Mostly Financial

To help you avoid being a repeat offender, here are 7 of the common money errors that many of us make repeatedly, along with the real-world cost of each and a better way to handle each situation.

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This is an extended explanation of how emails with viruses and worms are birthed.

In case you are too lazy to read the rest of this important item, the gist of the message is

Your friend might get the idea that you sent him a message with some kind of virus in it. This is one of those instances that resulted from someone sending you an email message with dozens of people CCed - but not using the BCC (Blind Carbon/Complimentary Copy) option.

When a message is sent with everyones email address visible (they DIDNT use the BCC method), then any one of those visible addresses can be used by someone who eventually gets a copy of the message. It could be that they deliberately use it - or it could be that it was used automatically, unknowingly.
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IT’S easy to get caught out by the complex rules on taxation of overseas property. Here we answer the essential questions.
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Compounding is the word to describe the phenomenon of interest earning interest.

This is powerful because as the interest that is earned by the initial capital also earns interest, the value of the account grows at a geometric (ever-increasing) rate, rather than an arithmetic (straight-line) rate.

An Example Of How Compounding Works

Let’s look at two investors who each have £1,000 to invest every year. They will leave any dividends in the account to compound. Investor A’s fund has a 7.9% annual return, while Investor B’s fund returns a mere 4.1%. While Investor A’s rate of return is twice that of Investor B’s, over time the increase is significantly more than twice as much. After 10 years, Investor A’s gain is 2.2 times greater, and after 20 years, it is 2.6 times greater.

• Gains                Investor A        Investor B 
  Rate of Return     7.9%                 4.1% 
  10 Year Gain      44.9%               20.1% 
  20 Year Gain      128.8%             48.9%

Remember that examples are for illustrative purposes only. A  fund’s investment return and share value will fluctuate.

Put Compounding To Work For You

Reinvest Dividends: Rather than taking your dividend distributions in cash, give instructions to let them remain in your account to purchase additional shares. Most companies will allow you to do this without any additional sales charges.

Invest Regularly: Add to your portfolio on a regular basis such as monthly or quarterly. You may be able to have this done automatically by setting up a systematic investment plan. By investing regularly you take advantage of a strategy called pound-cost averaging.

Make Time Your Ally: The longer your money can work for you, the better compounding works. Consider this illustration: £1,000 invested at 8% earns £80. Left to compound, the original £1,000, plus accumulated interest, will earn £160 in the 10th year, £507 in the 25th year, and £1,609 in the 40th year — returns of 16%, 51%, and 161%, respectively, on the original £1,000. The longer your money works for you, the more you will have later.

This checklist may be helpful as a starting point, if you are thinking of buying a property. You can add/remove items to your heart’s content, then print it out.

• Work out how much mortgage you can afford.
• Decide what you can afford to spend.
  No matter how much you can borrow, having borrowed too much you may have to cut back on other expenses such as holidays or entertainment. Consider how your day-to-day cash flow will be affected.
• Make your wish list.
  Consider what features you would like, what you don’t like, and what you would find useful or more comfortable. Determine your housing needs and wants to determine what types of houses you should be considering. Consider the general location.
• Begin house-hunting.
  Start with the Internet.  Read the estate agents sections of your local newspaper. Visit the area . Don’t just drive around. Get out of your car and walk.

Costs of home ownership 
Sales tax
Legal Fees
Moving Costs
Repairs and renovation
Survey fees
Sales tax
Mortgage payments
Property taxes
Utilities: gas, water, cable television, telephone
Insurance
Gardening etc.

House
Age of House, Square footage, Type of Construction
Practicality of floorplan
Ability to Expand/Enlarge House
Interior walls condition
Age of Heating System
Age of Water Heater
Age of Electrical Wiring
Estimated Water Bill
Estimated Heating Bill
Oil Heat
Gas Heat
Electric Heat
Hot Water Heat
Estimated Electric Bill
Number of Stories
Number of Bathrooms 
Number of Bedrooms
Roof Condition
Foundation Condition 
Energy-Conservation Features
Plumbing condition
Kitchen Eating Area
Overall Exterior Condition
Garage Size 
Fence
Landscaping

Neighbourhood
Environment 
Near Churches
Near Doctors/Dentists
Near Industry
Near Public Transport
Near Schools
Near Shopping
Near Work
Noise Levels
Parking
Parks
Pet restrictions
Police
Restaurants/entertainment
Safety/Security
Shopping
Streets
Street Lights
Supermarket
The Neighbourhood
Traffic Volume

A mini-boom is sweeping the most exclusive streets of central London, where prices have risen by 14.7 per cent in a year.
 

In the last four months, prices in Chelsea – where Hugh Grant and Jemima Khan are understood to have just bought a £12m house – are up by 11.8 per cent.

A typical two-bed flat in the area, now £500,000, has spiralled in value by £15,000 a month since Christmas, according to research by agents Knight Frank.

The balance of supply and demand for London’s most upmarket homes is now at its most lopsided for a decade, the agency says. Supply has fallen by 21 per cent in the last year while demand has soared 43 per cent.

The boom in central London helped lift the average price of a UK home by 2 per cent last month – 8 per cent ahead of a year ago – according to the Halifax, Britain’s biggest lender.

“A fair amount of that growth has come from London and the south-east; people are investing substantial sums in that market,” said Martin Ellis, chief economist at the group.

• Elsewhere in the UK, though, the market has been far weaker, with prices up by just 1 per cent in Scotland since the New Year and 2 per cent in the north-west, Yorkshire and the south-west.

Many experts believe central London is booming because it saw more subdued growth in the last four years than elsewhere.

Liam Bailey, head of residential research at Knight Frank, said the central London boom was “unsustainable” in the medium term, but prices showed little sign of waning because of international demand and a strong City bonus season.

David Ogilvy once admitted, “99% of advertising doesn’t sell much of anything.” He was right. Fact is, most ads today are ineffective

If agencies hype the importance of branding campaigns for public companies to enhance their image among investors, why is it that Interpublic, Omnicom, Publicis and WPP don’t support their brand images on Wall Street?

According to Nielsen Monitor-Plus, the four holding companies spent a total of $3.7 million to promote themselves in the U.S. in 2005, down 15% from the $4.4 million they spent in 2004.

Considering that agencies recommend their clients spend 10% of their revenues on marketing, the big four are spending .01% of their combined $29.3 billion in global revenue. Mull that for a second or two.

Kinda makes you wonder if the advertising agencies know something about the value of advertising, doesn’t it?

It reminds me of the old saying - why is there only one Competition Authority?

ISP Biscit has launched a deal it says will compete with TalkTalk’s free broadband offer announced last week.
TalkTalk entered the broadband market with a splash, promising free, up to 8Mbps broadband to anyone who switched to its £9.99 a month telephone service, paid a set-up fee of £29.99 and paid line rental of £11 a month to TalkTalk rather than BT.

In response, ISP Biscit is offering a phone and free broadband package from £19.99 a month for the first six months of an 18 month contract, and £21.75 after that.

Biscit is also charging a £29.99 set-up fee. Its package eliminates BT landline rental charges, includes 720 minutes anytime calls to national landlines each month, offers unlimited free calls to other freeMAX or Biscit broadband users, and includes an up to 8Mbps broadband connection with a 2GB monthly cap – enough to download 500 MP3 files.

Nathan Relevy, Biscit’s chief executive officer, said: “The launch of freeMAX today is a key date in the history of broadband Britain.
“Unlike other phone-talk packages which will eventually include free superfast broadband, biscit’s is available now and nationwide.”

Chris Williams, broadband product manager at comparison and switching service uSwitch.com, said: “This is the opening salvo in the broadband price war sparked by Talk Talk’s recent offer. [Consumers] should be aware that they will be locked into an 18 month contract. This compares to Talk Talk’s £20.99 a month offer which also has an 18 month tie-in however TalkTalk’s includes inclusive calls to 28 international destinations.

“It will be interesting to see how long these offers can be sustained as inevitably companies will be making initial losses in their battle to sign up customers. We predict that other providers will have no choice but to slash their prices over the coming months in order to remain competitive.”