How To Make Money With No Effort

Can you make money with no effort? Yes, you can, and in this video we cover 6 realistic ways to make money with zero effort. If you’re anything like us, you have probably been cruising through life trying to maximise your income per effort input. Basically, trying to scrape by for minimum effort.

Neither of us want to be yacht sailing billionaires because we’re not prepared to put in the work. We do however, want to be millionaires as this is far more achievable and agrees with our work ethic.

That being said, the way to make real amounts of cash are by exerting some effort – so as well as 6 ways to make money for no effort, we’re also talking about ways to massively boost your income by applying just short bursts of effort at the start.

Don’t worry, this isn’t one of those get rich quick articles where if you sign up to our masterclass you’ll be making 30 grand a month – we don’t have anything to sell.

Do you want to make money the lazy way? Let’s check it out!

How To Make Money With Minimal Effort?

#1 – Matched Betting

We have a whole area dedicated to this here, but here’s a quick summary of what matched betting is. First of all, it is not gambling. Matched Betting is a bеtting technique used to profit from the free bets and incentives offered by bookmakers, and it can make you £500 every month for about half an hour a day of effort.

As long as it’s done properly, the element of chance is removed by placing bets both on one outcome and on the opposite outcome of an event. Normally if you placed bets covering all potential outcomes of a result, then you would lose money because the bookmakers obviously structure the odds in their favour.

However, with bookmakers continually trying to entice you to gamble they will flood you with bonus offers, aka free money. Because one half of the money on each bet you make is provided by the bookies in free bets, assuming you follow the process correctly you literally cannot lose.

Matched betting is legal and gambling wins are tax free in the UK, and anyone over 18 with an internet connection can do this. The gambling industry is fully aware of the practise but the profits from other gamblers more than covers any losses, so they haven’t cracked down on it.

#2 – Get a Lodger

No matter where you live there is always some demand for accommodation, especially as renting alone can be far too expensive for many people.

This can easily bring in thousands of pounds a year and in the UK can be done tax free up to £7,500.

The only effort on your part is to find a suitable lodger, but this can be a simple as placing an ad on spareroom.co.uk – and then effortless rental payments will flow in your direction month after month, which Ben (MU Co-founder) can attest to personally, having at one point had a lodger for 18 months.

The downside is having to live with a stranger, at least until you get to know them, which is probably why most people don’t do this, but thousands of pounds of easy money is not to be sniffed at.

#3 – Airbnb

If your home is in a tourist area and you don’t want someone permanently living with you, then an alternative to a lodger would be to occasionally rent out your place on Airbnb. The obvious time to rent it out would be whenever you’re away yourself but you could also go a step further.

Someone we know who regularly uses Airbnb as a tourist said that the owner of the house would go and live with her parents while the house was being used. Airbnb could be a nice little earner for you.

#4 – Pet Sitting

We all love our pets and many people will pay massive amounts of money for somebody to look after them while they’re away on holiday, out of town or even just at work.

A mate of ours used to pay £10 a day per dog for doggie day care while he was at work and others also pay good money for cats, rabbits, you name it! £220 a month is good money for letting a single dog sit around your house while you do other things. Look after a few and you may even have a very lucrative business.

#5 – Investing

The best way to make passive income is by investing. For it to be completely passive you could invest through a robo-investor such as Nutmeg, Wealthify or Moneyfarm. These are great if you have no idea how to invest or you’re not inclined to manage your own portfolio. They charge you next to nothing and do all the work for you.

We’ve got some great introductory offers to many robo-investing platforms on the Money Unshackled Offers page, here, so feel free to check these out.

 

If you do want to manage your own investments, you can still do it semi-passively by choosing your own funds but there is some work involved such as choosing a platform, suitable funds, rebalancing and so on.

Picking individual stocks on the other hand is not passive at all if you’re doing it correctly. We enjoy it but please ignore those that say it’s easy money.

#6 – Rent Out Your Driveway

If you have an unused driveway or if your flat comes with a car parking space, then put it to use. People will pay hundreds of pounds a month to park a car in a city when they go to work. So why not take a piece of the action and make your space available on one of the many parking websites.

And don’t think you have to be living in the city to do this. If you live near an airport, a tourist attraction or even a train station this could be a great money spinner.

100% Passive Income Doesn’t Really Exist

All of these ideas, although relatively passive, will not make you mega rich anytime soon. Investing will eventually, but you want life changing money now.

Work that can be done once and pay you forever is very rare. In practice lots of upkeep will be required and when people talk about passive income there is never enough emphasis on the amount of hard work upfront.

Take YouTube for instance or a blog. How many times have you heard that if you set up a YouTube channel you will have passive income flowing in? We’re sure a very small number of creators do but for most it’s a full-time job – an enjoyable job but a full-time job nonetheless.

Most YouTube videos have a short life span, so is not truly passive even after you’ve shot the clips, but it is scalable, meaning income grows for no additional effort. It sure as hell beats trading time for money earning linear income from a job. If you can get past the initial struggle of no views and no subscribers, you will benefit from scale from that point on.

It’s very important to go through this struggle though. It took us an entire year of struggle to learn the basics but by doing so we cracked the code and now know how to create content that people want to consume.

Make More Money For The Same Work

We have established that lots of money is never going to come fast and easy, but can you get paid more for what you already do?

One way is just to switch employers, and this will almost certainly lead to an instant pay rise but what about knocking out a professional qualification as well? For example, Accountants can be doing the exact same job and even be at the same company but if one is a qualified accountant and the other isn’t, the one with the qualification might be paid £10k or even £20k more.

A short burst of effort to become qualified will reap dividends.

Short Bursts of Effort – Buy To Let Property

Every so often Ben buys a rental property, which takes a lot of up-front effort viewing multiple candidate houses, organising contractors to do renovations, sorting out the gas and electric, council tax, talking to lawyers…

But once that’s all over and the sale is stamped, Ben hands it over to an agent who manages it from that point onwards, sorting out the tenants, any further maintenance, gas certificates and so on.

Each short, one-off burst of energy adds around £300-£400 a month to Ben’s future income – indefinitely.

It’s Good To Be Lazy… Sort Of

The word lazy is used as an insult. Look at all these synonyms – idle, work-shy, inactive, do-nothing, bone idle. All have negative connotations.

And the opposite – active, industrious, and energetic. All positive sounding.

Your boyfriend or girlfriend will probably call you lazy if you haven’t washed up the kitchen pans…or is that just us dodging the chores?

In reality, there’s not a normal person on the planet that doesn’t want to maximise their output based on their input. Businesses live and die by this. It’s called efficiency.

Of course, in terms of your job that often means that the business owner will work you to the bone. Their input – your salary – is fixed, and the business will want to squeeze as much out of you as possible, which is one reason why so many people hate their jobs.

Bill Gates supposedly once said, “I choose a lazy person to do a hard job. Because a lazy person will find an easy way to do it.”

When it comes to the art of making money, there are certain jobs that can be heavily automated.

For example, in Andy’s (MU Co-founder) corporate days when he slaved as a financial analyst, he worked his ass off learning and building financial models, which would fully update at the click of a button.

He did this this so in future he didn’t have to repeat the work because deep down he’s (self-confessed to being) lazy. Essentially, he used short bursts of effort to boost work output and ultimately get pay rises.

When it comes to making money, laziness can be a strength as long as you are inclined to maximise output and your earnings, while doing as little as possible.

Do you know how to make real money with zero effort? If you do, let us know in the comments section!

Gaming Industry & Stocks Set To Level Up

The video games industry is now larger than the movie and music industry combined. It doesn’t get the same attention as those industries, but maybe it should. There are over two billion gamers across the world. That is 26% of the world’s population and it should come as no surprise that all manner of gaming and tech companies are battling it out to gain as much market share as possible.

 

There’s so much going on right now with the imminent release of new consoles, new games, new technologies and new ways to play, that we’re asking the question – should we be investing in the gaming industry?

 

Here we can see the growth of the global video games market according to Statitsta.com. Since this forecast we now know that the market is even bigger than this, largely thanks to Covid.

YouTube Video > > >

With people locked up inside their homes many have found respite by grabbing a controller and immersing themselves into gaming.

 

For investors, this incredible growth is an awesome opportunity, so we’re looking at the future of the gaming industry, how you can invest and profit from the surge in its popularity, and 3 gaming stocks & 1 gaming ETF that we are think are set to level up.

 

The Future of Gaming

#1 – Console Wars

It’s really exciting times right now as we’re about to witness a new console war with the imminent release of Microsoft’s new Xbox console and Sony’s PlayStation 5. Microsoft has said the Xbox Series X will be four times more powerful than its current Xbox One X console and no doubt the PS5 will be equally impressive.

 

According to Sony, the inclusion of a solid-state drive will give the console 100x faster loading speeds compared to a hard drive. With faster load speeds we’re expecting these console improvements to lead to even greater gamer satisfaction and therefore far more spending on games and downloadable content.

 

The release of faster and more powerful consoles has in the past fuelled growth in the video game industry overall, as increased marketing and gaming quality leads to a new generation of players.

 

#2 – Cloud Gaming

Cloud gaming is a new way to play games and according to Mordor Intelligence, a market research company, the emergence of cloud gaming will be driving the global market growth in the industry.

 

Thanks to advances in cloud technology a gamer will be able to play games on a mobile or other device that normally would be far too graphically intensive. Rather than the local device doing all the computational work, this is instead handled by the cloud server, where all the games are stored.

 

This new sector is also seen as a serious competitor for the traditional game market, but we see it as complimentary to console gaming rather than cannibalising it and this is a viewpoint shared by Microsoft. In a post their chief vice president described their new cloud gaming service as, “a vision for game-streaming technology that will complement our console hardware and give gamers more choices in how and where they play.”

 

This type of technology is still very new and will make giant leaps over the next few years but surely by bringing true console-quality gaming to mobile devices we’re on the cusp of a revolutionary change in the gaming industry.

 

Not everyone can afford a gaming console or gaming PC and not everyone wants one but almost everyone on the planet has a mobile phone, which will soon be able to handle the best games the gaming industry has to offer. Even in developing countries everyone has a phone, but not necessarily a console. Cloud gaming could be a gateway into the adoption of gaming across the globe.

 

#3 – Smartphone Gaming

Smartphone gaming has exploded in the past few years. According to Newzoo, a gaming insight company, the mobile gaming market is worth $68.5 billion or 45% of the global games market.

 

We knew that mobile gaming was huge, but this is mind blowing. Interestingly, Apple, who do not even make games, is the fourth-biggest public gaming company in the world due to its operation of the App Store. Apple managed a record $22.2billion in revenue from gaming apps in the App Store during the first half of 2020.

 

What strikes us is just how much money is floating around the mobile gaming industry.

 

We’ve personally have never been particularly keen on mobile games because most of them seem to implement the freemium model, where paying more allows you to advance through the game rather than based on skill alone. However, based on the revenue figures it seems that many gamers are more than happy to pay.

 

The top gross mobile game in July 2020 according to Sensortower.com game is Battlegrounds (PUBG) from Tencent and generated $208 million in July alone. Honor of Kings came in second, which is another Tencent game. The next top grossing game was Monster Strike from Mixi, followed by Pokémon Go from Niantic and Roblox from Roblox Corporation.

 

If you’re interested in investing in mobile gaming our tip to you guys would be to check out what the top games are and then research those companies. Another good source of information is your own kids. What games are they playing and who makes them? Get in early before the rest of the world can see what’s happening.

 

#4- eSports

eSports is competitive and organised gaming. Gaming competitions have long been part of the video game culture, but this was largely between amateurs until the late 2000’s. A lot has changed since then as it has experienced a surge in popularity with participation by professional gamers and events being live streamed.

 

The increasing availability of online streaming media platforms such as YouTube and Twitch have been a driving factor in the growth and promotion of esports competitions. FYI, Alphabet (more commonly known as Google) own YouTube and Amazon owns Twitch in case you were tempted to invest.

 

Industry revenues will rise from $776 million in 2018 to an expected $1.6 billion in 2023. According to Statista.com, the majority of these revenues come from sponsorships and advertising, and the rest from media rights, publisher fees, merchandise and tickets, digital, and streaming.

 

In terms of revenues, Asia and North America represent the two largest eSports markets, with China alone accounting for almost 20% of the market.

 

Gaming Stocks Set To Level Up

If that wasn’t enough to get you excited about the gaming industry let’s take a look at some massive US gaming stocks that could be set to level up.

 

#1 – Take-Two Interactive (TTWO)

Take-Two Interactive Software develops, produces, and markets interactive software specialising in video games. The company creates video games for consoles, handheld systems, personal computers, smart phones, and tablets.

 

The market cap of Take Two is $19bn and revenues continue to climb yearly, surpassing $3bn in 2020. EPS is growing at breakneck speed and could well continue for years to come. The icing on the cake is they have no debt and are in a cash positive position with net cash of $2.3bn.

 

The company owns 2 major publishing labels, Rockstar Games and 2K. Take-Two’s combined portfolio includes franchises such as BioShock, Borderlands, Grand Theft Auto, NBA 2K, and Red Dead among many others.

 

GTA is the third highest selling video game franchise of all time and is practically a guaranteed best seller whenever it releases a new game. GTA V is the best-selling game of the decade in the United States and has consistently sat in the top 20 best-earning titles for 74 consecutive months since release.

 

Moreover, Take Two have a 50% share in professional esports organization NBA 2K League, so could be a great stock if you believe esports is set to skyrocket.

 

#2 – Activision Blizzard (ATVI)

Activision Blizzard is America’s largest video game software company by revenue and combines three main developing and publishing divisions.

 

The company’s Market cap is $63bn, and is seeing revenue growing fast every year with EPS following suit. The operating margins are also very healthy and there is even a very small dividend, which is growing at an annual compound growth rate of 13.1%.

 

They own King Digital, which mostly does mobile games such as Candy Crush Saga. Activision has primarily been focused on console platforms, and Blizzard has been responsible for some of the biggest hits in PC gaming. This company has all major platforms covered.

 

Their major games include Call of Duty, Guitar Hero, Tony Hawk’s, World of Warcraft, and Overwatch among many others. Many of their franchises such as Call of Duty and have also been very popular as eSports.

 

#3 – Electronic Arts (EA)

EA is a gaming juggernaut with a market cap of $38bn. The company develops, publishes, and markets video game software for consoles, personal computers, mobile phones, and tablets.

 

EA develops and publishes games of established franchises including Battlefield, The Sims, Medal of Honor, Star Wars and let’s not forget their EA Sports titles of FIFA, Madden NFL and so many more.

 

Sports games such as FIFA are huge money spinners as they essentially release the same game every year, and yet fans still rush out to buy it. As casual gamers ourselves we would usually wait to buy games until they’re cheaper but even we can’t do this with sports games as you have to have the latest players.

 

Stockopedia are rating this very strongly in both quality and Momentum and the revenue has been growing year after year. It has excellent operating margins as so many software companies do, and like the other 3 stocks we’ve looked at, are sitting on a big pile of cash.

 

VanEck Vectors Video Gaming and eSports UCITS ETF (ESPO)

The 3 stocks we’ve discussed are ones that we think are particularly well placed to take advantage of cloud gaming but if picking individual stocks isn’t your thing, then you could instead opt for the VanEck Vectors Gaming ETF. This ETF is available both in London and in the US and gives you direct access to the 25 largest companies with at least 50% of their revenues from video gaming and eSports.

 

It is globally diversified with big weightings in the US, Japan, China and Taiwan. It has some awesome stocks but as it only it focusses on the companies that generate most of their revenue from gaming, it does miss some huge players, like Microsoft.

 

Arguably, Microsoft are one of biggest gaming companies around and have just agreed to purchase Zenimax, the holding company for a number of great gaming studios for $7.5 billion. Game franchises such as Doom, Fallout and Elder Scrolls will all now fall under the Microsoft umbrella.

 

It’s worth pointing out that you don’t have to make games to be a gaming company. Nvidia who take top spot as the largest holding in the ETF make all the graphics cards for gaming PC’s, and AMD hardware will be present in the upcoming consoles.

 

Gaming stocks have had an awesome year so far with this ETF up an extraordinary 62%. It’s always scary investing after the fact, but we think the gaming industry will do well for years to come.

 

And our final tip – we think the gaming industry is set to benefit from a full-on shift to digital downloads of new games. As the new consoles will be pushing this more than ever before, the gaming companies will have lower distribution costs and customers will be more likely to download in-game items resulting in bumper profits across the industry.

 

You can invest in all of these stocks with Stake – an investment app specialising in US stocks. Stake offers fractional investing too, so you can easily afford to buy highly priced stocks. And Stake are also giving away a free US stock worth up to $100 to everyone who signs up via our link, which can be found on the Money Unshackled Offers page here.

What Investors Think About Covid And The Recovery

What do investors think will happen next with Covid and the stock market, with Winter fast approaching? Investing is as much about human emotion and anticipating the actions of other investors, as it is about picking fundamentally sound stocks, regions or assets.
 
In September, Bank of America surveyed 224 fund managers with $646 billion in assets under management to find out what THEY think is going to happen next in the markets.
 
Today we’re dissecting what these market leading investors think is coming, and how it can help us to invest through a likely turbulent market this Winter.
 

Fundamentally Optimistic

When asked the big question – when is a Covid vaccine going to arrive? – investors are predicting that a vaccine for Covid-19 will be available in the first quarter of 2021, with 37% believing a credible vaccine will be announced by 30 January 2021.
 
Let that sink in for a second. A majority of market plays are being based on the assumption that life will be returning to normal by March next year, and over a third of investors are looking as near-term as January.
 
To us, this is incredibly optimistic to the point of foolishness. But whether you’re an optimist – or a pessimist, like us, who believe a working vaccine is still many months away, if ever – knowing how the market thinks works in your favour. Many stocks will rise or fall depending on the outcome of that question.
 
A vaccine by Spring 2021 means planes are flying, office working resumes, physical shops survive, night-life isn’t curfewed, people keep their jobs and money moves around the banking and housing sectors.
 
No vaccine by Spring 2021 means the opposite of all these things.
 

The World Will Bounce Back

58% of investors say that a new bull market has begun, compared to just 25% in May, and the majority are predicting global growth will rise in the next 12 months.
 
For the first time since February, more investors are saying that the global economy is in an early cycle phase, rather than being in a recession.
 
Early cycle phases follow recessions, and it means that the world economy is starting a climb back to strength.
This may very well be true. The world is a big place, and not everywhere will close down their economy at the first sign of cases rising.
 
While here in the UK our first instinct is to economic shutdown, mass unemployment, and a removal of freedoms, in countries which realise they can’t afford the luxury of a second lockdown, they will allow their economies off the leash instead.
 
In many regions of the world, people will be allowed to continue making their livings and building their countries back to wealth.
 

Cash Jitters

It’s not all sunshine and rainbows though. While investors do on the whole think a recovery is more likely than not, they are not so confident as to put all of their money where their mouth is.
 
Cash levels rose amongst fund managers, up from 4.6% to 4.8%. This doesn’t sound like much, but we’re talking 4.8% on trillions of investable dollars here.
 
The normal range is between 4% – greed; and 5% – fear. 4.8% from 4.6% puts them 20 basis points closer to fear on the scared-ometer. Fund managers are hopeful, but edgy.
 

Rotating Away From Large Growth Stocks

Fund managers are rotating away from large cap growth stocks like the FAANG tech stocks, after the massive rally from March lows.
 
We think investors are turning away from big tech too early – it has a lot of room still to run, despite being at all-time highs, which we think is the sticking point for fund managers.
 
They struggle to justify buying big tech stocks when PE ratios are heading into the high double digits.
 
We’ve covered this plenty before but just to recap, there is a ton of growth opportunity still for all of the big tech companies, especially if you are more pessimistic about the covid situation than the market seems to be right now.
 
More lockdowns mean more opportunity for cyberspace to take over.
 

Tech Is Still There

Despite investors halting their purchases for tech, it is still there in their portfolios as the most popular positions overall.
 
Current investments into Tech are still the most crowded trade area of all time. The tech-heavy Nasdaq has surged 60% since March lows.
 

Value Stocks Are More Popular

Money has been flowing out of growth stocks, into value stocks – but on a targeted basis.
 
Value stocks, which are stocks with a low Price Earnings ratio, are more popular than stocks with higher Price Earnings ratios for the first time since the pandemic started.
 
However, value stocks whose industries are in particular trouble – energy companies and banks – are still being avoided.
 
This means it could be a good time to buy oil and banks, if you are a value investor and believe in their long-term potential. These stocks are being shunned by the market right now.
 
Oil stocks have returned to the lows last seen in March after shooting up over the summer.
 
We still believe the future needs oil – we just don’t need much of it right now while planes are not flying and cars are not commuting. It strikes us that the market is being short-sighted on oil, which is why we’re holding our positions in BP and Shell.

 

Small Caps Up

Fund managers are shunning large caps and turning to small caps, which we’ve been saying for some time now are the end of the market best poised for growth, as we prepare to enter a redesigned economy in 2021.
 
Only 14% of professional investors said they think large caps will outperform small caps, the lowest outlook on large-cap stocks since July 2018. So looking for small caps with strong fundamentals is growing in popularity.
 
There will be a flood of companies going bankrupt and entering the history books before this crisis is over.
 
Investors are picking the future winners from the small caps pool of stocks which will replace them.
 
A relatively undiscovered gem in Ben’s portfolio is Dotdigital (DOTD), a digital marketing platform. It’s a UK small cap tech company, with market cap of £408m, which soared on the news of harsher UK lockdown measures in late September.
 
Based on its fundamentals, it’s a very good bet to be one of the future winners. It’s a high-quality stock with great returns, with a strong track record on EPS and dividend growth.
 
It’s health scores on Stockopedia have it as incredibly safe – backed up by a big pile of cash. Hopefully we won’t be referring to it as a small cap for very long!
 
Start investing without any fees by using the Freetrade app, and you’ll be given a free share on sign-up worth up to £200 – when you use our link on the Offers Page.
 
Always do your you own research but if you are interested in Dotdigital you can find it on Freetrade along with thousands of other stocks and ETFs.
 

Biggest Risks

The biggest risks to the stock market are seen as: (1) a Covid second wave; (2) a tech bubble popping; and (3) the upcoming US election.
 
Obviously a second wave of Covid would cause a high level of disruption. As for a tech bubble, we don’t see that there is one.
 
Yes, all tech companies seem to be highly priced right now, but that is reflecting their future profit-making potential.
 
Some do have silly prices, and some will come to nothing, but a company like Amazon with a PE of 100 probably does have the potential to grow and grow. Did you know it’s only currently in 18 countries?
 
Its logo is on our TV screens, on piles of packages by our front doors, on our music players, our e-book readers, and all over cloud software being adopted by more and more companies every day.
 
As for the US election, this is another potential game changer. If Trump wins, it’s more of the same for the US stock market, which reacted favourably to his tax cuts and has seen 4 years of record growth.
 
If the Democrats get in, it might be worse for US stocks, if only in the sense that if something is already at an all-time high, changing the rules of the game are more likely make it fall. But they may do better with calming the trade wars with China – who knows.
 
But the Democrats are likely to increase taxes and regulations on big companies.
 

Investors Still Love America

Despite dialling down on tech and healthcare, the US is now even more favoured by investors than in preceding months.
 
The Eurozone, emerging markets, and UK are generally less popular, except for some UK value stocks.
 
We think investors need to be careful here. While we agree that the US is home to the world’s best companies, their awesomeness is very much priced in to share prices.
 
The PE ratio of the S&P500 is 24, while the UK’s FTSE 100 is just 15.
 
The UK is being shunned by investors right now, and we ourselves have been critical of the FTSE 100 for being full of dinosaur industries like mining and retail.
 
But it’s wrong to ignore the UK completely. When everyone else is shunning a market, it’s probably time to invest.

 

We’re currently having fun investing in individual UK stocks to get the Best Of British, without the turds.
 
But an arguably equal strategy would be go heavier into FTSE 100 and FTSE 250 ETFs now while prices are so suppressed.
 
Enough companies are being undervalued right now that we think making a small increase to your UK positions could be worthwhile, assuming you’re not already overly exposed.
 
Just be aware that it can take a long time for the market to re-rate stocks.
 
Do you think we’re approaching a crash or a recovery? What are you investing in to turn this to your advantage? Let us know in the comments below!

Second Lockdown – Invest To Win

Never before have we been so uncertain about the UK economy’s ability to pull through this pandemic. We know that it could if given the chance.
 
Over the summer, British companies with a fighting spirit reminiscent of the Blitz were more than capable of dusting themselves down, adapting, and coming out of lockdown strong.
 
But now the government is taking away freedoms again with another heavy round of lockdown measures set to cost the economy £250 million per day. It’s the first steps of Lockdown 2, and this time, it’s gonna be brutal.
 
We can argue all day about whether the health benefits of a 2nd lockdown exceed the health costs or not, and frankly, we don’t know. There is definitely a health cost in cancer patients missing appointments, unemployment causing families to choose between heat and food, depression and so on.
 
What we can be certain about is the devastating impact a lockdown has on the economy. Last time, 33% was wiped off the UK stock market. It has since recovered around 15%, but are we about to see those gains wiped out again?
 
It seems the government is so scared of being accused of not taking enough action to avoid a second peak that they are willing to gradually shut down the country again.
 
Winter is not even here yet, but 1/5th of the country have been living under full local lockdowns, and now the first of many expected new national measures have been announced – including curfews certain to kill off parts of the economy, ending jobs, reducing national spending power, and ultimately impacting all businesses.
 
So what does all this mean for investors? Do we just accept that our portfolios are likely to take a beating? Or can we act now to limit the damage? Or even to invest in some lockdown winners?
 
Don’t know where to start investing? Why not let a robo investing platform build a globally diversified portfolio for you, based on your unique profile? Open an account with Nutmeg via the link on the Offers Page, and you’ll get your first 6 months with zero management fees!
 

Shuffling Into Another Lockdown

Up until now we’ve been very bullish about the economic recovery, choosing to see the daily panic in the media as the usual hyped-up doom and gloom.
 
We saw policies like Eat-Out-To-Help-Out and the furlough scheme as expensive and untargeted, but also as a positive signal from the government that they wanted life to return to normal as soon as possible after the first lockdown – so we took some cheer from that.
 
These economic initiatives from chancellor Rishi Sunak have always been in contradiction with other government policies.
 
Rishi tells us all to go to the pub, socialise and buy a meal; now Boris tells us we are going to the pub too much and should stop socialising after 10pm.
 
With 1 in 5 people in local lockdowns, and these new draconian curfews, we see the UK heading day by day in the direction of another full-on lockdown, with all the economic impacts that brings.
 

Will There Really Be A Second Peak?

For months the media has been doing its thing of screaming in hysterics about cases rising.
 
However, normal people were left looking at the charts and not seeing what the big deal was. Cases were rising, but not deaths. Deaths were falling.
 
But if we look at deaths in September, the charts are now showing a real cause for concern – deaths are sadly creeping up for the first time since April, which means that a second peak of tragedy might be around the corner.
 

Alternatives To Lockdowns

The Swedish model of not locking down was widely mocked at the start of the pandemic, but as of September 2020 their approach seems to have worked remarkably well.
 
They didn’t lock down and coronavirus has been no worse there than in the UK, with deaths in both countries at 6 for every 10,000 people, or 0.06% of the population.
 
Could the same work in the UK? Sweden still has a strong economy, people still have their freedom, and lives are being protected through voluntary social distancing.
 

Forget The What-Ifs

Regardless of the alternatives, and what-if scenarios, the reality is that we are stuck with our government’s approach, and therefore probably stuck with lockdowns for the foreseeable future.
 
So – with that in mind, what do we do about that as investors?
 

What We As Investors Do Now

Scenario #1 – If Life Returns To Normal In 2021

While we had this scenario as the most likely outcome just days ago, with Lockdown 2 measures already being implemented before Winter has started, we now see this as unlikely – though still possible.
 
If you think life will return to normal in 2021, then now is the time to buy stocks which are plays on economic recovery.
 
These include amongst others the airlines and the housebuilders. Jet2 is the best of the UK airlines in our opinion, with incredible business fundamentals and a huge pile of cash to help see it through tough times. Before Covid, they were poised to fill the space left by Thomas Cook’s collapse and massively grow their revenue.
 
Redrow is the equivalent company in the housebuilding sector, with great fundamentals, at a rock bottom share price. This stock though is reliant on the government extending the help-to-buy scheme in 2021 – a scheme which accounts for over half its sales – and on land prices retaining their current high values.
 
We expect help-to-buy will be extended, but nothing is confirmed.
 
Both these stocks are dependent on business-as-usual activity in 2021. Jet2’s share price is very volatile right now, with big swings almost daily, moving on covid news.
 
If you’re are buying, wait until a bad news day to buy Jet2 stock.
 
Both these stocks were priced very temptingly at time of writing, but both depend on a sunny 2021 for near-term success. I personally own shares in both of these stocks.
 

Scenario #2 – If 2021 Sucks Too

Quite a lot changes if 2021 is also a write off. For one, the culture will have changed such that people no longer want to book holidays for fear they’ll be quarantined, or their destinations being placed under lockdown during their visit.
 
People will grow used to not going to the pub, and withdraw into virtual worlds. High street shopping will be an activity done in a past life, no longer needed or wanted.
 
Working from home will become the default position. If government policy on working from home changes with the wind –  “work from home, don’t work from home, work from home” – many companies will invest in making the move permanent, leaving city centre restaurants and other businesses which serve office workers dead in the water.
 
Money will stop flowing around certain parts of the economy, but will not stop entirely. Instead, more transactions will happen online, to the benefit of payment facilitation stocks like Paypal and Visa.
 
The UK stock market will slump, while fundamental rearrangements in the economy take place. High street retail will be killed off even more than it already has, the tourism industry will lag, and the price of oil will remain in the doldrums.
 
Taken together that’s a cocktail for the FTSE 100 to revisit the lows seen in the 1st lockdown.
 

What To Invest In If 2021 Is A Write Off

#1 – Tech Stocks

We touched on one area just now, being technology and fintech stocks. The UK itself has some sweet tech stocks hidden at the small and mid-cap end of the market.
 
But America has all the big tech companies. During the first lockdown, tech stocks boomed with the likes of Amazon, Netflix, Paypal, Visa, Zoom and Microsoft providing services to people and businesses who didn’t necessarily need them before.
 
The argument against relying on Tech to save the day in a second lockdown is that prices have held steady at close to all-time highs all summer, because nothing has fundamentally changed.
 
Many people are still either furloughed or working from home, or are still too scared to change their new online shopping habits back to leaving the house to get supplies.
 
So in the short term we expect a second lockdown would just consolidate and confirm the positions of these giant tech companies as masters of all they touch.
 
But longer term, tech innovations introduced during lockdowns will continue to be popular. People don’t want or need to commute on packed and dirty trains, nor spend their evenings sat in traffic. And companies realise they don’t need to pay for office space.
 
And the future of shopping will be shaped by E-commerce stocks like Amazon and online payment facilitation stocks like Paypal and Visa… coronavirus or not.
 

#2 – Defensive Stocks

Defensive stocks include things like national defence, cigarettes and consumer staples – things that are in demand regardless of whether there is a recession or not.
 
The advantage of defensive stocks is they also tend to be dividend champions, so while we’d hope that their share price would be somewhat protected, they also pay out big chunks of cash consistently to their shareholders.
 
In this way, you stand to at least get a cut of the profits regardless of what happens with the share price.
 

#3 – Global Trackers

These should be the core of your portfolio – globally diversified ETFs which invest in thousands of stocks around the world, for almost non-existent fees.
 
A favourite of ours is VWRL, a Vanguard fund which invests in 3,500 large and mid-cap stocks across 50 countries, weighted towards those with the largest markets like America.
 
If the UK commits financial suicide, it doesn’t mean the rest of the world has to.
 
But in the event of a global crash, it would make global trackers an even more attractive buy, as prices would fall across the board.
 
With ETFs, one of the best times to buy is during a crash because you can buy low, safe in the knowledge that the diversification they provide protects you from the risk of individual companies going bust.
 
Especially during uncertain times, it is wise to focus more on ETFs and less on individual stocks. We are still buying well researched individual stocks during this time, but the easy money during a crash is in ETFs.
 

#4 – Gold and Bonds?

Traditionally, the answer to a plummeting stock market is to have held a position in bonds. Bonds certainly saved a lot of portfolios back in March 2020 when stocks were crashing hard.
 
But bonds will not come to the rescue this time because bond prices are already at record highs and yields at record lows.
 
QE, or money printing by central banks, helped push up bond prices the first time around, but little has changed since then – banks are still printing, and bonds are still very expensive.
 
Gold is another recession hedge, which traditionally is good to hold before a crash. But gold too is already at record highs.
 
Could gold rise further during a winter of discontent? It probably could. But we are wary about placing too much of a reliance on an unproductive asset to save us.
 
We think it’s better to weather a storm with defensive stocks which at least pump out dividends.
 

What To Invest In If You’re Unsure?

None of us can predict the future accurately, and our best guesses can be upended by a meddling government or by an unpredictable pandemic.
 
There may even be many more lockdowns over the years ahead – as Julius Casear lamented, “All bad precedents begin as justifiable measures”.
 
Just stick to your target portfolio ETF allocations of Shares, commodities like Gold, Bonds, Property and so on, and stop trying to beat the market!
 
In 30 years time, the world as a whole will move forward – whether the early 2020s were a write-off or not!
 
How are you adapting your strategy to the increased likelihood of a second full lockdown? Let us know in the comments below.

How To Use Pensions Alongside Your S&S ISA and Retire Young

If you’re like us and want to retire young, then listening to the mainstream media drone on about paying into your pension will be to the detriment of your life goals.
 
In previous episodes we’ve talked about the magical £500,000 investment pot that should be able to pay you 20 grand every year until you kick the bucket.
 
However, if you had listened to conventional financial advisors you would have no access to this money if you retired young, as you thought the sensible approach was to save it into a pension.
 
You could even be a pension millionaire and still be living on the breadline as the money is locked away out of reach until old age!
 
Does this mean that pensions are completely useless for retiring young? We think in the right circumstances they can be very useful. But how much should you use them?
 
And what is the main alternative retirement savings vehicle? That’s what we’re talking about in this video. Let’s check it out:
Alternatively Watch The YouTube Video > > >

Free Pension / ISA Retirement Calculator Spreadsheet

Open a Nutmeg Pension or ISA and Save 6 Months Fees Using Our Special Link on the Offers Page:

I Just Bought This Small Cap Stock – Stock Picking Step-By-Step [UK Market]

I’m really excited about this new video! I’ve just bought shares in small-cap stock CMC Markets PLC, to test out an improved Fundamental analysis method of stock picking that I’ve been studying, in what should be a vastly superior way of picking stocks to what we’ve used previously. 

 

Our plan is to steadily invest and grow a portfolio of market beating stocks, alongside of our existing ETF and property portfolios.

 

The stock I bought – CMC Markets PLC – is a FTSE SmallCap growth stock that has all the hallmarks of a company that is going places.

 

In this video we’ll walk you through:
  • the research involved in picking this particular stock out of the thousands available;
  • every test it had to pass through in order to interest me;
  • my long term plan for this stock, and;
  • what happened in the buying process.
 
Let’s check it out!

 

MU Ben

 

YouTube Video > > >

Free Stock Picking Assistor Spreadsheet (with worked example and blank template)

Try The Stock Picking Package We Use With A 14-Day Free Trial (+25% Off Thereafter!)

How To Retire By Age 30 (or within 5 years)

Retiring by aged 30 is the dream for most young people.

 

They join the workforce as young adults with vigour and in high hopes, but then reality sinks in – jobs are monotonous, repetitive, paid poorly and consume your most valuable and limited resource – time. The one thing that you can never get back!

 

Retiring by age 30 doesn’t have to be a pipe dream, but it will be if you don’t make an escape plan now – not tomorrow, not next week – now!

 

Neither of us achieved retirement by 30 because we started too late. Currently in our early 30’s we are each set to be completely financially free by 35. So, like us, maybe 30 is too late for you, but making that decision and then following it up with the required action will set you free – and soon.

 

You CAN retire at 30, or within 5 years if you’ve already missed that milestone. Here’s how.
YouTube Video > > >

SPM

The most crucial part in achieving early retirement is to maximise SPM but what the heck is SPM?
 
SPM is savings per month. In fact, your savings per month is more important than any other factor if the goal is early retirement. But to retire by 30 or within just a few short years means that compound interest or compounding returns doesn’t have enough time to work its magic.
 
Say that you have an existing stash of £100,000 and you invest for 5 years earning 8%. This will grow your stash to about £147k. That’s awesome but nowhere near enough to retire on.
 

 

If you were happy to wait 30 years, that same stash of £100k would grow to just over £1m – now that’s more like it but who wants to wait 30 years? Investing is important, so it’s not to be neglected. Consider it more like KFC’s gravy. Works brilliantly with a delicious piece of boneless chicken but by itself it’s not the secret blend of 11 herbs and spices.
You don’t have time for that

How Much SPM Is Required?

This totally depends on how you will draw an income once retired. If you went down the rental property route, we think you can achieve retirement much quicker than say a stocks portfolio.

 

The rule of thumb for stock market based investments is that you can draw down an income of about 4% per year without eating into the stash, which is very important to be able to maintain your standard of living and stay retired. We can’t imagine much worse than being forced back to work if the freedom fund ran dry.

 

So, if the goal is to live on say £20,000 per year, funded by stock market investments, then you would need to build up a stash of just £500,000 using the safe withdrawal rate of 4%. Flex that number to your own goal by just taking the annual income that you want and dividing it by 0.04 or multiplying it by 25. So, if the income goal is £30,000 for example. Take £30k and x25 to get a required stash of £750,000.

 

Using an online financial freedom or compound interest calculator we can see that to get to £500,000 from £0 in 5 years would require SPM of £6,800 per month and earning a return on investment of 8% per year.
 
With no investment, and therefore earning 0%, it would require SPM of £8,333 per month. So, you still can’t neglect investing.

 

If you have longer than 5 years, perhaps you’re aged 20 with more time on your hands, then you can drastically cut down those SPM’s and compounding interest will have an even greater affect. With a 10-year plan you can save about £2,700 per month, if you achieve 8% annual returns. This is still tough but beginning to look a little more achievable.
Where is that career ladder going?

Excessive Strategy

It’s quite clear that for a normal job an SPM in the several thousands of pounds per month is close to or even impossible. That’s why so few people ever achieve retirement by 30. If you want to achieve the extraordinary, you need to do what few people are prepared to do.

 

You need to take risks! This doesn’t mean you need to be reckless, but you need to do things that few people are brave enough to do. Knowing this, maybe retiring by 30 isn’t for you. But if you’re still game, here are the key pillars that will enable you to retire by 30:

 

#1 – Frugality

Frugality alone will never set you free but being stingy leads to a life of cheapness and constraints. A life of less than you deserve.

 

However, without a sensible level of frugality, the required yearly income will keep on growing meaning the required stash will skyrocket. This in turn will send the required SPM through the stratosphere – much more than it already is.

 

We are not advocating the frugality that is endorsed so highly by much of the FIRE community. We believe that freedom can only to be properly enjoyed when you have space to enjoy some of life’s little luxuries.

 

#2 – Investing (with suitable risk level)

We’ve already shown that investing over the short term will not on its own provide a big enough stash to retire on, but it will, subject to your returns, support the goal.

 

We typically build global ETF portfolios, which we expect to achieve an 8% annual ROI.

 

You will need to take higher levels of risk. Bonds and cash have historically low levels of return and should be avoided like a hippy avoids shoes.
If you don’t want to put the hard work in now, retiring at 30 is not for you!
Equities and property have proven track records of producing higher levels of inflation adjusted returns and we could do with these if we’re serious about early retirement. You can’t achieve extraordinary things by playing it safe.

 

When investing you will want to keep more of your returns and pay less in fees and you’ll want this whether the goal is early retirement or not.

 

Commission free trading apps help you minimise fees and we have some generous offers on our website from the likes of Freetrade and Stake.

 

New customers to these investment platforms can sign up with the links on the Offers page and they’ll give you a free stock to get you started, which can be worth up to £200.

 

#3 – Debt

Debt should be utilised to drastically ramp up your returns when the interest rate is manageable.

 

Mortgages and interest-free or even very cheap credit card debt could be used to buy additional assets that can work hard for you. An obvious one is BTL property. You can amass a moderately sized rental empire using mortgages that otherwise would take a lifetime to acquire without leverage.

 

This also entails not paying down your residential mortgage early and in fact, for the early retirement goal, it is wise to drag out the mortgage term over as long a period as possible to minimise monthly payments.

 

Contrary to popular belief, you can be retired and still have a mortgage, if your passive income from your portfolio covers the bill. You’ll need to be syphoning off as much cash towards your stash as possible.
Get debt working for you: rack up some mortgages with rental property!

#4 – No Pensions

Normally we would at least encourage you to take advantage of your workplace pension as it’s effectively a 100% instant return. However, money locked away until old age is not helping you one iota to reach that early retirement milestone.

 

#5 – Minimise Tax

To retire quickly, you’ll have to kick pensions to the curb and utilise other tax efficient vehicles. You won’t be able to get rick quick if you have the greedy taxman holding you back. And he is greedy.

 

Where possible your investments will need to be in a Stocks & Shares ISA and the overflow in general investment accounts. You’ll need to utilise clever tax strategies to minimise tax where possible. Capital gains can be deferred by not selling just yet.

 

Dividend paying investments would be best placed in the ISA. Growth stocks should be in the general investment accounts. Other forms of income should be done via a company structure as they are far more tax efficient than the punishable tax rates that employees incur.

 

#6 – Maximise Income By Starting A Business

The most important pillar of all is maximising income. Going down the high paid job route isn’t going to cut it to achieve this radical goal. It might be okay for retiring at 40 but by 30 it’s not going to happen. To save thousands per month you need to make thousands per month and then some. But how do you do this?

 

If you don’t own the means of your income, then you will never retire by 30. Getting an insanely high salary takes years of graft to climb that greasy pole. You don’t have time for that!

 

You need a business. We’re telling you this from first-hand experience that you can achieve income growth from a business that is inconceivable compared to what an employee can expect. An employee gets the crumbs, while you can have the entire buffet.
You’ll never get rich quick if you allow the tax system to weigh you down

#7 – Scalable Income

Trading time directly for money should only ever be done in an emergency and when learning new skills. Real wealth – the kind needed to have thousands in SPM – can only be achieved by having scalable income.

 

Scalable income is where the input remains the same, but the output is potentially unlimited. Say you create an exciting new mobile game. Your income will go through the roof but the workload that went into the project was the same whether it was downloaded 10 times or 10 million times. Only pursue scalable projects.

 

#8 – Network

Don’t constantly hang around with the financial losers that you’ve known all your life. You are the average of your 5 closest friends. If they’re living paycheck to paycheck there’s not much hope of you retiring by 30. Surround yourself by financial winners and wealth will be attracted to you.

 

#9 – Outsource Everything

The classic FIRE enthusiast and the general public will say, “save some money and do things yourself”. This is nonsense. Every minute not doing value added tasks is time wasted.

 

Doing low value chores and everything yourself is the path to the middle class – not retirement by 30. Every hour saved is an hour you could be learning more about wealth creation.

 

What are you doing to retire early and when can you expect to retire? Let us know in the comments section.

Trading 212 Invest/ISA Review and FAQs

Trading 212 is an incredible investing app – not just because it’s free but because it’s packed full of awesome features.
It’s a really exciting time in the UK investment app scene right now with lots of innovation and platform fees falling all the time – Trading 212 is at the forefront of this revolution.
We did a full review of Trading 212 back in 2019 and since then the app has gone from strength to strength. As a quick recap, Trading 212 offers zero fee investing in 3,000+ global stocks and ETFs, with no foreign exchange fees.
It also has zero fees for using an ISA and a feature we absolutely love is fractional investing. In his video, unless we say otherwise, we are only talking about the Invest and ISA Accounts.
Since our first review we’ve had hundreds of questions about Trading 212. So, today we are going to answer all of the most frequently asked questions such as:
Is Trading 212 a Scam? Do they pay dividends? If it’s free how do they make money? Should I go direct to Vanguard? And many others. All these and more coming up. Let’s check it out…
Editor’s note: We have lots of cashback offers worth hundreds of pounds on the Offers page – from time to time we have Trading 212 offers where they give you a free share, so it’s worth checking the offers page out. There are currently some great offers for competing apps including Freetrade and Stake, so maybe check these out as well!
YouTube Video > > >

Which Account Do I Use? CFD, Invest or ISA

When you download the app, you’ll have a choice of 3 different accounts or product types. We’re of the belief that most people should not go anywhere near CFDs. These are potentially dangerous financial instruments if you don’t know what you’re doing.
The CFD account is NOT free to use and 76% of retail investors (i.e. you and us) lose money when using this Trading 212 CFD account. We have an entire dedicated video about why to avoid CFD trading, which we’ll link to in the description below, so feel free to check that out later.
The Invest and ISA accounts are the same except the ISA is tax efficient. Although most beginners don’t have enough money invested to pay tax anyway. When you invest through the Invest and ISA account you own the underlying investment – you’re not just placing a bet!
Don't use the CFD section - most users lose money in there! The Invest and ISA sections are for proper investing

Is Trading 212 a Scam?

We’re not sure why people are saying that Trading 212 is a scam. They are authorised and regulated by the FCA. You can check this out for yourself but here we have done this for.
We have also used the app ourselves and know many other people who have had no issues whatsoever.
As we just mentioned, a lot of people lose money on CFDs, so are likely to be extremely disappointed and which we suspect is the root cause of this “scam” myth, but despite this the app has an incredible rating on Trustpilot.
Almost all the negative feedback seems to come from those using the CFD account, which you should only use with caution anyway. We’re not suggesting that there are no genuine complaints, but it seems that this is the minority.
In any case, as a regulated platform they must comply with complaints according to FCA requirements.

Is It Really Free?

Incredibly, yes. At least from fees that they directly control. A lot of things these days claim to be free but have hidden fees that you have to navigate around like a ninja.
Usually there’s a big heading that’s say ‘FREE’ that gets you excited and then you go straight to the T&Cs or fee section only to discover that it was a load of nonsense. Well in this case it’s true – it is free!
We’ve scoured the entire site and have personally used the app ourselves and have not been victim of any hidden nasties.
Of course, these is no such thing as completely free investing because you have to pay the bid/offer spread, which is a feature of the stock market.
All shares and ETFs have 2 prices – a buy and a sell price. The spread is what you would lose if you bought and immediately sold an investment.
You may also have to pay stamp duty or other taxes depending on what you’re buying.
And when you buy ETFs, you will pay a fee called the OCF, which costs typically around 0.10 to 0.30% of your holdings depending on the ETF – again, this fee is to the ETF provider, not Trading 212, and is outside of their control.
Freemium - the "mium" is Latin for "not really"

If Trading 212 Invest/ISA Is Free How Do They Make Money?

According to the co-founder, actual trading costs that they as a business incur are less than £1, so waiving trading commission does not have a detrimental effect. Charging for other services should more than cover for these shortfalls.
The most obvious service that they make money from is their CFD service. So, we would suggest that they are using free investing to entice people to their platform and then hoping they also go on to use this paid product.
Also, as with many online businesses, we would expect them to be currently going through an explosive growth stage where it’s really important to grow as quickly as possible. With size comes economies of scale and strength. Profits can be made later.
Trading 212 adopts a classic ‘freemium’ model – like mobile games or probably your bank current account. Your bank account is free, but they’ll charge you for additional services like overdrafts, loans and so on.
We would expect them to start introducing paid for premium services at some point. They often give little teasers of upcoming features and from what we’ve seen we wouldn’t mind paying a small amount for these if they were to charge.
Trading 212 now offers fractional trading

Should You Use Vanguard/X Platform Instead?

You would think that Vanguard’s own platform would be the cheapest place to buy its own funds, but this is not the case. Vanguard’s platform is incredibly cheap, but you cannot beat free.
However, price is not the only factor when choosing a platform. Investment choice along with additional services need to be considered.
Trading 212 doesn’t offer the extensive choice that you get with more premium platforms such as Interactive Investor. We both prefer to have more choice and are prepared to pay a little extra for this, but this doesn’t stop us from occasionally using Trading 212 and other free trading platforms.
Vanguard’s platform is amongst the cheapest place for the full range of Vanguard funds – Trading 212 for instance does not offer OEICs, so you cannot invest in the LifeStrategy range for example.
You can use multiple platforms, so you don’t have to commit to any 1, but you can only use 1 active Stocks and Shares ISA in any given tax year.

Do They Pay Dividends?

We’re not sure where this question comes from. We suspect it arises from the complexities of CFD Trading.
As you can see here, dividends for the Invest and ISA accounts are paid directly into your account balance. We can confirm this from our own experiences with the app.
Some ETFs are of the Accumulation variety, in which case dividends are not paid directly to you, rather they form part of the growth in the ETF price.
The ETFs that pay dividends to you directly are the Distributing variety. Check the ETF providers own site to find which type it is.
On Invest and ISA accounts, you own the shares and ETFs

Why Does The Share And ETF Prices Differ To The Real Price?

This is going to surprise beginners, if they even notice it, as the price you pay for the stock is very likely to be different to what you see on the screen prior to placing the order.
Stock prices change all the time and it should be expected that by the time the order is fulfilled it will have moved. This is the explanation they give and we know this will be part of the answer. However, we have noticed significant differences and we doubt this is the full explanation.
We have seen some people incorrectly state this to be a spread, but this is not the case. T212 don’t apply their own spreads on the Invest and ISA accounts and the actual market bid/offer spread is usually tiny.
From what we’ve worked out this is just an error or delayed price that the app is showing – perhaps due to extreme market volatility.
We tested this by taking a live ETF price from a different app and comparing it to Trading 212. In this case Trading 212 was over stating the share price by about 4%. The price had crashed that day, so it seemed that T212 was delayed somewhat.
However, the executed price from T212 was almost identical to the live price that we were expecting. This was correct and expected as prices move continually.
To sum all this up, we have no concerns in their executed prices, but the app does display incorrect prices on occasion, which is annoying.

Is It Okay To Invest In German Listed Stocks And ETFs?

Unfortunately, we don’t know for sure. Many foreign countries automatically apply a dividend withholding tax and we’re unsure if Germany does this but from what we’ve read, it does seem to withhold tax.
Unless we totally understand an investment, we don’t invest.
What do you think of Trading 212? Let us know in the comments section.

Tickr Review – Ethical Investing App

Today we’re reviewing the Tickr app, a simple investing app that let’s you invest easily into ethical funds. With its 3 themes of Disruptive Technology, Climate Change, and Equality, it’s a platform for people who want to make money from stocks while doing some good.
Does it have its drawbacks? Of course. But it fills a space in the market not covered by other investing apps. Should you invest via the Tickr app? Let’s check it out!
Editor’s note: Open an account with Tickr using the link on the Offers page and you will get some cash added to your account, currently £10. And for some clever marketing reason they will also plant 4 trees, when you use the link.
YouTube Video > > >

What Does Tickr Do

Tickr let’s you invest in one of 3 fund themes, or in a combo fund covering some of all 3; Climate Change, Disruptive Technology, and Equality.
It works by investing your money into a handful of ETFs – exchange traded funds – which closely align to the theme description. It also puts some of your money into bonds, both Green and Government.
As a very brief overview, an ETF is usually a collection of shares or bonds that have something in common, be it by sector or geography – a fund, but which is not usually actively managed, and so has low fees.
Let’s dig into one of Tickr’s theme’s – the one I picked to invest in – Disruptive Technology.
Tickr's 3 themes, and Combination option

ETFs In The Disruptive Technology Theme

We’ll use this theme as the example in this review; the other themes have the same basic structure – 2 to 4 subsectors with an ETF for each, supplemented by Green and Government bond ETFs. The Combo theme takes a couple of ETFs from each of the 3 main themes.
Disruptive Technology has 3 sub-themes: Automation & Robotics, which invests in the iShares Automation & Robotics UCITS ETF (RBOT); Digitalisation, which invests in the iShares Digitalisation UCITS ETF (DGTL); and Cyber Security, which invests in the L&G Cyber Security UCITS ETF (ISPY).

What Are The ETF Costs?

There are 2 types of cost on the platform – those charged by the ETF providers, and those charged by Tickr themselves. Let’s first look at the fees on the ETFs, called the Ongoing Charges Figure, or OCF.
When you choose a theme, you must then also choose between 3 risk ratings: Cautious, Balanced, and Adventurous – from least to most risky.
I chose Adventurous for it’s higher potential return, which has a higher average OCF than Balanced, which in turn has a higher average OCF than Cautious – due to the mix of stocks to bonds, with Tickr’s bond ETFs being cheaper than their stocks ETFs.
The range of OCFs on Tickr range between 0.25%-0.49% p.a – low enough that we don’t really care if one theme or risk level is slightly more expensive than another – they’re all pretty small.
The OCF fees you might pay on the app

What Other Costs Do Tickr Charge?

#1 – Monthly Fee

There is a £1 a month flat fee for holding an account, but the first month is free.
We quite like flat fees instead of percentage fees because we invest large amounts, but it’s no good if you’re only investing small amounts of, for example, £50 a month or less. £1 on £50 is effectively a 2% fee, which would act as a brake on your investment gains.

#2 – If Your Account Goes Over £3,000

If your account goes over £3,000 Tickr will add an additional 0.3% fee to the portion of your money that is above £3,000. For instance, if you invested £10,000 in the platform, the 0.3% would be applied to £7,000 of it – which would be £21 a year.

#3 – Round Ups

Tickr offer a service called Round Ups which we’ll cover shortly – there is no additional fee for those who join the platform after 17th March 2020.

No Transaction Charges

This is great – It means you can invest as often as you want without being penalised. There are also no fees for selling, or for withdrawals.

Changing Your Theme

You can change your theme at any point by going into My Account in the app, and clicking on My Fund.
However, to do this the app sells your existing holdings and buys into the new ones in the new theme, which can take up to 7 days.
This means you could make a gain or a loss on transfer as trades do not take place immediately – the market will likely have moved either up or down by the time your trades are executed.
Here the app shows you the geographies and ETF names you are invested in

Features Of The App

#1 – App Interface

As investors who want to own the world, one useful feature that we love is that the app tells you clearly which geographies your investment covers.
There’s a bit of info about the top companies in your themes, the split of your portfolio by sub-sector and how the different parts of your theme have performed, and which stock-ETFs you are investing in.
It doesn’t tell you which bonds you are investing in though, and we looked all over their website and app for info on this. We want to know what we are investing in.
So we contacted them and this is what they said the bonds were: Lyxor Green Bond (DR) UCITS ETF (CLMU) and iShares Global Govt Bond UCITS ETF (IGLH), both with OCFs of 0.25%. UK bonds make up less than 5% of these investments, so do your own research into them to check you’re happy with them.

#2 – Fractional Shares

It effectively has a fractional shares feature built in, as you can invest any amount you like – over £5 – into your theme ETFs.
You can’t do this on many traditional investment platforms. For instance, the L&G Cyber Security UCITS ETF (ISPY) costs around £13 to buy one unit on the open market, but you could invest £5 in Tickr and be invested in this Cyber Security ETF.

#3 – Monthly Investments

You can set this to anything from £5 upwards. Too many investors try and fail to time the market, but dripping equal amounts into the market on a regular basis over the long term has been shown to give better results.

#4 – Round Ups

Round-ups works by securely connecting to your bank, and rounding up the spare change on your transactions to the nearest £1.
Using an example from the app, spend £2.40 on a coffee, and the remaining £0.60 will be invested into your Tickr portfolio.
You can also apply a multiplier, which doubles, triples or quintuples the amount you invest via this method.
However – this Round-Ups service suffers from similar limitations as round-ups offerings on other apps.
It doesn’t happen in real-time. Instead, it keeps track of your round-ups over the week, and takes them all at once on a Monday. This could catch you off-guard with your household budget.
It would be much more expensive for Tickr to offer an instant round-ups service; which is likely why they don’t offer one.
Just click on your pie to deposit funds

Deposits and Withdrawals

Deposits are instant and the app makes it super easy to do – just tap on your portfolio pie and type in an amount to deposit.
Withdrawals are not instant, in fact they can take up to 12 working days – the funds are sold on the next available Wednesday and the cash processed the following Monday, which then takes 3-5 workings days to reach your bank account.

Do I Receive Dividends?

Dividends may be paid by the underlying ETFs in each theme but they will be automatically reinvested.

Is There An ISA?

Yes, and there’s no fee to use it – great if you want to use Tickr as your main investing app, as you will pay no UK taxes on your portfolio.

Better To Invest On A Do-It-Yourself Platform?

Tickr invests in ETFs which, in their words, have “a positive impact on the world”, most of which are not available on other free trading platforms. It’s the cheapest place we’ve found to buy these specific ETFs.
However, investing only in this range of ethical ETFs is not a fully diversified way to invest. Limiting yourself to only ethical investments means you could miss out on some excellent companies.
And there are other platforms available that do not charge any fees, such as Freetrade.
It is possible to build a global portfolio diversified by geography and by market sectors within the Freetrade app by buying just 7 ETFs, which we’ve covered in our World Portfolio series, linked to in the description below.
But we think Tickr is a great app for what it does – and you do feel good using it, seeing your trees getting planted and knowing you’re making a difference.
Are you using the Tickr app? What else do you want answered? Let us know in the comments below.

How The UK Government Can Afford to Pay Everyone’s Salary

The UK along with most of the Western World are, for want of a better word, absolutely screwed…. And that was before Covid-19! Pile on a huge amount of additional debt and then prohibit the entire country from working and you have a catastrophe just waiting to happen. A ticking time bomb!

This debt seems to be the primary way in how the UK plans to get out of this mess. Surely when you find yourself in a hole, stop digging. If we hadn’t seen it with our own eyes, we’d never have believed a Tory government could borrow so much so fast. Boris must have just read Jeremy Corbyn’s latest book “How To Sink A Country Faster Than The Titanic.”

Of course, we’re being facetious, but the terrifying amount of debt and money printing is a serious concern to the UK and your own pocket. Many people will be wondering, if the UK government can just pay everyone’s salary, then why can’t they do this all the time? And why do we normally have to pay taxes? Just print more money and lets all go to Skeg Vegas.

It may sound like we’re criticising the government’s approach but we’re not really; we recognise that there is a real health crisis – Could it have been handled better? Yes. But it could be a lot worse.

Editor’s note: Start investing with a freebie – investment app Freetrade are giving a randomly chosen free share to each new customer who opens an account using the link on the Offers page – it could be worth up to £200, and all you have to do is open an account and top up by £1 – what are you waiting for?

YouTube Video > > >

What is the Furlough Scheme?

At the time of writing, more than 4 million workers have been furloughed. That means the government will be paying up to 80% of over 4 million people’s wages up to a maximum of £2,500 per month.

Companies continue to pay these workers’ wages and reclaim it off the government, and this scheme is likely to go on until at least the lockdown ends – whenever that will be. Rumours are that the furlough scheme will be extended and may even run into July, but we wouldn’t be surprised if it continues past this as the UK doesn’t seem to have any exit strategy.

According to Wired, “One in four UK workers, or more than nine million people, are expected to be furloughed during the coronavirus crisis as businesses struggle to survive.”

What Is The Cost?

The last figures we’ve seen suggest the furlough scheme’s costs could reach £42billion but that was before the scheme was extended by a month, and if it keeps going for a few more months and the number of furloughed staff increases we think this could easily reach £100 billion.

That’s not money the government will get back. These are not loans. That money will have disappeared like a fart in the wind.

The real question is what will it cost if the government doesn’t pay everyone’s salary?  The effects would be unthinkable. Mass unemployment and severe long-term damage to the economy. In the US they have taken a slightly different approach to bailing out their economy and the unemployed figures are already at 33 million people.

These are insane numbers. To put that into perspective there were only 15.3 million American jobless at the height of the 2008 financial crisis.

So, with that said, the UK’s approach to save jobs should help to get the country back on its feet as soon as it’s safe to do so. If a total lockdown was the right approach – a big if – then we think a furlough scheme to save jobs was the logical follow-on course of action.

The Economy!

Is The Furlough Scheme Too Generous?

Let’s not ignore the elephant in the room. Of course, it’s too generous. Who wouldn’t want to be sitting at home chilling and earning at least 80% of your normal salary, with many people even earning 100%?

Peoples’ living costs have plummeted. You’re not driving, partying, eating out, going on holiday or doing anything else that costs a lot of money, so 80% salary is more than enough! It’s so generous that YouGov found that 88% of people think it would be wrong to start loosening restrictions now. If those people were struggling, we’re betting that that percentage would be a lot lower – people would be begging for the lockdown to end.

Anecdotally, workers are asking to be furloughed, and complaining when they haven’t been. It seems unfair that your neighbours are lying out in the sun and having a beer, when you’re stuck chained to your kitchen table slaving as hard as ever. Who wouldn’t want to be furloughed when those are the terms? Of course, we’re not making light of some people’s situations as there will be plenty of cases of genuine hardship. But many people so far have done very well from this crisis.

Another issue with the furlough scheme is it encourages businesses to just put everything on hold rather than adapt. They can simply just pass the cost of their staff to the state and wait for this to blow over.

If the scheme wasn’t in place or was far less generous, then is it is highly likely that businesses and entrepreneurs would do what they do best – that is, engineer their way out of this mess and somehow prosper.

The UK Right Now

How Is The Government Paying for it?

There are many other measures being taken and the numbers are eyewatering, but we’re not too fussed about all these loan schemes that the government is offering to businesses, as in theory they should be paid back, so the overall cost of these should be relatively small. That’s a lot of emphasis on the word ‘should’ because who knows what defaults will arise?

Anyway, there are a few ways in which the government is obtaining humungous sums of money to pay for this crisis.

#1 – Borrowing

The first is through borrowing money from the markets and they have been raising billions this way, adding to the ever-growing Debt Mountain. Latest UK debt figures say the total debt is, but factor in other liabilities and some sources say it’s as much as £4.8 trillion – that’s £78,000 for every person in the UK.

Can the government really afford this? Absolutely NOT but they will raise it anyway. Debt is just delaying the inevitable – a big nasty bill for future generations. According to the Independent, some analysts expect government borrowing to top £200bn in the current financial year. This is ridiculous. Who is going to pay for this?

Labour were constantly berating the Conservatives to end austerity after the financial crisis of 2008, but the hard truth is that austerity didn’t even start. If national debt is always increasing it means we’re still living beyond our means. How can it be austerity if you’re still borrowing to cover normal day to day costs?

We as a country have been living beyond our means for far too long and yet nobody is brave enough to put an end to it. As you may have an overdraft with your local bank, the government effectively has one with the Bank of England known as the Ways and Means (W&M) facility.

The borrowing limit on this overdraft is normally quite small at £400m but it has effectively been made unlimited during the Corona crisis. This overdraft is to be used as a reserve but in 2008 the government tapped it up for £20 billion. This overdraft will likely be paid back quickly using additional borrowing.

How To Sink A Country - Borrow Like Crazy

#2 – Print Money (Quantitative Easing)

We don’t know why it’s called quantitative easing – a more appropriate name would be state sponsored theft.

The Bank of England purchases government bonds from the open market in order to increase money supply. The goal here is to improve conditions in the gilt market, which ultimately allow the government to raise more money through borrowing.

The increased money supply should filter down and stimulate the economy. The problem is that an increased money supply should lead to inflation because the value of money is derived from supply and demand.

If you theoretically doubled the money in circulation, then prices would double. Printing money has a track record of dire consequences as it leads to hyperinflation. Check out Germany after WW1 or Zimbabwe more recently.

The BoE has said it will buy £200bn of gilts in a fresh round of QE. Western Governments generally have inflation targets of around 2% but we think the government’s intention is to engineer higher inflation in an attempt to shrink the debt mountain.

Most people don’t understand inflation properly and while it may be good for eroding government debt, it is not good for your wealth.

By borrowing money, the government is stealing from the future. By printing new money, they are stealing from the value of your savings. Either way, it is you and your children who will be paying for this Furlough scheme.

What are your thoughts on the ever-growing UK national debt? Let us know in the comments section.