Thursday, 31 July 2014

Money Saving Apps and Sites: FPL edition

Welcome to the "Money Saving Apps and Sites" feature on the site. The idea here is to list and discuss mobile apps, blogs and websites that are designed to help us save or earn money in our day to day life.

Money Saving Apps and Sites: FPL edition

This time round we will be looking at a great free site called Free Postcode Lottery.

What is it? Its a free lottery which randomly selects a postcode daily. If your postcode is selected you win the pot (which at the moment is £40 a day, but this rolls over if the winner does not collect it within 24 hours). Recently they have had their highest ever payout of £320. So go and join the site with your postcode, and remember it could be you!

If multiple people from the same postcode win (i.e. you and your neighbour), only the claimants get the prize split evenly between you. If anyone forgets to claim within 24 hours, they lose out of their share of the pot.

The site is paid for by adverts, but after having used it for a few months, I assure you there is no malware or adware on the site. It is run by one generous person and it is pretty automated. You get a draw reminder everyday by email (you can opt out of emails), click the link and check the postcode.
If you scroll to the bottom of the page, there is a mini £10 draw at the bottom of the page, so you might win £10 on any day - even if you do not win the main prize that day..

But wait, that's not all, for every day you visit you get a penny added to 'your' bonus. You can increase this bonus by doing a whole host of things. Current bonus boosting tasks include, shopping at tesco through a referral link on the site for an extra £5, liking them on facebook, referring friends and booking train tickets. It may not seem like a lot, but some people have bonuses of £30 just waiting to be picked up. Should you win, you get paid the bonus alongside your winnings.

So, there you have it, great little freebie. What are you waiting for?

Thursday, 24 July 2014

On consuming and giving

In this day and age of mass consumerism, we are raised by society and expected by society to consume. No longer are our shopping sprees about ‘need’, it is about ‘want’. One of the focal points of my life recently has been to reduce how much I consume, and reduce my wants. Focusing instead on high quality products, that is applicable in many situations.  The kitchen for example, modern kitchens have a plethora of equipment, pots and pans and electronic gizmos and devices that crush, and slice, and scrape and do all sorts of things. Do we need them all? Do they add as much value to our lives as they take away (shopping, maintenance, warranty, worrying about bigger and newer models).  

I personally do not think these items add value.
Take a knife set, you can purchase a large set of knifes for cheap, with fancy shaped blades, but you will have to replace the set within a short time span. Why? Quality, they do not hold their sharpness and edge for long, and some of the knives you will rarely use.  Me, I invested in a singular Naifu D67 chefs knife (I would have spent on a Kai knife, but it was a over twice the price of the Naifu, and didn’t offer as much value to me). Both of these blades are high quality, have a last-a-lifetime construction, and are useful in every situation, slicing, cutting, crushing – letting me use a single knife in multiple situations and reduce the clutter in my kitchen. But this is not the point of this post. I will rant about consumerism another day. For now let’s discuss after sales service.

Businesses no longer sell singular products, along with the product comes presales service, and after sales service. It’s all done to tie you in to the brand and grow loyalty and sales. And many people are willing to pay a premium to show their loyalty. I have never understood this need. I would only use the manufacturers services, if there was no one else out there who could do this. 

For example, a jeweler can hike up the price of a ring polish up to £45. On the high street, I have found prices less than £10 – while you wait. Shopping around for things you cannot do pay dividends.

Other recent examples follow.

Mobile phone screen: I recently took apart my friends phone and replaced his cracked screen for a total cost of £37 (the tools supplied with the kit was inadequate, and my trusty toolkit came in handy).

Car tyres: I bought them online, to the same specification as my car manufacturer recommended, saving myself £100 on the cost of tyres, and my local garage fitted them for £15, saving me another £99.

Wing mirror for my car: One of the uncertainties in life, is having people hit you (I am a good driver and have not hit anyone as of yet), luckily in this case the only damage was some shattered mirror glass on my wing mirror.  Just the glass costs £150 from the dealership (not the housing for the electronic motor that attaches to the car, just the mirror glass!), google came in quite handy, as I was able to call a few car breakers and scrap yards and get quotes (~£75 region), until eventually I found a part on amazon, that I could either stick on top of the shattered mirror or I could replace the mirror with. £11 and about an hour of my time is all it took, but I saved about £140, so that was well worth it.

A replacement watch battery, £10 at high street retailers (they will do it for you while you wait). I have invested in a precision screwdriver toolkit with plenty of removal heads and a flexible attachment that lets me work the screwdriver at odd angles, this lets me take apart plenty of small things, like glasses, watches, car keys, toys and so on. My cost for replacing the battery on my Timex? 99p for a set of 5 batteries, I still have 4 left over, so total cost was 20p and and 3 minutes of my time.

In the process of all of this tinkering, I believe I have learnt a lot. Not just handyman skills (I am quite a handyman already), but my curiosity about how the world works was sated a little each time I attempted something new, I have now replaced parts on broken watch complications, I can refurbish alloy wheels at home, repurpose old computers, reuse wooden pallets for building things, fix broken buttons, and shorten/lengthen the cuffs on my trousers – I am no longer just a consumer, I can create and repair and give back to the world.

I no longer hoard lots of things, in case I might need them some day, I find value in high quality items that I can build a bond with and reuse time and time again.

The point of this post is that, shopping around and getting your hands dirty can not only save you money, but bring about a better person in you. It certainly has in me.

Tuesday, 22 July 2014

The NISA's have landed!

July the 1st marked the date when the UK government upped the Cash ISA limit to a whopping £15,000, up from the previous £5760. And that's not all, you can now decide to invest the whole amount in either cash or in stocks or any combination of the two. They have now been named NISA (New Individual Savings Account).

Junior ISA’s (JISA) have also upped their limit to £4000.

This is a radical change from previous years, where your cash ISA was limited to £11,880, and only half could be held in cash and the rest HAD to be in stocks and shares or you could have had all of it in stocks and shares.

My recommendation is to locate a good ISA account, and fill this up to the max as soon as possible, to ensure the best returns for your money.

What is a NISA?
It is a savings account, in which you do not pay any tax on the returns. Every other type of investment in the UK, once you claim your profit, requires you to pay the tax-man his share. If you invest in shares and stocks, your dividends and profits are taxable after your salary. If you run a business buying and selling cars, the returns are taxable. If you earn interest from your current account or a savings account - the returns are taxable.

A NISA account protects your returns from the taxman. No matter how much you earn, the taxman does not get a slice of the pie. Nothing at all. Regardless of how much you earn and what tax threshold you fall under and how much National Insurance you pay, your NISA earnings are yours to keep.

So a savings account that gives you a £100 return, is only worth £80 to you after you pay 20% tax (if your on the lower threshold, obviously if your on the higher tax threshold, you pay 40% tax and only get £60 back). A NISA that earns £100, lets you keep £100.

How do they work?
Each year you are given a limit (it is £15000 for adults for April 2014-2015), you can put up to that much, in any number of NISA accounts with any number of banks. It is completely up to you, how you split it up. There are 2 types of NISA accounts available, Cash NISA and stocks & shares ISA. Previously there were limits imposed on how much cash you put in. This limit has now been removed.

You can open up both types of ISA’s. And invest your £15K limit 50/50 (or 20/80 or any other combination - as long as you don't exceed £15K in total) to reduce some risks. You can completely forgo the shares if you don't want any risk and just put £15K into a cash ISA and reap the lower % rewards. Or you can go guns blazing and invest in a shares ISA for maximum returns (and maximum risk, as stock prices do drop sometimes).

The NISA will continue to pay returns on this account year after year, as long as you do not close the account. The returns paid are cumulative, so in the first year from a 3% NISA, if you invest £15K you earn £456.23, in the second year that same account pays £470.12 and so on. If you have a partner or a spouse, you can double that (by opening 2 accounts, one for each).

The only limit imposed is that £15K limit. Any withdrawal also cuts into the £15K limits. So if you say, put in £14K (you only have £1K left of your limit), then withdraw £2K (for a luxury cruise trip), your limit is still £1K - the withdrawal does not increase your limit. So if you can, avoid withdrawing from NISA’s, have a contingency fund elsewhere.

Also you're able to switch your NISA provider (anytime during the financial year or afterwards), if they change the returns rate, or if you find a better deal elsewhere; But you must fill in a transfer form and get it transferred, DO NOT withdraw the cash, and open a new account elsewhere. A new NISA account eats up your cash limit for the current year.
For example, if I had invested £3000 a few years ago in the old ISA and wanted to switch to a higher rewarding NISA account, if I withdraw that cash and put it into a new NISA account. I lose £3K of this years £15K limit. If I transfer that old account, to the a new account, I still have my £15K limit for this year.

Some NISA accounts also have a very slow withdrawal rate (120 days in some cases to access your money), and some of them will penalize your returns if you withdraw from an account you have opened in the last 12 months. Read the small print - but in most cases, I find that the penalties and low access, are acceptable, as the returns are still greater than the paltry 0.01% a current account pays (and then you get taxed on that too).

Finally once the financial year has ended, you are no longer able to add (you can still withdraw your cash) to the NISA for that year. A new £15K limit will be imposed and you can open up a new NISA for the next year.

So from 5th April 2014 to April 2015, you can invest £15K. If you do not use up your £15K limit by 5th April 2015, you cannot add to that account any more. But you can open up a NISA for the April 2015-2016 financial year, and that year will give you a new £15K limit (this depends on the government, they usually increase the limit as inflation rate increases). This limit is not tied into an account or a bank, it is tied to a person, you, and applies between april of one year and the next. After which a fresh new limit starts. Any money you save this year continues to gain returns. Hence why I strongly urge you to use up as much of this limit as is possible, before the start of the new financial year. Obviously withdrawal from the account removes that tax-free shield it has. A 3 year old ISA will continue to be tax-free until you take the money out and put it into a savings account or something. Sadly, you cannot top up that old account any more. So again, I urge you to try and leave old ISA’s alone, and let them accumulate.

How to maximise profits
Kill off debts. Most lenders charge a higher amount of interest on debts than a NISA can return. A £100 debt on a credit card will leave your bank balance -£134 at 34% APR. A payday loan, pfft  -£200 or more. An overdraft or personal loan of £100 at 5% will leave your bank balance at -£105, once paid back. The tax free NISA gains on a £100 at 3%  will give your account £103 at the end of the year. Use the money to pay off your debts first or your returns from your NISA will be wiped out.

Siphon the money into a NISA as soon as possible. Most people only wait until the end of the financial year, near the deadline for the year end, as they accumulate cash in their current account, before investing in a cash NISA. This wastes valuable tax free savings, and the only entity that benefits from this is your bank, as your current account probably does not beat the returns of a good NISA. If you invest a month prior to the deadline, £15000 will get you £37.5 tax free returns, for the year. Invest at the start of the year, and you will accumulate £456 tax free savings. If you drip feed the account from your salary, you will still reap more benefits than a lump sum at the end of the year.

Play the banks. Savings in current accounts are generally quite good, with Santander paying up to 3% on sums of up to £15K, for earnings of £564.23 for the year - but don't forget that the returns are taxable, leaving you with £364.98.
Nationwide FlexDirect, though pays 5% on sums of up to £2,500, so that £2500 would earn £75 in a cash NISA, but  £125 at nationwide, which amounts to £100 after 20% tax. Its worth £75 after 40% tax. So it could be an extension to your £15K cash NISA limit, as it still beats most of the other accounts out there. Also a current account gives you access to your money instantaneously. I recommend utilising both.

Do not withdraw. If you decide to withdraw from your NISA, the amount you withdraw is not taxable. So your £15,000 NISA will give you £15,456.23 after one year, but once taken out of the NISA and sitting in your bank account returns you get from your bank are now taxable. So if you're planning a holiday or buying a house and need cash, do not withdraw earlier than you need to as you lose the tax free earnings (think £30 or £40 lost out on, if you withdraw a month earlier than you need the cash).

Keep an eye on your old (N)ISA accounts. Banks may change their return rates, and may have ‘forgotten’ to let you know or you may not have read that letter they sent you. If rates drop, transfer the account, as soon as possible.

Consolidate old ISA accounts. Another tip, not to maximise profit, but to save you some time (time is money, afterall), you are able to consolidate your previous NISA accounts into one. This lets them all share the same returns rate and also lets you keep an eye on them from one online account, or a single telephone call, as opposed to having to log in multiple times to multiple accounts to check balances and rates of returns. Discuss this with your banks and they can consolidate all old accounts in one place.

Thursday, 17 July 2014

Shaving the cost of shaving

18 months ago I took the plunge and went for my first ever shave with a straight razor. This was prompted by the many discussions online regarding the benefits of wet shaving. I have not looked back since then.

For many a man, daily shaving seems a chore; waking up a little early to scrape your face to remove the remnants of stubble growth that takes place over night. And the plethora of ruddy shaving equipment on the market makes it all too easy for us to continue to damage our face on a daily basis, just to save a few minutes of our time. And marketeers would lead us to believe that its perfectly fine to have a mediocre shave as long as we buy expensive multi-bladed shaving equipment and some chemical gloop. Nada, no more, I wanted out, I wanted to treat my face better and I wanted to enjoy my shaves.

When it comes to old school wet shaving , there are 2 choices, either the double edged shaving razor or the single edged straight razor, which is even older and perhaps employed by your great grandpa. I chose to go with the latter, having seen Clint Eastwood use it in a movie. (Its not just Clint, many manly figures shave like this).

But either is fine and in retrospect, the double edge razor would have had a lower learning curve for me. I opted for the straight razor, which had quite a steep learning curve. I wanted a razor which used disposable blades, the reasons for this were manyfold; First, looking after the razor would be easier, than the stropping, sharpening and oiling required on a traditional straight razor. Secondly, if I couldn't get the technique right or my face did not take too well to the fine shave promised by the straight razor, I could sell the unused blades or experiment with different blade types. Finally, the initial outlay was a lot lower. A decent Dovo straight razor would have set me back at least £70, then the leather strop, stropping paste, sanding block and so on would have mounted to the cost. All in all, I shelled out £27. Here is what the £14.95 kit included:

  • A stainless steel straight razor
  • Pack of 100 Derby blades
  • A shaving brush (boar hair)*
  • Arko Shave stick
  • Alum sticks (in a cardboard fold out matchbox)**

* The shave brush was rubbish, so I got myself a Vulfix 404, (in black), due to its favorable reviews, at about £10.
** I also got tempted to try a larger alum block, which my barber gave to me for £2 (the same sized blocks are about £6 on amazon)

There is a wide variety of lovely
shaving creams and soaps available
I normally find myself spending about £12 a year on Gillette cartridges and shaving cream cans. So the initial outlay may seem extraneous. However considering that the, razor and brush do not have to be replaced, the ongoing cost, year after year, are just the shaving soap, alum block, and blades.

After 18 months of usage, I can confirm, that I have not had to replace anything. That's right, I have not spent a single penny on shaving since that £27 initial outlay.

Here are what the costs might be once I do run out of replacement blades:

Assuming that I use a blade for 2 shaves before disposing of it, and I shave twice a week. I can stretch 50 blades to last me 52 weeks, so 1 year. The whole pack will last me 2 years. Ebay sellers list derby blades at £4.99 (inc. p&p) for a 100 blades, so yearly that's a cost of £2.50.
The reality is the derby blades are usable far more than that, and I find them dulling after 3 uses, and completely useless after 4 shaves. So, that £2.50 is slightly pessimistic, I expect the cost to be closer to £1.25. The most optimal, sharpest, smoothest shave is either the second or third shave, for my skin and bristles, YMMV.

Again assuming I can use half a shave stick in a year, (the reality is the arko shaving stick is still going strong and I am about halfway through it. It has a lovely smell to it and lathers really well), shave sticks cost 49p in the UK. So my yearly cost is 25p.
(Asda and Tesco both sell palmolive shave sticks for 49p, and from what I hear, it is one of the better shaving soaps out there). 

Alum block is not necessary, it is soothing (and horrendously painful at first, especially after a good sharp shave), but it helps your skin heal and closes up any capillaries you may have opened during shaving. I estimate my £2 block to last me at least 5 years, as it seems like it has not shrunk at all since I have been using it (the corner that I do rub on my face, is slightly rounded). Since I do not use it all the time, I do not think I will add it to my ongoing costs.

I need the half penny to be
reintroduced to measure my shaving costs
My very pessimistic costs, then are £2.75 a year, and shaving twice a week, thats 104 shaves, making my cost per shave equal to £0.026 (or 2.6 pence per shave). And, being optimistic, since I cannot use as many blades and as much shave soap as my pessimistic estimates within 12 months, my current costs are less than 1.5 pence per shave.

My shaving journey has not all been about driving down costs, I have improved the quality of my shaves, I actually look forward to having a shave, as the lathering process and careful shaving is quite therapeutic, and not to mention, having the sharpest bit of metal put to your neck just makes you feel alive and so very manly. The cheaper costs are a side benefit.

At less than 2 pennies per shave, thats a lot of cost shaved off the cost of shaving. Adios Gillette.

If you are interested in learning more about wet shaving, and interesting in putting together your own kit, here are some resources to get you started:

These are the resources I found most useful (in order), I cannot recommend Art of Manliness enough, every article they have is a gold mine of information.
Art of Manliness
the HUKD shaving thread

Other forums you might want to visit, browse and ask questions at:
Badger and Blade
The Shave Den
The Shave Room
Straight Razor Place
Shave my face

And finally, do not forget the power of visual learning, use youtube!

Wednesday, 16 July 2014

How I got 22.5% guaranteed return on my investment

I just got myself a 22.5% guaranteed return on my investment.  Impossible you say? Not at all, it’s plain common sense.

First direct are offering £125 incentive to switch to their 1st current account. This is a limited time offer as, at the end of this month, it reverts to £100 again.

All you have to do is go to their site and click on apply now, fill in details of your current account and then within 7 days they will move all of your direct debits and payments to the new account. And you will get £125. But do read the terms and conditions, here are the most important ones:

  • ·      There is a £10 monthly charge which is waived if you have an income of £1000 per month (salary of £12000 after tax). There are other ways to avoid the fee – read on.
  • ·         To qualify for the £125, you must switch from an existing bank. Do not open a new account with them.
  • ·         £250 fee free overdraft
  • ·         Pays no interest on balances, but will give you a separate 6% interest paying savings account.
  • ·         No need to set up a direct debit to receive benefits (unlike some other current accounts that require direct debits set up)
And they seem to have great customer service, with humans at the end of their phone lines, which are open 24/7.

So what was that thing about return on investment? Well, I have multiple current accounts (as do all finance savvy individuals). So, I switched one of my dormant current accounts to first direct. And got myself £125. But what about that pesky £1000 monthly fee – well after a brief perusal of their site, they state:

Is there a charge to bank with first direct? Banking with first direct usually costs £10 a month, but you will not be charged this fee for the first six months from account opening, when you pay in at least £1,000 to your 1st Account each month, or maintain an average monthly 1st Account balance of £1,000, or you hold a selected first direct additional product. Take a look at our Interest rates and charges for more details of other additional products.

Which was confirmed with their customer services team over the phone. So here’s my plan:

  • ·         Switch accounts (£125 reward)
  • ·         Put £1000 into the account and leave it for 6 months
  • ·         Switch away after 6 months (£100 for leaving)

So for investing £1000 for 6 months, I get back £225. Which is a 22.5% return on investment, for very little work, I cannot find any other investment vehicle that offers those kind of guaranteed returns. Even without leaving them after 6 months, 12.5% returns trumps the stock market for most average investors.  And the benefits are vast, instant access to cash (plus that overdraft) – just pay it all back before the end of the month, and there are no fees.

I’m not advocating milking the bank just for money, after all they are one of the few banks that offer truly great service, so by all means I might stay with them after 6 months, but let’s see how annoying Halifax get in the meantime, their £160 this year is quite enticing for now.

So what are you waiting for, go and earn some free money.  Comment below to let me know your thoughts and feedback.