups in alternative investing is retail investors – in other words individual investors, who want to take an active role in propelling their own financial success.  One of the most active groups, drawn to alternative investments is a millennial cohort, who exert skepticism about the power of pensions to really secure their retirement, as well as a propensity to learn to operate an alternative portfolio. Technology now allows to ensure sufficient diversification with only a few clicks, and to branch out into immediate passive income or short-term high-return opportunities. 

Five most popular alternative asset classes

1. Real estate. Part of the real estate investment market can be considered a traditional asset class – after all, even banks own real estate and hold on to it as a long term investment strategy. It’s an all-time classic to store value and a potential tool to expand earnings during positive market cycles. The biggest disadvantage of real estate are the big upfront costs and relatively low liquidity, if ownership is outright. That said, the modern – alternative investment options have become available in the real estate market, including real estate investment trust (REIT) and partial or fractional ownership ventures. Retail investors can now invest in various real estate projects by owning a part of its development and then receiving interest once it is developed.

2. Art, valuables, and collectibles. Once again, just like property ownership, some collectibles like fine wine or paintings are quite traditional – accessible to exclusive investor circles, with very high-buy in cost. The alternatives that are accessible to a wider audience, like baseball cards, or designer sneakers are easily researched on online marketplaces, like eBay. Some items can be owned outright in physical form, requiring some care and protection. But it is also possible to fractionally own any of the collectibles, including in-game items and virtual goods with residual value. This asset class has unpredictable returns with relatively difficult average appreciation, but can outperform other asset classes as an insurance. Companies like Masterworks and Otis are allowing retail investors to purchase shares in fine art pieces or unique collectibles. 

3. Crypto-assets. A hot and highly volatile asset class, which allows for both passive buy-and-hold strategies, and for trading. The chief advantage of cryptocurrencies is the relatively easy entry, with the potential to operate and hold the assets in a personally protected wallet, instead of relying on brokers or other third parties. Challenger banks, like Revolut, or  payment platforms like Paypal have integrated digital asset trading on their platforms – making it even more accessible. With recent cryptocurrency popularity, a new alternative investment asset class became popular – NFTs (Non-fungible tokens) – which are centered around collectibles, such as digital artwork, sports cards, and rarities. One trending platform would be NBA Top Shot, a place to collect non-fungible tokenized NBA moments in a digital card form.

4. Loans. Interest-bearing investments in packaged loans can bring transparent, predictable returns that outperform traditional investments. While investing in loans gives short-term returns, loans should be viewed as long-term investments. This asset class has a low entry point, while some platforms, like Mintos also sort potential investment in loans with a risk tolerance profile. It is important to diversify investment in this asset class in order to achieve stable income over time.  Investing in loans is also accessible to multiple economic areas.

5. Private company investments. Private equity and company loans are asset classes sometimes reserved for accredited investors. Because of the risky nature of private companies, some of the investments are only available to accredited buyers. Private equity is also off-limits to most retail buyers, due to its riskier nature and the higher barrier to entry. Loan investments can sometimes circumvent this limitation, by offering business loans for partial ownership and relatively low sums. More accessible option, albeit not very liquid, would again be fractional investment, or crowdfunding, which is available through platforms like Crowdcube.

Final thoughts 

Alternatives are bound to grow. Research by Prequin shows robust growth of alternative investments, to as high as $14 trillion in 2023. The Prequin report covers private wealth managers, but alternative investments are also open to retail owners, due to their variety and enhanced technological access.

The growth potential of the alternative investor sector also means adequate liquidity and price discovery will happen as more buyers join in. Fees are one of the hurdles that diminish the real returns of investment, but the more apps and investment hubs pop up, the more competition to offer low fees, increase service quality benchmark and attract investors.

Money mistakes
ArticlesFinance

Don’t Make These Money Mistakes

Money mistakes


Paying your bills and having a little leftover each month to contribute to savings can be challenging. Even working in a well-paying career, it can be difficult to feel like you are making headway with your financial goals. If it doesn’t feel like you are progressing as you should, take a look at these common money mistakes and see if any sound familiar.

 

Paying High-Interest Debt

If you have credit card debt, there is a good chance you are throwing money away. Unless that debt is tied to a zero-interest promotional offer that you know you will pay off before the promotional period ends, you need to look at getting rid of this expense. Cutting expenses and focusing on paying off credit card debt is one way to attack the problem, but there are other options. Consider taking out a personal loan. Check online to see what rate you qualify for and choose an APR that works best for you. Unless you have a great deal on your credit card, you are sure to pay less interest by taking out a personal loan to pay off your cards.

 

Mindless Spending Stemming from a Lack of Planning

If you find that you are frequently stopping to pick up takeout on the way home from work, paying late fees on your bills, and purchasing items to replace something you know you have somewhere, you could easily save money by dedicating some time to planning. Look at your bank statement to see where you regularly spend money on your discretionary income. Pinpoint holes that are easy to plug, like fast food lunches. Packing your lunch saves money and is also generally a healthier choice.

Other questionable expenses may not be as noticeable. Do you regularly throw food out at your home? Make adjustments to your menu to reduce food waste, and you will lower your grocery spending. Do your utilities seem high? Look for easy fixes, such as hanging drapes to block drafty windows and turning your thermostat down a few degrees. Comb your bank statement for subscription services that you don’t use and cancel them. Cancelling can be a hassle, but spending a few minutes doing so can save you money each month.

 

Not Prioritizing Savings

Consider your savings account a bill like any other. If you only contribute money that you have leftover, you are sure to find that your savings aren’t growing very quickly. Instead, transfer a specific amount from your checking to your savings each pay period. Prioritize retirement savings as well. It is tempting to put saving for retirement off when you are young. Your income may be low, and you feel like you have plenty of time to contribute.

All of that is true, but the earlier you start saving, the more time the money has to grow. Your retirement savings will be much greater if you make regular deposits during your 20s and 30s. If, after examining your budget and making changes, you still struggle with having money left to save, consider taking a part-time job. Don’t think of it as a permanent move, just a chance to get out from under debt and boost your savings.

Insurance
ArticlesFinanceInfrastructure and Project FinanceWealth Management

This Is What You Need to Know About the Insurance You Didn’t Know You Needed

Insurance


There is no end to the questions and misconceptions people have about insurance. One of the most common misconceptions is that insurance is intended to be a discount for needed services. Indeed, many people never have reason to question this idea. After all, a visit with the general practitioner costs about $150 without insurance, and $5 or less with insurance. They measure the quality of insurance based on the perceived discount they gain.

However, this confusion drives many people to make bad decisions about insurance due to the fact that they are fundamentally wrong about what it is. Insurance is not a discount service. It is a risk management service. No one sells you insurance for events they know will occur. They sell you insurance for events they believe are less likely to occur. Insurance companies need you to pay them more money than they pay you. The house always wins. When it doesn’t, it goes bankrupt.

That is why life insurance generally costs less for people who are young and healthy. Coverage for lightning strikes is inexpensive in places that don’t have many electric storms. But in Tornado Alley, you might not find a company that offers it at all. It is primarily about risk management. Here are some other factors that will help you decide what insurance you really need versus that which you can do without:

 

Car Insurance

You know you need car insurance because most places require a certain amount of it before you can legally drive. But what about insurance for a car you have that you don’t drive? Do you need insurance on a car that doesn’t run? The answer might surprise you. It is more of a maybe than a yes. But it is more yes than no. Confused? Good. It is a confusing issue.

What happens if your undrivable car is stolen? Do you still expect it to be covered? If so, you are definitely going to need insurance on that parked car. What happens if it gets whisked away Wizard of Oz style? It might not be an act of any god you believe in. But insurance can still cover it. If you don’t want coverage for those things, it still might not matter. If you are paying for the car via a loan, the loan holder determines whether you can end coverage. Hint: You are going to need to keep that coverage. Remember, insurance is about risk management. The loan holder will not be taking a risk on that even if you want to. There are things you can do to reduce your insurance burden on a car that doesn’t run. But at the end of the day, you are probably going to have to carry some type of insurance on it in most states.

 

Renters Insurance

Everyone has heard of homeowner’s insurance. It is advertised in TV commercials. Not everyone knows about renters insurance. Only 41% of renters opt for renters insurance despite the price of renters insurance hitting average lows of $15 per month. It is clearly a type of insurance people don’t think they need. They will have a very different notion of what they need if they find themselves a victim of burglary. Your neighbor can set the building ablaze leaving you holding the bag for losses. Renters insurance might even cover accidental damage of items like smartphones and laptops.

 

Life Insurance

It should go without saying that everyone needs life insurance even when they are young. The problem is that young people feel invincible. So they never consider what will happen to their family if they died unexpectedly. It is even more of an issue if children are involved. When young couples get together, they blow the budget on elaborate rings. Instead of an expensive ring, insist that your partner buy life insurance instead. That is a much better sign of love and responsibility than jewelry.

Insurance is complicated and confusing. The thing to remember is that it is less about discounts for things you know will happen and more about risk management against things you don’t expect. Whether it be auto, renters, or life insurance, ask plenty of questions. And don’t stop until you get the answer you need to make a good decision. 

Expand business
ArticlesBankingTransactional and Investment Banking

Looking for the Right U.S. City for Your U.K. Business Expansion? Here’s What You Need to Know

Expand business


We are used to reading about U.S. businesses expanding to Europe. We often overlook the growing trend of
E.U. based businesses expanding to the U.S. There are many good reasons a U.K. company, in particular, would be interested in expanding to a location across the pond. Those reasons include, but are not limited to the following:

  • Virtually no language barrier

  • Cultural familiarity

  • Similarity between currencies

  • Relatively stable and predictable political system

  • Robust economy relative to other places

Although the U.S. is a mess right now relative to more stable periods from the past, it is still a viable capitalistic republic with a functional economy ripe for a strong rebound. Coronavirus is not just a U.S. phenomenon. We are in a pandemic. Everyone is having to deal with it at some level. There is also political unrest in much of the world. The U.K. is still unpacking what it means to no longer be a part of the E.U. 2020 was a reality for everyone. The real emphasis is on how we recover worldwide. U.K. businesses and U.S. consumers can benefit each other in the recovery process. When looking for a U.S. expansion city, here are a few things to consider:

 

A Livable City

Before looking too closely at any single metric, what you need is a livability assessment. Is the city the kind of place where your potential customers would want to live? If expanding to New Jersey, you wouldn’t just look at the housing market in Jersey City. You would assess the overall reality of living in Jersey City.

Livability scores are based on a variety of factors. Two of the most important factors to consider are crime and housing prices. Boston, NYC, and San Francisco are not the most livable solely on the basis of stratospheric housing costs. But a place like Jersey City would still be in the running because of the high safety index and reasonable cost of living. Obviously, there is more to consider. When you are opening in a new city, you have to consider more than your market. You also have to consider your workforce. Your employees might not be able to afford to live in a city where the cost of living is too high. When you move your business to a city, you become a part of that city and that community. Pick a city where you wouldn’t mind calling home.

 

A Stable Economy

One of the markers of a stable economy is a survey of foreclosures in the area. It is clearly a bad sign when the foreclosure rate is moving in the wrong direction. You can also look at the price range of properties in foreclosure. If the upper end of the housing market is suffering high foreclosure rates, that is a much bigger problem than foreclosure at the lower end of the range. That is where most foreclosures would be anyway.

You also need to look at economic markers over time. A place where things are great one year but horrible the next will not be a good location on which to base the economic future of your company. It is better to expand to a place that has slightly less money, but is more stable and predictable.

 

Transportation Infrastructure

What is the average commute time for workers in that city? Long commute times indicate poor transportation and housing options. Commute times would be shorter if people could live closer to work. If people are commuting from two cities away, that says something about livability.

It also has indications for retail success. Ease of moving about in a city affects who can shop at your stores. If it is hard to get to, it will be hard to attract customers. Look for a place where there is good public transportation and walkable neighborhoods.

There are many good reasons to consider expanding your business to the U.S. Just be sure to pick a city that is highly livable, economically stable, and easily navigable.

Consumer spending
ArticlesFinance

Self-Sufficiency Set to Influence Consumer Spending in 2021

Consumer spending


In times of sudden and dramatic change, people tend to react in one of two ways. They either tense up and resist the inevitable for as long as humanly possible or take a deep breath and adapt to the new normal.

Generally speaking, the coronavirus pandemic has forced many of us to decide which way we’re going to react. While many people have chosen to live in denial, others see the pandemic as an opportunity for self-improvement.

For most folks, 2020 was the year when they realized they weren’t nearly as self-sufficient as they thought. In the absence of products and services we took for granted, it became apparent to many that achieving some sense of normalcy would require self-sufficiency.

With most experts anticipating another year of mask-wearing social distancing, it’s safe to say the self-sufficiency trend will continue through 2021 and beyond. With this in mind, investors and wealth management professionals will want to get on board before it’s too late.

Investing in the self-sufficiency industry opens up hundreds of possibilities. That’s because, as a result of the pandemic, the push for self-sufficient living permeates through every aspect of our lives. For example, due to working from home, many people are learning how to make coffee for the first time. Previously, they made a daily stop at Starbucks or Dunkin Donuts on the way to work. Since that’s no longer a feasible option, they opt to brew gourmet coffee at home.

If you’re an investor in early 2021, do you buy stock in one of the nation-wide coffee shop chains or online services sending monthly boxes of gourmet coffee to homes across the country? While the question assumes a false dichotomy (you could hedge your bets and invest in both or invest in neither), it highlights the gut-check security of investing in any business that’s currently selling a do-it-yourself alternative to things we outsourced before the pandemic.

However, investors must know the difference between a gimmick and a pot of gold. Do-it-yourself baking kits? That’s a winner. Do-it-yourself foundation repair kit? That’s probably not something people will want to tackle on their own in any circumstances.

With that said, the current trend towards self-sufficient consumerism doesn’t mean investors need to give the cold shoulder to big business mainstays. While so-called disruptive industries have been the topic du jour among investors for years, the prevailing pattern suggests industry giants will adapt to the new normal. If the new normal is more consumers choosing to DIY things they previously paid others to provide, it won’t be lost on those in control of the world’s largest companies.

2020 was a year to remember for all the wrong reasons. With that said, the pandemic and events surrounding it have led many to make changes to the way they do things. On the consumer side, individuals take on more responsibilities, while businesses are tasked with adjusting to changing consumer trends. While the overarching circumstances are unique, this pattern is business as usual. Investors should take note.

 

credit
ArticlesBanking

The True Impact of Credit On Your Everyday Life

credit


There’s a common misconception that credit doesn’t matter until you’re applying for a mortgage, credit card, or personal loan. Truthfully, most people don’t even review their credit history until they need to borrow money or a line of credit. Although having a good financial record does apply in these circumstances, it’s just the tip of the iceberg. Ultimately, a consumer’s credit is used in many different areas of their lives. 

 

Character, Risk Level, And Financial Responsibility

Creditors, lenders, retailers, and service providers use credit reports to assess potential customers. There are risks involved in loaning money, credit, products, or services. If consumers don’t repay their balances in a timely fashion, these establishments suffer a loss. As such, getting a general idea of a person’s creditworthiness helps businesses to make an informed decision. 

Whether you know it or not, your credit score and history tell a lot about how you handle your finances. It showcases your level of character and financial responsibility, which dictates your risk level. If your credit is less than satisfactory, it can have a significant impact on your everyday life. Continue reading to learn more. 

 

Renting An Apartment

A good credit report is indeed necessary to acquire a home loan. However, did you know that it can also affect your ability to rent an apartment? Though you’re not borrowing any money to secure a property lease, you are making a promise to pay your rent on time. Landlords rely on rental payments to maintain the mortgage, keep the property intact, and cover other expenses. If you don’t pay, this puts them in a bind. If your credit check shows that you don’t pay your bills on time, it could backfire. Some applicants are rejected and unable to find a suitable place to live. Others are required to pay a higher deposit as a means of security for landlords. 

 

Utility Services

Water, electricity, and gas are some of the basic necessities of everyday life. However, you may not know that your credit history has a significant impact on your ability to get utility services in your home or apartment. Utility companies need to know that you’re going to pay for these services. So, they review your credit report for more information. If you have a low score, past due balances, and collection accounts, this sends up red flags. If you’re not turned down for services altogether, chances are you’ll be required to pay a sizable deposit to get started. The utility company holds the deposit in an account that’s used if you fall behind on the bill. 

 

Loan And Credit Card Interest

Your credit score doesn’t just help determine if you get approved for a loan or credit card; it’s also a determining factor in how much you’ll pay in interest. The higher the interest rate, the more expensive it is for you to borrow money. Over the lifetime of the loan or credit card account, consumers can spend extra hundreds if not thousands of dollars in interest alone. How much more money you’ll pay, is determined by your creditworthiness. Someone with a credit score of 650 is going to pay more for a mortgage, student loan, or credit card than someone with a score of 750 or higher. 

 

Getting Things In Order

As you can see, your credit impacts a lot more than you think. Whether you’re trying to rent an apartment or get utility services setup, your credit is evaluated to determine your character, risk level, and financial responsibility. Essentially, a person with poor credit will have a difficult time acquiring things they need. Even if they do, chances are they’re going to pay a lot more. That’s why consumers are encouraged to use financial management practices and resources like no credit check online loans to improve their credit. 

Life is already challenging enough. Why make things harder if you don’t have to? Now that you have a clearer understanding of how your credit impacts everyday life, you can take steps to turn things around for the better. 

Finance software
ArticlesFinance

Improve Your Business and Finances with Software

Finance software


It doesn’t matter if you’re a business owner or an individual simply looking for a way to boost your financial standing, there are steps you can take to move in the right direction.

One of the first things you should do is consider the benefits of software.

There’s a software application for almost everything, ranging from budgeting to building your credit score to managing your debt. On top of this, there are advanced applications, such as master data management software, that are more inclined to help you maintain control over your company finances.

If you’re wondering if software is the right solution to your financial problems, you’re in luck. Here’s a list of five benefits of implementing software into your financial strategy:

 

1. Accuracy

Take for example a budget that you track with a basic spreadsheet or pen and paper. While it’s possible that you’re able to maintain accuracy, it’s also more likely that you’ll make a mistake.

But with software, this is never a concern. You’re relying solely on the application to maintain your accuracy, so the only thing you have to worry about is the inputs. Proper budgeting takes accuracy. 

Without accurate numbers, you can’t expect your finances to be in order. 

 

2. Time Savings

Who wants to waste valuable time managing their personal finances? Not most people!

If you continually find yourself wasting time and wondering how to speed up, the answer is likely to be a software application.

Pinpoint where you’re losing time, find a few software solutions that make sense, and give them a try.

As you save time, you’ll come to realize that you have more time for tasks that have a greater chance of moving the needle. 

Tip: if you find that a software program is costing you time—not saving you time—you should think about moving on. It’s counterproductive. 

 

3. Money Savings

Even if you have to pay for a software program, there’s a good chance you’ll save money in the long run.

Sticking with the example above, imagine a situation in which you make a budgeting mistake because you weren’t using software.

By the time you catch this mistake, it’s already cost you money, such as in bank fees or a client that’s upset with you and canceled their service.

If you want to save money—and everybody does—consider the way that software can help you do just that. 

 

4. It’s More Fun

At first, you may not agree with this. After all, you have to learn a new way of doing things. 

Even though there’s a slight learning curve in many cases, you’re likely to have more fun over the long run.

There’s something cool about using an app that allows you to maintain efficiency and save you time and money. It makes you feel good about the steps you’re taking. It makes you realize that you’re doing your part in making the most of your financial circumstances. 

 

5. It’s Easy to Use

There’s no doubt about it. Many people shy away from using software because they don’t want to deal with the learning curve. 

It’s 2021 out there, so this is no longer a problem. When you choose a high-quality software solution, it’ll be easy to learn and use. So, you can get up and running within a matter of minutes.

Adding to this, most software providers have robust learning centers and customer service teams. There are answers to be had and people who can provide feedback in a timely manner.

Tip: don’t just ship if you’re facing an early learning curve. Stick with what you’re doing. It’s likely that you’ll eventually catch on. And when you do, that’s when the real benefits start to flow in. 

 

Final Thoughts

So, there you have it. This should give you a better idea of how you can use software to improve your business and finances.

If you’re ready to take action, choose a few solutions and implement them in your daily life. This will allow you to see what works, what doesn’t, and where to go next.

What are your thoughts on using software to assist you with money management related tasks? Have you done this in the past at work? How about in your personal life?

Financial stability
ArticlesFinance

Becoming Financially Stable

Financial stability

Do you feel like you are always going through ups and downs with your income? Unfortunately, riding a financial roller coaster won’t allow you to achieve wealth or even hit your long term goals. 

Thankfully, you no longer have to live life that way. 

 

Consolidating Debt

An excessive amount of debt can make you cash poor regardless of your income. Consolidating credit card debt will free up money from your budget. Applying for credit cards that offer balance transfer interest-free or finding low-interest refinance mortgage loans are a few options to help you get out from under the debt.

 

Eliminating Reckless Spending

Many people mismanage their money. They see something they want and buy it giving no thought to repayment. Unfortunately, spending money on impulse is a sure way to remain financially unstable. There are a few preventative measures you can put in place to reduce your chances in the future. 

First, if you can’t browse, don’t visit stores unless you have things you need. Second, pay with cash. You’ll get a genuine sense of how much something costs and only have a set amount of money on hand. Finally, when you do shop, bring a list and stick to it. 

 

Invest in You

One of the best ways to achieve financial stability is to earn to your full potential. If you accept less than you’re worth, then you could be cheating yourself out of comforts in life. If you took a job without a college degree or left college with a bachelor’s degree, take some classes and earn your master’s. The higher your education, the higher your earning potential. 

 

Promote Health

While genetics may put you at a greater risk of contracting a disease or illness, it doesn’t mean that you have to drain your finances to experience a good quality of life. Promoting a healthy lifestyle is something you can control. 

Eat foods high in nutrition and avoid saturated fats and excessive amounts of salt and sugar. Kicking bad habits like smoking, drinking and drugs is also beneficial to a prolonged life. Getting regular exercise will prevent weight gain and costly health issues. 

 

Create a Budget

Budgeting your money teaches you how to save and spend it wisely. Without a budget, you might not have funds set aside for a vacation, to buy a home, pay for emergencies or your retirement. 

A budget also keeps spending under control. You know what you owe and to whom it goes. This allows you to make changes that benefit your finances. 

 

A Good Credit Score

Having a good credit score is essential to your finances. A high score opens the door to financial opportunity. You have access to the best interest rates when buying a home or a car, or taking out a personal loan. You can rent a property and avoid deposits for utilities. 

A good credit score also means you can apply for credit cards offering the best perks and the lowest interest rates. Today, a high score also provides access to the best insurance companies and can even play a positive role in securing a good job. 

 

Retirement Funds

You may think that retirement is far into the future. However, it comes along quickly. Having money set aside for your golden years will ensure you maintain the same quality of life. 

If you want to invest in the stock market, find a qualified broker. If your employer offers a 401(k) or other pension benefits, enroll. 

 

Find Ways to Spend Less

Spending less on the things you need such as food, transportation and living expenses will increase your net worth without sacrifice. Use coupons and perks stores offer to reduce costs for everyday living. When shopping for big-ticket items, compare prices and wait for times throughout the year where prices are lower. 

The good news is you can become sound with your finances and reap the benefits of a good quality of life. 

Salespeople
ArticlesFinanceSustainable Finance

The Five Key Financial Services Sales Skills

By Lars Pedersen, CEO, Questionmark

Many financial services firms rely on the effectiveness of their salespeople to drive revenues and growth.

But many salespeople may not be maximizing their performance. As a result, they may be hindering the firm’s performance.

To unlock potential, financial services firms should assess the top behaviors and skills of their best-performing salespeople. They can then replicate these skills across the broader salesforce through relevant training and support.

 

What’s the problem?  

Financial services firms depend on making sales. But half of financial services salespeople expect to miss their annual target.

Regardless of this, many salespeople believe that the targets they were set were reasonable.

So, while some salespeople may be performing well, many may be underperforming, despite the investment in training them.

 

Five key skills

The most successful salespeople have clear behaviors and skills that enable them to sell more than their peers. 

By measuring the skills of the best performing workers with staff assessments, employers can get a good understanding of what works and what doesn’t. Firms can then train other salespeople in these skills.

There are often five key skills that firms look for in their salespeople.

First, digital marketing. Some 82% of customers look up salespeople or their companies on LinkedIn before responding to their communications. A strong digital presence will help with lead generation.

Second, first-class knowledge. Customers know they can get basic information online.  During a conversation with salespeople, they want to go to the next level of detail.

Third, consultancy. A would-be customer expects a salesperson to understand their business and their challenge and identify products that are right for them. Customers want advice on how to use products effectively.

Fourth, qualifying leads accurately. Some salespeople waste too much time pursuing leads that are unlikely to convert. They should be able to spot a future opportunity early on and be ruthless in ignoring those that are unlikely to bear fruit.

Last, communication. Both speed and quality of communication are essential. Calls must be returned. Emails have to be answered quickly. 

 

How assessments help

Assessments, which measure progress by testing skills, help employers to understand the skills that their people have. By measuring such progress, employers can help improve it.   

Regular skills assessments give employers reliable and accurate information on the strengths and weaknesses of their salesforce. 

They can then introduce training to address weaknesses, and to replicate the skills and behaviours of the best performers. They can also test the effect of training with further assessments.  

That’s why one in six US Fortune 100 companies use Questionmark’s enterprise-grade assessment platform.

 

Providing a competitive advantage

When the financial services industry is changing as rapidly as it is, firms must know their people have the skills they need to maximize performance and their potential. 

Getting a clearer picture of why some salespeople perform well, and others don’t, is crucial.

Building this picture through robust skills assessments could make a difference to performance and drive both sales and revenues.

Money transfer
ArticlesBankingTransactional and Investment Banking

Top 10 International Money Transfer Companies You Need to Know

Money transfer

The relevance of international money transfer companies is growing fast. It’s because slow and expensive bank wire transfers are a big problem for many people. Businesses need cheaper transfers for making and accepting payments. International investors need them as much as small business owners. Losing up to 3% on each transaction (bank transfer cost) can make their investments unviable. Most of all, migrant workers need these transfers as the cost of remittances matters a great deal for them and the global economy. There are also international travelers and other people who mostly use these services for convenience.

All in all, the demand in this market is high and it’s no surprise that dozens of money transfer providers sprung up all over the world. However, not all of them are equally good and trustworthy. As this industry is not well-regulated yet, it’s essential that you choose a provider with extreme care. The following International Money Transfer Top 10 list will help you find the best provider based on your needs. Bear in mind that while there are many great companies that offer affordable transfers, they also have specializations. Therefore, you should consider the type of transfers you need in order to choose the best company for you.

Top 10 International Money Transfer Companies to Fit Every Customer

Western Union

Western Union is, possibly, the most well-known yet most disliked money transfer provider worldwide. No matter negativity surrounding this company, it deserves a place on any top list for international money transfer companies because no other company can reach this far. In fact, for many migrant workers Western Union is the only available option.

This is a money transfer provider focused on remittances and it has an unmatched network of offices worldwide. The company supports 145 different currencies and offers in-person cash pickups even in the most remote places. Literally, there are Western Union money transfers in areas where no other international money transfer companies operate and even banking is severely limited.

That said, Western Union transfers are very expensive. They are the most expensive in the industry. The level of customer service and overall customer support is also not very good. The company has thousands of negative reviews on platforms like Consumer Affairs and BBB Customer Complaints.

The exact cost of the transfer depends on the currency, destination, and transfer amount. The company itself is highly trustworthy and regulated by multiple authorities. Western Union has been in business since 1851. It remains one of the most reputed names in the industry despite high transfer costs.

MoneyGram

MoneyGram is another reputed and remittances-oriented veteran in the money transfer industry. This company was founded in 1940 and it keeps growing and improving even through the current crisis. MoneyGram transfers are also quite expensive. However, it’s on the top 10 international money transfer companies list due to its wide global reach. The company offers cash pickups and supports 58 currencies for online transfers. Note that more currencies are supported if you make a physical transfer through a shop.

There is no minimum transfer amount, so MoneyGram is well-suited for small remittances. But transfer fees and currency exchange rates offered by the company are rather unfavorable. The cost of a transfer can reach 10% to some more remote destinations, like Ethiopia. Also, MoneyGram has multiple negative customer reviews.

It’s important to note that MoneyGram is a licensed and one of the most reliable international money transfer companies. It’s also regulated by multiple financial authorities, like the FCA. Therefore, for all that these transfers aren’t cheap, you can be sure they are 100% safe.

Xoom

Xoom is another great money transfer provider for remittances. It allows you to send transfers, no matter how small, to 131 countries and supports 79 currencies. Xoom earned its place on the top 10 international money transfer companies list due to the fact that it offers cheaper remittances. It also has a very good mobile app and is generally a user-friendly service.

However, at the moment Xoom allows you to send money only from Canada and the USA. Within those countries it’s also a very popular service for small personal transfers. These transactions are very cheap and fast. International money transfers through Xoom will cost more as the transfer amount increases. That’s why it’s a good service for remittances but not the best choice for large investment or business transfers.

TransferWise

TransferWise is currently the biggest among the “new generation” of international money transfer companies. It’s valued at $5 billion, which means it’s grown by about $1,5 billion in the last year alone. This company offers the cheapest international small transfers you can find today. Due to its fixed currency exchange margin and the minimum transfer amount of $1 it’s perfect for remittances and other small personal transfers. However, note that TransferWise doesn’t offer discounts for high-volume transactions.

The company is innovative and growing fast, including its global coverage. It’s also transparent in its pricing and highly safe. It’s regulated by multiple financial authorities, including the FCA. It’s also one of the few licensed to work in the US.

The level of customer satisfaction for TransferWise is very high. The mobile app and online transfers are very user-friendly.

Notably, TransferWise offers some of the lowest foreign currency exchange rates for international money transfers. These rates are unmatched for small transfers. The only reason it’s not currently the leader of the top 10 international money transfer companies list is that TransferWise’s global reach is not yet as wide as Western Union. However, considering its rate of growth and popularity, this might change soon.

OFX

OFX is one of the most notable international money transfer companies today due to the high versatility of its services. This is an online-based company with 10 offices worldwide and 115 bank accounts. Due to this, OFX can offer cheap and fast international money transfers to both businesses and individuals.

The minimum transfer amount with OFX is $100 and the company offers rather low exchange rates and fees. This is why it’s well-suited for small transfers. But most importantly for businesses and investors, OFX has flexible margins. Therefore, the larger is your transfer, the cheaper it will be.

Moreover, the company has a corporate desk and offers very helpful services for businesses and investors. This includes hedging and dedicated currency guidance.

Customer satisfaction rate for OFX is high and the company is regulated by the FCA and other relevant authorities. All transfers are available at zero fees and the company is transparent and traded publicly. Its yearly turnover is around $20 billion. As online international transfer companies are, in essence, currency wholesalers, the large volume is what allows them to keep FX rates low.

One small issue that customers report with OFX is that waiting times for support can be long.

Payoneer

Payoneer is somewhat limited in its functionality and types of transfers you can make through it. However, it offers such a great balance of price and ease of use that it deserves a place among the top 10 international money transfer companies. It also must be noted that the company is constantly growing and improving. Just recently it announced a $3.3 billion deal with SPAC: Betsy and it’s going public. Already Payoneer offers very fair currency exchange rates and transfer fees. The new announcement shows that we can expect it to get even better soon.

Payoneer money transfers have a huge global reach and the comp-any is popular with online merchants, expats, travelers, etc. There are no good high-volume discounts. That’s why it’s not the best for large transfers. However, it’s an excellent solution for quick and cheap small-to-medium transfers. 5 million people are using Payoneer already and the majority of customer reviews are positive.

One of the best Payoneer features is that it allows freelancers to easily withdraw payments they accept from clients through a Mastercard. The solution is also a good choice for SMEs that need to accept payments from multiple countries.

AirWallex

AirWallex is one of the international money transfer companies targeting the eCommerce sector. This company offers secure and reasonably affordable transfers and is rather popular worldwide. Please note that one cannot use AirWallex as a private client to make small transfers. However, online merchants can benefit from this service greatly as it’s secure and regulated by many authorities, including FINTRAC, FCA, ASIC, and HK Customs and Excise Department. Exchange rates offered by the company are very good.

At the moment, AirWallex supports 50 currencies. It’s open for business clients from Europe, Singapore, Hong Kong, Australia, and China. There is no minimum transfer amount and fees are very low.

There aren’t many customer reviews of this company available online. However, those that exist are mostly positive. AirWallex was founded only in 2015. But it managed to build a solid reputation of reliability within its niche. It’s also known to have a very good app. The company is growing steadily and already has eight offices worldwide and over 300 employees. Its turnover has reached $3 billion a year and it currently plans expanding to the US market.

WorldFirst

WorldFirst is one of the online money transfer industry veterans. Recently this company has undergone a major overhaul. It was purchased by Alibaba Group and with this huge influx of funding it managed to rise fast. Today WorldFirst offers the best FX margins in the entire industry. It’s one of the best solutions for making large transfers at a fixed margin. Due to its close association with Alibaba, the company also offers a wide range of useful services for eCommerce merchants.

All in all, WorldFirst is near the top 10 international money transfer companies because it’s nearly impossible to find a cheaper and more reliable solution for businesses and independent investors. It’s not the best option for small transactions because the minimum transfer size is $1000.

The company is transparent in its pricing and supports over 130 currencies. It has multiple offices worldwide and accepts clients from all over the world, except for the USA. Customers usually praise low rates as well as great service. WorldFirst is rather innovative and its apps are highly advanced but easy to use.

In fact, using WorldFirst international money transfers is so easy you can make a transaction in a few minutes. The registration process takes less than a minute. The company’s global reach is unmatched by any of its direct competitors (Currencies Direct, Moneycorp, TorFX).

Moneycorp

Moneycorp is among those international money transfer companies that are rapidly growing and improving today. Just recently it announced joining Shortlist to provide simple and affordable payments for freelancers. This is a good reminder that despite being an industry veteran (founded in 1962) the company thrives on innovation. Its annual turnover is near $40 billion now and Moneycorp prides itself on working with high-wealth clients.

This is one of the top 10 international money transfer companies that are perfect for investors and businesses. The company offers lower rates for large transfers and many additional services, including guidance from currency experts. Note that Moneycorp has won numerous awards and has the highest D&B rating in the industry.

The minimum transfer is only $50, which makes it possible to use Moneycorp for small private transfers as well. However, the provider has the best rates saved for customers who make high-volume transactions. The company has offices in several European countries, the US, the UAE, Hong Kong, Brazil, and Australia. It’s regulated by multiple authorities, such as the FCA, ACPR, and FINCEN. It supports 120 currencies and over 90% of all customer reviews are positive.

Currencies Direct

Currencies Direct is another of international money transfer companies that work primarily with high-wealth clients. It offers many helpful services for investors and business owners. This includes offering expertise on global real estate investments.

The company has a $7.5 billion annual turnover and 22 offices in different countries. It offers some of the best exchange rates for high-volume transfers. It also offers a very efficient and friendly multi-lingual customer support service.

The minimum transfer with Currencies Direct is $100 and the company charges no transfer fees. It’s regulated by the FCA, SARB, FINTRAC, and FinCEN. It also has a Level 1 D&B rating and supports 39 currencies.

Bottom Line: International Money Transfer Companies Are Changing the World

As globalization is growing billions need to be transferred worldwide every year for business and personal purposes. Money transfer companies with their cheaper and more efficient transactions are going to become the new norm for international payments. This means that we can expect more competition in the industry, which will prompt even better offers.

National debt
ArticlesFinance

Study Reveals UK Among World’s Worst For Its National Debt – Equal to £40K Per Person by 2025

National debt

Government debt could be as high as £2.75 trillion by 2025, nearly £40K per person

The COVID-19 pandemic has been financially challenging for tens of millions of Brits, but none more so than for the UK Government who has borrowed billions so far to fight the Coronavirus and keep the economy afloat. 

 

Just like businesses, governments have balance sheets and competing priorities for their money. And a new study by investing platform Stockopedia.com, comparing national debt across the globe during the pandemic, has found the UK is among the worst in the world for its rising debt levels. 

 

According to the study, the UK’s net national debt was £2.02 trillion in the final months of 2020. To put this into perspective, that’s £30,042.05 for every person living in the UK (67.3 million of them) and ranks the UK in 7th place globally for the most debt per person.

The UK’s net debt is up from £1.67 trillion at the end of 2019 (or £25,020 per person), before COVID-19 had reached our shores.  

 

Out of the G20 and EU countries, the UK has seen the 3rd largest impact on national debt during the pandemic, up 22.75 percent, behind Spain (+25.58 percent) and Italy (+25.8 percent). 

 

Net debt takes into account a country’s financial assets like gold, currency and deposits, debt securities, insurance and pensions to give a truer figure of what’s owed. Of course, this isn’t debt that the public has to pay back; rather, it’s a reflection of the financial hole in the UK economy that will affect everyone in one way or another.  

 

In order to start getting its finances under control, the UK Government announced a public sector pay freeze in November, despite this workforce playing a frontline role during the pandemic. This will affect the income of 5.5 million people, although NHS staff are exempt.  

 

It’s also expected that the Chancellor will increase income tax, National Insurance contributions and VAT in the coming months to raise what could be an extra £19bn of revenue a year, further squeezing the finances of tens of millions but helping to pay off some of its debt. 

 

What’s more, the IMF is projecting the UK’s debt could be as high as £2.75 trillion by 2025. That’s equal to £39,905 for every person living in the UK – estimated to be 68.88 million in four years’ time. 

 

This means the UK is set to become the 5th worst country globally for its amount of national debt per person, overtaking Italy and Ireland. 

 

The UK isn’t the only country globally facing spiralling national debt. The study reveals Japan is in the most debt, with its economy hit hard by the global recession in 2008/9, as well as the catastrophic earthquake and tsunami in 2011, and subsequently the COVID-19 pandemic.  

 

Calculated proportionate to its population, Japan’s net national debt of over 932 trillion Yen (roughly £6.5 trillion) accounts for a staggering £52,758 per person.  

 

The United States follows closely in 2nd place with a net national debt of almost £50k per person, totalling over $22.2 trillion. Meanwhile, closer to home, Ireland is in 3rd place with debts of over £36k per person (totalling over 204 billion Euros).  

 

At the other end of the rankings, there are only four countries who are debt-free: Lesotho, Kazakhstan, Luxembourg and Norway. While it’s true they all have varying amounts of gross debt, this is completely offset by their valuable financial assets. 

 

You can explore the full data from the study here.

 

Ben Hobson, Markets Editor at Stockopedia.com commented on the findings: 

 

National debt is a reality of the modern world. But few could imagine the impact the COVID-19 pandemic would have on major world economies, as well as smaller nations. 

 

While it can be difficult to predict how the situation will change in the coming year, what’s certain is that there’s a long road ahead for financial recovery, as highlighted by the IMF projects up to 2025. What’s clear is that we’re likely to see the situation become worse before it gets better.”