Reader Question: How much was your first passive income?

How much was your first passive income? I’m not talking about the first investment you made, but about the return it generated for you. How much was it? I was asked this question by a reader this week, and the answer is a simple one. £1.67 I was 18 years old, and had recently started pursuing income-producing assets. I’d been saving money since I was in my teens, but it took me years to do much more than stick it in my savings account. At the time, I didn’t have much capital to invest in anything other than P2P lending with Zopa Loans. I couldn’t afford to trade stocks because I was going to be incurring crazy costs to trade through the brokerage on commissions and stamp duty. I also hadn’t discovered the value of investing in entrepreneurs. So, I did what I thought was my only option and invested in something with a higher […]

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Reader Question: Are my dividends sufficiently diversified?

I received an email from a reader last week, asking about shares and the reader’s concerns about the growing risk of a share market collapse due to record high stock market valuations. This reader had primarily invested in dividend focussed funds and investment trusts, rather than individual shares, thinking that these provide sufficient diversification to mitigate risk. When I asked what the top five holdings of each fund were, however, they weren’t entirely sure; unfortunately, I happened to know the answer, as I’d carried out research recently on several of them myself. Although many of the funds my reader had invested in had excellent track records of growing both dividends and capital, nearly all of them had invested in the same set of around 10 shares. Names such as AstraZeneca, BP, Legal and General and British American Tobacco were all present within multiple funds – hardly a truly diversified portfolio! Spreading investment risk As I’m […]

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Why your team is your biggest asset

For as long as Donald Trump has been in office – possibly as long as he’s been running for office – he has been dogged by scandal and rumour, and more chaos than Armando Iannucci’s The Thick of It. Since being inaugurated on January 20th, 2017, he has; Fired a set of ambassadors and the acting attorney general, Sally Yates Faced the resignation of his national security advisor, Michael Flynn Had his actual attorney general, Jeff Sessions, recuse himself from the Russia investigation (who a few days later asked a set of US attorneys to tender their resignations. Fired James Comey, his FBI Director Had his Communications Director, Mike Dubke, resign Had Mike Corello, spokesman for his legal team on the Russia investigation resign Had his Press Secretary, Sean Spicer resign Fired his second Communications Director, Anthony Scaramucci Had a host of business leaders resign from national strategy committees Scrapped more committees before they even […]

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What I’ve learned from investing in Carillion

I see investing as a constant opportunity to learn and improve my financial understanding of the world. For the last few weeks, my friends have heard me talk about an investment I made which went south big-time a few weeks ago, losing 75% of it’s value almost overnight. The investment was in international facilities management and construction company, Carillion plc. Although I only own a modest sum of publicly listed shares, I take trading as seriously as any other investment, and have a number of criteria a share has to hit before I invest in it. The share has to yield more than 4% in dividends The dividend has to be covered by more than 1.5x earnings The dividend has to have grown by at least 2% over the last five years The company cannot have net gearing of more than 300% The company must have had positive cashflow for 8 of the last ten […]

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Six mistakes that Ultra High Net Worth investors know not to make

The ultra wealthy, known as Ultra High Net Worth Individuals (UHNWIs), are wealth holders with a personal net worth of at least one hundred million pounds. Their wealth consists of public and private company shares, real estate investments, and personal investments, such as fine art and jewelry, cars and designer clothing. These individuals understand the basics of having their money work for them, but have also developed a complex understanding of how to take calculated risks. UHNWIs aren’t mystics, and they don’t harbor deep investing secrets. Instead, I believe their success comes largely from knowing what mistakes to avoid. Although many of these mistakes are common knowledge, most regular investors fail to avoid these mistakes, burning through their capital and consequently failing to join the ranks of the UHNWIs. 1. Deciding to Invest Only in the UK, EU and US While developed countries such as the United Kingdon and those within the European Union are […]

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Reader Question: What’s the secret to making ‘great’ investments?

Last week, I was speaking to a colleague about investing and why he’s not riding a Rolls-Royce when he spends so much time saving and investing. Once I’d stopped laughing at the idea of driving a Rolls (although I think they’re classy vehicles, I think they’re a horrendous misuse of capital!), I asked him what he was trying to get at with his question. What I’m asking is why I’m scrimping and saving to put £200 a month into a savings account – I have been for years – and why after so many years my bank account is still in the 4-figure range, not the six or seven figures that I aspire to. You’re always talking about deals you’ve done – what is it that you’re doing differently to me? What is your secret to making great investment deals? This question didn’t surprise me, as it’s something quite common to a lot of people. […]

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Assertiveness whilst being polite

Today, I want to share a personal story with you. I was travelling to Nottingham last month and was getting on the train when I came across a young Mother and her two kids struggling with their luggage. Noticing that she was struggling with her case, I gave her a hand to get it onto the train and was helping to load it into the rack, when a guy shoved me from behind and said “Will you hurry to f**k up – I just want to sit down already,” Fortunately, I’m pretty tall and when I turned around I found myself looking at a short, middle-aged man who looked considerably less hassle than he’d sounded when I’d had my back turned. Turning fully around, I stood and glared down at him and found that he was suddenly greatly interested in the floor rather than meeting my eye. As it turned out, myself, the young lady […]

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Why I preach financial discipline

Despite our lack of financial training and advice at school, the internet is awash with financial gurus teaching different systems and techniques for financial success. From paying off debt, to reducing spending, to investing like the next Warren Buffet, there is no shortage of useful, well-written articles available for an interested reader to dive into. Despite this, there is one thing that they nearly all overlook. To be effective, the reader must want to change their behaviour. This sounds obvious, but it was really driven home to me a few days ago when I was speaking to a friend who was reeling off a long list of reasons why they couldn’t save any money. First of all, their car needed a new wing mirror. Then, their girlfriend had wanted to get a new table for the lounge. Next, a pair of their suit trousers had torn, and when they’d gone to buy some, they’d seen […]

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Using Seller Financing to Acquire Income Producing Assets

Income producing assets are a great addition to your portfolio. The only problem is that they’re often prohibitively expensive to acquire. I don’t know about you, but I certainly don’t have £500,000 lying around to acquire ownership rights over a successful business. But what if you didn’t need the money right now? What if you could use the forecast profits of the company as collateral and get a loan for the money? Most banks aren’t generally too happy to lend money like this, as the profits of the business aren’t guaranteed and unless you’ve got a strong track record in the industry, you’re a bit of an unknown quantity as an owner. Despite this, there is another model of financing which can help you acquire the business without needing the entirety of the payment upfront. Consider this example. A local engineering company is selling for £500,000. By carrying out your due diligence, you’ve spoken to […]

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How to Build a Website Series: 4. Re-programming for success

Welcome to Part 4 of my ‘How to Build a Website’ series. In this article, I’ll be talking about how to handle challenges and re-programming a schedule to keep things on target when things get challenging. If you’re only just joining us, I’d recommend reading Part 1, where we launched our website project, Part 2, where we examined the importance of defining outcomes for the website, and Part 3, where we looked at the wire framing process. Things began moving swiftly after we’d defined the outcomes and started building the wireframe. As I’d been tasked with leading the content strategy for the site, I set about undertaking interviews and writing the content we needed to populate the site. I’d got a huge challenge in front of me, needing to understand the services of multiple businesses which worked under a single umbrella, and trying to understand their markets and customers. Each of the businesses has a […]

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