S&P 500 To Crash 50% / “ISA Millionaire” Numbers Revealed / Crypto Ban

Hello and welcome to Money Unshackled News. The headlines:

  • The S&P 500 is in freefall. Legendary investor Jeremy Grantham predicts the S&P 500 will crash almost 50%. Here’s where to invest to protect your wealth.
  • New figures from HMRC reveal that the UK has around 2,000 “ISA millionaires.”
  • Soaring food costs and the energy bill crisis drove inflation to 5.4% in December. The energy industry has called on the government to intervene ahead of huge expected rises to household bills in April.
  • Microsoft is set to acquire Activision Blizzard in a $69 billion mega deal as gaming content land-grab heats up.
  • Russia set to invade Ukraine with 100,000 troops stationed at the border. Dire consequences for the world and investors could follow.
  • And in other Russia news, as the third largest crypto mining country, Russia proposes a ban on crypto trading and mining.

We’ve gathered all the latest money news from the past few weeks that matter most to your finances. Let’s check it out…

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Jeremy Grantham Predicts The S&P 500 Will Crash Almost 50%

The S&P 500 is currently in free fall. Legendary investor Jeremy Grantham predicts the S&P 500 will crash almost 50% after the 4th US ‘superbubble’ in the past century pops. Jeremy Grantham is the co-founder of asset-management firm GMO which had $120 billion of assets under management at its peak, and he has predicted the last three market bubbles.

He said the S&P 500 index may slip to around 2,500 – even with multiple efforts underway to prevent it. This is a drop of 48% from January’s peak, and the tech-heavy Nasdaq Composite, meanwhile, might see an even sharper downturn, he added.

Grantham said, “This time last year it looked like we might have a standard bubble with resulting standard pain for the economy. But during the year, the bubble advanced to the category of superbubble, one of only three in modern times in U.S. equities, and the potential pain has increased accordingly.”

He goes on to say that “Even more dangerously for all of us, the equity bubble, which last year was already accompanied by extreme low interest rates and high bond prices, has now been joined by a bubble in housing and an [emerging] bubble in commodities.”

He compared this bubble to Japan in the 1980s, which saw two asset bubbles at the same time – real estate and stocks. The US, in contrast, has three and a half major asset classes bubbling simultaneously for the first time. These are stocks, bonds, real estate, and commodities. He said, “When pessimism returns to markets, we face the largest potential markdown of perceived wealth in U.S. history.”

By now he has scared the living daylights from anyone who has their money invested, so what advice does he give to investors? He advises to avoid U.S. equities, invest in value stocks of emerging markets and several cheaper developed countries, most notably Japan. He likes to have some cash for flexibility, as well as a little gold and silver.

And for all the Crypto fanboys, unfortunately for you he takes a dig at digital money. He says cryptocurrencies leave him increasingly feeling like the boy watching the naked emperor passing in procession.

For those that don’t remember that folklore: two swindlers offer to supply magnificent clothes to the emperor that are invisible to those who are stupid or incompetent. Everyone goes along with the pretence, not wanting to appear inept or stupid, until a child blurts out that the emperor is wearing nothing at all.

HMRC Reveal That The UK Has Around 2,000 “ISA Millionaires”

New figures from HMRC reveal that the UK has around 2,000 “ISA millionaires”, sitting on pots worth an average £1,412,000 according to the data obtained by InvestingReviews.co.uk.

Included in these incredible numbers are 60 investors who are in the £3 million+ bracket with the average pot among them standing at £6,199,000. And 80 investors had pots valued between £2 million and £3 million.

Becoming an ISA multi-millionaire is more difficult than you might think, due to the historical deposit limits. The predecessor to ISAs was the Personal Equity Plan (or PEP), which was only launched in 1987 with just a £2,400 allowance. With the annual allowance for the PEP being around £6,000 for most years after that and the ISA being around £7,000 for many years, the data released by HMRC indicates a small number of investors have benefited from supercharged returns over the years.

AJ Bell commented that if somebody had saved the full allowance since 1987 and earned 5% returns a year, they would only have built up almost £708,000 in their pot.

Investors starting from scratch now could expect to reach millionaires’ row in around 22 years by making maximum use of their annual ISA allowance, assuming a compounded 7% annual return, InvestingReviews.co.uk said.

Currently, there are around 2.7million Stocks and Shares ISA holders of which 37 per cent are maxing out their allowances, which at £20,000 per year is very impressive.

Inflation Soared To 30-Year High

In mainstream financial news, the biggest problem facing ordinary people is soaring inflation. The BBC report that surging food prices have pushed inflation to a 30-year high. Soaring food costs and the energy bill crisis drove inflation to 5.4% in the 12 months to December, up from 5.1% the month before, in another blow to struggling families.

Food writer and anti-poverty campaigner Jack Monroe said the inflation index measure “grossly underestimates the real cost of inflation” and what it means for people in poverty. She went on to list some examples.

“This time last year, the cheapest pasta in my local supermarket was 29p for 500g. Today it’s 70p. That’s a 141 per cent price increase as it hits the poorest and most vulnerable households,” she said.

“Baked beans: were 22p, now 32p. A 45 per cent price increase year on year.

“Canned spaghetti was 13p, now 35p. A price increase of 169 per cent.”

As for energy, the energy price cap is due to be revised on 1 April and as a result, fuel bills could increase by another 50% in the next few months pushing the average bill to around £2,000 a year. This is a potentially terrifying prospect for many people up and down the UK who simply cannot afford these price increases. The energy industry has called on the government to intervene.

One of the issues is dependence upon oil and gas from other countries. Theconversation.com say that the UK government should be taking a stronger position on developing the Cambo oil field off the Shetland Islands, which is estimated to have 53.5 billion cubic feet of gas undeveloped, not to mention 180 million barrels of oil.

These days companies seem to simply index their prices with inflation, rather than increase them because their underlying costs have gone up, so high inflation is sort of a self-fulfilling prophecy.

The Mirror reports that millions of phone, TV and broadband customers are facing £42 a year hikes on their bills under a series of price rises from the likes of TalkTalk, BT, Plusnet, Vodafone and EE.

Here at Money Unshackled we try to find a silver lining and inflation is good for at least one thing – the erosion of debt. Both the British public and the government are up to their necks in debt, and if we are able to maintain our earnings in line with inflation (a big ask), paying down the debt should in theory be a lot easier.

The best example we have seen of this is student loan plan 1 debt, which is the student debt held by people who started Uni between 1998 and 2011 in England, Wales and Northern Ireland. The interest rate on this is calculated as the lower of the Bank of England base rate + 1%, or the rate of inflation.

A few years of high inflation and relatively low interest rates would make that debt disappear, so for some it’s not all bad news.

Takeovers Heat Up

In takeover news, Unilever has had its third offer for GlaxoSmithKline’s consumer health business rejected. The business includes brands like Aquafresh and Sensodyne toothpaste, Panadol painkillers and Nexium antacids. The final bid was £50 billion, and Unilever have said they will not be increasing the offer.

The Financial Times said that Glaxo is likely to try to proceed with a planned demerger of the consumer health business in the middle of this year unless another bidder emerges.

In other mega takeover news, Microsoft is set to acquire Activision Blizzard in a $69 billion mega deal. It’s one of the biggest acquisitions in the tech industry in recent years, one that will boost Microsoft’s standing in the growing gaming industry, making Microsoft the third-largest gaming company by revenue, after Tencent and Sony.

The agreement is pending regulatory review and Activision Blizzard shareholder approval, with the deal set to close in 2023.

Activision Blizzard own game franchises such as Call of Duty, World of Warcraft, Candy Crush, and Overwatch. Activision has hundreds of millions of people playing its games, which could help Microsoft win subscribers to its Game Pass service, says CNBC. Overtime massive game franchises could become exclusive to Microsoft.

This acquisition comes on the back of the ZeniMax purchase in late 2020 in a $7.5 billion deal, which added game franchises including The Elder Scrolls, Fallout, and Doom to Microsoft’s growing intellectual property. Microsoft are not messing about when it comes to a land-grab of video game content.

Russia Set To Invade Ukraine

In other takeover news, Russia is set to launch a hostile takeover bid for Ukraine. Russia already has a small holding in the eastern European country after acquiring the Crimea in 2014 and is looking to take full ownership. Joking aside this a serious situation we find ourselves in and it could have devastating consequences for both the region and the wider world, including a heavy financial toll.

Mainstream media is reporting that Russia has an estimated 100,000 troops deployed near Ukraine’s borders. US President Biden says his guess is that Russia will move in but has warned that a full-scale invasion would be a disaster for Russia. From what we can tell it would be a disaster for the world, as the West would have to act. To do nothing would set a precedent and likely stoke further aggression from Russia in the future. Let’s not forget that World War 2 started after appeasing Hitler for far too long while he annexed European territory.

The West’s main tools for dealing with Russia, outside of military action, could be to disconnect Russia’s banking system from the international Swift payment system, and/or to prevent the opening of Russia’s Nord Stream 2 gas pipeline in Germany.

Other sanctions are mostly unknowns for now, but if they are indeed severe, both a military conflict and/or the sanctions could have a serious impact on the world economy, reports barrons.com.

As Russia supplies a lot of gas to Europe, any gas supply sanctions self-imposed by the West or a counter-reaction by Russia would lead to spikes in the price of natural-gas above the punishing increases we’re already experiencing.

Proposed Crypto Ban

In Crypto news, Russia’s central bank proposes a ban on crypto trading and mining within Russian territory. The announcement surprisingly did not appear to knock the price of Bitcoin any further down. Russia is the third largest cryptocurrency mining country after the US and Kazakhstan, and it has developed a thriving mining industry after China last year outlawed the practice. Russia’s share of Bitcoin mining rose to 11% last year from 6.8% in 2020.

Meanwhile, in the UK, the Treasury plans a crackdown on ‘misleading’ cryptocurrency ads by making them subject to the same regulations as marketing for other financial products such as shares and insurance.

Bitcoin’s price is down more than 50% from its November high. Is this a buying opportunity? Or could the price fall further? Join the conversation in the comments below.

Written by Andy

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The Nightmare Ahead For Investors In 2022

The economy fell 9.4% in 2020 and bounced back by roughly 7% in 2021. But now the recovery looks like it will start to slow in 2022. Where once there were worries of mass unemployment after covid, instead we now have huge labour shortages that are likely to continue throughout the year, stopping businesses from operating at full capacity. Not only are there fewer staff available, but people have been told to work from home again, with a presumable fall off in productivity.

Elsewhere in the economy, the interest rate rise in December was mild, but likely a warning of further rises to come.

The Bank of England’s toolbox to fight the massive wave of inflation currently engulfing the country is running empty, as any significant action they take now will have massive negative consequences for homeowners, businesses, investors, pensioners, and the government finances.

GDP may be heading back to where it was before the pandemic and presumably higher, but business investment is not, suggesting that despite the so-called recovery, businesses are still struggling. Businesses are not able to grow, still in firefighting mode.

source: ONS data

The biggest political issue of 2022 is widely expected to be the cost of living crisis, with energy bills skyrocketing and taxes due to go up in April.

Some politicians like Jacob Rees-Mogg are fighting back against tax rises from within the cabinet, but it may be too little too late for many families. And when people reign in their spending, then businesses and investors will feel the pinch to their profits.

Is 2022 going to a tough slog for investors? Or is there anything to be hopeful for, with initiatives like the metaverse taking off, and the return of dividends post-pandemic? Let’s check it out!

And by the way, Stake are giving away a free US stock worth up to $150 to everyone who signs up via this offer link – T&Cs apply, see the Offers Page for full details.

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The Inflation Effect

After insisting for months that inflation was “transitory” (meaning temporary), central banks are having to concede that it’s not. Inflation looks like it is here to stay.

It’s currently hovering around 5%, which is pretty damn high. In real terms it means that if you’re not getting a pay rise this year of 5% you’re effectively getting a pay cut.

Inflation was mostly caused by the reaction to covid, both at home and abroad. The main culprits are believed to be the large scale money printing by central banks to pay for schemes like furlough, and supply chain issues due to borders being thrown up around the globe.

The transition to greener energy has pushed up the price of energy too; UK labour shortages have pushed up prices in general; and Chinese workers demanding more pay for their work has pushed up the price of goods coming from the world’s manufacturing hub. The problem for investors going into 2022 is… none of these factors are going away anytime soon!

So, it looks like we’re going to have a long run of inflation and there’s not much that can be done about that.

To ease inflation, central banks would have to either start taking money out of the economy, or raise interest rates. Neither would be a good thing for investors – but nor is inflation.

Let’s look at the 3 main options for dealing with inflation and how they impact investors:

  1. No significant action is taken, and inflation stays high and possibly gets worse. Your investment returns are eroded by inflation. A return on investment of 8% becomes a real return of 3% after deducting 5% for inflation.
  2. Interest rates are raised significantly. Money flows out of the stock market into high interest investments like cash savings accounts. The result is that stock market prices go down.
  3. Cash is deleted from the economy. The opposite of money printing, central banks have the power to delete cash from existence by selling bonds for cash and removing that cash from the economy. You saw the stock market skyrocket during the covid money printing – the opposite may happen in the case of banks reducing the money supply.

All 3 outcomes are bad for existing investors, though lower prices are good if you’re buying more. But the most likely course of action we think is option 1: no real action. Central banks may raise rates a little but will do nothing of significance and will wait for the market’s underlying issues to resolve themselves.

These include the container ship shortage, the microchip shortage, and the problem of rising labour costs across the world, particularly in China.

As a sidenote, if you’re an investor in property with a load of mortgage debt, then inflation (without an accompanying significant rise in interest rates) might actually be helpful – your loans stay the same size, but inflation means that their real value goes down. Inflation of 5% effectively wipes 5% off your mortgage debt.

In the same way, governments of the world aren’t very incentivized to address inflation right now. Inflation erodes public debt and can be a blessing in disguise for countries like the UK that are drowning in the stuff. But for the people inflation is often known as the ultimate stealth tax!

Other reasons to think that inflation is here to stay for the long term include:

  • A reversal of globalization, with a trend towards less free movement of trade and of labour.
  • We’ve not had normal interest rates now for 14 years. The economy is reliant on low interest rates and easy credit and can only transition away from this slowly over many years. Central Banks can’t raise interest rates significantly to counter inflation for many years to come without smashing the economy.
  • Now inflation is embedded, people expect decent pay rises, exacerbating the issue because it will be a huge cost to businesses who will need to try to pass this cost on to customers. That chart we saw earlier showing the collapse in business investment isn’t helped by a larger wage cost.
  • China has been the engine of global growth for many years, growing at 8/9/10%, but if that’s going permanently down now to around 5% and lower, then that has a long-term knock-on impact for every economy and stock market.

Aside from inflation, the economy does seem to be bouncing back from covid, which to a long-term investor should be a good thing. But in the short to medium term, it might be better to be investing in a weaker economy.

The fear of the pandemic response being dragged out for at least another year is at least creating some resistance to the tax rises we might otherwise see in a strong economy, and the money-printing that helps push up stock prices is more likely to continue rather than be rolled back so long as we’re in crisis mode.

But in the UK and presumably elsewhere, many industries including retail are on their last legs. 2021 was meant to be a boom year for retail after the 3rd lockdown ended, but when non-essential retail opened in the spring, instead of a runaway boom, we saw several months in which retail sales fell.

source: ONS data

Below 100 on the chart is below normal pre-pandemic activity. There are big drops during the lockdowns, and we were supposed to see amazing growth around Freedom Day in 2021. Instead, we saw stagnation.

The predicted spending spree from lockdown savings never happened.

The omicron scariant knocked confidence out of the economy in the run up to Christmas, further delaying the release of savers’ cash into the economy and thereby into investor’s profits.

And now it may never happen – people will rely on their savings from the pandemic to get them through the energy price rises and tax hikes in April.

The household energy price cap is reviewed then, likely resulting in a £600 energy bill increase for the average household.

Also in April, National Insurance goes up by an effective 2.5% (that’s 1.25% paid directly by you, and 1.25% that your employer has to pay out of their wages budget, impacting your future pay rises). The foretold Roaring Twenties is looking like it’s not going to happen.

Impact On The Stock Market

In the UK, stock valuations remain stubbornly low compared to markets like America. The Brexit effect on this is unclear, wrapped up as it is in the covid debacle. The types of company in the UK are dusty and old fashioned, which doesn’t help the FTSE 100 fight back quickly when it takes a knock.

One positive we saw in 2021 was the return of dividends, after companies reduced or withdrew them during the pandemic:

source: AJ Bell

It’s important though that companies came to their senses and recognised that for many people, receiving those dividends is an important part of their income, and is what pays the bills. Plus, the entire capitalist system is based on the trust that there will be fair reward for risked capital.

Dividends may have returned in 2021 but AJ Bell expects dividend growth to slow in 2022, and even worse will provide a negative real return thanks to inflation.

It also remains to be seen whether companies start to lean more towards share buybacks when it comes to returning cash to shareholders according to AJ Bell, in light of the government’s 1.25% rise in dividend tax.

As many as 22 members of the FTSE 100 have announced buyback schemes post-pandemic, to the tune of £18.7bn of cash to be returned to investors. Shell and Diageo have already made clear their intention to buy back more shares in 2022.

Will 2022 be another successful year for American tech stocks? The noises coming from Silicon Valley are all positive, with their CEO’s gushing with ideas for the future.

We’ve seen NFTs just start to take off, we’ve seen billionaires and actors launched into space, and just before Christmas we were all treated to Mark Zuckerberg’s vision of the metaverse.

If the rest of the world’s companies are in a quagmire fighting supply chain issues and inflation, maybe cash-rich software stocks like Facebook are the best placed to simply apply the blinkers and power ahead.

Tech in the 21st century is like electrification was in the 20th century, or railways in the 19th century – it’s a total gamechanger, and we think that investors with good exposure to tech such as by owning the S&P 500 will continue to do alright long-term.

Could part of the pandemic boom in trendy stocks have been due to the higher savings rates seen as people were locked down? People had more money to play with, and maybe there was a boredom element from being sat around at home. This is surely over now, and the boost to prices that came with it.

Danger Of A Reversal Of The Recovery

Given all the crap going on in the economy, none of us can rule out a serious reversal of the recovery. Some commentators are warning that consumer pessimism is indicating a possible recession. Others point to the multiplication of energy costs that traditionally is an indicator of a recession ahead.

A recession in the economy doesn’t necessarily require a crash in the stock market alongside it, though that is usually the case. But then, there are always reasons not to invest, and the sensible thing may be to just ignore the news, keep your head down, and carry on investing no matter what happens in 2022.

Will 2022 be a bad year for investors? Join the conversation in the comments below!

Written by Ben


Featured image credit: fizkes/Shutterstock.com

Also check out the MoneyUnshackled YouTube channel, with new videos released every Wednesday and Saturday:

The FASTEST Way To Pay Off Debt

Normally we prefer to focus on ways to get rich but before you can begin doing this you need to pay off your bad debt first. Quite frankly, becoming wealthy for most people is nothing more than a dream because statistically speaking they’re more likely to be struggling with debt.

Let’s kick-off by first looking at some of the terrifying UK debt statistics to put the debt problem into perspective: The average total debt per UK household in October 2021 was £63,000. Total unsecured debt per UK adult was just over £3,700 and the average credit card debt per household was almost £2,100.

People in the UK have personal debt at almost £1.75 trillion, up £60 billion from the year before, which is an extra £1,136 per UK adult over the year. The problem of personal debt is only getting worse.

Beyond the numbers, the biggest debt problem of all is the changing attitudes to debt; it has wrongly become acceptable! Past generations would shy away from debt, instead choosing to save first, and then buy. Today that’s been flipped on its head and it’s far too common to spend first and work out a way to pay for it later. In a nutshell debt has been normalised.

If other people want to be burdened by debt that’s their choice, but we want you to make the decision now that enough is enough. In this post, we’re going to lay out a 7-step plan that you should follow to pay off your harmful debts as fast as possible. Now, let’s check it out…

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Step #1 – Understand Your Debt

First off, you need to take stock of exactly how much you owe, who you owe it to, how much interest you’re being charged, and what the minimum payment is.

Literally draw up a table, so you can tally up the total amount owed and what the total minimum monthly payment is. You should be aiming to pay more than the very minimum or otherwise you could be paying off debt until what seems like the end of time, but we’ll calculate what you can afford to pay in a moment.

Step #2 – Draw Up A Monthly Budget

You absolutely need to understand what money you earn and what exactly you spend. Start with the obvious monthly costs that stay the same month-in, month-out. The bulk of your monthly spending is likely to be fixed (or consistent) such as the rent, energy, broadband, food, petrol or bus, and so on.

Then you need identify irregular or non-monthly expenses such as Christmas, holidays, clothes, and so on, and calculate an equivalent monthly figure for all of those, which you put aside each month into a separate account and can spend when the time comes.

It is these irregular or non-monthly expenses that cause most people to blow their budgets which is what forces them to go into debt in the first place. But irregular expenses shouldn’t come as a surprise; Christmas was on the 25th of December last year, and it will be on the 25th of December this year too.

For the time being, plug in your minimum debt payments into your budget, which should give you something like this:


Income: £2,500

Fixed Bills: £1,400

Irregular Expenses (Monthly Average): £400

Minimum Debt Repayment: £400

Other Spending £200

Surplus: £100


Bear in mind we’ve heavily summarised this for simplicity. In this example, we’ve got a surplus of £100, which should also be directed to clearing off that debt.

Step #3 – Cut Out The Fat

If you’re in debt, it’s highly likely that you won’t have a surplus in your budget and will in fact have a deficit. This needs to be corrected pronto! Even those with a surplus should follow this next step to speed up your debt repayments.

You need to cut out the fat, or in other words, cut unnecessary spending. You need to go full on ninja and slash everything you don’t need.

Go through your budget with a fine-tooth comb and identify which of your spendings are necessary and which are not. Holidays, eating out, coffees at Starbucks, nights out, expensive tv subscriptions are a thing of the past. Even the stuff you identified as something you need should be scaled back if you can.

We all need a roof over our heads, but if your debt’s really bad, might you move somewhere cheaper? Can you do the food shop in Aldi instead of Waitrose? Can you catch a bus instead of driving the car?

This might sound counterintuitive, but you may want to continue with one very low-cost entertainment expense such as Netflix or your PlayStation Plus subscription. People tend to spend a lot more when they’re bored so these can entertain you for next to nothing and help to prevent you spending more elsewhere. With some of the “free” PlayStation games I’ve literally clocked up hundreds of hours of gametime – and now it’s conformed… I’m a saddo.

By this point you should have a calculated plan to pay down the debt. If the maths isn’t working out, then you need to go back and be tougher with your cuts. If that’s not possible, there are still solutions to be found in the next steps.

Step #4 – Reduce The Interest Rate

It goes without saying that you want to pay as little interest as possible on your debt as slashing the interest rate will help you pay down the debt much quicker. Assuming lenders are still willing to lend to you, it might be a good idea to transfer whatever debts you can to a 0% credit card or cards.

There is a usually a small fee of around 2% from the new credit card provider but you could lock in 0% interest for maybe 2 years depending on what cards are available to you. The transfer fee is much cheaper than the 19% APR on a typical credit card.

Moneysavingexpert.com lists all the best offers and, in many cases, they can check your eligibility before applying to prevent any damage to your credit rating.

Another option you might want to consider is a debt consolidation loan. A debt consolidation loan is a type of loan that’s used to combine all your existing debts into one pot, so your debts become much easier to manage. The rates vary significantly between providers and on your personal circumstances. Technically, a debt consolidation loan is simply a personal loan, so you’re free to do whatever you want with the cash once received from the lender, but you’d be mad if you didn’t repay your existing debts.

Another option you may have is to shift the debts to your mortgage if you have adequate equity and can pass the mortgage provider’s affordability requirements. To do this you can borrow more on your mortgage and use the cash released to pay down the other (more expensive) debt. Mortgages tend to be extremely low cost – at time of filming rates are around 2% – and are also long-term, so provide you an opportunity to not have to take drastic lifestyle changes.

However, remember that because a mortgage is a secured debt, if you fail to make your mortgage payments you will be in danger of losing your home, so this last option should be considered very carefully.

Step #5 – Pay Off The Debt

There are a few different strategies you can use to pay down debts and they tend to cause disagreements within the finance community about which method is best.

On YouTube a lot of the content is dominated by American channels, and we don’t know if it’s different over there – we see no reason why it would be – but either way this next point doesn’t seem to get mentioned. Here in the UK, the first debts you should clear are your ‘priority debts’.

Priority debts mean that if you don’t pay, you could lose your home, have your energy supply cut off, lose essential goods or go to prison. They include things like: rent and mortgage, gas and electricity, council tax, and court fines. It’s important that you still make the minimum payments on your other debts whilst you clear these.

Once your ‘priority debts’ are sorted you need to tackle your other debts. The two strategies are the debt avalanche method and the debt snowball method. Both methods require you to make minimum payments on all but one of your debts.

The mathematically best way to clear the debt is the debt avalanche method, whereby you pay as much as you can on the one with the highest interest rate. The theory is that by concentrating on the one with the nastiest interest rate you pay your total debt down quicker by avoiding additional interest.

The debt snowball method ignores the maths and tells you to you pay down the smallest debt first and work your way up from smallest to largest, regardless of the interest rate. Advocates of this strategy argue that there is a psychological benefit to clearing the quantity of creditors you owe, and we think they have a point.

So, which is best? Well, that depends on you. Personally, we would always tackle the most expensive debt first if the interest rates varied significantly. Say you have one credit card charging 40% and a loan charging 10%. The credit card is going to be spiralling out of control if it’s not dealt with urgently, whereas the loan’s interest is far more reasonable.

Another contentious point is whether you should have an emergency fund if you’re in debt. Critics of debt such as Dave Ramsey over in the US argue that you need a $1,000 starter emergency fund before tackling the debt. This would be about £700 here in the UK. Some people would even argue that you need more than this as £700 won’t save you from many disasters.

Many people might struggle emotionally with this but as long as you have access to a credit card that isn’t already maxed out, then this kind of is your emergency fund in case something substantial comes up whilst you’re clearing your other debts. It doesn’t make financial sense to be paying say 20% on a credit card if you have some cash sitting there. If an emergency arises you can pay the 20% then and only then.

Step #6 – Make More Money

Cutting back and budgeting can only go so far. No matter how many times you have sliced and diced your budget, if the maths still doesn’t work, you need to grow your income instead. In fact, even if you’re not in debt you should be thinking about how to grow your income so you can move on to further financial goals like investing and retiring early.

Can you work extra hours? Dave Ramsey would be telling you to get a 2nd and 3rd job. If your debt is particularly bad this might be something to consider. But we prefer exhausting other avenues first such as getting better paid work for the hours you currently spend working.

Speak to your boss and see if there are opportunities for a promotion or added responsibilities. This might not be achieved overnight but let the world know your intentions. Alternatively, it’s quite often the case that it’s easier to promote yourself by simply switching employer.

Or, if you want more control you should think about setting up a side hustle to bring home some extra bacon. Somebody I know restores antique furniture and sells that on Etsy. Someone else used to buy women’s shoes from car boots and resell on eBay, and someone else did wedding photography. It could literally be anything.

Our favourite side hustle we like to promote is matched betting because you can do it with no skills, and you can quite easily make hundreds of pounds or more a month tax free (the amount you make is heavily determined by how much time you put in) – enough perhaps to allow you to start saving more for your future.

Matched betting is a betting technique that covers all outcomes of a bet, which unlocks very lucrative bookies’ free offers, which is how you make the money. Whilst it involves using gambling sites, because you have covered every outcome you can’t lose as long as you follow the instructions precisely. Visit our Matched Betting page for more info and videos. There you’ll also find discounted offers for the required software.

Step #7 – Get Help

If after all this, you still can’t stop drowning in debt then it’s time to get help. Moneyhelper.org, which has replaced the Money Advice Service, has a list of free debt advice services, which we’ll link to below. From what we’ve heard on the grapevine stepchange.org is particularly good, so please do check them out if you need help.

What other tips can you give to help those trying to get out of debt? Join the conversation in the comments below.

Written by Andy


Featured image credit: SB Arts Media/Shutterstock.com

Also check out the MoneyUnshackled YouTube channel, with new videos released every Wednesday and Saturday:

You Need To Know This About Money BEFORE You Turn 30

Among the countless stereotypes about young people is the belief that they manage money poorly. How to manage money well is not something that is ever taught in school or University, but if you take the time to master the money game you will have it in abundance.

In this post, we’re discussing the 6 things you should know about money before you turn 30. The more of it you can earn and invest from as young an age as possible the better. You need to make sure you’re on top of all the points in before it’s too late. Now, let’s check it out…

FYI: Stake are giving away a free US stock to new UK investors, worth up to $150, to everyone who signs up via this offer link. More info on the Offers Page.

Alternatively Watch The YouTube Video > > >

Multiple Streams Of Income Is (Usually) Much Better Than One

Most people’s job income is their lifeline. If this is you and your wage income suddenly stops, you could be in serious trouble because you have bills to pay and responsibilities. In the event of losing that single source of income, the likely best case is you are forced to spend your savings, which means either your retirement will get pushed back or you’ll have to forgo whatever you were saving for.

But for many the outcome is far worse, with the loss of your home a real possibility and/or racking up a load of expensive debt. Most people have one job and depend on it like a new-born baby depends on its mum. They are totally reliant.

It’s common to think that a salary is a reliable source of income but ask anyone who’s been fired or made redundant, and they will tell you the exact opposite.

This powerful chart shows how many people were made redundant in the UK by month since 1995. The typical monthly figure is between 100,000 to 200,000 people. And during the bad times it has been 300,000 and even 400,000 people per month. Essentially, no job is safe, so you need a backup plan.

The wealthy very rarely rely on one source of income. Take a professional football player for example. They make millions from their day job and yet they still earn money on the side through sponsorships.

1.1 million people in the UK have a second job but as many as 25% claim to have a side hustle. We’re not proposing that anyone gets a second job on top of a full-time job but you may want to consider a side hustle.

One source of additional income that everyone should work on obtaining is investment income but realistically this is not going to be achieved overnight. Having multiple sources of income from your work is more easily achievable if you’re self-employed or a business owner.

Consider a website like Amazon which might be the ultimate example of income diversification. They are not reliant on any one customer, any one product, any one country, nor any one industry. What once was an online bookstore expanded into other physical products, and then into all manner of services, including music and video streaming, cloud services, financial services, logistics, and everything else.

On a much smaller scale, and so perhaps a little more relatable, a plumber will likely serve thousands of people in a small local area. No single customer will materially damage the plumber’s income if they choose to go elsewhere the next time their drain is blocked.

Multiple income streams are one of many advantages of being a self-employed plumber over being an employed office worker (other advantages being increased freedom, and greater control over their hourly rate). But the job with the single income stream is the one that the education system herds you towards.

You Need A Game Plan

A lot of people drift through life without a destination. They have no goals and therefore no plan. It’s little wonder why they don’t achieve much.

But if you want to accomplish great things – no matter how big or small – you need a game plan. You need to know how you’re going to cover your immediate living expenses, and simultaneously you need to have a long-term plan for achieving comfortable wealth, with a clear roadmap to how you are going to get there. Without a game plan, it’s just a pipe dream.

First things first, you need to draw up that budget. A lot of people find budgeting tedious but more times than not it’s because they don’t have a long-term game plan. Once you know what you’re striving towards budgeting becomes, dare we say it, fun.

People budget in different ways, but what we’ve found is if you overcomplicate it, you stop doing it. This is our tried and tested budgeting master plan:

  • The day you get paid, transfer a pre-determined amount into a separate account, which will cover all your fixed bills for the month.
  • Also on the day you get paid, transfer a pre-determined amount into a separate account, which is for irregular or non-monthly expenses. Christmas comes about once a year but from now on you budget for it monthly. Some excellent banking apps like Starling allow you to have separate pots all within the app. This budgeting method is often known as savings pots or the jam jar technique.
  • Again, on the day you get paid, you transfer another sum of money to your investment platform. From your budgeting calculation you’ve already determined what you can afford or what is required to achieve your long-term plan. We call this pot our freedom fund and it’s so satisfying to watch it grow.
  • Whatever’s remaining in your bank account is what you have to left spend during the month. If you find it’s not enough you need to go back and adjust your budget.

Only 30% of Americans, so presumably a similar number of Britons, have a long-term financial plan – no wonder most people are skint!

Insurance Matters – You Are Not Invincible

We reckon this could be one of the most overlooked parts of financial planning and we’ll admit it’s not something we even thought about until more recent years. I was always put off because the only time it was ever mentioned was when a seemingly dodgy financial broker was trying to push it, cos he clearly got some huge commission.

But as you go through your twenties you start noticing that nobody is invincible and sadly some people start falling ill; some even don’t make it. If you have loved ones that depend on you, you have a responsibility to ensure that in the case of your premature death they are financially taken care of. You do this by taking out life insurance.

The second type of insurance you should take out is Income Protection Insurance. This insurance product is designed to pay you an income if you are unable to work. Some policies will pay out for a few months, while others will pay out until you reach retirement age.

Unless you can somehow fund your lifestyle without income protection insurance, such as with investment income, we strongly urge you to take out a policy that pays out until retirement, which is exactly what we both did.

Because we feel so strongly about this, we’ve teamed up with the same broker that we both used, and if you visit our lifestyle insurance page you can read a little more and get a quote.

The System Isn’t Rigged

Some people who struggle financially blame the financial system, claiming that it’s rigged. But the fact of the matter is, just because they haven’t become financially successful doesn’t make it impossible. There are thousands of examples where normal people have become not just wealthy but insanely rich.

One such example is the rags to riches story of J.K. Rowling. You will know her as a best-selling author who has sold more than 500 million books and became a billionaire. But prior to her success she was desperately poor, jobless, and with a young child to provide for. She described her economic status as “poor as it is possible to be in modern Britain, without being homeless.”

Becoming a best-selling author might be difficult to relate to, so how about an incredible story about a janitor who secretly amassed an $8 million fortune by the time he died. He achieved this through smart spending and good investing habits, reports CNBC.

His family was “tremendously surprised” upon finding out about his hidden wealth. “He was a hard worker, but I don’t think anybody had an idea that he was a multimillionaire,” his stepson said.

There is no secret to becoming wealthy. It’s simply a case of adding value that other people are willing to pay for, spending less than you earn, and investing the rest. The more value you add, the more you will earn, and the more you can invest. Sooner or later, your invested money will be making more than you do. You can make as much money as you want if you are willing to put in the necessary work.

You Must Seek Out Pay Rises – They Won’t Come To You

Too many people moan that their employer doesn’t pay them enough, and yet they never seek out a pay rise. Your employer is running a business and their goal is to maximise profits for the shareholders, not to be handing out pay rises if they don’t need to. Pay rises aren’t given for nothing and certainly aren’t given to those who don’t reach out to take them.

Most employers will expect you to work a job for at least a few years before being eligible for a proper pay rise of more than a derisory 1 or 2 percent. So, to climb the career ladder at breakneck speed, the best thing you can do is to job-hop between companies. You’ll earn a promotion each and every time.

If you want to be paid more and stay at your current employer, you need to effectively tell your boss what the craic is, but this only works if you’re well-liked by the entire management chain. You’ll be amazed at how high up the chain your measly pay rise request goes to be authorised.

Your boss and your boss’s boss are unlikely to give you a promotion without first doing more than what you are already paid to do. You should literally ask your boss what you need to do to earn a promotion and then deliver that. At the very least, you make your boss aware of your desires and this will give you an idea of whether a promotion is even possible.

Start Investing For Your Future NOW

When it comes to investing, the earlier you start the better because compounding takes a very long time to make a serious impact! The longer you put it off the more you have to contribute to make up for the time you missed.

If you’re putting it off because you think your financial situation will get better, you’re taking a huge risk. From our experience, life gets more expensive as you get older, not cheaper.

If you invest £100 a month for 40 years from age 20 at 8% return, your pot is worth £324k at age 60.

But if you miss the first 10 years, and then invest £100 a month for 30 years, your pot is worth only £142k.

If you did start early, you might even be able to Coast FIRE if you wish. Coast FIRE is when you have enough in your investment accounts that without any additional contributions, your net worth will grow to support retirement at a traditional retirement age. For instance, stopping investing at age 40 and allowing your pot to grow by itself until you’re 60 and ready to retire. Then you can spend more money on lifestyle and enjoy your later career a bit more.

All your peers will be squirrelling away as much money as they can for the last couple of decades before they retire and probably still won’t have enough, whereas you who learnt these financial lessons early, could be coasting all the way to a comfortable retirement.

What other financial tips does everyone need to know before turning 30? Join the conversation in the comments below.

Written by Andy


Featured image credit: Dean Drobot/Shutterstock.com

Also check out the MoneyUnshackled YouTube channel, with new videos released every Wednesday and Saturday:

Why You Should Buy Gold In 2022 (And The Best Way To Do It!)

Hey guys! Today we’ll be looking at the many different ways to invest in gold, as well as the reasons why you should.

We’ll look at the parallels that gold has with cryptocurrencies, and we’ll explain the great advantages of holding gold physically, as well as the dangers that holders of gold need to be aware of.

We’ll ask whether gold should really be thought of an investment, or should it be considered as an insurance product against disaster.

And finally, we’ll look at the expected returns of gold. Let’s check it out!

The world’s largest online investment gold service, BullionVault, have a special offer for gold lovers. Everyone who opens a BullionVault account with this offer link will receive 4 grams of silver for FREE, and will find their online account preloaded with a small amount of cash to let you try buying and selling for free.

Alternatively Watch The YouTube Video > > >

How Do You Invest In Gold?

There are lots of ways to own gold that on the face of it seem to be different ways of essentially doing the same thing.

  • You can own gold bullion physically and take delivery of it at home.
  • You can store physical gold in a managed vault, like the BullionVault service above.
  • You can buy a gold ETC.
  • You can own gold derivatives, which have the added benefit of being able to apply leverage.
  • Or another way that some people choose to loosely track the gold price is to own shares of gold mining companies.

Gold enthusiasts or gold bugs as they’re often known will say that there is only one way to own gold, and that is to take physical delivery. They would say that if you don’t hold the gold, you don’t own the gold.

People who physically hold their own gold are using gold for its primary function, as a store of wealth that can’t be magicked out of existence by the banking system or stolen by a computer hacker or corrupt government. No other method of owning gold provides this protection.

But physical holdings of gold are not as popular as synthetic holdings, also known as gold derivatives, or paper gold, whose values fluctuate in price in line with the real price of gold. There is vastly more synthetic gold on the market than the actual amount of real gold in the world: 50 times as much, by some estimates.

Paper gold has its uses in the global economy, helping the flow of transactions between investment banks and letting them bet on future gold prices. But does it provide you with the full benefits of owning physical gold?

Holding Gold Physically

Imagine the world’s digital economy imploded, and there was a run on gold with people wanting to take physical delivery of their assets.

At least 49 out of 50 people presumably wouldn’t get any, as they only held paper gold. People who can actually touch their gold bullion have a significant advantage in this scenario.

However, there is a security risk in holding gold physically. You either need an expensive safe – or a combination of a garden, a spade, and a treasure map.

There is every chance that your gold might be stolen and insuring it may be difficult. But this may be a risk worth taking if your gold only constitutes part of your total net worth.

The solution in the interim may be to buy physical gold but have a specialist company hold it for you in a vault, with the option to take physical delivery of it in the future if you so wished.

Using BullionVault as an example, you can do exactly this, building your gold reserves up regularly, just like you would any other investment. You can even set up a direct debit monthly to make the process automatic.

You can even hedge your bets further by storing your precious metals in a vault in renowned jurisdictions such as Switzerland or Singapore, so the British government wouldn’t be able to confiscate it in times of crisis.

This isn’t such a crazy idea. It’s happened before in the US in 1933, when a law came in banning private citizens from holding gold, which stayed in effect right up until 1974.

Coins vs Bars

Gold coins can also come with an added antique value, due to the engravings on them. Historic gold Sovereigns have been known to command premiums of 35 per cent over and above their contemporary gold value.

This is of little benefit to you if you are both buying and selling at inflated prices, but it should be factored into the price you should trade at. Gold bars meanwhile hold little historic or traditional value and are traded exclusively for their gold content.

Certain gold coins also have the tax advantage of being exempt from Capital Gains Tax. This is only if they are considered legal tender in the UK and includes gold Sovereigns and gold Britannias amongst others. But all gold coins have a big disadvantage versus gold bullion bars, and this is a much higher bid/offer spread.

The bid/offer spread is the difference between the buy price and the sell price – it’s effectively a cost of trading. Because coins are smaller and less commonly traded in bulk than bars, their spreads can run above 10%. That’s an instant 10% loss on the day that you buy. Whereas the spreads on gold bars can be around 0.2%. Gold bars are therefore likely to be the better investment of the two.

Gold Exchange-Traded Commodities (ETCs)

ETCs are like ETFs, but for commodities. They are traded on a stock exchange and can be bought on the majority of stock market investment platforms. They come in 2 types: synthetic and physical.

Synthetic gold ETCs use futures or options contracts to replicate the gold price. While we don’t use synthetic gold ETCs, we do use gold futures elsewhere in our spread betting strategy – more details here.

But when it comes to ETCs, we prefer the physical type. Physical gold ETCs have some similarities with the service offered by companies like BullionVault, whereby your investment is in physical gold, stored in a vault, with every penny of your investment matched to a real piece of metal.

You get the same advantages from market movements in the gold price, but the great disadvantage of an ETC versus a gold storage service is not having the option to take physical delivery of the gold. As such, you might not be protected if the digital economy gets hacked or if there’s a financial or political crisis.

With a service like BullionVault you own the gold, but with an ETC, you own the fund, which owns the gold. Small difference, but it could have a large impact during Armageddon!

If you are looking at gold ETCs, you’ll note they are all in different currencies. A top tip is to get one priced in GBP, as it will avoid any FX fees charged by your investment platform.

Why Gold Is A Good Inflation Hedge

Gold provides such good protection against inflation over the long term primarily because nobody’s making any more of it.

While the Bank of England and the US Fed run the printing presses on full to pump cash into their flagging economies, nobody is producing any more precious metals. They have to be mined, at great expense, and there is a limited supply of the stuff on planet Earth.

Gold preserves its purchasing power for long periods of time. When measured against gold, the prices of commodities such as oil are relatively stable over history; but it’s not the case for fiat currencies like the US dollar, with the dollar inflating by over 5,000% against gold in the last 70 years.

But gold didn’t get more expensive: rather, the value of paper money has depreciated significantly over time. The major economies of the world are still locked in a downward spiral of currency devaluations in their efforts to stimulate growth. Meanwhile, gold stands as stable as it has for thousands of years.

Gold As An Insurance Product

Owning gold is like holding an insurance product. If the stock market goes belly-up, or if there’s a banking crisis, or a political crisis, you may be glad you own gold. Historically, gold is an excellent hedge against a falling stock market.

This chart shows how gold has moved during the last 9 stock market crashes. The majority of the time, and overall, gold went up, shown in green. Twice it fell by less than stocks did: also a good result. Gold’s only significant selloff – 46% in the early 1980’s – occurred just after its biggest bull market in modern history.

Gold is therefore a little different to other investments, and common cries of “well it’s not a productive asset” are perhaps misguided.

You don’t hold gold for its dividends – it has none. You hold gold because when the chickens come home to roost in the economy or the stock market, you can hope for a big pay-out from gold. You also hold gold because it’s a great store of wealth.

Why Gold Has Always Been The Best Store Of Wealth

Gold is amongst the oldest of investment assets, in the sense that it was once literally money. Gold has some very special qualities that have kept it in demand for thousands of years as a store of wealth.

First up, it doesn’t decay. Unlike corn, furs, or bits of paper, gold will last forever. Secondly, it is easily divisible into standard units, or grams.

Thirdly, gold is portable. One small coin may have been worth several cows back in the day, but it’s easier to carry a coin around with you than a herd of cattle.

And finally, gold has a limited supply, and is why things like pebbles and rocks could never become a mainstream currency. It is this limited supply that sets gold apart from government cash, which is theoretically infinite.

Crypto As Digital Gold

Crypto also shares some characteristics in common with physical gold. Though there’s nothing stopping new cryptos from popping up all the time – and they do – most individual cryptos like Bitcoin have a finite supply, meaning only so much can ever be in existence. Like gold bullion, central banks can’t print more of it.

As such, crypto has come to be seen as an alternative hedge against inflation, sharing the role traditionally dominated by the precious metals.

And also like gold, you can spend your crypto anywhere in the world. There are no borders when it comes to gold, and now crypto has come along to claim the same role of international currency.

As investments, cryptocurrencies have been hoovering up money from the economy over the last couple of years that may otherwise have flooded into gold during these times of inflation and quantitative easing.

But given the volatility of cryptos like Bitcoin, the next big crash in the crypto markets may remind investors that if they’re looking for a STABLE long-term inflation hedge, gold has always been the answer in the past.

Gold Returns

Gold has an average 5.8% per annum return going back 70 years, but there have been periods during that time where gold has exploded. Over the last 20 years, the average annual return has been 10.0%, in part due to large scale money-printing around the world.

The price of gold lagged throughout 2021, despite inflationary worries, we think due to the crypto craze.

We would have expected with all the talk of inflation right now to have seen a gold price BOOM during the pandemic if it had followed the usual pattern of its history. The next major gold boom may happen if crypto starts to lose some of its shine.

Will you be expanding your portfolio to include gold? Join the conversation in the comments below, and remember to grab your free silver from BullionVault and try their service for free.

Written by Ben


Featured image credit: Momentum Ronnarong/Shutterstock.com

Also check out the MoneyUnshackled YouTube channel, with new videos released every Wednesday and Saturday:

Big Bold Money Moves To Make In 2022 To Explode Your Wealth

Today’s post is about taking massive action to significantly change the course of your life.

We’ve covered the need for regular monthly saving and investing on this site a lot – the small incremental steps that almost guarantee eventual success. That is all very important stuff and must be done, but arguably more important are the big, one-offs events that transform your finances in one go.

Looking back over the last few months and years, have you taken some specific action that you can single out as the point when you achieved something big financially?

Let’s make this next year count, with massive action. It’s time to put a stop to all of your years merging into one long line of working and saving.

If you want to grab some free cash, check out the Offers page. Loanpad, EasyMoney, Octopus Energy, and others are all giving away £50 in welcome bonuses. Free stocks potentially worth hundreds of pounds are available too.

Alternatively Watch The YouTube Video > > >

What Is Massive Action?

Massive action in the personal finance world is when you spend a short amount of time to implement a major change to your life which from that point on results in a bigger income, lower costs, and/or more free time.

It is an event, rather than a lengthy process – though it may be followed by continuous action such as starting and then managing a business. Massive action instantly changes everything about your money making potential or return on investment. Massive action might also be a restructuring of your working life which results in you having more free time to work on your life goals.

The End Goal

So how will taking massive action result in you getting rich? Your end goal might be to massively increase the income you earn from your 40 hour work week. Or, maybe you’ll slash your expenses so much that you can retire a few years earlier. Maybe you’ll engineer a shorter work week, making more time for family and friends. Or, maybe… you’ll establish multiple income streams.

This last one is the secret that sets the rich apart from the working and middle classes. Nearly everyone in the UK has just a single income stream – their job.

They may have a few quid from dividends or interest trickling in each month too from savings accounts and investments, but because no massive action has been taken these pots are small for most people, and the income insignificant compared to their wage.

Having several income streams in addition to your main wage, each providing at least a few hundred quid to your total income, is all but guaranteed to result in you becoming rich.

Let’s now look at the practical bold money actions you can take to initiate this change and rocket-power your wealth.

#1 – Reset Your Primary Income Stream

Before you get started on building multiple income streams, first focus on your main one. If you’re not satisfied with what you’re earning from your job or maybe you’re having second thoughts about your career choices, then it might be the time to hit that reset button.

Usually, changing jobs alone isn’t enough because you’ll probably end up in another one with similar pay to what you’re already on, in a similar field to what you’ve done in the past. Your CV will allow little else.

Instead, consider abandoning your current career path altogether and going through the short-term pain of retraining. Unless you’re passionate about your job it’s unlikely you’ll ever rise to the top anyway. Your massive action in this regard might be paying those fees for a new degree or professional qualification.

As an example, someone who puts themself through a professional accountancy qualification can make around £40,000 on the day they qualify.

If you’re stuck in a lower paying career, signing up to a professional course like that could mean you make significantly more money going forward for the same number of hours worked each week.

On the flip side, it’s just as bold to scrap a qualification that you’ve already earned, in favour of taking a different path. We both did this, choosing to end lucrative careers in order to strike out on our own with this website and our YouTube channel.

#2 – Start Your Own Venture

You’ve heard us preach the virtues of starting a business or side hustle before, so all we’ll do here is remind you that this can be an excellent second income stream alongside your main job. Quitting your job is optional, once you’ve built your venture large enough.

As such, we believe most people would benefit from having a side hustle, especially if you can monetise a hobby. In fact, in the UK, 1 in 4 people do have a side hustle, and have already taken the massive action to set this up, contributing an estimated £72 billion to the UK economy.

Some of these hustles will be true businesses capable of going to the moon, and some will just be second jobs. But if you enjoy what you’re doing and are making extra money then it’s all good. Some practical steps you can take to make sure that you commit to the idea of a side hustle are as follows:

[1] Register your new business as a limited company on Companies House. The act of making it official may seem inconsequential, but it makes it feel real and exciting, and gets the ball rolling.

[2] If your business idea requires you to learn new skills (which it will), go all in and sign up to a proper course that teaches those skills.

Maybe you want to learn carpentry, so you can make and sell furniture on the side. When you hand over your money and attend the course, you’re far more likely to make a success of it than if you just bought a book or watched some free videos on YouTube.

[3] Announce your services to the world. You should be making good use of all the local Facebook groups in your area to tell the world about the service you’re offering. All your friends and family will know, and it will be harder to go back.

If your service isn’t confined to the local area, find the time to build a website.

#3 – Materially Downsize Your Outgoings

The amount you can invest each month is significantly affected by your outgoings too. But trimming a bit of fat from your household budget is unlikely to make that much of a difference.

There are, however, perhaps 2 main expenses you need to focus on that can be vastly reduced with massive action, improving your savings rate and future wealth.

These 2 areas are cars, and housing. Starting with housing then, you can save hundreds of pounds a month and many years off your mortgage payments if you were to move to a cheaper city.

Londoners could more than halve their housing costs by relocating to Manchester. Residents of leafy Cambridge could have a similar lifestyle in York, again for a fraction of the price.

Regarding cars, there are a few actions you can take to slash hundreds of pounds a month from your car expense.

  • If you’re a multi-car family, drop to one car. Even the most basic of cars costs at least £200 a month, and often more once you factor in insurance, tax, depreciation and maintenance.
  • If you’re leasing your car, stop doing that! Buy a second-hand car instead. Even a 3-year-old equivalent model to your current lease car will save you a fortune.
  • If you drive a BMW, Mercedes, Audi, Tesla or other top-end car, trade it in for a Ford or a Kia. You can invest the difference, and it won’t cost so much to service.

#4 – Get A Lodger

While this probably fills most homeowners with dread, getting a lodger is not a permanent fixture – if you don’t get on with them, you can ask them to leave. But they CAN bring in £400 or more a month in passive income – I once enjoyed this boost to my income for nearly 2 years.

#5 – Investing Action

Starting to invest in the first place can be a mental leap too far for some. This won’t be an issue for many of our viewers who have already taken massive action in opening their first investment account, but for many people it’s a big psychological hurdle to overcome.

We suggest starting out by putting a material, yet losable, amount of cash into an investment account, which might be a couple of hundred quid. That first deposit is like breaking through a mental wall.

I remember my first investment well. Other than a brief dabble at age 16, I had done nothing until around 6 years ago, where in a moment of inspiration whilst chilling in a holiday cottage I decided enough was enough, opened a Stocks & Shares ISA, and whacked £500 into a stock market fund.

This action spurred me to then properly research what it was I’d just bought – it was something undiversified and expensive like a managed fund – but this was how I began investing like a pro, from that first leap forwards.

Most people do already invest, though they may not realise it, because their pensions are invested in the stock market. But the quality of the investments in a workplace pension, as we said before here, are often substandard.

You could potentially increase your retirement wealth by hundreds of thousands of pounds by simply taking a weekend to understand what your pensions are invested in and moving that money into better and more suitable funds. You might also want to perform this exercise on your Stocks & Shares ISA if you have one. Here’s some videos to get you started [How To Build The Perfect Vanguard Portfolio & The Ultimate ETF Portfolio – Low Fees, Low Taxes, High Returns!].

Wealthier investors might choose this next year to be the one where they add a seriously high returning asset to their portfolio – a buy-to-let property.

I’ve taken massive action 4 times now with buy-to-let – buying one isn’t as simple as buying a stock. The cash profit I earn monthly from my 4 rentals brings in at least an extra grand of income each month. More information on my property strategy here.

#6 – End Relationships

A controversial one perhaps, but sometimes the relationships you have with partners or friends can be holding you back from achieving your potential. With regard to partners, their financial priorities may not be in line with yours.

Maybe they are a big spender. Or maybe the two of you have conflicting life goals, such as financial freedom and travelling the world at age 40 for you, versus work and a community-based life for her. Is it time for a fresh start?

Likewise, if your mates like to blow their wages and waste their weekends and are dragging you down to their level, then maybe it’s time to find a better network as you are the average of your 5 closest friends.

#7 – Master Good Debt

The massive action which started my rental property portfolio was doing a low interest equity release on my own house for some 50 grand, which was added to my home mortgage. I stand by my assertion that it was the best thing that I’ve ever done, and was the single biggest influence on my wealth today.

I’d go as far as to say my wealth would be a third the size that it is now, if I hadn’t taken on good debt to buy investment assets with.

#8 – The Big Clear-Out

Andy (MU co-founder) has just moved house and has realised he had a tonne of stuff that was clogging up his space and mind. So, recently he’s been selling all his possessions on eBay and Facebook, minimalist style. Well ok, not all his possessions – just the stuff that is surplus to requirements. Most of which was just gathering dust in the loft anyway.

There are 3 financial benefits:

[1] There’s less stuff to distract him from the job of making money.

[2] Less time and money goes on replacing or maintaining stuff he didn’t need when it breaks.

[3] He’s making over a grand, which he could invest.

#9 – Claw Back Time From Your Employer

As we’ve stated, you can and should also take massive action to free up more of your time. This time can then be used to implement some of the big-money actions we’ve already covered.

There really is no need to work 5 days a week, every week, without pause. Why not arrange a 6-month career break like Andy did, or drop a day and go part-time to 4-day weeks, like I did?

The action in this case is to give your boss an ultimatum. You need to tell them that this is what you want to do, and if they can’t make it work, you will have to leave. Always be prepared to walk away and find another employer who can give you what you need.

What bold steps have you made in your life or career? Join the conversation in the comments below!

Written by Ben


Featured image credit: Ollyy/Shutterstock.com

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