Only Buy Your Home If You Answer ‘Yes’ To These 6 Questions | Rent vs Buying UK

Is buying a property always better than renting? In the UK we’re obsessed with home ownership, and you’ll have heard people say that renting is just throwing money away. But is this really the case?

Because of this belief many young people stay living within their childhood bedroom well into their late 20s because they can’t afford to buy and yet refuse to rent.

Owning your own home is both very exciting and scary at the same time.

You have the freedom to live how you like, can decorate it how you please, and can get a furry companion to keep you company, but every little problem is now your problem to deal with.

Saving for a house deposit is a tall order but let’s assume you have been saving diligently and have managed to put aside enough to secure a home.

Before taking the leap into home ownership you need to answer ‘yes’ to the questions in this article. Plus, we’ll finish up with our best less-talked-about financial tips for when buying a home. Let’s check it out…

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If you’re looking to bring in some extra money alongside your day job to build up your house deposit then check out our guide to matched betting, along with free trials and discounts to the software that walks you through the entire process. Despite the name it isn’t gambling and can be a great way to bring in an extra £500 a month!

Question 1: Do You Plan To Live There At Least 5 Years?

Buying a home is a huge commitment and the running costs can often be far steeper than people expect. But before you even get your hands on the keys, you will have to pay all manner of fees and taxes. There’s always someone with their hand in your pocket!

If you’re intending to live in this property for years – we suggest it has to be 5 years minimum to warrant these high upfront costs – then they become less and less important.

So, what upfront costs can you expect to pay? You’ll have surveyor fees, legal fees, mortgage arrangement fees, and the savings-destroyer: stamp duty. Then you’ll have to furnish the house and bring it up your standard.

You’ll even be stung for little things that you would never expect. When I (MU co-founder Andy) bought my last house, I had to pay the council £50 just to get some wheelie bins – ridiculous.

You can expect all this to add up to thousands and thousands of pounds, and this will vary hugely based on the value of the home you’re buying, the state it’s in, and what furniture you already own.

For those interested here’s an article with some estimates of what this may cost.

Some of these costs don’t affect the buy or rent decision because you can still keep whatever it was you bought.

For example, if you buy a sofa you will very likely be able to take this with you should you move elsewhere.

Unfortunately, a boat load of those fees are expenses that once spent is lost money. It’s gone forever.

For example, and ignoring the temporary stamp duty holiday, stamp duty will cost thousands. On a £400k house you are charged £10k in stamp duty alone. Ouch!

Many people are so desperate to own their own home they buy based on their current lifestyle, but a lot changes in life, especially in your 20s.

That 1-bedroom studio apartment in the city centre might be perfect for you now when all you want to do is party all the time, but will it be suitable when you’ve met someone and now want a bigger house or to live in a better area?

You also probably bought the best property you could afford at the time and sacrificed a great deal because the budget wouldn’t stretch that far.

Within a few years you could potentially have doubled your income and that small and dingy apartment will no longer be good enough.

Question 2: Do You Expect House Prices To Keep Going Up?

There’s a widespread belief that house prices only go upwards, so you should get on the property ladder asap and ride the property wave to a wealthy retirement!

We get why people think this. This is a trend that has been mostly true for the last 3 generations. All we have ever known is increasing house prices. published a really powerful chart showing house prices vs average earnings over the last 174 years:

For the first 70 years they just kept getting cheaper. So maybe we’re due a spell where house prices at the very least stagnate.

House prices are already over 8 times the average wage, and if we combine that with current economic stagnation, rock bottom interest rates which long-term can only go up, and massive unemployment being masked by government job retention policies, then one does have to question whether house prices can continue to rise.

Arguably one reason for such epic house price increases over the last few decades has been due to high immigration and not enough houses being built to meet the demand.

We have no idea what immigration policies the UK will implement now that we’ve Brexited but with the UK fertility rate per woman at just 1.7, there could now be a shrinking population, which isn’t good for house prices.

Question 3: Is A House Deposit And Associated Expenses The Best Use Of Your Money?

If we assume that house prices do continue to rise, that doesn’t automatically mean that home ownership is a must.

Right from the outset there is a massive opportunity cost that comes from having to pay a big deposit and all the associated expenses. Over time as you pay down the mortgage you will end up with equity of hundreds of thousands of pounds just sitting there doing nothing.

For those of you who aren’t boring accountants, an opportunity cost is the forgone benefit that you would have received if you’d chosen to spend your money differently.

For example; if you don’t tie your money up in property, you could instead use it to invest in the stock market – or boost your employment prospects with an expensive professional qualification.

Better yet, could that capital be used to start a business instead? The stock market can be very lucrative but there’s no better route to wealth than to cast your employment shackles to the ground and go into business on your own.

Most businesses require some upfront capital, and with most young people struggling to gather enough money for a house purchase, there is slim chance of there being any left over to start building the business empire.

In other words, that mortgage is just another set of chains preventing you from achieving your ambition.

Question 4: Are You Willing To Sacrifice Your Current Lifestyle?

As a finance channel we typically encourage delayed gratification. Any small amount of money saved and invested today could be worth 10 times that amount in the future.

Nevertheless, what you do with your money is up to you, and renting can give you access to a better-quality home than you could afford to buy.

You might not be able to afford to buy in the trendy part of town where you have great access to the best bars and restaurants, or fantastic public transport connections, or a good local school. However, you might be able to afford to rent there.

If we wind the clock back to the good old days when we were at University, we had a big house in the centre of the main student area surrounded by everything a 20-year-old would want.

There was no way a bunch of poverty-stricken students could have afforded that house, but by renting we could live the high life!

Question 5: Do You Know The Area You Are Buying In?

Never buy a property in an area you don’t know. As we’ve already mentioned, buying a house is a medium to long-term purchase. If you don’t know the area… how do you know if you like it?

You can do all the research but some things you won’t know until you actually live there.

On paper the area might have everything that you want, but the commute to work could be a nightmare or maybe the mobile signal is non-existent.

You’ll likely never find the perfect home, but renting in an area first before buying can help you get a little closer to perfection.

Question 6: Are You Good At Budgeting?

One of the best things about renting is you know with a degree of certainty what your housing costs are each month.

Rent will be the same each month, so will council tax, and utility bills will be roughly the same month in, month out. So, if you suck at budgeting, then renting will make it as easy as it can possibly get.

For homeowners, however, it’s not quite so simple. While the mortgage payments often stay consistent in the short-term (if you’re on a fixed-rate mortgage), there could be any number of unexpected costs.

From boiler breakdowns, to clogged guttering, to leaky pipes, to birds living in the roof – there is an infinite number of potential faults that can occur at any time that must be paid for by the homeowner.

If You Are Buying…Consider These First

Don’t Buy The Most Expensive Home You Can Afford

It’s a common belief that you should buy the most expensive house that a bank will allow you to, because property only ever goes up and therefore you will get the maximum returns possible.

We’ve already busted the myth that property only ever goes up but let’s also consider 2 other reasons why buying the most expensive house is a bad idea.

  • Being crippled by mortgage payments is no way to live and it can tie you to a career and life you hate. If you want to gain extra exposure to the property market it can be done with a BTL property. It doesn’t have to be done with your own home; and
  • Buying an expensive property which you can barely afford now leaves no wiggle room if interest rates go up, you lose your job, or your partner decides to pack up and leave you.

Only Buy A Property Others Would Want To Buy

From a financial perspective never ever buy a property that has some unusual feature or is of a Non-Standard Construction.

A Non-Standard Construction uses materials that don’t conform to the ‘standard’ definition, which means brick or stone walls with a roof made of slate or tile. A Non-Standard Construction is basically anything that falls outside of this definition and can include thatched roofs, or walls constructed from concrete or wood to name just a few.

A Non-Standard Construction can cause a property to have increased costs to maintain and insure. In fact, potential buyers may even struggle to secure a mortgage on such a property.

Even though you may think it’s your dream home now, there’s a high chance that you will want to move in the future and selling might be problematic. Our tip is to always think of selling even when you’re buying.

Beware Of The New Build Premium

New build homes are awesome. Everything is in a perfect unspoiled condition and any issues that arise within 2 years will be fixed by the builders as part of the guarantee.

But these positives don’t come for free. According to Zoopla and data from the Land Registry, in 2019 the average new home sold for £290k, compared to a typical sales price of £225k for older properties – that puts the new build premium at £65k or +29%.

Does that mean from a financial perspective that you should never buy a new build property? We don’t think so.

Older properties tend to need a lot of work to bring them to a condition that you’re happy with. You might need to install new bathrooms, a new kitchen, rewire the house, and so on. All this costs a substantial amount of money and has to be 100% paid for today.

A new build, however, doesn’t need any major work for several years, so you have essentially been able to pay for all the renovation work to be done with a mortgage instead.

Although the new build property is more expensive, it is better for your cashflow. A fixer-upper on the other hand costs far more in cashflow and time – but you do have a significantly higher chance of increasing the value.

Have we changed your views on the Rent vs Buy debate? Let us know in the comments below.


Features image credit: Keith Ryall/

Check out the MoneyUnshackled YouTube channel, with new videos released every Monday, Thursday and Saturday:

Analysing Long-Term Trends With Relative Asset Values – Stocks vs Gold vs Oil vs Property

When investors talk about beating the market, they usually mean picking stocks.

That’s one way to do it, but an arguably safer, more consistent way to do it is to use historic market trends to weight your portfolio towards the asset classes currently in the dips of their long-term value cycles.

All the asset types move in cycles relative to each other on a grand historic scale. Gold for example will spend decades valued highly relative to stocks, only for the pendulum to swing back the other way and become comparatively cheap.

By analysing how asset values have moved against each other over decades, we can see patterns that repeat themselves, and choose to allocate our portfolios more towards assets that are currently cheap.

This is about stacking the deck in your favour. It’s the long-term approach to beating the market. But which assets should you allocate more towards?

Don’t forget to check out the Offers page to scoop up some goodies we’ve collected for you. These include links to Freetrade and Stake accounts, who are giving away free stocks!

Relative Asset Values

Working out if it’s a good time to buy into a type of asset is possible by comparing 2 assets directly to each other.

It’s no good looking at their cash values, as almost every asset type has gone up massively in cash terms over history – so not very helpful for analysis.

That’s because cash is constantly losing value to inflation, exaggerated by government money-printing programs.

But between the other asset classes, the differences in their values change slowly over time as they fall in and out of fashion, and as a result of a gradually changing world.

120 ounces of gold will buy you an average UK house in 2020, but in 2004 you’d need 350 ounces of gold.

There’ll be times when a house could be sold to buy 2,000 shares of X company, and other times that this same property could be traded in for 3,000 shares of the same company – cash values don’t come into it at all.

In this article we’ll be comparing assets against each other to work out which stand to do the best over the next couple of decades – starting with…

Gold vs Stocks

Fig.1 Gold to Stocks

The story of gold is fascinating. Going back 70 years, we see reasonably smooth, cyclical trends going up and down.

Fig.1 is showing a trendline for the value of gold divided by the value of stocks, for which we have used the S&P500 as a proxy for all stock markets.

In 1950 1 Troy Ounce of gold was worth 2 times the S&P500, in 1982 1 ounce of gold was worth 3 times the S&P500, in 2011 1.5 times, and so on.

A reasonable man or woman in the street may have assumed the ratio between gold and stocks would be either a flat line, or a random zig-zag, but what we actually see is a cyclical trend – the ratio moving in decades-long curves.

Gold is currently at a low valuation relative to stocks.

But it’s important to understand the context of what was happening at the time in the world during each dip and spike before we pile our money into gold.

The 50s and 60s saw a recovery after the Second World War with stocks outperforming safe haven assets like gold as economies picked themselves up again.

Then in 1971, President Nixon took the dollar off the gold standard, which had previously fixed the price of gold at $35 an ounce, which explains this sharp spike as gold was let loose to find its own value.

The trend continued upwards during the early 80s, leaving this chart entirely and hitting brief highs of 6.4x in 1980 when high oil prices – another asset – caused high inflation across the world.

Then stocks took over again – the period from the 80s to the millennium was one of strong economic growth.

As you might have guessed, the story of stocks and gold are tied to economic cycles – when we’re in a good period, stocks do well, and when the economic cycle hits a roadblock it’s gold’s turn to shine.

The economy went south again in the years of the last recession, and then stocks recovered for a few years to bring us to today.

Interestingly, the economic brutality caused by the coronavirus hasn’t really appeared on this chart – the data goes up to November 2020, but we can see that the relative value of gold held steady.

We think that what we’re seeing in the chart is another bottom in 2020. The only time gold was valued lower in the last 70 years was during the foolish sell-off of gold by central banks – a policy swiftly halted once they realised that they’d ballsed up big time.

Incidentally, between 1999 and 2002, UK Chancellor Gordon Brown sold 56% of the UK’s gold reserves – at a rock bottom price of $275 an ounce. Gold is now worth $1,800 an ounce.

What a clown. A simple glance at a chart like this would have told him that this was a historically stupid idea.

We think we’re at a point in the gold cycle that if we overweighted our portfolios toward gold, we’d see market beating returns, such as by buying more of the iShares Physical Gold ETC (SGLN).

We’re probably entering one of those periods of the economic cycle where everything goes to hell, starting with the lockdowns of 2020 and the economic chaos that followed.

Gold vs Oil

Fig.2 Gold to Oil

OK, so gold is valued at historic lows relative to stocks. What about oil?

Fig.2 shows the gold price divided by the oil price going back 70 years; the price of a Troy Ounce vs a barrel of Brent Crude. It flat-lined in the years before 1971 because of the gold standard and oil being linked to the US dollar and therefore to gold.

Since the brakes were removed from gold in 1971, we see less of a cyclical pattern, and more of a moving range between 10x and 30x.

If gold was at 30x a barrel of oil, it’d be fair to say that either gold is expensive, or oil is cheap. But look at what’s happening right now at the end of 2020 – the ratio is over 40 times. Either gold is super expensive, or oil is super cheap.

Or maybe the world is moving away from a need for oil. There is widespread belief that renewable energy will make oil redundant.

However, we see this as a slow evolution over many decades still to come.

Gold is not expensive relative to stocks as we’ve proved, so maybe oil is driving this movement.

And we know that the oil price has been massively hit by lockdowns, and will likely rise once economies open up again.

Will oil return to its normal range against gold? History tells us it will, and we should all now be buying oil according to this data, and lots of it.

Here’s an article detailing how we’d go about buying oil.

Is UK Property Expensive?

Fig.3 UK Houses to Stocks

Relative to stocks, it’s a super cheap time to buy residential properties. It’s mostly stocks driving this movement though.

The peaks coincide with economic downturns – the inflation of the 70s and 80s and stocks market crashes of 2000 and 2009 – and the dips with periods of stock market growth.

Fig.4 UK Houses to Gold

We see a similar story though when we compare UK houses to gold. The average UK property is not far away from being worth just 100 ounces of gold.

The periods since 1971 where property was cheaper than this didn’t last long – and pre 1971 was a unnatural time for gold. Nixon really did change everything when he unhooked gold from the dollar.

But it feels like property is expensive, and getting more so. This is because cash is becoming more worthless.

Fig.5 Multiple of Earnings

Fig. 5 shows how house prices since around 1900 have been rising as a multiple of earnings.

What we conclude from this section is that property is cheap, but your wage is not able to keep up!

Small Caps Or Large Caps?

Back to stocks – what analysis can be done to beat the market over the long term? Well, one way is to look at the cyclical pattern of small caps vs large caps.

Small cap stocks are not actually small – Investopedia defines them as companies with values between $300m and $2bn.

But they are much smaller than the companies that make up the S&P 500 for instance, which range from $4.5bn to $2,000bn (or $2trn).

And small caps go through long cycles of over and under performance relative to large caps.

Fig.6 Small Caps to Large Caps (Whole World): 30 years

Fig.6 shows a comparison over the last 30 years, with small caps dipping and then going up fairly consistently relative to large caps.

There’s a dip in 2020 which could be the start of a down-trend, but overall small caps are still relatively expensive in 2020.

Whole-world data was limited for small caps, but we found the following chart (Fig.7) which looks at the top 3000 US companies – comparing the bottom 2000 to the 1000 largest.

Fig.7 Small Caps to Large Caps (USA): Longer Term

The trend from 1990 to 2020 from Fig.6 is visible in Fig.7 too, but prior to 1990 we can see that small caps were doing much, much better – some would cite this as a reason to buy small caps now.

We’re taking a balanced approach with small caps. To us, they look mid cycle.

Going back to the recent history in Fig.6, a lot has changed since 1990 in the stock market that represents a permanent shift, starting with the invention of the internet.

Although they look expensive now compared to the rest of the modern era, a small cap stock can launch on the internet and take over the world in less than 10 years.

Amazon, Facebook and Google didn’t exist in 1990, and are now all among the top 10 biggest companies in the world.

And small caps have shown historically that they can outperform current levels.

What We’re Doing

We’ll hold our small caps position at 18% of our equities – still a large weighting, without going mad.

We’re giving more of a focus to gold and silver in our portfolios. Silver moves in line with gold but with more volatility.

Where before they took up 5-7%, gold and silver now make up 10% and we are thinking about increasing this further – but it’s a difficult decision to commit so much portfolio space to an unproductive asset.

We said back at the start of the first lockdown that the time was right to buy oil, and we think it still is.

We’ll be holding on to our oil stocks and ETFs in the short term until there’s a recovery in the oil price.

The price may be slightly higher now than what it was during the 2020 crash, but compared to long term trends it’s still ridiculously low.

You still need to hold a majority of diversified stock market funds or ETFs regardless of these trends – there’ll always be an exception to the rule.

Owning the world will always be the best starting point, but you can overweight at the edges towards historically cheap assets.

You could take this further and compare other assets yourself, or run a comparison of stock market industries to see if there’s any historical trends worth knowing about. Let us know what you find!

How will you be tweaking your portfolio as a result of these findings? Let us know in the comments below.

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

Complete Guide To Buy To Let Property

If you have a dream of building a rental property empire, then you’re not alone. There are at least 1 million active property investors in the UK with income from 2 or more houses.

These people are smashing it – why not join them?

In this short guide we’ll cover:

  • how much money you can make from renting out property,
  • the strategy for getting rich;
  • how much it all costs;
  • how to find the perfect rental property;
  • the tax essentials;
  • and more advanced strategies for those building a larger empire.

About once a month we send out the Money Unshackled email newsletter, so if you have not yet subscribed to this, do so! It’s the best way to ensure you don’t miss anything.

Part 1 – Your Returns

Ben (MU co-founder) makes around £325 a month after-tax rental profit on average from each of his properties, based on an average £700 rent.

These properties are nothing special. They are pretty average investment properties; mostly terraced houses in the North. Where he buys, the average upfront investment for a house like that is around £40,000 today.

That’s a cash return of about 10% annually (£325 x 12 months ÷ £40,000). Such high returns are possible because you keep all the rental profit, despite only having to fork out for a small fraction of the property upfront by using an interest-only mortgage.

This is most commonly a 75% Loan To Value split, with you investing just a 25% deposit.

After factoring in the mortgage interest, the effect is roughly a doubling of your cash returns compared to owning the property outright.

On top, you also earn capital gains from property. And this is again magnified by your mortgage.

If you have just a 25% deposit in the house, then a 3% inflationary rise in house prices would give you a leveraged gain of 12% (being 3% ÷ 25%): a 4-fold profit boost. Both profits combined, you’re looking at 20%+ annually.

Part 2 – Your Goal

A goal is a dream with a deadline, and yours should have one. For you, is that 5 houses? 10? 20?

To reach that goal as fast as possible you should keep reinvesting all your cash profits into the next property until it’s achieved.

This means you’ll need to fund your lifestyle through other income sources like you job until your goal is reached.

Part 3 – Can You Afford It?

Upfront Costs

You can buy a decent rental property from around £120,000. Think we’re joking?

In the video version of this guide on YouTube we showcased a perfectly respectable rental opportunity for £120,000 near one of Ben’s goldmine locations in Leeds, that might fetch £650-£700 rent. A 25% deposit on that is £30,000, and stamp duty plus legal fees and minor other expenses would bring you to about £35,000 total investment.

Some people question whether it’s possible to buy such a cheap house, but they’re usually hung up on where they’d want to live, or what they know about their area, rather than sound investment opportunities.

Where you live, property might not be this cheap – so you’ll either have to buy elsewhere and have an agent manage it for you, or simply make sure that the rent you’re getting is proportionally higher. It’s roughly comparable for instance to buying a £240,000 apartment where the rent is £1,300.

Additionally, you may also need to do some initial refurbishment on your new investment to get it tenant-ready. is a fantastic resource for estimating the cost of a project – or to check contractors quotes against, to tell if you’re being fleeced or not – with handy pricing guides for pretty much any contractor work you could think of.

Top tip: for any job that needs scaffolding, add at least £600 to the price!

Ongoing Costs

Your rent should cover these, but what about the times when your house is untenanted?

The tenant is normally responsible for paying the utilities bills and council tax, while you are in charge of paying the mortgage interest, maintenance, landlord’s insurance and safety certificates. On a low-budget investment property, these may respectively cost £120 a month (mortgage interest), £50 a month (maintenance), £12 a month (insurance) and £5 a month (safety certs).


First, don’t do this yourself. You’re an investor, not a toilet fixer!

You should set aside £50-£100 a month from each house into a savings pot to pay for any future maintenance, called a provision.

Ben just had to spend £1,000 to fix a leak in one of his.

Was he bothered? You bet he was. Money is an emotional subject. But rationally, he’d already spent that money months before when he first added it to his provision.

Letting Agent

Use an agent. Don’t try saving every pound by doing it all yourself. Otherwise, your life becomes about other peoples’ problems.

Maybe you start out doing it yourself just to experience the amount of work required; then outsource once the lesson has been learnt.

An agent costs around 10% of your rental income; and means you can treat your investment property like a box on a piece of paper, with money coming in and money going out.

Part 4 – Finding Property

This is easy to do on Rightmove. First up, set up a filter for the house type and price you want to buy. We typically look at 3-bed terraced houses around the £110-£140k range.

Look at a few cities and towns until you find houses in your desired price range.

Then switch to filter for rental property of the same size in that area. Use the map feature on a computer so you can zoom in on specific areas and streets.

If 3-bed houses are getting high rents in the same area as you’re looking to buy, then houses for sale in that area are worth a phone call to the estate agent to book a viewing for.

Part 5 – Your Dream Team

To buy a rental property you will need a mortgage broker, mortgage provider, a solicitor, and contractors to tidy up the house if required.

It’s important you find a good mortgage broker – they don’t need to be local, just highly recommended. They’ll find you the best mortgage, and handle the mortgage provider for you.

The estate agent selling the property can provide you with a solicitor if you don’t have your own – though usually at a premium fee! Contractors can be found at, or

Part 6 – Tax

The tax rules are unnecessarily complicated for property investors, but be aware that there are 2 sets of rules; one for if you own the properties, and another for if you own a company which owns the properties on your behalf.

We can’t tell you which is best, as the answer will be personal to your circumstances. But generally, if you plan on having a large portfolio of 5 or more properties or you’re a high rate taxpayer, you’ll likely be better off using a company.

Owning through a company has the following rules:

  • A 19% tax on rental profits;
  • To access profits you must pay yourself a dividend, with are taxed at 7.5% for basic rate taxpayers, or 32.5% at the higher rate;
  • Mortgage interest is a valid tax-deductible expense.

Also, not tax related, but mortgage products for companies typically have around 1% higher interest rates than ordinary buy-to-let mortgages.

Owning directly yourself has these rules:

  • You pay tax on profits at the normal 20% basic rate or 40% higher rate of income tax;
  • Mortgage interest is not a valid tax-deductible expense (but you can get a 20% credit against profits).

We think this is a disgusting theft by the taxman – not allowing property investors to offset the largest monthly expense in their profit calculations for tax.

Like much of the tax system, there is no logic or consistency being applied by the taxman here!

Part 7 – Advanced Strategies

House in Multiple Occupation (HMO)

Ben converted his first property to a HMO. It meant he could rent out the property by the bedroom to multiple separate tenants, who share a communal kitchen/lounge area and bathrooms.

Where an ordinary single-let house might fetch £700 rent, a multi-let HMO could bring in £300 a room, across 5 rooms – or £1,500 total. But the landlord pays the utilities, council tax and TV licence.

You’d typically convert lounges and dining rooms into downstairs bedrooms, which could turn a 3-bed into a 5-bed.

From Ben’s experience of managing a HMO by himself – in the days before he realised that time is more important than money – there is no worse way to live than to have to take calls and deal with several peoples’ problems and disagreements 24/7.

Make sure you’re outsourcing the management to an agency.

HMO law has tightened up massively in recent years.

Most cities have an ‘Article 4 Direction’, meaning you must ask permission from the council before you convert a property – with the answer almost certainly being “no”.

Check your city council’s website for where you can and cannot convert – here’s Manchester’s version for example.

The hotspots are typically at the edge of cities, where rent demand is still high but where councils don’t insist on such heavy-handed planning permission.

There are a million other hoops to jump through, including many safety regulations – here’s a comprehensive checklist.

Commercial Property

Investors who’ve built up a decent sized property portfolio might have the financial clout behind them to be granted a commercial mortgage on something like an office building or retail space.

This is a very different market to residential, as your tenants are businesses. The void periods (the name for the time a property is empty) are likely to be longer than for residential houses.

But the range of potential profits are far wider – you might bag a bargain opportunity that makes you your millions.

Development Projects & Flipping

This is another potentially lucrative opportunity you can grasp once you’ve built up several properties’ worth of capital. Instead of buying a nice house on a mortgage, you can buy a horrible shell of a house, and hire contractors to turn it into a very nice house.

You can’t use a mortgage to do this, as a house must be habitable to qualify for one.

So the usual way forward is to both buy the house and pay for the renovation using cash, for which you’d need at least £100,000 at the bottom end of the market.

It’s either that or use expensive short-term debt known as a bridging loan, which we wouldn’t recommend for beginners.

You’d then either sell it on at a profit, called “flipping”, or, get a mortgage on the finished house to extract 75% of the value back into your bank account – and get it tenanted and producing a monthly income!

Are you planning on buying buy to let property? Or do you already have budding empire? Let us know in the comments below!

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

Enemies of Investing Rant – Things To Look Out For

We all need to look out for a number of threats or evils when it comes to investing. If you don’t, whatever small amount of money you have will be stolen, pilfered, and swiped, and slowly moved from your pocket to someone else’s.

In this post, we’re going to look at the enemies of investing, what you need to look out for, and some of the things you can do so you’re less likely to be a victim of these wrongs. Let’s check it out…


Fees are a constant drag on your investment performance, and if not given the attention they deserve, they will chip away at your little pot until there’s barely anything left, whilst at the same time making the finance industry rich as the money is siphoned from your pocket into theirs.

The good news is that fees across the industry have been coming down and this trend looks set to continue. With that said, here are some of the nasty charges that you can minimise with a little research and forward planning.

Platform Charge

Most investment platforms will charge you a fee just to hold your investments. Some charge a percentage based on your investment pot and others charge a fixed fee. Whichever you opt for we suggest you never pay more than an effective 0.25%.

Today, there is no need to pay any more than this – thankfully a surge of new investment apps such as Trading 212, Freetrade and Stake have entered the fight by introducing zero platform fees.

Trading Fees & FX Fees

Trading fees are some of the worst charges because they often prevent you from building and rebalancing your desired portfolio, and therefore impacting on your investing behaviour in your effort to avoid them. FX fees are similar and will usually slice away at your money whenever you trade and receive dividends.

While the more comprehensive platforms are allowing these fees to run rampant – often charging 1.5% FX fees and around £10 per trade – the new commission-free trading apps have eliminated them or significantly reduced them.

There’s a hell of lot more fees that investors should be aware of but that is a full article in itself and we have a lot of other stuff to cover in this post.

Other major fees you want to watch like a hawk are transfer-out fees, the Bid/Offer spread when trading, a fund’s OCF, a fund’s internal transaction fees and advice fees.

If you need help in picking the best investment platform that’s right for you, we’ve gone ahead and done all the hard work for you. See the Best Investment Platforms page for the top picks.


To put it nicely, taxes are a thorn in any investors side. If we described them accurately, no doubt we would be banned from Google for obscene profanity.

On the plus side, in the UK we have some quite generous accounts that allow us to avoid the worst of it on smaller investment pots – such as ISAs and SIPPs – but there are still some god-awful taxes that are effectively stealing what is rightfully yours.

First let us clarify our stance on taxes. We are pro taxes when they are levied as a reasonable percentage on real profits. What we despise are taxes that are incurred on transactions, cash flows, and real losses. For example, stamp duty on UK stocks is 0.5%. Why? The investor has not made any profit and yet the government feels it is okay to take a slice.

The irony is that UK investors can invest in many foreign stocks with zero upfront tax, incentivising UK investors to forgo UK stocks and trade international stocks instead.

Income tax on dividends is another tax that really grinds our gears. When a dividend is paid, the value of a company falls by the value of the dividend paid. Therefore, no wealth has been created for the investor; but the tax man wants a piece. This also encourages some companies to seek other ways to increase shareholder wealth, so affects behaviour.

This leads us to the sickening dividend withholding tax imposed by many foreign countries. For example, France will deduct 30% from any dividend paid by French stocks to UK investors. Remember, a dividend is not real profit.

As an investor you have limited means to reduce taxes but there are still some weapons in your arsenal. Use ISAs and SIPPs where you can. You may want to avoid certain countries entirely if they have punishing withholding taxes and/or transaction taxes.

Synthetic ETFs are a potential way of reducing withholding tax but not all synthetic ETFs successfully achieve this from our research. If you’re interested in learning more about synthetic ETFs, then search our YouTube channel page as we have a few videos on the subject.

Moreover, spread betting is another way to avoid tax but probably not something you want to do until you’ve maxed out your ISA. Don’t forget the goal should never be to solely minimise tax if it lowers overall return. The most important thing is to maximise profits after the deduction of tax.

What worries us is that nobody ever talks about the impact that these taxes have on long-term returns. It is widely recognised that stocks have returned 8% per year over many decades, but we’ve never seen any study or heard anyone talk about the returns that an investor can expect after the deduction of fees and taxes.

Say an investor invested a lump sum of 10 grand over 30 years believing he was earning 8% annually. The final pot would be a not too shabby £100.6k. But in reality, the fees and taxes could take that 8% down to 5% maybe. At that rate of return the final pot would just be £43.2k – almost 60% smaller than what it should have been.


Most people would never have thought that inflation is a tax, but it really is. Tax is usually collected but in the case of inflation it is an invisible hidden levy on your wealth. The reason that inflation can be labelled as a hidden tax is because the government indirectly controls it.

They can increase the money supply seemingly at will, as demonstrated by the money printing to fight Covid, and before that the credit crunch. They can raise and lower interest rates, and they can stimulate or slow down the economy through government expenditure, known as fiscal policy.

Raising inflation brings money into the government purse because it reduces the value of government debt. It works like this: they raise inflation; the assets of investors get hammered; and government debt goes down. It is a transfer of wealth from us to the Treasury – a hidden tax – to help pay for the national debt.

To carry on the example from earlier: if we assume inflation on average is 3%, that will take our investor’s real return from 5% down to 2%. That £10k investment would now only grow to £18k over the same time frame. It now doesn’t seem like such a great return, especially considering the time it took and the amount of risk that the investor had to take.

Our tip to all investors and savers is to start considering your returns after the effect of inflation. This is known as the real return. Too many people only ever look at nominal returns.

This means if you’re one of the majority of people in the UK who only saves money in a bank account, then you need to start investing. According to, only about 3% of people in the UK were subscribed to a stocks & shares ISA account in 2019. That is a shockingly low figure.

We conclude from that, that the majority of people in the UK are getting rinsed by inflation. Further, that 3% of people using S&S ISAs will include people who are investing in investment products that are producing dismal returns, like bonds. Vanguard’s Global Bond Index Fund has returned on average just 3.5% annually for the last 10 years – barely beating inflation.

Recently we’ve been asked a few times to comment on the rumoured changes to capital gains tax. The rumours are that the capital gains tax threshold will be lowered, and the rate increased – a double whammy. Whether this directly affects you or not, let’s be clear – if this change happens it’s totally unjust and unreasonable.

Capital gains tax does not make concessions for inflation. A property owner may be sitting on a large nominal return, say for example if the property value moved from £200,000 to £400,000 over 25 years. But the real return over that time frame is likely to just be inflationary and so no real gain to their wealth was made. And yet, they will be expected to pay a high level of capital gains tax when they sell up.

These sorts of policies are often vote winners but only because most people don’t understand the difference between nominal and real profits – in fact most people and even most politicians have probably never even heard of these terms.

Bad Advice

If all those threats to your wealth wasn’t enough, then bad investment advice will surely make your investment stack topple over like a game of Jenga. You will get bad advice when it’s free, and even when you pay for it.

When Ben (MU Co-founder) was 16, he went to his bank seeking to invest a small sum of money. It was a disaster, and he lost half of it – and to top it off he committed a cardinal sin and sold it at the bottom in panic. Whilst technically he had been speaking to a qualified financial advisor, in reality this advisor was just a salesman for the bank. We’re sure they did well enough out of the fees. Learn from Ben’s mistake and make sure you know who you are taking advice from.

Even the most honest advisor is likely to underperform the market, as the hit your portfolio takes from their fees is likely to offset any edge they can provide over just using passive index-tracking funds.

A financial advisor usually gets paid a percentage of the size of the pot they manage for you. This means they are incentivized to have your assets in investments that they can manage themselves, like funds. They’re not going to encourage you to invest in things like Buy-To-Let property or physical gold bullion as they can’t charge you for it. Remember, there’s usually a conflict of interest with any advice you get.


The next great investment evil is groupthink. This will likely impact your own decision making and even the actions from paid-for advice, whether that’s financial advisors or fund managers. Fund managers will invest in line with everyone else, so they will loosely track the performance benchmark and avoid looking foolish.

Groupthink also impacts every decision you make. Debt is bad. Pay down your mortgage as fast as possible. Stocks are risky. Stocks are overpriced. Interest rates can’t fall any further.

Some of these may be true but make your own decisions. People are taught what to think, not how to think.

We’ve also found, and this doesn’t just apply to investing, that the best, cheapest, and most suitable products are not always the most popular or well known. Cheap products don’t tend to have the marketing budget to reach a wide enough audience.

It’s why you see so many adverts for CFD brokers. In most cases these are not platforms that beginner investors should be using, but because CFD brokers often rinse their customers in fees they have large profits to fund more advertising to rope in the next unknowing victim.

What other evils do investors need to be aware of? Let us know in the comments below.


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

Your Opportunity Fund – Career, Investing & Side Hustles

Everyone gets opportunities to make more money. But most people either aren’t equipped to take them, or don’t see them. Missed opportunities keep you poor.

Money opportunities can be small and incremental, like buying a stock when it’s cheap or changing jobs. On their own they won’t make you rich, but taking your opportunities day after day will soon add up.

The problem is, to take advantage of most money opportunities you need to already have some money to fall back on – enough cash and investments to give you the balls to take a risk.

This is your Freedom Fund, which looked at through a different lens is really an Opportunity Fund.

This article should help you to capitalise on the opportunities that life throws at us, and tell you why you need an Opportunity Fund – and why having one of any size makes the difference between being too afraid to make money, versus having the confidence to get rich.

Your Opportunity Fund

At its heart, the Freedom Fund that you hopefully have stored under your metaphorical mattress is there to pay you an income and also to allow you to take advantage of life’s opportunities.

If you see an investment worth buying, or a career or business opportunity worth taking, the fear of loss will stop most people.

A Freedom Fund – or Opportunities Fund as we’re calling it today – is there to be used to pursue opportunities. Not risked recklessly, but used in a targeted way.

Opportunities to make or save money come along daily and can compound to make you much better off, but you need to be zen enough with your cash situation to risk putting some on the line to make more.

With our own Opportunity Funds, we’ve found we grow more relaxed about making money the bigger it gets.

What An Opportunity Fund Buys You

#1 – Better Jobs

At the smaller end of the scale, your Opportunity Fund gives you the confidence needed to change jobs or change careers, as you have assets and maybe even investment income to fall back on.

It’s all about being able to politely tell your boss that you no longer have need of their employment, and will be going off to pursue better options.

Finding a new job is a chore, and finding a good one that’s worth trading your life in for should be given some serious effort to find. It’s not something that’s easy to do whilst already in a job.

In our view, with jobs it’s best to first quit, then give 100% of your time and brain power over to the search for a replacement, climbing higher up the career ladder as you do so.

We’ve only been able to do this because we had Opportunity Funds to catch us, and genuinely believe our strong career paths were made possible by the comfort of having that cash buffer.

#2 – Better Investments

You want to be in a position where you never again have to turn down an investment opportunity because you’re living on the breadline.

It’s not just poor people who live like this – half the middle class families that we know are living pay check to pay check.

It can take time to learn how to start investing, and it would be disheartening to not be able to put theory into practise.

If the FTSE 100 falls to 10-year lows, like it did in 2020, you know in your bones that you should be putting some of your spare cash into buying a FTSE 100 index fund while it’s cheap.

But if you don’t have an Opportunity Fund, you can’t do what’s necessary to help yourself – in this case reallocating some resources into the FTSE 100. It’s just another chance you missed out on to get ahead.

With a decent sized Opportunity Fund you can also take advantage of riskier investments like small-cap stocks and property. Those with a small or non-existent Opportunity Fund must take safe harbour in less volatile and less rewarding investments instead.

With property, it’s more about the investment being expensive to buy in the first place, and that it may need funds to maintain.

If you go through an untenanted period, or the roof leaks, you need a pile of cash to fall back on. It’s the type of investment you’d only buy if you also had some spare cash set aside for (possibly quite literally) rainy days.

#3 – Better Side Hustles

Side hustles are becoming more popular as a way of making extra money in these troubled times, with the Independent reporting that 20% of people already do things like dog walking and selling old clothes and gadgets to top up their bank balances, and a further 25% wanting to start a side hustle.

These are the types of hustle you might do if you had no capital behind you. After all, anyone can walk a dog or sell some junk.

But side hustles are not limited to the financially challenged. If you’ve first built up a decent sized Opportunity Fund, you could start a far more profitable side hustle.

With a bit of investment into monthly web-hosting fees you could open an online shop to sell your bits and bobs – by buying a van with a nice paint job, some equipment and paying a helper or 2, you could have a dog walking business catering for hundreds of dogs.

Essentially, if you commit yourself and your finances to a side hustle, it can turn into a business that replaces your job.

“But a new business is not guaranteed to make enough money to live on”, most will say. Exactly. This is why the confidence boost of having an Opportunity Fund is essential for taking the leap.

A lot of money management is psychological. You might have the best business idea in the world, and a plan for how to implement it, but if there’s a slight risk that it won’t make money immediately you probably wouldn’t do it.

Fear of potential loss always takes priority over excitement of potential success. It’s just human nature.

#4 – Better Business

At the larger end of the Opportunity Fund spectrum, a successful small business owner might be too scared to hire their first employee.

Do they wait to hire someone later when they can more easily afford it; or do they hire someone now while they can’t, but trust that the value created by the staff member will mean they pay for themselves?

It could be the difference between a business that grows fast versus one that stagnates.

If you have some small amount of cash set aside so you can survive for say 6 months without any payback on this employee, it’s a different decision from if you were living hand to mouth without any savings.

#5 – Better Experiences

It doesn’t have to all be about making more money. A big Opportunity Fund gives you better opportunities to have fun.

Perhaps you’re given a once in a lifetime chance to sail the world, or a mate asks you to tag along on an excursion to Antarctica to see the penguins.

Or maybe you’ve got the chance to go to the World Cup final, or your favourite singer is doing one last tour.

How Big Your Opportunity Fund Needs To Be

The answer is that any size is better than nothing. A small Opportunity Fund of £10,000 might give you the confidence to change career.

A pot of £100,000 might give you the confidence to move 30-40 grand into a rental property to leverage some of your returns by using mortgage debt.

A pot of £500,000 might kick out enough passive income that you never have to work a day again and can spend your time starting or investing in businesses.

While a pot of £10,000,000 will have people coming to you to throw equity at you, Dragon’s Den style.

Getting Started

The hardest part can just be getting started building that initial fund. If you were able to just save aside a few extra hundred quid a month it could soon make all the difference.

You’d be able to start taking advantage of small-scale money opportunities which further compound your wealth.

One thing we’ve both been trialling is matched betting, a risk-free process of scooping up cash bonuses offered by bookmakers by placing bets on both outcomes of an event. We’ve each made around £500 per month from it, but some people put more time into it than we can and make over £1,000 monthly.

To do this we’ve been using OddsMonkey – they collect all the bookie bonuses in one place, hold your hand while you scoop them up, with specific walk-through guides and tools for all offers.

For instance at time of writing, one bookie has an offer for £100 in free bets – OddsMonkey will walk you through how to grab this free cash, plus hundreds more offers like it.

Check out our matched betting page to read more about it and get discounts for matched betting services that you won’t get by going direct.

Other Ways To Grow Capital

Other than taking advantage of easy income enhancements, you can build up your Opportunity Fund by keeping more of what you make, which can often be done by just making better spending decisions.

Even saving up a few grand will get the ball rolling, which can then grow itself by investing it, as well as using it to grab opportunities as they arise.

Most people we know waste money on frivolous crap – it’s fine if you’re happy to take that enjoyment now, but accept that it removes your ability to take advantage of lifestyle enhancing opportunities in the future.

One of the best arguments for paying down your mortgage early is so you can free up money each month to spend on opportunities without fear.

We’ve countered this argument before by saying it’s better to lower your mortgage payments by extending your term, and use the money saved on opportunities while you’re young.

But both are better financial decisions than blowing that money on a new Range Rover.

Having an Opportunity Fund is a choice. Some people have big cars – others conservatories, holidays in California, or designer handbags.

The people who get ahead can have all of these things too, and more. They just get them later… after they’ve first built up an Opportunity Fund.

Money Leads To More Money

The old saying that you need money to make money isn’t true, but it certainly makes it easier or perhaps more accurately, makes it faster.

Money leads to more money – if you allow yourself to take your opportunities as they come.

What have you been able to do with your cash that made your finances better? Let us know your stories in the comments below!

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

Take Control Of Your Financial Life – You Can’t Rely On Anyone Else!

We see a lot of people whinging on social media and in some news publications about how the government is a disgrace and that they’re not doing enough. We agree that the government are making a pig’s ear out of everything recently, but is it their job to mollycoddle us?


The same people complain that their boss isn’t fair or that rich corporations are somehow dodging taxes. They complain about their wages, their commute, the tax they pay, the cost of a beer. They pretty much moan about everything. Everything but themselves of course.


People can generally be split into two camps – the Doers and the Do Nots.


The Do Nots are the complainers who want everything for free and done for them; and the Doers are those who take control of their futures.  The Doers know that nothing worth having in life comes for free and that you can’t rely on others to improve your life. You must take control to improve your own future.


Today we’re going to look at some of the things that too many people are foolishly relying on getting, and will be whinging about and blaming someone else when they don’t get them. These are all key areas where you can snatch back control and improve your life.


If you are one of these people that expects something for nothing and has a tendency to be easily triggered, we advise you not to read any further! With that said let’s check it out…


Reliance On The State Pension

Too many people put their wellbeing, security, and life in the hands of the state. This is especially true when it comes to retirement. Growing old is not a surprise. If we’re lucky it will happen to all of us.


And yet, millions of people in the UK fail to prepare – instead choosing to be saved by a future government. A government that will not be able to carry this burden.


A lot of people pay taxes throughout their lives and assume that the government must put some of that aside to save for their future state pension. This is not the case at all. Any taxes that you pay goes towards paying for the state pension of current pensioners. There is no state savings pot for you.


State pensions are really just a pyramid scheme on an epic scale. Pyramid schemes only survive for as long as new members can join at the bottom. Sooner or later the whole thing comes crashing down. This will happen in some form to state pensions.  There is no doubt about it.


When pensions were first created in 1909 it was only paid out to some people aged over 70. At the time, only one in four people reached the age of 70 and life expectancy at that age was about a further 9 years.


Nowadays, the age you can take a State Pension is set to rise to 68 from the current 65. But 68 is not high enough –from a “how we gonna pay for this” point of view – as too many people are qualifying for it and drawing from it for too long.


Children born today are expected to live until they’re 90 years old. That’s over 20 years of taking from the system, rather than contributing. The state pension relies on a large worker-to-pensioner ratio, but the problem is that the ratio is forever shrinking.


In 2004, there were approximately 4 working age individuals for every 1 person aged 65 and over. By 2056 this ratio is predicted to fall to about 2:1. Therefore our kids will be asked to pay the living costs of twice as many old people as we do today.


Despite all these problems, people continually moan that the amount paid out is not enough, and the age that you can claim at is too high. FYI, the state pension is currently over £9,000 a year. This won’t get you a lavish lifestyle by any means, but the state should never have been expected to do this in the first place.


State benefits should be an absolute minimum. People have 40-50 years to plan for retirement and need to take action now.


Reliance On Government Handouts

Worryingly, there seems to be a growing dependency on and expectation of government handouts. Ask 10 people what they think the role of the government should be and you will likely get 10 different answers.


We consider the role of the government is to run and manage the parts of the country that the private sector cannot or should not. This includes things such as a military defence, fire and police services, basic healthcare, the transport network, basic education, social services, environmental protection and ensuring everyone has access to utilities – water, gas, electric and broadband.


It’s now taken for granted that the government should be the wage payer of last resort. This was always the case with the benefits system, but has been significantly ramped up during the coronavirus response.


The need for a furlough scheme – whether an arbitrary 80% or 73% – is only there because barely anyone has taken the steps over their working lives to put money aside. It surely must be recognised that the country is so deep in debt that it cannot afford such expensive schemes.


There is a lot of noise that the current job support scheme is not enough, but we ask the question why do so few people not have an emergency fund? Instead, since the last recession many of these people have been splashing the cash on frivolous stuff.


While the exact timing of the Corona pandemic is unexpected, recessions are fairly routine, with history littered with them. The one before 2020 was only in 2009.


For the record we don’t think the government should be force closing any business in the manner they have, but why were the masses not financially prepared? This time it was Covid that sunk their finances, but next time it could be something else entirely such as a personal injury, or a war sending the country into a financial depression.


We all need to be prepared, so that we can fight off temporary setbacks, and it starts with having an emergency fund of at least 6 months of living expenses. Help from the state should only ever be sought as a last resort, not in the first instance. Why do so many grown adults depend on the state like a child depends on a parent?


Reliance On Chance

We’ve come across countless people who hate their lives and hate their jobs but do nothing tangible to change this. Instead too many people are relying on chance, such as a lottery win or an unexpected windfall from an unknown relative, to improve their lot.


Other than by a miracle this isn’t going to happen to you. The chance of winning the lottery is 1 in 45 million.


There is also ample evidence showing that many lottery winners blow their fortune because they didn’t learn financial literacy. Believe it or not, statistics show 70% of lottery winners end up broke and a third go on to declare bankruptcy, according to the National Endowment for Financial Education.


The problems they had with money before they had wealth carry over but on a much larger scale.


Reliance On A Boss

Why do so many people put their future in the hands of one person? One person who frankly doesn’t give two hoots about them.


Bosses are people too with their own lives to think about, and most people have enough problems on their plate to worry about yours as well. Sure, some bosses will genuinely care, but not a single one will care about your future and your wellbeing as much as you do. This means you must take control of your future and don’t rely on someone creating it for you.


Time and again people are hoping their boss gives them a pay rise out of the kindness of their hearts.


No! You must take what is yours.


Your boss’s performance and therefore his or her own bonus is probably measured against a department budget. Paying you more or sending you on an expensive training course will result in the department going over budget. Your boss is being incentivised to pay you as little as possible. They don’t have your best interests at heart.


This conflict of interest also affects the work you’re doing. Sooner or later most people get bored to death doing the same task over and over again. Trust us, we’ve been there before.


At this point your boss might dangle a carrot. It might include additional responsibilities or more interesting tasks. Rarely does it involve relinquishing the existing tedious work. Your boss doesn’t want the hassle and expense of having to find someone else to do your work. They will do whatever they can to keep things ticking over. This again is not in your best interest.


You need to stimulate your brain, which means you likely need to progress elsewhere, but only you can make this happen.


Businesses generally break down massive processes into small, tedious, repetitive tasks and assign one person to each. Think of a car production line but it happens in offices as well. If you’re screwing that same screw for the 1 millionth time, you are not developing yourself.


Reliance On The Crowd

By this we mean deferring our major life-decisions to society’s standard playbook.


This is most illustrative in the life path dictated by society. You know the one. You go to school, get good grades, go to University, get a good job, buy a nice car, get married, buy a nice house, fill it with expensive stuff, have children, have an annual holiday, work until old age, and then retire.


Too many people are not engaging their brains and instead just follow the crowd. They believe if other people do it, that means it’s right. Nobody ever stops to question why or whether they even want it.


When you think about it, maybe you don’t want this. Maybe you don’t want to work a crappy job for 50 years; maybe you don’t want to waste £30k on a wedding; maybe you don’t want to be a slave to debt repayments for your entire life.


Following the crowd doesn’t just apply to how society dictates your path, but also impacts every decision you make. For example, from our backgrounds we know that too many people don’t make their own investment decisions. They are looking for that hot stock tip, so they can get rich quick. Analysing the investment themselves is too much like hard work – far easier to follow the crowd.


Reliance On Family

A long time ago, Andy (MU Co-Founder) was talking to a friend of his about retirement planning and was shocked that she wasn’t contributing to her workplace pension, despite the company matching any contributions.


Andy could not understand why she would throw free money away and that she wasn’t preparing for old age.


The reason she didn’t contribute to her pension was nothing to do with her young age. She said that she expected her future family to look after her in her old age.


This is both stupid and selfish because it was passing over responsibility of her life into someone else’s hands. Even if her family did want to help her, they may not have the strong finances to do so. Life will throw a lot of curve balls and it’s very presumptuous of her to think that her family will bail her out. They themselves could die young, develop financial or health problems, move away, may have their own problems, or simply not want to be put in that position.


Our suggestion to you guys watching is to make sure that you take action today to control your own future, by first building that emergency fund and then investing. This is well within your power.


Are you independent or do you rely on the government and other people to get by? What are you doing about this? Let us know in the comments section.


It’s worth checking out the Money Unshackled Offers page as we have tonnes of awesome cash bonuses and ways to make money listed that are continually being updated, including how to make £500+ tax-free each month consistently from Matched Betting.

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

How Overpaying Your Mortgage Kills You Financially

Paying off your mortgage early will destroy your finances.


If you were raised in an average family you were likely taught the importance of paying down your mortgage as quickly as possible.


Your parents probably believed it was the wisest financial advice they could give you.


That advice was coming from an era of high interest rates, inaccessibility to investing markets and lack of available information. Today’s world is a very different place, in which it is potentially financial suicide to sign-up to a repayment-heavy 15-year mortgage term.


Today we’re laying out the arguments against paying down your mortgage early, the risks involved, and our alternative approach to paying off your house and getting financially free in the process.


Nothing here is financial advice and is certainly not for the faint-hearted or the financially illiterate! This is what we’re doing.


The Myth Around Shorter Mortgages

Maths teachers up and down the land will tell you that shorter mortgages make the most financial sense.


A mortgage is a loan, they’ll tell you, and loans attract interest so long as you hold them. If you hold the loan for fewer years, you will pay less interest overall. Case. Closed.


This is why they are still maths teachers; instead of retired, with their feet up, eyeing their investment portfolios.


An investor worth their salt would give you a very different lesson.


No Risk, No Reward

Investors measure risk against return. They don’t invest for a low return when the risk is high.


And it turns out having a shorter mortgage or paying more than the minimum is one of the riskiest things you can do for your finances.


One reason for this is that when you make a mortgage payment, that money gets locked away. It’s gone from your accessible funds.


Extend this concept into mortgage overpayments, and you find that a lot more of your money gets locked away beyond your reach.


The Reward that you get from making a mortgage overpayment is that you get to save around 2% interest.


The Risk is that when hard times strike, as they do for all of us at some point, your money is trapped in mortgage jail and there is nothing you can do about it.


Repossession Risk Is Higher For Overpayers

Let’s start at the extremes before looking at the more every-day ways in which overpaying can kill your finances. Overpaying now actually raises your risk of repossession in a downturn.


If you do the so-called “right thing” and overpay your mortgage – filling your house with equity and your pockets with air – then if the day comes that you lose your job and can’t make the payments anymore you are in a far worse position with the bank.


How many people will have lost their jobs due to Covid and are now wishing they hadn’t made over payments on their mortgage?


For one thing, you have no spare cash to use in emergencies. The fact that you’ve overpaid your mortgage previously counts for exactly nothing in your favour.


And in the eyes of the bank, your house is a very attractive target for repossession.


Say the bank owns 50% of the house because you’ve been diligent and overpaid, resulting in 50% of your mortgage being paid off.


This means the bank only needs to sell the house for 50% of its initial purchase price to recoup their money. They get paid first, see, and you’d get nothing back.


All your hard-saved equity would have gone up in smoke. In a recession when the market isn’t moving, they might be happy to sell at half the initial purchase price for a quick sale.


If you find yourself in a recession, unemployed, and with house prices falling like they were during 2009, then the banks will be looking at houses owned by unemployed people (i.e. high risk), and which are also full of equity, because then even in a falling property market the bank can get their money back on these houses through repossession.


Remember, the banks are keen to give money to those who don’t need it; and the first to screw you when you’re in desperate need of some.


Contrast with someone who still owes 90% on their mortgage and so only has 10% in equity, whose house falls by 30% in a recession, to 70% of its initial purchase price.


The bank is less likely to want to repossess and sell this house because they know they’ll lose out.


If they’re trying to scrape together some emergency profits mid-recession, they’ll start with the low hanging fruit.


An Investor’s Approach To Mortgages

We hate the idea of locking our money away in the bank’s pocket for years, outside of our control. Much better to keep as much money as possible back from the bank, in our own pocket. It’s partially a matter of control – that money is better off protecting us from recessions, than protecting our banks.


It’s also a matter of return. We believe we can put that money to work for a better return than the interest saving we’d get by paying down the mortgage early.


Let’s look at what happens over a 15-year period of diligently paying down a £200,000 mortgage.


The interest on a modern-day mortgage is typically around 2%, which is less than the rate of inflation, typical around 3%, so by making overpayments you are losing money in real terms.


By this we mean inflation is eating away at your money’s future buying power at a rate of around 3% a year, while your mortgage interest saving from overpayments is around 2% per year, so a real loss of 1%.


Avoiding interest on your mortgage through overpayments is really just like paying into an elaborate savings account, which pays you around 2% interest.


Keeping the maths simple, by “doing the right thing”, in 15 year’s time you’d be down by £16,000 at real time value of money.


This is what normal middle-class people do, and it’s one amongst many common lost opportunities for financial improvement which keeps them trapped in a job all of their lives.


If you play the game with your finances, you can retire early, you could pay off your mortgage in one go at that point as well, and have your feet up watching the world pass by, by the time you’re 40.


Being smart with your mortgage payments opens up a big opportunity for you to build an investment portfolio of stocks and shares and other investments, which pay you a big passive income for the rest of your life.


‘Investors’ is how we would describe ourselves, if people asked us what it is we do. One way to think of investing is just “moving money around”.


Instead of moving your money from your current account to your mortgage account, instead move as much of it as you can to a stocks and shares ISA, whilst only making the minimum repayments on your mortgage.


It takes the same amount of effort, except one could cripple you financially, and one can set you financially free.


It makes a big difference over that same 15-year period. An 8% stock market return, minus 3% inflation, gives us a 5% real return on average each year.


At the end of the 15 years, you would have not paid off the mortgage, but you could have £280,000 in your ISA. You can then either pay off the mortgage by writing a single cheque, and pocket the £80,000 difference… or carry on growing your freedom fund at 5% a year, knowing that you could pay off your mortgage at any time.


In reality, you do need to pay something towards your mortgage capital every month unless you are on an interest-only deal, but we’ll show you soon how you can get that money back.


Effort-Free Investing

People who pay down their mortgages early tend not to be interested in investing, because they see it as either too risky or too complicated. Let’s quickly address both of these points.


#1 – Too Risky

We’ve shown that by overpaying you are guaranteed to lose money.


And we’ve said that long term investing can make around 5% real annual returns on average – but how can we know that?


First, historical precedent. While stock markets often do go down, like in March 2020, the upwards-periods have always more than compensated for that.


The average annual return on America’s main index the S&P500 is 10% since the index opened nearly a century ago in 1926.


And second, logic. Stocks are productive companies employing people and capital to make profits. Businesses do not go to the trouble of existing, just to make measly profits of 2% – which is what you can save on a mortgage.


#2 – Too Complicated

Investing can be just as easy as making a mortgage overpayment. Open your stocks and shares ISA with a robo investing platform like Nutmeg, Moneyfarm or Wealthify, and all you need to do is set up a monthly direct debit and let them take care of the rest.


You will answer a few questions on sign-up about how you want your money to be invested – really simple stuff that anyone can answer – and they will build you a personalized, globally diversified portfolio and manage it for you.


Open an account with Nutmeg via the link on the Offers page, and the management fee will be reduced to 0% for the first 6 months – it’s an easy win. We have new customer offers for all 3 of these robo-investors in the Robo Investor section on there.


What If Interest Rates Rise?

People are funny about mortgages. They think they are magic in some way and that they must be treated with reverence, but they are just a very low interest loan over an incredibly long-term.


People seem to panic about not paying down their mortgages in case interest rates rise in the future. So what if interest rates do rise?


We are not advocating spending your would-be-overpayments on frivolous things. We’re saying it’s better to put that money aside to go to work for you in investments.


As long as your mortgage allows unlimited overpayments – and you can switch provider if not –  then if interest rates did rise to say, 10% in the future, you could instantly move your money around from the ISA, into the mortgage. Job done.


The risk is that your investments may lose value if interest rates suddenly rose significantly.


But interest would not rise suddenly – it would happen gradually over many years, and you’d be able to see it climbing long before it approached the 8% average return available on the stock market.


Extreme Money Moving – What We’ve Been Doing

With mortgages, we personally are willing to go further than most people – we actively avoid having money in our houses.


Andy (MU co-founder) is on a special tracker mortgage meaning he can restructure his deal to withdraw equity at any time.


Ben (MU co-founder) has a 35-year mortgage, which is the longest term he could get, meaning his capital repayments are as small as they can be. But as well as this, he has now 3 times withdrawn equity from his house.


You can do this when you change mortgage provider, which you can usually do without penalty if you are outside of a fixed term.


Many people are on fixed term mortgages of 2, 5 or 10 years, with a variable rate thereafter, even if the total term is for 15, 30, 35 years or so on.


The first time, he took out around £30,000 to invest in another rental property.


The second time he withdrew around £20,000 to help transform another rental property into a HMO multi-let in order to double the rental profits.


And the third time was this year, when he took the opportunity to withdraw £8,000, and invested it in the stock markets during the corona crash of Spring 2020.


This would be considered high risk by most people, but Ben has been able to use that money to increase his monthly passive income forever.


And with a higher income, you can then buy more assets to increase your passive income further.


What could have been sat in a house losing value can instead be put to work to build a future income stream of potentially thousands of pounds a month.


Whether you stop overpaying your mortgage, extend your mortgage term, or even contrive to get some money back out of your house, just by moving money around you can be far more financially secure.


Are you overpaying your mortgage? How do you balance that with investing? Let us know in the comments below!

Check out the MoneyUnshackled YouTube channel, with new videos released every Monday, Thursday and Saturday:

Robert Kiyosaki: Legend or Con Artist? Cashflow Quadrant – Rich Dad

Assets, assets, assets. Buy them, hold them, get rich from them. This is the philosophy of Rich Dad Poor Dad author Robert Kiyosaki, distilled to few words, and yet he has a lot of detractors who like to call him a con man who doesn’t understand what an asset is.

A lot of the hate comes from the probably correct perception that his fortune was made from the books that described his fortune, rather than the assets which he writes about.

Take a step back from the man and look at the words in his books however and you are left with a treasure trove of sound advice – an investors’ Bible which both of us have used to plot the course of our lives over the last 5 years, culminating in massive increases to our portfolios as well as the creation of the Money Unshackled business.

It is no small exaggeration when we say that we owe our own successes in part to the teachings of the likely fictional Rich Dad in the books, whose words on the Cashflow Quadrant and the power of Assets we both took to heart.

Robert Kiyosaki – Legend or Con Artist, or both? Let’s check it out…

Editor’s note: People interested in investing in Peer to Peer Lending now have a new way to ease into it with our latest offer – open a new account with just £10 in the RateSetter platform and you will get a £20 cash bonus when you use the link on the Offers page!

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Asset Theory – We Like

The core concept of the Rich Dad series is that Assets are things that create a positive passive cashflow without any further input from you, and that everyone should own a whole bunch of them.

We absolutely love this simplified view of investing, and it inspired each of us to new investing heights. Appraising an investment for its cashflow potential is how we pick investments to this day.

We took this concept and ran with it by buying assets such as rental property, dividend stocks and ETFs, and Peer-To-Peer Lending portfolios.

And now we can each draw good cash incomes from our assets every month. Winning advice from Robert there.

Fiction Sold as Truth? – We Find it a Little Dishonest

The “Rich Dad” story of Robert as a young boy and having 2 father figures who taught him everything he knows about money has widely been ridiculed as fiction, despite the author insisting it happened word for word as he said it did.

But as a parable it holds its own truths – all the advice given by the (likely fictional) Rich Dad is sound advice that we and many other investors live by.

And much of it was out of step with the thinking at the time that investing should be for long term growth rather than income creation.

We still find the majority of the investment media encourage a long-term growth strategy aiming at freedom in old age, rather than the “investing for passive income generation” method that we promote.

In this regard, the story of Rich Dad talks truth to power by going against the grain of common investing theory. But Robert should really stop pretending that the story is literally true.

Is the story true? Does it really matter?

Financial Freedom – Our Reason for Being is an investing site unlike most others because we promote Financial Freedom now, while we’re young, instead of the freedom in old age that most leading gurus including Tony Robbins and countless others around the investing world promote.

The story of Rich Dad Poor Dad is one of building up a portfolio of cash-flowing property assets and start-up businesses that Kiyosaki could then live off of, instead of employment.

By all means build a sweet global portfolio of shares to grow your wealth – we do this too. But alongside that have cash flowing assets like Peer-to-Peer Lending and Rental Property or REITs to pump out regular cash that you can start living off.

Then we say to use your freed-up time to start businesses that can be turned into passive income streams. This is also what Robert Kiyosaki says.

Financial Freedom can be pictured as the movement from the left side to the right side of the Cashflow Quadrant

Courses – An Absolute Con

When I started out buying investment properties, it was to the Rich Dad University that I turned to get an introduction to the world of rental property.

I’d read the books and concluded that Robert Kiyosaki and his team must know their stuff. I paid to attend an online seminar, which cost me £120, and came out the other end more confused than when I went in.

And this course was a precursor for further courses, all of which would have cost a fortune. Many other players in the financial education market charge their loyal fans thousands for courses that are nowhere near worth it, so Kiyosaki is not alone in this regard. But it still strikes us as either a con or certainly not value for money.

We may one day create some paid-for courses, but these would be affordable, complete packages, with the aim to educate rather than to up-sell further courses.

The reason we give our tips away for free on YouTube is because we passionately want to change the country and get individuals to take care of their financial futures – because nobody else will do it for you.

Cashflow Quadrant as a Concept – Life Changing

The Cashflow Quadrant, Kiyosaki’s second book, opened our eyes to the truth, Matrix style. At school we are told there is one place to find income – a job.

The Cashflow Quadrant shows that Employment is just 1 of 4 ways to make money, and the 4 ways are equally weighted as there is no reason why Employment should be any more important or worthy than the other 3:

The E is Employment, where most people end up.
The S is Self-employed or Small Business owners – working full time in a business you own, including Self-employed contractors.
B is Big Business owners, people who own companies that make money without the owner’s continued input, because other people run it for them.
And finally the I is Investors, who buy Assets that pay them a passive income.

The Quadrant is further split down the middle, with those who work a 9-5 on the left, and those who don’t have to work anymore on the right.

This concept is eye opening in so many ways that we can’t stress enough how much we love this book. It’s there on the MoneyUnshackled website in the Top Books section along with a load of others that we consider essential reading – check it out book lovers!

The Downplaying of Small Business Owners – A Bit Misguided

Kiyosaki is very critical of small business owners who work in their businesses day to day – in his words, all that they own is a job.

We see his point, but there is a world of difference between being told what to do every day by a line manager, and owning your own little empire.

Plus, Big Businesses do not appear overnight. They start as small businesses, whose owners have to be very hands on.

We find the Cashflow Quadrant makes more sense as a line than a grid – the most common route to fast Financial Freedom follows a route from Employment, to save money to start a Small Business, to develop through time and effort into a Big Business, that ends in a passive income stream being established.

The Investor quadrant is really more of an overlay, that sits behind or around the other 3. Investing compliments and enhances your wealth and income streams throughout your working life.

The Investor quadrant as an overlay; E > S > B is a route map

Your House is Not an Asset – Yes We Totally Agree With This One

Your house in itself does not produce income, in fact it costs a fortune in mortgage payments, council tax, bills, and regular maintenance.

When your boiler blows up, is your house an asset, or did it just cost you several grand?

Kiyosaki has taken more stick for this idea than any other over the years, in fact it’s what made him famous in the first place. His declaration that people’s precious homes were not assets upset millions of people; and intrigued many more.

People don’t want to be told that the thing they’ve spent years overpaying a mortgage on and adding new kitchens and new bathrooms to is not an asset; but is really a liability costing them a fortune.

Kiyosaki’s main point is that you can’t spend a house – because you’re living in it. Its value might go up, but you can’t retire on the value of your home.

Not unless you sell up and move to a poorer city or country where you can buy a far cheaper house and live on the difference for a bit.

But even that is likely to be unsustainable for retirement. The hard truth that your house is not an asset is one that people need to understand, and then start investing in real assets instead.

Asset? Or a Liability packed full of expenses?

Your House is Not an Asset – oh, yes it is! – wait…

Although we totally agree, we also disagree completely 😉

I am far better off and further on my investing and financial freedom journey for having bought a house.

I had a lodger for nearly 2 years, paying by nearly £500 a month, and I have remortgaged my house twice, withdrawing equity to the sum of £50k to help finance 2 of my rental properties.

We’re not saying you should do this – it of course carries risk. A lodger may be dodgy, or an equity release could be invested in an asset that loses money.

But it goes to show that your home can be of financial use, and not always a total liability!

What have we missed? Is Kiyosaki wrong in any other regards, or is he just at the end of it all, a total legend? Let us know your thoughts in the comments below.

Written by Ben

Check out the recommended reading on the Top Books page for budding investors

Property Shares – Should You Invest in REITs vs Investing in Property Directly

Investing in property is a national obsession in the UK, and any way we can make that easier for investors to achieve gives us warm feelings inside.

That’s why today we’re talking about investing in property through REITs (Real Estate Investment Trusts), what they are, how you can invest in them, and whether it’s ultimately the right thing for you.

The most obvious way to invest in property would require you to raise a huge deposit of at least £20,000 to buy one house or commercial unit on a mortgage. An investment in the most popular UK REIT on the other hand can be achieved for about £6.50.

Knowing how to invest in property is a major gap in many investor’s knowledge, and any properly diversified world portfolio should have at least some exposure to bricks and mortar.

How do you get started invested in REITs? Let’s check it out!

Editors note: Don’t forget to check the Offers Page and grab free shares worth up to £200 plus £50/£75 cash backs when you open new investment accounts through the affiliate links there – including alternative ways to invest in Property!

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Equity REITs

This article is about Equity REITs, which is the type that normal people can buy into without needing to be well connected or a millionaire.

An equity REIT is a Real Estate Investment Trust – a company that you can buy shares in – and that company owns (and in most cases operates) income-producing properties.

The types of property within a REIT are generally commercial property such as offices, apartment buildings, warehouses, hospitals, shopping centres and hotels.

Also, within the past 3 years there have been a number of UK Residential REITs listed on the London Stock Exchange.

These investment vehicles offer an easy and diversified route to investing in residential property, as an alternative to Buy-To-Let, targeting returns of 8% plus!

The type of assets you might find in a REIT

How REITs Make Money

REITs own properties which they lease out to other businesses, collecting rent. In this way the company generates income which is then paid out to shareholders in the form of dividends.

REITs must pay out at least 90 % of their taxable income to shareholders by law—and most pay out 100%!

How to Invest in a REIT

Because equity REITs are public limited companies, you can buy shares in them just like any other company on the stock market – and there are some sweet buys out there right now.

Two of our favourite UK REITs on the FTSE are British Land (BLND) and Tritax Big Box (BBOX).

British Land is a London-centric portfolio with a 5.5% dividend which looks sustainable, while warehouse behemoth Tritax offers a 4.5% dividend and includes as commercial clients the likes of Tesco, Unilever, and even Amazon.

Those massive warehouses you see on the side of motorways? Likely to be owned by Tritax!

Regular followers of Money Unshackled know that we like to do our investing via ETFs where possible, to maximise diversification and minimise fees. Well, you’ll be please to know that REITs are available via ETFs!

Property inside a REIT inside an ETF


Exchange Traded Funds are collections of shares, usually highly diversified, that trade on a stock market like a company, meaning you can buy shares in it.

When you buy a share in an ETF of REITs therefore, you are buying in one transaction into multiple REIT companies, which in turn each own multiple commercial properties. Ultra, ultra-diversified property investing!

The top UK ETF for commercial property REITs in our opinion is the iShares UK Property UCITS ETF (IUKP), which includes – amongst many others – holdings in both British Land and Tritax REITs.

iShares is in our opinion one of the two best ETF providers in the UK alongside Vanguard, and tend to keep fees low. This ETF has a distribution yield of 2.95% and has returned total gains on average of 8.7% per annum over the last 10 years.

As an ETF it has an ongoing charges fee, which as a property fund is higher than a typical ETF which invests in normal stocks: at 0.4%. We assume this reflects the lower demand for REITs and the higher complexity of this type of fund. Expensive – but we think, a price worth paying.

This ETF is available on our favourite zero-fee trading apps Freetrade and Trading 212, and you’ll find links to set yourself up on these platforms on the Offers page. Use these links to get a free share on sign-up!

Residential REITs

Residential REITs

Most REITs invest in commercial property, big office blocks and warehouses used by big companies. A little-known fact is that there are now a few REITs that deal specifically with residential properties.

Residential properties are houses and apartments like the one you live in, rented to ordinary people who live there and pay their rent to a property company.

As we alluded to above, there are now a number of UK Residential REITs listed on the London Stock Exchange.

These alternatives to Buy-To-Let are in some cases targeting returns of 8% plus, without any of the stresses that come with being a landlord.

The Residential Secure Income REIT (RESI) gives shareholders exposure to UK house price movements combined with steady rental income streams.

Returns are passed to you, the shareholder, in the form of a target annual 5% dividend and total returns expected to exceed 8% per annum.

UK Residential REITs vs Buy-To-Let

The returns on Buy-To-Let are still way better. This makes sense from an effort-in/return-out point of view, as buying a few quid’s worth of REIT shares is far simpler than saving a £20,000 deposit, project managing a renovation and sourcing and managing tenants.

But the main reasons Buy-To-Let gets better returns are Leverage, and that they are Undiversified. Let’s take leverage first.

REITs are great for steady rental income as long term leases are standard


A standard Buy-To-Let will be financed 75% by debt – a mortgage – with a 25% deposit from the buyer. This means that any growth in the property value will be multiplied by 4 in returns to the investor.

A £100,000 rental property that grows by 2.5% to £102,500 is a return of £2,500; that is, £2,500 return on the £25,000 deposit the investor actually paid for the house. A 10% return – and that’s before rental income profits, which could easily be another 10% on top.

Interestingly, the Residential Secure Income REIT aims for a 50/50 debt to equity ratio, so profits should still be leveraged – but in this case only by a factor of 2.

Diversification Averages Out Returns

Diversification from a REIT means you are getting the returns from many average properties. A properly researched Buy-To-Let that you’ve put some effort into setting up yourself could easily make you better than average returns.

However, you have the risk that it is a single unit; and could yield zero rental income if the property were empty.

Get a £50 bonus when you open a Loanpad account through our link on the Offers page

Tax Benefits of REITs

Taxes on Buy-To-Lets are varied and can be in many ways manipulated to suit your own personal circumstances, but REITs have some tax benefits too.

REITs benefit from a benign tax regime. For example, UK REITs don’t pay corporation tax or capital gains tax on their gains from property investments!

Rather, investors are taxed on the distributions as profits of a UK property business, treated as income tax rather than as a normal dividend receipt – typically taxed before you receive it.

Considering dividends from normal companies are always after-corporation-tax, REITs being able to avoid being taxed pre-dividend is a win for most investors.

Getting Started

Understand the specific REIT ETFs and individual commercial and residential REITs we’ve reviewed and get started by adding this asset class to your portfolio – and why not get started investing in UK property ETFs on a zero-fee platform like Freetrade – and get a sign up bonus on when you use the link on the Offers page. And while you’re there, check out other ways to invest in Property like Loanpad, who’ll give you a £50 sign up bonus when you use our partner link. You’re welcome.


Work Once Get Paid Forever

Work once, get paid forever. These are the words of millionaire’s the world over, and by following this simple mantra we can all be in with a shot of the big time.

A mix of passive income philosophy and good old hard graft, there is no simpler route to becoming wealthy than those 5, simple words – Work once, get paid forever.

So how is it done? Let’s check it out…

YouTube Video > > >

The Problem with Pure Passive Income

The purest form of passive income is earning interest from a bank savings account. It requires the least amount of work on your part, and consequently gives a pathetic return.

On this channel, we Money Unshackled boys advocate passive income in the form of high cash returns on investments, but these sweet returns are not 100% passive. We say that you need to put some effort in to get the best mix of returns and lifestyle.

Share portfolios need to be regularly rebalanced; rental property needs to be found, renovated, and managed even if you let your agent do the heavy lifting; and you should always invest time into understanding an investment before it is made.

Portfolios Need To Be Rebalanced Regularly

But investments don’t require you to get up at 7am each morning and put in a 9 hour session in someone else’s office working on someone else’s dreams – so are infinitely more passive than the alternative – trading time for money.

Targeted Work – An Example

Instead of spending your efforts working hard and getting paid once for that time, what if you only invested your time into efforts that paid off forever?

In 2017, Ben worked hard for 5 weeks in his spare time doing up a large city Victorian townhouse, transforming it from a run-down family home into a 5 bedroom multi-let HMO.

With his business partner and some builders, his hard work resulted in a second bathroom, fire-doors throughout, and a high standard of finish in each room – in essence, an amazing investment asset.

Work like that pays nothing while you’re doing it but promises to pay handsomely forever.

Transform Your Assets Into Better Assets!

Enhancing a property from a standard house to a pay-by-the-room model can double your future monthly income.

This was a result of a small extra upfront investment, and a few weeks of targeted work. Should he have paid professionals to do all the work for him?

He would now, but the first time you do something it’s usually good to get involved yourself, so that you have the knowledge to manage future similar projects.

Time spent – 5 weeks of weekends and evenings. Increase to future monthly income – about £300 extra per month per business partner. Work once, get paid forever.

The 70:20:10 Rule

Charles Jennings, a workplace performance guru, told businesses to live by the 70:20:10 rule to power growth.

It is a rule that we all can and should be applying to our personal finances as well.

The philosophy, translated into home finance terms, tells us that 70% of our time should be given to what makes us the most money currently.

Your Job Will Soon Have To Be Ditched Entirely

For most this will be your job.

Then 20% of your time should be spent on building up your next great income stream (a side hustle business that has the potential to be passive) – leaving 10% of your time to research and think about future, as yet undeveloped projects.

The idea is that you ditch working on your primary income stream as soon as your second stream is large enough to benefit from extra effort and once your first stream is passive.

Unfortunately, if your first stream is a job, it can never be passive, so will soon have to be ditched entirely.

You want to end up in a position where you work hard on a side hustle business idea until it can run itself and pay you money forever with minimal further input; thereby allowing you to upgrade the time spent on Project 2 from 20% to 70%.

Over the years you want to end up with multiple established income streams for which you worked on in the past but get paid in perpetuity. If you can make even a few hundred pounds a month from each stream, you’re going to end up being very rich once a few are established.

Good Marketing Is Essential To Getting Paid Forever

Marketing and Working Smart

We both recently went to a SUM41 gig in Manchester which got us thinking about passive income.

We thought that the support act that played before SUM41 was great; they worked really hard on stage to put on a performance and they were playing to the right audience for their genre. But their marketing was terrible.

We never learned their name. There were no banners on stage. The tickets didn’t mention them as the support band, nor did an internet search.

As audience members, we should have had the name of this band shoved down our throats so we could find them later on Spotify and potentially generate them royalties forever. They were working hard but not working smart – they were missing an obvious opportunity to build a passive income stream.

Marketing is an essential part of Work Once Get Paid Forever. Once you’ve put in the hard work of building your asset, whether that’s a music album, website, book or whatever; tell people about it.

Work Hard - But Work Smart

Who Wants to Be A Millionaire?

Very few people become millionaires through a salary. That is, by trading time directly for money.

By far and away the easiest way to become wealthy is by building up multiple passive or semi passive income streams, which build up and can be reinvested into the markets or other business ventures.

Most entrepreneurs work hard, but only on tasks that grow their income streams and that they enjoy – rarely to be paid directly for their time.

We can’t relate to those corporate CEOs who get paid 6 figure salaries, who are obviously millionaires, but continue to trade 70 or 80 hours a week of their time directly for money. Just invest your salary and retire already!

Investing For Success - It's In Your Control

What Can You Do? – Investing for Success

If you don’t have a side hustle idea or aren’t confident to start a business, you can still stick to the Work Once Get Paid Forever mantra by investing as much of your salary as possible into the stock market or other investments.

By building up a substantial investment portfolio from your slave wages, you are getting paid an income forever in the form of dividends, rent, interest and royalties.

By reinvesting everything you earn from your investments, your income will grow. Soon, your efforts will pay off and you’ll be getting paid forever for work that you did in the past. That’s Work Once, Get Paid Forever!

Are you stuck trading your time directly for money? What are you doing about it? Tell us about your side hustles and investments in the comments below.