Month: May 2021

Gold
ArticlesFinanceMarkets

Why Gift Premium Bonds When You Can Gift Gold?

Gold


Becky Hutchinson, CEO at Minted, an investment platform which allows individuals to buy and sell gold bullion.

In light of the ‘new normal’, parents and grandparents are looking for new ways to gift, virtually or otherwise. But in a climate of stock market volatility and low interest rates, are traditional financial investments still a solid choice, and could gold bullion be a safer bet?

There’s no doubt about it, Premium Bonds have earned their reputation as a safe and steadfast savings option. First introduced by the Government in 1956, these tax-free bonds from the National Savings and Investments (NS&I) agency are now UK’s biggest savings product, with about 22 million people having over £86 billion invested in them. Every £1 Bond is given a unique number and all numbers are put into a computer called Ernie (which stands for Electronic Random Number Indicator Equipment), which draws monthly winners. For years, they have been popular to give as presents to children under 16. The parent or guardian named on the application looks after the Bonds until the child’s 16th birthday, when they are entitled to a gift that will hopefully keep on giving.

In December 2020, however, the prize fund was cut considerably and due to the drop in the Bank of England base rate, NS&I also reduced the odds of winning. As a monthly lottery, the closest thing Premium Bonds have to an interest rate is their annual prize rate, which currently stands at one percent. This is based on the average pay out, depending on the number of bonds owned and, while it isn’t completely accurate, it does allow for an estimated calculation to be made about interest gained in a year.

But winning may be harder than it seems. According to Money Saving Expert, only 30% of people with £1,000 in Premium Bonds win £25 or more per year. And, over five years, someone with £1,000 in Premium Bonds and ‘average luck’ is expected to win roughly £50. While that may seem a lot of money to a child who’s been gifted Bonds, any parent knows that £50 doesn’t go far in today’s society.

When it comes to investment options, however, Premium Bonds are as safe as they get. Operated by NS&I, which is backed by the Treasury rather than a bank, funds are easy to access and there is little-to-no risk of losing money – only a small gamble around any potential ‘interest’. However, while this level of financial security was once a significant perk, all UK-regulated savings accounts are now protected by the Financial Services Compensation Scheme (FSCS) under the savings safety rules. This extends up to £85,000 per person, per bank, building society or credit union – £35,000 more than the maximum deposit allowance for Premium Bonds.

So, is there an alternative safe-haven investment option, with a better interest rate and without a savings cap? There is and it’s far older than Premium Bonds. Gold was one of the first precious metals to be used by humans as a trading commodity and, to this day, remains a stable choice. Many children’s books tell stories of gold – from pirates to royalty – and, in sport, a gold medal has always been associated with winning. From a very young age, the intrinsic value of gold has been ingrained in most people’s minds.

Aside from the glitz and glamour, perhaps the biggest difference between gold and Premium Bonds is that gold is a tangible asset. Investors can handle their physical gold and store it as they wish or even liquidate an asset if needed. Gold doesn’t just sit pretty either; while its price may fluctuate, historically and over the long term, it trends higher. Currently, the average growth rate per year is nine percent, considerably greater than bonds or current interest rates. With this in mind, £1,000 invested in gold could be worth around £1,538 after five years.

With the popularity of the finite resource growing, more user-friendly and flexible tech-focused routes into gold investment are appearing, making gifting the precious metal much easier. Features such as reward points for referring friends and family also provide an incentive for parents to start building up points for their children. With investment platforms like Minted, people can either purchase gold with a lump sum or save set amounts every month, starting at £30. Once enough has been saved for a gold bar, the physical gold can either be stored in a secure London vault or withdrawn – something any child would be proud to own. 

Despite its high-class status, gold is much more than just a luxury good and can be a viable option for every investor, at any age. As markets continue to fluctuate and interest rates drop, the price of gold could remain on its upward trajectory for some time. No matter the state of the current economic climate, the metal will always be a must-have addition to anyone’s investment portfolio and, with growing options to transfer gold virtually, the best kind of gift.

Alternative Investment
ArticlesFinance

Why Choose Alternative Finance?

Alternative Investment


With retail, hospitality and leisure businesses opening again, and demand for suppliers, manufacturing and construction greater than ever, it is important that companies have the facilities to expand, grow and invest in the future. With cash flow becoming one of the main concerns for SMEs in the last year, it’s important to get the balance right, and with mainstream lenders come long waiting times, increased scrutiny and endless criteria, more business are seeing their applications for loans, finance and leasing being rejected than ever before. This level of scepticism has a significant impact on businesses and their operations

However, alternative finance is an option that cannot be underestimated, and has the ability to support suppliers, businesses and their clients in selling more and investing in their products and services. There are many reasons why businesses are turning to alternative finance, and will continue to do so.

 

Common sense

Mainstream lenders have different processes to alternative lenders, and therefore business plans and propositions with genuine strength and durability can be misunderstood or ignored. We specialise in being a common sense lender, listening to your story and finding out how we can make finance work for you, rather than the other way around. Common sense means decisions are made by people who understand your industry and what you want to achieve.

 

Competitive rates

This is, and should be, important for any business owner. It affects your bottom line and how your business operates financially, which is crucial to ensuring you succeed. By offering competitive rates, alternative lending is an attractive option for businesses who may be in doubt about the value for money they can get elsewhere. It’s important for us, and it’s important for you, that’s why we make it a priority to secure competitive rates for your business.

 

Quick

More so than ever the queues have been getting longer, processing time and waiting for decisions is not what you should be doing when trying to secure finance to improve your business. Our team work directly to ensure all necessary steps are completed in an efficient manner to give you the best chance of getting your funds quickly, as we understand how important every second is. Alternative lending means you have a dedicated team working tirelessly to help you and your business, your clients and your customers.

 

Experts in your sector

Knowing your sector and industry gives us alternative finance the edge, because we work closely with suppliers, customers and industry bodies to understand what makes it tick and what’s important. That’s why when you bring us some Quirky Kit that banks or lenders may not see as valuable, we make it our mission to help you secure it. There’s not much we haven’t seen, and it can be frustrating dealing with people who don’t understand why you need your equipment, what it’s for or how it can benefit your business. By specialising in this area of equipment finance, alternative finance has a significant advantage.

 

Improve cash flow

It’s important to keep on top of cash flow, and it can be a dilemma when you want to invest but don’t want to spend. Using alternative finance to secure a loan or equipment finance for your business you can improve your service or product, make it more cost effective, more efficient and increase revenue, allowing you to take care of overheads, bills, wages and other expenditures. This allows you to keep any cash you have for a rainy day, whilst also improving your business. You can find out more on how to improve your cash flow by viewing our guide here.

 

Freedom to grow your business

Another benefit of alternative finance is the freedom to grow your business. This means that we will support you in how you plan to use the loan or finance, as you know your business better than anyone, meaning you know how to make it succeed, and keep to your ongoing commitments. Compare this to mainstream lending which may require more detail and may be more strict with the delegation of your agreement, we want you to have freedom.

 

Whether you’re in manufacturing, engineering, hospitality, leisure, or any other industry, alternative finance can be a great option to support your business in its next stage, helping to increase revenue, decrease costs and improve service to your customers

ROI
ArticlesFinance

5 Renovations With the Best ROI in 2021

ROI


When remodeling your commercial property, one of the most important considerations is the return on investment (ROI). You want to make your property attractive to others so they’ll stop in or use your business. Plus, your clients and other companies see your building often, so you want to portray the right picture to them.

Any time you put money into your commercial property, you want to get that money back or even get more than what you put into the investment. Here are five renovations with the best ROI in 2021 to keep your business booming.

 

Remodeling the Kitchens

Most commercial properties have a kitchen of some sort or even kitchen appliances in a break room. Remodeling a kitchen in any building is bound to increase the property value. Freshening up the kitchen can be affordable, and it will have a great ROI in the end.

Add in some energy-efficient appliances and a new backsplash or countertop for a simple remodel. You don’t have to be fancy with it. Just keep it updated and modern.

 

Going Green

Implementing eco-friendly appliances and systems in your commercial property will lead to savings in energy usage. If your energy system is outdated, it’s time to take it out and invest in something newer and more efficient.

You can get a new heating and cooling system, install low-flow plumbing, put in a cool roof, and upgrade your windows. These investments will help you save money on utility bills and attract customers who have environmentally charged ideals.

 

Updating Safety Features

Older commercial buildings can be hazardous, especially if you haven’t renovated them for many decades. Safety should be your number one priority as the owner or operator of a commercial building if you have numerous clients and employees working there every day.

Safety features might include a fire alarm system, burglary alarms and even a designated shelter for inclement weather. Adding in new safety features will decrease the risk of a worker or visitor getting injured. Safety renovations will save you time and money overall.

 

Investing in Curb Appeal

The outside of your property is just as important as the inside when it comes to return on investment. Curb appeal renovations often bring in the highest ROI. Every time someone comes to your property, the first thing they see is the outside of your building.

Every year, take the time and money to invest in curb appeal. Add new mulch, keep the lawn looking trimmed and green, and add plenty of walking space for clients and customers. It will attract more people to your business when the outside looks just as clean and neat as the inside.

 

Upgrading the Cosmetic Features

Finally, you can boost your ROI by renovating the cosmetic features of your commercial property. For example, old flooring, chipped paint and fixtures that aren’t doing your building justice won’t bring you in as much money as possible.

Take the time to investigate your property and take note of things that could use improvement. Install new flooring, doors, lighting fixtures or anything else that needs to be updated. Keeping things fresh and modern will do wonders for your ROI.

 

Get to Work

Begin these renovations as soon as possible. Investing in your commercial property in these ways will bring you the highest return on your investment this year.

CBDC
ArticlesFundsMarkets

CBDCs Impact on Payments Market: A Push for Repositioning Barriers for Market Newcomers

CBDC


For the payments market, government-backed digital currencies could accelerate innovation by setting novel technology benchmarks, as well as rearrange some of the entry barriers for new companies looking to set up shop.

A recent survey of central banks has revealed that 86% are actively doing research into central bank digital currencies (CBDCs), 60% are already in the experimenting phase and almost 15% doing pilot testing. With CBDCs heavily gaining traction across governments worldwide, Marius Galdikas, CEO at ConnectPay, has discussed how this technological solution could impact the payments market players.

The idea of CBDCs has been circling around for a few years now, however, with the growing attention towards cryptocurrencies and money digitalization in general, banks are now focusing on how to put the idea into practise. For instance, the Bank of England together with HM Treasury has created a dedicated task force to explore potential use cases of CBDC in the UK market, as well as monitor international developments regarding the topic. Norway is pushing ahead with CBDC, too, while China is already in the process of testing digital Yuan out in the real world.

“CBDCs could be a game-changer for the payments industry. Aside from the clear benefits, for instance, low-cost cross-border payments or boosting financial inclusivity, it could also enhance domestic payments system resilience, slightly shifting dependence from the international payment processing networks,” Galdikas said.

According to Galdikas, CBDCs could be a major catalyst for the payments market, as government-issued digital currencies would be as easily accessible as current e-money payment methods, yet, in some respects, it could surpass what current market players have to offer.

“Although it has immense potential, the idea still has a long way to go. Essential decisions need to be made concerning how state-backed currencies could inherit the properties of cash, for instance, working offline or addressing the double-spending problem. Also, it’s highly likely that the central banks will not take on the responsibility to develop and implement the technology themselves, yet will want to retain the control of the currency itself,” Galdikas explained. “There is no best way to address these types of questions and that’s why specialized teams and task forces are being assembled — to come up with an approach that would combine different tools into a single solution.”

“Therefore payment service providers will have to step up their game to match the benefits CBDCs would bring to the table, which means moving up into a higher gear when it comes to innovation and delivering unique market solutions. They’ll have to be more strategic in communicating their strengths and value proposition to their target audience, too,” he added.

While outlining the benefits, Galdikas also noted how this would impact market newcomers. “CBDCs would definitely set an even higher standard for greater technological competence, which means setting up shop for new businesses is going to need a lot more investment from the get-go.”

“That said, I believe that some of the barriers would drop, for example, the requirement that only credit institutions have access to payment systems, such as SEPA. All in all, the CBDC, with inherent properties of cash, would allow for a wide variety of innovative financial solutions,” he concluded.

This could be a pivoting moment in the industry, which would greatly contribute to building a more financially inclusive society. However, a lot of questions must be addressed before then, with the main ones being technological implementation, as well as privacy concerns, which might arise due to CBDCs being state-backed.

Gold Investment
ArticlesRisk Management

How Gold Investments Help in Business Risk Management

Gold Investment


Gone are the days when gold was limited only to jewellery or to décor. When you think about the history of gold, you’ll find that many families have passed it on from one generation to the next as an asset. And, you should, too, particularly if you’re in business. Investing in gold can contribute so much to counter risks, making it a good strategy for risk management.

Whether or not you’re a seasoned businessman, it doesn’t change the fact that risks for businesses are always present. You can never really determine when a sudden change in the economy will happen, much like how the world was struck by unprecedented changes last year. Hence, you need to adopt effective asset protection strategies and make some crucial considerations to avoid dire consequences. One of the best options today is through investing in gold.

To convince you further of its viability, here are some great ways gold investments can help in business risk management:

 

1. It Offers Security of Value

One of the most compelling advantages of investing in gold is that its price will be consistently going up. Gold brings forth security of value, and this security can help smoothen out rough seas that your business might go through.

With gold, it’s normal that, sometimes, the price will go down, but it’ll always go back up again. For instance, if you bought a piece of jewellery five years ago and had it assessed by a jeweller, the value will have already increased. This becomes even so much truer with bigger gold bullions or assets, which businesses typically invest in.

With an appreciating asset, this means that you’re earning passive income. Should your business fall into the risk of low income, you can have a hedge through your asset. As a result, your financial portfolio may not suffer as much as it would’ve without this stable investment.

 

2. Offers Protection Against Inflation Risks

One common enemy of businesses, small or big, is inflation. If you’re not careful about following through the flow of inflation, it may kill your investment. This means losing everything you’ve worked so hard for.

Given this inherent risk of inflation in the economy, it’s never advisable just to put all your business resources in cash. Physically, the cash is kept in a bank, yes, but its value will deplete in a few years because of inflation.

Here’s a simple illustration of such a scenario: USD$100 in the past could buy you more than it can today. So, for instance, with your business, USD$10,000 can give you more today than it could ever do five to ten years from now.

To protect your business against inflation, it’s a good idea to place your eggs in different baskets so you can have a mix of stable assets. One of these stable assets is gold. There are online portals like https://learnaboutgold.com/ that can give you a better idea of how gold works as a stable asset to provide a hedge against inflation. Typically, this has something to do with its growth and stable history.

Such benefit is very advantageous to businesses, given that inflation usually comes along with dire effects. Some of the negative effects of inflation include the following:

  • If inflation continues to soar, this means that customers of your business will have lesser purchasing power. In effect, they may buy less from your business than they used to in the past.

  • Inflation can get out of hand, whereby businesses’ employees will also demand more in terms of their wages simply because their current salary could no longer buy them as much of their needs as it used to. When you’re forced to increase salaries, this means lowered profit margin for your business as well.

  • Inflation can also lead to disruptions in business planning, resulting in lower investments.

 

3. It Keeps Your Inventory Stable

When prices continue to soar because of inflation, this affects not just the purchasing power of customers, but also that of businesses. This is a risk that’s inherent as there really is no controlling the possible instability of economies. If your business puts too much faith on cash savings, then chances are you’ll succumb to an unstable inventory level.

Investing in gold can help you cover up the value losses of your cash savings. When the value of your cash gets too low, such that your inventory suffers, that’s when you can sell or trade gold, or make gold investments. You, then, can use the proceeds to level up your inventory.

With this, in a way, your business is protected against this business risk. Imagine how much you’d lose if your inventory won’t be able to keep up. You aren’t just losing profits, but you’re also losing potential customers that would’ve stayed happy doing business with you.

 

4. It’s A Good Way to Save Money For The Future

Over time, your business may need to expand so it can keep up with growth and competition. If you don’t have expansion in mind, then you’re not maximizing your business’s potential.

However, to achieve this business goal, you’ve got to save for it. Not only do you need to have a regular flow of income coming in, but you’ll also need to have money for your future investments. This means that your business has stable assets to keep up with the cost of future investments.

Apart from protecting your business against inflation, as explained in the sections above, having gold assets is also a good way to save business income for the future.

 

Conclusion

With the list above, now, you can clearly see that there are many benefits to choosing gold as your investment. When other assets don’t offer that much of a stability, gold is there to save the day. But, before you get too excited, don’t forget that it’s not always going to be positive all the time. Any investment form, gold included, isn’t without risk. The key is for you to ensure you’re investing in good providers, and that you’re able to weigh all pros and cons for your business before making a decision.