Compounding Success With Bonds on WiseAlpha?

Earlier this year I decided to support the WiseAlpha crowdfunding raise on Crowdcube as it is the type of business that gets my juices flowing.

Disruptive, innovative, democratizing, fin-techy. No one says fin-techy but everyone should get it. The platform allows anyone to get involved in high yield corporate bonds from as little as £100.

I approach all new investment platforms the same way, start cautiously then increase my holding as I become more comfortable. I have split £300 between 3 bonds. This should gross me roughly £21 a year which is about 7% give or take.

If things go well I will obviously add to my portfolio. If things go not so well the n the worse that can happen is a £300 L.

I learn best by doing, bonds can be tricky to understand so WiseAlpha is perfect for me to get to know bonds more thoroughly whilst adding to my passive income.

Have any questions about my WiseAlpha experience or any other investment plans? get at me  on Twitter.

Disclaimer

6 Point Guide To Why Stock Market Investing Is Not Gambling

I find this topic boring.  Too many people think that investing in stock is gambling so I thought it would be make a good post. I hope not to bore you.

Google your own definition of Gambling if would like, my definition is below

Gambling: placing a stake (wager) on a game of chance with the hope of a positive outcome.

Don’t be confused with the casual use of the word ‘gamble’ which is often chosen to describe any action or situation involving risk. It is a gamble to drink 10 shots of tequila at 1am when you have work the next day but this is not gambling now is it?

Here are the 6 points:

1. Regulation

The gambling industry is regulated by the Gambling Commission. The stock market is regulated by the Financial Conduct Authority & the London Stock Exchange Group. Nice easy start.

2. Time frame

When gambling, it’s usually a bet on a one-off event e.g. who will win the fight? Who will be top goal scorer in the tournament? Will Donald Trump be impeached during this office? The stock market isn’t so time sensitive, when you make a stock market purchase you can keep the stock or sell it whenever you want, which segway’s nicely to the next point.

3. Ownership

You enter the stock market by purchasing shares of a company. Some pay a dividend and some don’t. either way, you own a tiny piece of a company. Gambling has no answer to this. At best, a casino can give you chips to cash in. Weak.

4. Team Goals

Wouldn’t gambling be more fun if you didn’t know the house wants all your money? They want everything from you. How ever well they try to dress it up. It’s you vs the house with rules that they make and odds that they decided. No team, your nightmare. Now if I purchase shares in HSBC, the board have an obligation to try and make me happy as a shareholder. They want HSBC to succeed as do I. team goals fam.

5. Minimising L’s

Both the stock market and gambling involve taking loses. The big difference though is with the stock market you can control and automate what your loses will be. It’s called a stop-loss order. Usually with gambling you either win money or lose everything you put at stake. W or L. there are some exceptions: online sport betting now has cash out options, the zero on a roulette wheel (although this is such a con the zero is not included in the odds your betting on but It can still take halve your stake!) etc.

6. Diversification

You can buy multiple different stocks to de-risk your portfolio. Ever tried a multiple bet? Your odds generally get worse. The more you gamble, the more money you put to risk

Summary

The stock market and gambling both involve risk. this does not make them the same. Leaving the house involves risk as does smoking cigarettes. Gambling should be for entertainment purposes if done at all. As gambling mostly is a waste of money and can be addictive I’m against it and do not encourage it. On the other hand, the stock market is a great way to build wealth and increase assets.

With such similarities can the two be combined in a worthwhile way?

Buying gambling stock

Instead of gambling yourself, why not try to profit from those that do. Some notable public betting companies are below

  •  Ladbrokes Coral Group (£1.13 per share*)
  •  PaddyPower Betfair (£80 per share*)
  •  William Hill (£2.53 per share*)
  •  The Rank Group – owner of Grosvenor Casinos and Mecca Bingo (£2.27 per share*)

(*Please note, these prices are correct at time of publishing this post)

Spread betting

This is betting on the price movement of a financial asset. I have not tried this so I can’t say too much. It’s basically betting on how much a financial assets price will change aka gambling.

Disclaimer

Top Tip For Stock Investing With Small Amounts

So I just saw a very insightful article on Investopedia that I needed to share.

The article is titled “I have only $500 to invest, am I limited to buyng only penny stocks?”

For me, the meat of the article was around the danger of commissions and trading fees at low levels of investment.

“remember commission fees act as negative returns, so do try to minimize them as much as possible. For example, if the commission is $10 per trade, after making one trade with your $500, you have only $490 to invest – in other words, you have already lost 2% on your investment. This means that to break even, your stock will need to go up by roughly 2%.”

This is something I can relate to. Having previously paid £12.50 per trade. I now only pay £3.95, which feels so much better.

You can see the article in full here. Enjoy.

Passive Income For June: Patience Is Key

Man, I’m so glad to be a patient investor. Patience is my secret weapon to fuel the growth of my passive income.

My passive income can be low now but with patience I will watch it grow for years and years.

In June I took in a modest sum of £33.70. This was actually one of the good months!

Source

Amount

Dividend

£26.10

Bank

£3.00

RateSetter

£0.90

PropertyPartner

£3.70

Other

£0.00

Total

£33.70

As shown, the bulk of the £33.70 came from stock dividends. Theres something so sweet about dividends.

Being paid for owning part of a company – how?

Sadly, not all months are like this as most dividend-paying companies  pay out quarterly at the most.

The £3 from the Bank is the monthly reward for chosen current account.

RateSetter really is a strange one. Although 90p income isn’t anything to blog about. Along with the interest generated, I also received £86.56 of my own money back to reinvest (or withdrawal if I felt that way). I will be posting a full review of RateSetter soon but you can see for yourself in the meantime by clicking here.

Income from Property Partner was decent enough.  I’m hoping to see a nice increase on next month if I am able to secure all of my enhanced dividend pre-orders.

So theres month one complete. £33.70. Im happy, many will be underwhelmed but I remember when my passive income was £0, so I’m good. With patience I will continue to grow my portfolio and monthly income.

Do you know a strong source of monthly income that I should be tapping into? let me know  below!

Disclaimer

Save With The Plum App

Another savings based app is crowdfunding, this time on Seedrs.

Plum is sold as “the little savings butler you’ve been waiting for”.

I honestly didn’t realise that I was waiting for Plum, but now that its here I’m so impressed that I am investing.

Plum has many exciting facets which make it stand out. It is integrated with Facebook messenger and it it can automate investments via Ratesetter (a platform I already use).

Be sure to check out the pitch on the Seedrs website, just make sure you understand what a convertible campaign is and be familiar with the t&c’s etc.

Seedrs referral code:  VK6Z7L1B
https://www.seedrs.com/plum

Disclaimer

Hot Summer For Income With Property Partner

I am a consistent user of the Property Partner platform.

It’s a great alternative to buying a property outright for many reasons. No hefty mortgage to sort, ability to easily diversify, decent fee costs and low entry cost point – It’s such a winner.

Although Brexit has hurt my returns, I am still earning from monthly rental incomes and benefiting from valuation gains.

I will do a Property Partner review at some point (wait please) but for now I want to focus on the following announcement:

“We’re delighted to announce that we’ll be offering an enhanced rental income of 5% for two years on all new listing properties over the summer period. This begins with Norman House, Derby – a property yield of 3.8%*, topped up to 5% for the first two years.”

Well I’m impressed, 2 years of 5% income plus potential valuation gains. After the 2 years, 3.80% income (for Norman House, Derby) plus potential valuation gains.

I’m looking forward to benefiting from the enhanced income and you can too by clicking here.

Be sure to check out all  t&c’s and info on taxes, fees etc.

Disclaimer

 

Debt vs You: Quick Beef Breakdown

I remember. Mum used to get herself in debt every year just so I could have the presents that I wanted for Christmas. Wow.

Fast forward to this week and the Governor of the Bank of England has demanded UK banks to raise and hold additional funds due to the worryingly high levels of consumer credit in the economy right now.

The UK consumer credit market in the UK is said to be around 200bn and this is separate from the mortgage market (worth 1.4 trillion).

Another view; at the start of 2017, the average UK household held £13,200 in unsecured debt. I don’t have the latest figures but I doubt it has gone down.

Clearly we have a problem with debt in this country but why is that bad?

Debt comes at a cost, which is interest. The higher the rate of interest, the more you have to pay on top of the original amount borrowed. As the debt continues, the interest has more time to compound and grow exponentially. 

Credit cards in particular are designed to make us debt slaves. they ask us to repay a small amount each month (normally 2%) whilst charging an interest rate much higher which is divided by the days in the year and calculated daily! 

Becoming trapped in debt is easy if borrowing is not well thought out. If your struggling with debt then let a friend know or at least check out one of the following support resources

https://www.citizensadvice.org.uk/debt-and-money/help-with-debt/
http://www.debtadvicefoundation.org/
https://www.nationaldebtline.org/

The best way to avoid debt is to pay yourself first and save. A small amount saved each month means that you put something away for a difficult time and you benefit from interest. Yes, I do know interest on savings is pitiful these days but good habits are important.

If you’ve liked this post, then your friends probably will to. Drop it in the group chat with my regards. Why not make it Debt vs Us?