This week’s phony UK budget may have been politically expedient and mostly harmless, but it didn’t make it any easier to decide who to vote for.
No wonder the polls predict a hung Parliament – this is voting by elimination, a real-life version of Hangman.
Starting with the Liberal Democrats, Vince Cable grasped what was going in the crisis early and deserves some praise, but the rest of his party put the moan into sanctimonious.
Most writing about personal time management focuses on getting more done to make more money. And that’s certainly one potential benefit.
But shouldn’t a personal time management system be just that – personal?
What’s the point of taking control of your day to fit someone else’s agenda? As the Warren Buffett of personal time management, Stephen Covey
You don’t want to climb the ladder of success only to find it’s leaning against the wrong wall.
You could never have persuaded a ten-year old me to work more efficiently at school, which I hated, if the goal was to squeeze in more lessons.
But if you’d told me I could have finished school at lunchtime to go bike riding or hunting for newts, I’d give you tomorrow’s homework yesterday!
I suppose the authors of personal time management books know their target market. Their techniques are reached for by desperate office workers with 113 items on their To Do lists – people with no possibility of going home early.
I bailed from corporate life early, so my situation is different. There have been many benefits and a few downsides to working for myself, but the one I’d like to focus on today is taking control of your time.
When I first left the office, my daily earnings soared. Without the distractions of the office and its politics, I could focus on what made money, and I did.
But after a while most freelancers get caught up in new distractions, and I was no exception.
At least the new distractions were a more pleasant waste of time!
Instead of putting my heart into doomed projects or spending a week training a colleague who couldn’t go places on a rocket ship, I now wasted time:
All good stuff, but none of this puts food on the table – unless you like eating guppies.
When you waste time as a self-employed freelancer, you have less money in your wallet. Provided you’ve got some self-control, the threat of poverty stops you going too far off-track.
Eventually a balance is struck between taking advantage of the freedom of enjoying coffee in the park working for yourself, and the need to make money.
I don’t always get this right, of course. But when I’m at my most efficient, I run the following personal time management regime – very much tailored to me!
My mission: To schedule and complete whatever work is required to hit my daily earning target by 2pm each day.
This means I work a five-hour day.
So far I’m succeeding most days, and when I hit my target and down tools, it feels great. In fact, it makes me wonder why I didn’t always work like this!
Doing my five-hour workday experiment I’ve learned a few lessons, which may be useful if you want to try something similar.
I may be earning a little less overall with my new personal time management system, but my productivity on an hourly basis has soared.
Accounting for the slight drop in income, my productivity has jumped around 50 per cent.
The payout comes in a great deal more free time, rather than in money. I’m working 25 hours instead of more than 40 under the old conventional way, which means 15 more hours to do as I please.
This is a ‘big win’ for less effort. Rather than trying to micro-manage every hour of an 8- or even a 10-hour day, my system grabs most of the benefits of personal time management with just a couple of major rules. It’s a classic 80/20 payoff.
Ironically perhaps, I spend a lot of the free time I’ve generated sitting at the same desk working on my own passive income streams, in particular this money and investing blog, and my side trading portfolio.
I’ve found that after a couple of hours doing something completely different I get a second wind, provided I’m working on own projects.
Since these projects also make money, my actual projected annual income hasn’t fallen much.
But I prefer to account for the still modest blog income and my investing income separately from my freelance earnings, which as I say have dropped a little.
I appreciate for many readers, this is all academic. Despite the trend towards homeworking, most people can’t follow what I’m doing with my personal time management to get more free time back. They’re stuck in office jobs where they are paid for showing up.
If that’s you and you don’t like your job, you may want to change your situation.
One book I’d recommend reading first is the The Four Hour Work Week
True, his book is rather sensationalist and tilted towards the hyper-competitive field of making money by selling crap on the Internet.
But Ferris is also oddly inspiring, and I’d say the Four Hour Work Week is a great primer in applying personal time management to suit yourself, rather than the hours that society keeps, or the hours that suit your employer.
The lifetime limit on Entrepreneurs’ Tax Relief was raised from £1 million to £2 million in the UK’s 2010 budget.
This relief enables many entrepreneurs to pay just 10% capital gains tax when they sell the assets they create, rather than the standard flat CGT rate of 18%.
The £2 million allowance is spread over your whole lifetime.
Important update: The entire stamp duty system was overhauled in December 2014, so please read my explanation of the new stamp duty on UK property rules.
Chancellor Alistair Darling tweaked the stamp duty bands for UK houses in the 2010 budget to favour first-time buyers.
This means the bands are now as follows:
Note that unlike income tax the rate applies to the whole amount you’re paying for the house.
So you don’t pay £250,000 at 1%, and 3% on the next £250,000, and so on. You pay the full rate on whatever band you’re in.
Stamp duty is a tax you pay to the UK Government when you buy a house.
In 2003 it was given the official name Stamp Duty Land Tax to distinguish it from the different tax you pay when you buy shares (which was renamed Stamp Duty Reserve Tax).
The different rates are payable depending on the purchase price of the property (as opposed to say the size of your mortgage you use to buy it with).
From time to time special rates are brought in to secure votes encourage redevelopment in disadvantaged areas or zero carbon home building. The current rates are available on HMRC’s website.
In my view stamp duty is a cash crop for the Government. It has increased the rates of stamp duty several times since coming to power in 1997.
It has also raised more revenue from the tax every year by not redrawing the bands to compensate for price inflation. (This is known as fiscal drag, jargon fans!) Far more people pay the tax now than a decade ago, as a result of rising house prices.
Note that the new £1 million-plus category, which covers quite a swathe of family homes in London, will be permanent, whereas the special tax-free rate for first -time buyers spending up to £250,000 expires in two years.
The tax also adds friction to the home buying process, by making moving house much more expensive, and it doesn’t do much to restrain prices. All it really does is distorts asking prices around the different band divisions.
For instance, it’s pretty much impossible to sell a house for £255,000, because buyers will not want to pay three times as much stamp duty by being pushed into the 3% bracket.
In practice, you’d have to reduce the house to £249,999, or else wait for prices to go up enough to enable your house to be sold for around £265,000.
Finally, some sophisticated buyers have employed various tricks such as paying separately for ‘fixtures and fittings‘ to stay below a band limit, or by using an Islamic mortgage to avoid paying the tax, but the Revenue may take a dim view of such methods.
Tread carefully and do your own research. Remember, tax avoidance is legal but tax evasion is not!
