Record sales shopping and record level of personal debt- are people mad or just stupid?

In the run up to Christmas, the ‘credit crunch’ and the sub prime mortgage crisis in America were hugh news items, highlighted by collapsing banks, reduced profits, soaring credit costs. The personal debt of UK reached a record at £1,345 billion and an another is expected to be set as record number of people expected to file for bankruptcy in the coming year. You would have had to have been living under a rock to have missed this story.

And yet,  the British public refused to take any of this seriously and hit the sales with more force than ever before, 25% more people were shopping on Boxing Day than last year. and for what? cut price tat they’ll never wear or use….

A triumph of marketing over good sense? When will shoppers learn the lesson that they can’t keep spending? There are huge numbers of people hopelessly in debt to credit card companies, over 8 million to the tune of £10,000 or more. People can’t afford to pay their mortgages, credit card repayments often times take the bulk of household income and yet people are blithely continuing to spend.

People are to blame for getting themselves into debt, however credit cards have fostered the idea of instant gratification, the ‘I must have it now’ culture. and once you’re hooked, they start to reap their profits by encouraging you to spend more than you should, increasing your credit limits without checking whether or not you can even afford to repay.

Debt was once considered with distaste, a nasty necessity to own a home or a car. Now, however, thanks in part to the marketing campaigns of the banking industry, people see being in debt as part of the modern lifestyle. But this spirals, with people juggling one credit card with others, robbing Peter to pay Paul.

And when you end up at the bottom of the credit heap, you are at the mercy of the companies and because they share all their information, any defaults to another company will justify to them an increase in your interest rate.

Usury, a practice of lending at extremely high rates of interest that had been outlawed for thousands of years is now common throughout our modern world. The banks are making too much money from you to change now.

So how do you get free of debt? Well, you have to face the pain of living within your means. Stop spending without having the means to pay for it. Start thinking of debt as shameful and something you want to escape.

Learn about millionaire mindsets, investments and personal financial planning for prosperity. The Ultimate Entrepreneur is a great starting point to get a new perspective on your money and spending habits. Check out http://www.wealthfreedomfighters.com for more information. 

UK Property Market- crashing in 2008 or just slowing down?

We have ended 2007 on a cliffhanger, with buyers, builders, sellers and speculators all holding their breath. Nobody now doubts we have entered a slow down, it’s now a question of how long will it last and how low it will fall…..

Will the value of your property hold, will your mortgage become more costly than the home it provides? And if you’re looking to buy, what will happen to the price of the property you want?

The housing market in the UK is feeling the pain caused by America’s subprime crisis, turmoil in the financial markets and the most pessimistic outlook we have seen for years.

The clampdown by the banks and building societies burned by the US loans crisis, means fewer people are being forwarded mortgages, and less money is forthcoming and at a higher cost.

So, will we have a disastrous economic 2008 or just a slightly depressed market for house prices? There is a lot of uncertainty, but several leading economists have forecast significant drops in housing values in 2008 and onto 2009.

The giant credit wave we have all rode on has come to an end, and the market has been left vunerable by the high cost, high value mortgages that were needed to afford housing in the areas that had rapid price rises.

One property website, Primemove.com  suggested some areas may well see prices drop by as much as 40%, with the main losers being those who bought in the last year.

Sales are expected to drop to an all time low, and estate agents are already releasing anecdotal evidence that they’re already experiencing a dramatic fall out of buyer inquiries.

The depressed market is forecast to last through 2008 and into 2009, regardless of the expected interest rate cuts from the Bank of England.

What should you do? Sit tight, don’t panic but do stop spending money on unnecessary purchases. Do clear whatever credit bills you can, so you have more money to pay on your mortgage. Most importantly. do whatever you can so you don’t have to sell your home.

Because whatever happens, you’re always going to need somewhere to live, to sleep.

Brace yourself for a wild ride in the markets next year!

The Bank of England is set to cut interest rates upto 4 times next year, with the first cut likely in January. This is in response to the sharp economic downturn we are currently experiencing.

The Bank is expected to cut rates as a show of support in the financial markets and the economy, regardless of the inflationary impact such actions will have.

So far, only the housing and financial markets have been seriously affected by the ‘credit crunch’. However, in the New Year, it is expected that the negative economic data will become more widespread, with the lowest rate of the Uk’s economic growth since 1992.

Sterling is expected to continue it’s current fall against the dollar and figures last week revealed a record £20billion balance of payment deficit. All in all a gloomy forecast to start 2008.

What does this mean on a personal level?

Well, despite last month’s interest rate cuts,banks are still reluctant to pass the saving onto customers and high risk credit accounts will not feel any benefit at all. Credit card companies are actually increasing their rates to bull doze their customers and gain as much profit as they can from vunerable people.

As I have said before, banks are not institutions you should trust with your money. Manage it yourself, keep an eye on your rates and move your accounts to take advantage of any commercial edges you can find.

Never forget it’s your money.

Another year of scamming their customers – 2007 highlights from the banks

Millions of savers were shortchanged this year as banks and building societies failed to pass on the full benefits of rising interest rates. The Bank of England had increased interest rates from 5% in January 2007 to 5.75% in July.

And yet, the Big Name Banks, Barclays, NatWest, ING and First Direct have no savings accounts that matched the rate increase. In fact, the average rise across the banking industry was only 0.67 percentage points, costing savers an estimated £400 million.

Britain’s biggest savings provider, The Halifax actually only pass on 0.44 points of the 0.75 point interest rate increase to it’s savings customers, building a nice little profit cushion for themselves. And in a premature, but profitable move, it slashed it’s savings rate by 0.25 in anticipation of the Bank of England’s base rate cut. The cut will not be passed onto borrowers until January 2008, clawing back millions for the bank.

If you’re saving in any bank account, you must be vigilant and make sure you’re getting the best rate possible. I urge you to dump poor performing accounts and switch to better paying options.

Of course, higher rates made a lot of borrowers feel significant pain. And what did our lovely banking industry do to help their customers cope with the increased payments caused by the higher interest rates?

Why, they hiked up their fees of course! with a typical flat fee to arrange a mortgage now £800. And true to type, the banks are charging a percentage fee on large loans, which is averaging at about £10,000 per loan.

Another new fee, this one for the abused credit card user, is designed to punish the responsible user. An annual £35 fee has been introduced by some banks for infrequent users and for those who pay off their bills in full every month. and of course, it’s up to the banks to decide just what constitutes infrequent use!

Interest rates jumped on credit cards without any adherence to basic rate movement, with some companies, Lloyds in particular pushing one of their card rates up by 10.4%!

And even though we have had an interest rate cut, relief will not be felt by all borrowers as banks fail to pass on the full benefit to their customers.

Still trusting your money to these people? The only person you should trust with your money is you!

Learn how to gain financial freedom by purchasing a quality financial education and business opportunity through www.wealthfreedomfighters.com The Ultimate Entrepreneur will help you get free of the corrupt banking system and build your own wealth and prosperity.

Stop giving your money to the jackals – it’s only going to get worse in 2008. Take action today

Put some cash back into your pocket after Christmas

It’s easier to get into debt now, than it’s ever been before. The government takes over 60% of what you earn in tax, both the obvious and the ’stealth’.  House prices, even with the recent market wobble are still out of reach of the majority of the population. And banks and credit card firms lure you with advanced marketing techniques, and hike up interest rates just when you can least afford it. 

 However, there are ways of living cheaply without living miserably. Having faced up to the difficult financial circumstances the christmas holidays can create for us, you can support yourself with these savvy shopping and saving tips.

Remember, you can have the things that really matter, if you accept you can’t have it all. Concentrate on core items that you really want and don’t waste money or effort on anything else.

Don’t confuse buying the cheapest with saving money. Quality lasts and will save you money in the long run.

Always make a list before grocery shopping and never buy anything not on the list. also stop impulse buying when you pay for petrol, you don’t need the bag of crisps, bar of chocolate or fizzy drink. See – I’m getting you healthy too!

Avoid prepacked fruit and vegetables when supermarket shopping. there’s usually too much in the prepacked bags and often some items aren’t the freshest. Bag only what you need.

Never buy from the middle shelves in supermarkets. These are the premium items, supermarkets actually charge suppliers for that space! Items here are the supermarkets most profitable and usually the most expensive. Look for your goods on the high and low shelves.

An old staple of frugal shopping, Never shop when you ‘re hungry! You can actually increase your spend by as much as 20%.

Readymeals are up to eight times more expensive than buying raw ingredients and you usually get much smaller portions. So make the meal yourself. See- now you get a new hobby and skill too!

Buy chicken pieces with the skin on and remove it yourself. Pre-skinned chicken portions are over twice the price.

Buy nuts from the cake making section where they are unsalted and and tend to be much cheaper.

Chop everything finely, the way Chinese do. Both vegetables and meat go much further and you tend to use less. It’s also faster to cook smaller pieces.

Stop using shopping as a hobby or pastime. If you have issues, they’re not going to be solved by filling up your wardrobes or littering your shelves with unnecessary clothing, gadgets etc. Deal with whatever’s bothering you by facing it.

Remember you’ll also have less to face as you’re not adding to your bills or living in denial anymore. So, you can feel proud of your personal growth and strength and be ready to take on whatever you’re underlying problem is.

Don’t fall for ‘cheap’ fashion. the way to decide on an item of clothing or shoes before buying is to ask yourself, ‘Can I live without this?’ If you can, then you don’t need it or really want it. 9.5 times out of 10 the answer to that question will be yes!

Become a discriminating shopper. If you come home empty handed, celebrate. It means that your taste is so good, the shops don’t have anything to satisfy your exalted standards.

When you do need a particular item, a suit, new blouse, whatever. Shop around! Check out good quality retailers, price compare on the net and buy the best you can afford. That way the piece will last, will wear better, fit you better and you’ll wear it more often. A great shopping investment.

Frugal but not miserable, cost conscious but not cheap. that’s the way to think when shopping in 2008.

Two Sides to The Post Christmas Sales

This post starts out factually, but it ends up very bleak. I didn’t really mean to go there, but what I’ve written is true, so I’m just going to go with it.

The busiest shopping period is after Christmas during the sales clear outs. Retailers announced increases in business of between 8% to 11%. Even on Christmas Day people managed to break shopping records. Although no retail outlets were open, bargain starved people raided the internet, where shopping activity was up 269% on last year! (This was after yet another record breaking pre Christmas shopping result)

And yet, Credit Action UK released debt statistics  that showed more than a million bills in January 2007 were not paid as a result of excessive festive spending. And since we spent several billion more this year, I would suggest that there will be more unpaid bills in 2008.

It’s as if we’ve had a collective fit of irresponsibility. Millions have rushed out to max their cards to the limit in the sales. No doubt buying things they don’t want or need just becuase they’re half price!

January will be the time to pay, with credit getting more and more expensive, credit card companies and banks are already fleecing their clients and will do so with even more gusto as they have to recoup their losses from the sub-prime fiasco.

Do we all think there’s someone coming to rescue us from the results of our spendthrift ways? A white knight that will sweep in and pay all our bills?

Maybe we think that finally our ship will come in, we’ll get that promotion or pay rise, the book we’ve been slaving over will be published, or we’ll have the best product idea since James Dyson!

Unfortunately, the reality will be a doormat of red bills that keeps growing, phone calls from creditors wanting to know when they’ll be paid, and a spiral of depressing, worrying circumstances that make our lives miserable and dull.

Is a few days of over indulgence really worth it?

Credit Card Rates Shooting Up, Customers Have No Right To Appeal

Marbles,  the ’sub-prime’ credit card operator, is pushing through large increases in its lending rates, even as base rates fall.

Marbles is closed to new business, so has no incentive to keep rates down to attract new customers, and is pushing through rate rises that leave it’s account holders looking at 33.9% interest on cash advances and 26.9% interest on purchases. If Marbles customers cannot switch to other credit card suppliers, they will be completely at the mercy of this credit card company.

Profiteering? Many card companies are seeking new ways to boost new revenue after the crackdown on excessive late payment fees, and this is probably the first of many inventive and immoral ways that card companies will exploit their customers and fatten up their margins.

Customer care is obviously a dirty phrase to banking and credit card companies, don’t expect them to look after you, they only want your money and they’ll try to get it anyway they can.

There’s no rules on credit card companies, they along with banks, have no real watchdog and are able to raise interest rates at will, and you have no right to appeal. Who can you turn to?

Well, how about stepping up and taking responsibility for your financial welfare yourself? Stop spending money you don’t have, stop spending all the money you do have, and start saving so you can invest, make more money and get out of the credit trap.

Most of us are honest people who want to pay what we owe, but we should not be made to pay the mercenary, greedy credit charges banks now force on us. Check out how to reduce credit costs with The Ultimate Entrepreneur at www.wealthfreedomfighters.com

Bah! Humbug! Seasonal Cheer from the Banks!

Borrowers are still waiting to feel the benefits of this month’s interest rate cut, as several mortgage providers continue to hesitate over reducing their rates by the full 0.25% point.

More than half of lenders have announced what their new variable rate will be, and most changes will not take effect until January, a good month and half after the Bank of England action. But then the Bank’s are past masters at holding onto money for their profit not yours.

Also, remember that interest rate reductions only apply to certain mortgages, credit cards, loans etc are unaffected by central bank actions. In fact, they change at the whim of the credit card and loan company. Scandalous but true, there’s even fewer controls on this market.

 About 75% of institutions will pass on the full rate reduction, but there are a few big lenders like Egg, Northern Rock and Alliance & Leicester who have decided not to pass the full cut to their mortgage customers.

They are using the rate cut as an opportunity to claw back some profit margin, hang their customers!

Once again, the great customer care the banking industry is renowned for in action.

Interest rates are expected to be cut three, possibly four times in 2008 and each time, we can expect fewer and fewer lenders to pass the benefit onto their customers.

So what can you do about this blatant profiteering at your expense? Well, not much actually! The banking industry is self regulating, so they have no great system to ensure customers are properly serviced.

What you really should do, is start to take control of your money. Move banks, write to your bank and demand immediate action and/or money credited to your account for their tardy response to the central bank’s actions.

Ideally, take yourself out of the banking system completely. Refuse to be controlled by the money men. Join us at wealthfreedomfighters and The Ultimate Entrpreneur to learn how to create a cash rich income that gives you the freedom to control your finances and live life the way you want.

Freedom is fun and it’s your right. Take it now!

US Financial Rescue Package Abandoned

Three top Wall Street banks have withdrawn  from a US government backed plan to set up a fund to bail out ailing funds.

Citi, Bank of America and JP Morgan Chase have pulled out of the so-called ‘Super-Siv’, which was to have raised around $70 billion to invest in Structured investment funds caught in the sub-prime crisis.

Bankers have said their withdrawal was caused by problems raising money for the bail out.

I’m sorry, but I thought that was one of the reasons the Fed had joined forces with the Banks of England and other Central Banks to issue billions of extra cheap credit into the economy. Surely the banks aren’t  being reluctant to invest cash to rescue the sub-prime they fraudulently created?

I think they’re afraid this ‘credit crunch’ has a fiercer bite than they’re telling us.

A Very Merry Christmas to You All

Tis’ the season, and we all should be jolly, give thanks for what you have, focus on the love and warmth of your family and friends. Think about how great life is going to be in 2008 and commit to making it so.

It won’t happen by magic, you’re probably not going to win the lottery, but if you persevere and fight the good fight, you’ll win and there’s no better feeling than overcoming the odds and creating the life you want to lead ALL BY YOURSELF!

Go do it!