by The Investor
on March 19, 2010
A lot of people say they want to earn more money, but when you talk to them in a few years time they’re not doing any better.
Most people don’t actually want to be rich. Certainly not enough to do whatever it takes to get there.
There’s no shame in that. Being wealthy has its downsides, and there’s much more to life than money.
Some people are too lazy to earn more money. They say they want to increase their salary, but they’re not actually prepared to do the extra work or take on the responsibility required.
Or else it’s not the very real risks of starting a business that holds them back, but inertia. They sit in front of their PC night after night ‘researching’, but there’s always just one more website to read, or one more funny pet video on YouTube.
Such people may also fear making the changes in themselves that are required to earn more money.
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by The Investor
on March 17, 2010
I believe cash is king of the asset classes, which might come as a surprise given that I most often talk about investing in equities (by buying shares in companies).
But equities are a necessary evil that come with big downsides:
- There’s relatively high costs involved in buying and trading equities, even in cheap index funds.
- If you buy individual shares you can lose all your investment (though this risk is easily avoided by using an index tracker or an ETF portfolio).
The case for investing in equities is that over long periods in the UK (and even more so in the U.S.), equities have beaten the returns from all other asset classes.
But investing isn’t just about getting the highest returns.
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by The Investor
on March 15, 2010
Note: This guide to mitigating capital gains tax in the UK was updated in June 2011.
Most people won’t ever need to consider trying to reduce the hit from capital gains tax, because they’ll never be liable to pay it.
Your home and car are exempt from UK capital gains tax, as are personal belongings worth less than £6,000 when you sell them, and the average person has few other assets outside of cash, pensions, and ISAs – which are all exempt, too.
You also get a personal capital gains tax allowance every tax year (from 6th April to 5th April), which is usually sufficient for avoiding capital gains tax bills.
- The allowance is currently £10,600 in gains a year, where a gain is the increase in the value of the asset between buying and selling it. You subtract capital losses from capital gains to arrive at your total gain for the year. (Note: Gains and losses are only ‘realised’ when you sell).
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by The Investor
on March 13, 2010
My regular Saturday musings, plus a roundup of interesting blog posts and money-related articles.
Curiously, we saw two very different market anniversaries this week:
- The new bull market is now a year on from touching those incredible stock market lows back in March 2009.
- A decade ago, the ten-year bear market began as tech stocks started to slide. The NASDAQ is still less than half its peak.
I can remember where I was both times.
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