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If you are struggling to manage your grocery bills while juggling a busy schedule, you are certainly not alone. Fortunately, that’s where subscription meal prep services offer a smart solution. 

By delivering ingredients directly to your door, they save time and often money, compared to traditional shopping. This post dives into how these services can economize your weekly meal plans. From cost comparisons to long-term savings, learn how making the switch can leave more in your wallet without sacrificing quality or flavour.

Stop Compromising Between Well-Planned Meals And Budget

Creating a family budget is crucial for long-term financial stability. However, this often forces a compromise on the quality or variety of foods and ingredients, leading to a cycle of repetitive and less nutritious meals. 

Meal prep subscription services can help you stop compromising between affordability and meal quality. Specialists in the sector and nutritionists can help you choose your daily meals so that you can be sure you are getting all the macronutrients, minerals, and vitamins needed for a healthy life, while also remaining in control of your spending. Ultimately, they offer well-planned, diverse menus that fit within your budget, ensuring you don't have to sacrifice food quality for cost. 

Reap The Financial Rewards Of Investing In Your Health 

Some of the most expensive chronic diseases to manage and treat - including heart disease, stroke, diabetes, cancer, and obesity - have been seen to be related to lifestyle choices and, in particular, nutrition. 

That’s where regularly consuming balanced meals can help you improve your overall health and potentially avoid the high costs associated with managing chronic conditions. Meal prep and delivery services can help you make the switch to a more nutritious diet in a way that causes no disruptions or significant changes to your life.

Combat Impulse Buys With Weekly Meal Prep Services

Frequent grocery store visits often lead to impulse buys, inflating your food budget without adding value to your meal plans. The solution? A weekly meal prep subscription

These services streamline your food expenses by providing exactly what you need, eliminating the temptation to grab unnecessary items. With this option, you can more easily stick to your financial goals and enjoy the satisfaction of well-planned, delicious meals without the extra cost and clutter of impulse purchases.

Design A Diet That Meets Your Unique Health And Financial Needs

Americans allocate an average of $779 on food monthly, with a significant portion, nearly $475, going towards groceries. Not only are such high costs difficult to bear for families, but, to reduce living expenses, they can cause you to start compromising on the nutritional value or quality of your meals. 

By embracing a balanced approach through meal prep subscriptions, you can design a diet that not only caters to your health needs but also aligns with your financial objectives. With these services, you can make every dollar count by investing in meals that nourish your body and your budget.

Access High-Quality Foods And Ingredients 

Millions in the US face challenges not only in getting enough food but in accessing high-quality, healthy options, according to Feeding America. This can lead to entire families making poor dietary choices, which, as we have seen above, can represent a significant risk factor for chronic diseases. 

Meal prep subscriptions step in to bridge this gap, delivering nutritious ingredients directly to your door. This ensures everyone can enjoy the benefits of a healthy diet, regardless of local grocery selections, by bringing better choices to the table without the hefty price tag or the hassle of sourcing them.

Avoid Wasting Money On Food Waste 

If you often find that some of your groceries end up in the trash or are left rotting in the fridge at the end of the week, you are not alone. Many find themselves discarding a significant portion of their groceries, especially perishables - the most expensive items in the basket!

This cycle of buying and throwing away can undermine your budget and have a significant environmental impact. If you are still in the process of planning your weekly food shopping spree down to a T, a strategic shift towards meal prep subscriptions can help you avoid food waste while you are fine-tuning your weekly grocery shopping. By delivering the exact quantities of ingredients needed for your meals, these services ensure that everything you purchase gets used. 

Gain Full Control Over Your Weekly Food Spending 

Undetected, inflation and evolving dietary preferences can inflate your grocery expenses, slowly draining your budget without you even noticing. This financial leak becomes evident over time, though the gradual increase in spending can be hard to track. 

Meal prep and delivery services offer a more transparent solution that helps you stay in control of how much you spend each week. By setting a consistent expenditure for your meals, you gain insight into exactly how much of your budget is allocated to food. This awareness can help with your financial planning without taking anything away from meal variety, nutritional value, and ingredient quality. 

Some people are just better with money. Now, when you say that someone is good with money, what most people imagine is some sort of a financial wizard. In reality, it just means that this person knows a thing or two about financial instruments that the majority of people are using daily. To show you exactly what we mean, here are four things you can learn to become “better with money” yourself. 

1. How does credit score work?

Your credit score will determine the terms of your loan. It may determine how much money you’re approved of, what your APR is, and how long you have to repay it. The problem is that the majority of people don’t think about their credit score until they need a loan. Then, they find themselves in a peculiar situation where they ruin their credit score unintentionally. 

They usually don’t have collateral to obtain a secured loan, which means that they’re in an awkward position where they have to go with P2P platforms or payday loans, both of which have pretty bad APR.

To avoid this, try to learn how credit score works and start improving it before you ever need it.

There are five parameters, not all of which are intuitive.

Now that you understand your credit score, you can start working to improve it, already. 

2. Why you’re never too poor to invest?

Sure, some of you might believe yourselves to be too poor to even pay attention; however, this is never the case. One of the biggest obstacles in the world of investing is the mental blockade about whether you have enough money to start investing. 

It goes something like this - imagine wanting to create a passive stream of revenue. The first thing that pops to mind is buying a rental apartment. Still, you don’t have enough money to buy an entire apartment, which makes you quit on the whole plan. We’re not just talking about the idea of buying a rental property but the idea of getting passive income altogether. 

The same goes for putting money into your retirement fund. It’s better to put in just $100 monthly during your 20s than not putting in anything at all, believing that you have time or that this $100 won’t make a difference.

Another mental barrier is the idea that you’re investing too little to make any real difference. This is just outright not true. Sure, you won’t get rich off major company shares, but there are different assets out there. For instance, you can easily find crypto presales with 10x potential, which means that you can return your investment tenfold. 

The key thing is that you start investing and develop a habit of investing. The sooner you start, the better, and you need to keep in mind that everything makes a difference. Stop making excuses.

3. Figuring out how your credit card works

The majority of credit card users fall under one of two categories:

The worst part of belonging to either of these groups is the fact that you’re not using your credit card to its full potential. Depending on how you use it, a credit card can be an asset or a liability. You’re the one who’ll decide which direction your credit card use will take.

To get the most out of your credit card, you need to learn a few tricks. For instance, if you travel a lot, you might want to pick a card with a lot of travel rewards. On the other hand, someone who doesn’t travel that much could pick a card that offers cashback on various subscriptions.

The majority of these credit card companies are trying hard to attract and retain their users, which is why they often sweeten the pot with an extra benefit. However, these benefits vary. The key thing lies in learning how to master the reward points game. If you can manage that, there’s so much financial value to gain.

The key thing to remember is that a credit card is a financial instrument. If you can’t use it right, this doesn’t mean that the instrument itself is faulty. 

4. Automating and gamifying your savings

For a lot of people, the question of mental fortitude is quite serious. Namely, you need to understand that transcending your programming and seeing short-term sacrifices as necessary doesn’t come as easy for everyone. 

The problem is that these steps are sometimes so small that you’ll often feel like you’re standing in place or barely moving at all. So, what harm is there in taking some much-needed break? Just think about it: if the amount of money you can save this month is so minuscule, do you need to do it this month? Can’t you just postpone it until the next month and save double then? We all know it’s not how this works.

The problem is that you’ll feel this kind of temptation all the time, which is why you need a way around it.

There are two solutions to this problem:

 Gamify your savings: The first thing you could try to do is gamify all your savings. This means turning it into a game. A swear jar is the perfect example of this. You set aside some money every time someone swears. Another smart idea is to start a 52-week saving plan, where you set aside some money every week. With each subsequent week, you add n+1 amount of money into the jar.

Automate your savings: It’s even easier to gamify your savings. Just automate your platform to set aside a specific amount every X day of the month (when you know you’ll have the money). This way, you take away some of your agency to avoid scenarios in which you need to show restraint.

Both methods are easy and dependable. 

Boosting your financial prowess has never been easier

By learning just these four things, you can easily improve your finances. The truth is that while boosting financial literacy takes a lifetime, these few tips can make a difference when you just apply the fundamentals. For instance, automate savings and repayments (to boost credit score), start investing every month, and learn what your credit card is good for. This will already make a world of difference. 

Staying informed isn’t a choice, but a strategic option when it comes to investment management. The financial sector is dynamic and heavily relies on other factors, majorly economic indicators and political events. The success of your investments hinges on your ability to navigate these factors.

Generally, investors should be knowledgeable, adaptable, and proactive. As such, staying informed remains the cornerstone of successful investment management. It empowers you to make informed decisions and seize available opportunities. Below are a few tried and tested tips for managing your investments.

#1 - Seek Professional Advice

Not seeking professional advice is a common mistake made by even successful investors. Unknown to them, professional advisors provide great insights, especially for those who are uncertain about their investment strategies. You should also consult experts like Avidian Wealth Solutions if you don’t have time to manage your investments effectively.

Financial advisors are beneficial in many ways. For starters, they bring forth expertise and knowledge in this field. Investment professionals deeply understand all investment facets, be it investment management, estate planning, or retirement planning. You can rely on their guidance on all your financial issues and goals.

That aside, you can be sure of personalized recommendations. These experts offer personalized recommendations that fit your unique objectives. They assess your financial goals and other factors to create a personalized investment strategy.

You will also benefit from behavioural coaching offered by financial advisors. While other factors come into play, most businesses fail due to emotional biases from entrepreneurs. Greed and overconfidence often lead to irrational decisions that can hurt your business. Professionals offer guidance on how to remain objective to achieve your goals.

You should also seek their advice on goal setting. These experts can help you set clear financial goals. Whether you want to fund your education or have a retirement plan, they will give you a perfect strategy for attaining them.

#2 - Rebalance your Investments

Rebalancing your portfolio is also crucial to investment management. This essentially involves adjusting your asset allocation to maintain a balanced risk-return level. Unfortunately, rebalancing a portfolio is easier said than done, and most entrepreneurs can’t hack it successfully.

Here, you should begin by settling rebalancing thresholds. Identify triggers that indicate the right time to rebalance your portfolio. You should have a clear guide to avoid making unnecessary adjustments.

Rebalancing your portfolio should also be dependent on the market conditions. Always assess the prevailing market conditions and economic factors before making adjustments. Interest rates, inflation, and other financial factors should be your key rebalancing principles. You should rebalance when the market is undergoing extreme volatility.

While at it, you should consider the tax consequences of rebalancing your investment portfolio. This is especially important if you have taxable investment accounts. Your financial advisor can recommend using strategies that minimize the impact of your actions on your taxes.

Lastly, document all your rebalancing decisions. Having a record of all the changes and adjustments you’ve made over time and the outcomes makes it easier to track progress. You also get to evaluate the effectiveness of this strategy.

#3 - Review Fees and Expenses

Reviewing operational fees and expenses of running your investments is also important, especially if you want to maximize returns within a given period. However, understanding fees and expenses comprehensively isn’t easy. For starters, you should understand the fee structures. Investments have varying fee arrangements. For instance, how much you incur for your mutual funds won’t be the same as managed accounts or exchange-traded funds.

You should understand the common and unique fees of every investment. Review the total costs of running your investments before making any adjustments. This should include all the fees and other associated costs for every investment. You should then compare the costs of various investment products.

Doing this will help you know if you are getting value for your money. Finding low-cost investment options compared to their alternatives is prudent. For instance, you can opt for index funds instead of managed funds.

Some investment options allow for the negotiation of applicable fees. You should do so where possible. You can negotiate the fees with investment providers. Check out and take advantage of fee discounts and waivers available. However, ensure that you remain updated about recent regulatory changes on applicable fees.

Endnote

Managing your investments incorrectly requires that you adopt a multi-faceted approach. Besides monitoring them regularly, you should rebalance strategically, diversify, and review operating costs. Seeking professional advice is also important, especially if you aren’t an expert in investment management.

As a new investor, you have to make strategic decisions that will lead to a successful investment for the future. 

So, keeping this in mind, let's explore all about IPO investments in detail.

What is an IPO?

An IPO is when private companies become public by selling their shares to the public for the first time. This shift enables the company to secure funds from external investors. In exchange for their investment, these external investors become shareholders of the company. 

The upcoming IPO process involves the company transitioning from private ownership to a state where its shares are available for public trading on the stock market. This facilitates capital raising for the company and grants individuals the opportunity to own a stake in the business by purchasing its newly offered shares.

How Do Initial Public Offerings Work?

Initial Public Offerings work by converting a private company into a publicly traded organization. First, the company hires investment banks to guide them through the process of IPOs. In this, all the financial details and plans are shared in a document called a prospectus. 

The Securities and Exchange Commission reviews this document to ensure full transparency. After that, the company then goes on a roadshow to attract potential investors. The IPO or SIP price is set based on the demand and value of the organization. Finally, the company's shares become available for public trading on a stock exchange that allows investors to buy and sell them to get a high ROI.

What are the Key Considerations for IPO Investments

#1 - Research the Company

Understand the company's business model, competitive landscape, and financial performance before any investment.

#2 - Evaluate the Prospectus

Read the prospectus carefully to gain insights into the company's risk factors, plans, and management team.

#3 - Consider Market Conditions

Assess the overall market conditions and economic climate before investing.

#4 - Long-Term Perspective

IPOs can be volatile in the short term. So, consider your long-term investment goals and whether you can hold the stocks or not.

#5 - Diversification

Don't put both feet in one shoe. That means diversifying your investment portfolio to manage risk.

#6 - Open a Demat Account Online

Have a demat account online so you can seamlessly apply for and receive allotted IPO shares. Many brokers now offer the convenience of opening a demat account completely online.

Tips for Navigating IPO Investments

#1 - Conduct Comprehensive Research

Thoroughly investigate the organization before committing your funds. Also, examine the company's business model, revenue growth, and future profitability prospects.

#2 - Diversify Your Portfolio

Mitigate overall risk by diversifying your investment portfolio with a combination of established companies and IPOs. Moreover, consider a balanced approach to ensure stability and potential growth.

#3 - Long-Term Holding Strategy

Be prepared for a long-term commitment, as IPO investments or SIP may take time to realize their full potential and deliver a substantial return on investment (ROI). Investing in IPOs means patience, which is a key that allows the company to navigate the post-IPO phase and capitalize on growth opportunities.

#4 - Seek Professional Advice

Ensure to consult with a financial advisor or conduct your due diligence to thoroughly assess an upcoming IPO investment's risks and potential returns. However, informed decisions based on expert advice or personal research contribute to a more secure investment strategy.

The Bottom Line

While investing in IPOs offers potential rewards, it carries inherent risks. Before delving into IPO investments, undertake comprehensive research, grasp the company's fundamentals, and assess broader market conditions. Nevertheless, adopting a cautious approach and prioritizing long-term objectives can make IPO investments a beneficial complement to your overall investment strategy.

 

 

 

They are often used by property developers, investors, and home movers who need to act quickly or face a gap in their cash flow.

Bridging loans are not meant to be a long-term solution, but rather a temporary bridge to cover a specific need. They usually have higher interest rates and fees than other types of loans, and they require a clear exit strategy to repay them.

In this article, we will explain what bridging loans are, how they work, what they are used for, and what you need to consider before taking one out.

Why are Bridging Loans Popular with Property Developers, Landlords and Investors?

 Bridging loans are favoured by property developers, landlords and investors as they are fast, flexible, have many uses and can be arranged in a matter of days as opposed to a traditional mortgage or property development finance which is more complex, has a higher minimum loan and can take longer to arrange.

Bridging loans are commonly used for projects requiring borrowing from £50,000 to around £2,000,000.

The primary focus of Bridging Lenders is on the value of the property being purchased and the viability of your exit route rather than your credit history. This means that having a poor credit history or income that is difficult to prove won’t necessarily mean an automatic decline of your application.

Borrowing can be up to 75% of the value of the property or the purchase price, whichever is lower, this can be increased to 85% if you are planning to refurbish the property.

However, in certain circumstances Below market value bridging loans are available which allow borrowing up to 100% of the purchase price if the purchase price is below the actual open market value of the property or if you are offering an additional property as security.

What is a bridging loan?

A bridging loan is a loan that is secured against an asset, usually a property, that you own or are buying. The loan gives you access to a large amount of money for a short period, typically between 3 and 24 months.

The loan is designed to be repaid as soon as you receive the funds from another source, such as selling your existing property, getting a mortgage, or completing a project. The loan is then ‘bridged’ or closed, and the lender releases the charge over your asset.

What are bridging loans used for?

Bridging loans are typically used for property-related purposes, such as:

Bridging loans can also be used for other reasons, such as:

What do you need to consider before taking out a bridging loan?

Bridging loans can be a useful and convenient way of accessing funds quickly, but they also come with some drawbacks and challenges. Here are some of the things you need to consider before taking out a bridging loan:

How to Apply for a Bridging Loan?

Most bridging lenders generally require applicants to submit their applications through an experienced commercial finance broker, with over 30 years of experience, being based in Scotland and covering the whole of the UK we are ideally positioned to guide you through the application process.

Conclusion

Bridging loans are a type of short-term secured loan that can help you buy a property, develop a property or complete a project while you wait for other funds to become available. They are often used by property developers, investors, and home movers who need to act quickly or face a gap in their cash flow.

Bridging loans can be a useful and convenient way of accessing funds quickly.

 

Hughes Hubbard & Reed LLP, a leading international law firm, has successfully represented JOST Werke SE, a global leader in the manufacturing of smart systems for commercial vehicles, in its recent acquisition of Crenlo do Brasil. The firm acted as the primary legal advisor, leveraging its extensive expertise to navigate the complexities of this international transaction.

Gerold Niggemann spearheaded the Hughes Hubbard M&A team, bringing to the table his rich experience and strategic insights. His leadership was crucial in coordinating a multidisciplinary team comprising specialists across various legal domains—antitrust, tax, employment and benefits, real estate, compliance, and intellectual property—ensuring a seamless transaction flow.

The firm's global reach and collaborative spirit were further amplified by the involvement of local counsel, with Santos Neto providing essential Brazilian due diligence insights and Nauta Dutilh offering advice on Dutch law matters.

This transaction stands out in the Brazilian M&A market for its pioneering use of representations and warranties insurance—a testament to Hughes Hubbard's innovative approach to managing potential risks and liabilities in M&A deals.

With Hughes Hubbard’s comprehensive legal support, JOST Werke SE is well-positioned to capitalize on its expanded presence in Brazil, aligning with the company’s strategic growth objectives in South America and reinforcing its commitment to delivering excellence in the commercial vehicle industry.

 

While it might be challenging to think of your golden years when you're still in your late teens or early 20s, it's a good idea to begin investing for your future.

Consider the following tips to get started building wealth and saving for your retirement.

#1 - Work with a Bank that Can Help You Reach Your Goals

The process of saving for retirement might feel overwhelming at first. To get started on the right track, it’s important to work with a bank that can assist you in reaching your financial goals. For example, East West Bank, led by Dominic Ng, has helped countless customers over multiple decades realize the importance of saving for the future to help make their financial dreams a reality.

#2 - Contribute to Your 401(k)

If your employer offers a 401(k) retirement account, by all means, try to make regular contributions to the plan. This tip is especially important if your employer will match what you're already adding to your account. As U.S. News and World Report notes, this is essentially free money that your employer is allocating toward your retirement, so taking advantage of this offer is a good idea. To make it as easy as possible to contribute to the 401(k), you can have a certain percentage of your paycheck directly deposited into the account.

#3 - Invest in Stocks

Another way to start building wealth as a young adult is to invest in stocks. While stocks can be a volatile investment — meaning they can increase and decrease in value rather dramatically at times — overall they have a great long-term record. Plus, if retirement is decades away, you have plenty of time to ride out any ups and downs of the stock market. Unsure of which stocks to purchase? Then you might consider investing in companies that you know and like. For instance, if you're a fan of Starbucks, consider buying some of its stock — and know that every latte you buy is helping your stock values stay strong.

#4 - Consider Crypto

Investing in cryptocurrency is another way to start saving for retirement. While crypto has a well-deserved reputation for its volatility, there are several ways to make money with it. For instance, once you purchase crypto, you can hold onto it until you see its value rising before selling it and making a profit. Use the profit to either purchase more crypto, add more to your stock portfolio, or contribute more to your 401(k).

#5 - Look Into Real Estate

There are different ways real estate can help you build your retirement fund. For instance, if you acquire a property to rent out, you can allocate as much of the monthly cash flow as you can to your long-term investments. You might also look into short-term vacation rentals as a way to make money. You could either own a home to rent out to travellers or, if you're on the road quite a bit for work, look into renting out your own home. Granted, it can take some time to save money to purchase a property, but if you're able to afford it, it can be a potentially lucrative investment.

Your Future Self Will Thank You

Of course, everyone wants to have enough money to live comfortably after retirement. If you start now, you'll be that much more financially prepared for this time of life. Start by finding a bank to assist you with your goals and then consider adding to your 401(k), investing in stocks, crypto, and/or real estate — or a combination of all of these. No matter what you choose, your future self will thank you for the financial planning you start today.

Mastering Your Legacy:

The Essential Guide to Estate Planning

Clive Barwell, TEP CFP™ Chartered FCSI

 In a world where financial acumen is pivotal to one’s peace of mind, delving into the intricacies of estate planning and wealth management is imperative. Today, we sit down with Clive Barwell, TEP CFP™ Chartered FCSI, who has a journey as intriguing as his advice. Starting his career serendipitously after a simple bank visit, he swiftly became an expert in matters of Wills, Trusts, Probate, and Tax Advice. With a remarkable 53 years of experience in the industry, Clive’s specialisation in the later-life market has made him a beacon of guidance for many. In this insightful conversation, we explore the vast world of estate planning, unpack the complexities of inheritance tax, and dive deep into the essence of a well-structured will. Join us as Clive demystifies the financial intricacies of our lives and illustrates the importance of planning ahead for the future.

 

Clive, could you start by telling us about your journey into financial planning and why you chose to specialise in the later life market?

In common with many from my generation, financial services wasn’t my first choice of career. The family profession is teaching, and I thought I was going to teach biology.

However, when that didn’t come to pass, and being an impoverished former student, I asked my Bank Manager for an overdraft whilst looking for a job. Instead of interviewing me for an overdraft, he interviewed me for a job, and the rest, as they say, is history. That’s 53 years ago; I started just seven months after decimalisation.

My initial career in the bank was in their Executor & Trustee Department, so Wills, Trusts, Probate, Investments, and Tax Advice. My first client was a widow in her 70s whose late husband had appointed the bank executor. Not only was this lady vulnerable because of her bereavement, she was also vulnerable because of her lack of financial acumen; her husband had dealt with everything secretively, believing he was doing his wife a favour.

I realised that I had an aptitude for dealing with older people, and the outstanding training I received from the bank through a 24-year career stood me in good stead to advise on not only investments but succession planning and taxation, particularly Inheritance Tax (still Estate Duty when I started). I have continued in this vein as an Independent Financial Adviser for the last 29 years.

 

Could you briefly explain to our readers what estate planning is and why it’s so crucial?

 

Estate Planning is the process of cascading wealth down through the generations in the most tax-efficient and timely manner. This is oversimplifying it. Although it is the case for most families, it also encompasses using some of the accumulated wealth for altruistic purposes.

Most of my clients consider estate planning to be crucial because they feel they’ve already paid enough tax whilst amassing their nest-egg and don’t want to pay any more.

The old business adage, “Failing to plan is planning to fail”, applies equally to estate planning.

The first obstacle to achieving someone’s intentions is the loss of capacity.

The recent, tragic case of Derek Draper, Kate Garraway’s husband, who had a dreadful reaction to Covid-19 in his early 50s, serves to illustrate it is never too early to be thinking of a Lasting Power of Attorney. In the absence of a Lasting Power of Attorney, the only alternative is an application to the Court of Protection for a Deputyship order which is costly, laborious, and onerous.

To be fair, Attorneys under a Lasting Power of Attorney for Property & Financial Affairs are limited in the scope of the estate planning they can undertake. However, with a robustly drafted document, Attorneys can certainly continue what has already been started.

The second obstacle is failing to make or update a Will. In the absence of a Will, the Laws of Intestate Succession dictate who has what and when. It is inappropriate to discuss all the ramifications in this article, but in the case of a married couple with young children, the spouse would get the first £322,000 (increased from £270,00 on 23 July 2023) and half of the balance. The remaining half-share goes to the children at the age of 18. Ask yourself what the 18-year-old you would have done with a substantial inheritance at that age. Would the answer have been different at 21 or 25?

The third obstacle is potential care costs, especially following the first death. At least with Inheritance Tax, there’s a reasonable tax-free threshold (see later comments), but in England, the lower means-tested threshold is just £14,250.

According to Lottie, in May 2023, the average cost of a care home in the UK is £928 per week, and a nursing home £1,025, so it doesn’t take long for a king-sized hole to be made in any inheritance.

 

Inheritance tax can be a complex topic for many people. Can you simplify it for us and highlight the most important aspects people need to be aware of to legally mitigate tax liabilities?

 

Simplify it? The HMRC Inheritance Tax (IHT) Manual runs to 40 volumes alone, so it isn’t easy to summarise, but I’ll give it a go. I’ll use the words “couple” and “spouse” by which I mean people who are married or in a Civil Partnership, so it doesn’t include unmarried people living together, regardless of whether they have children together or not.

For ease, I’ll say it is payable upon death when assets pass by Will or Intestacy to a non-exempt beneficiary. An exempt beneficiary is, in essence, a spouse or UK-registered charity. The first £325,000 (frozen since 2009 and until 05 April 2028, at the earliest) is known as the Nil Rate Band (NRB), which isn’t an exemption but a band of net assets (total value of the estate less liabilities) charged at 0%. Everything above this is taxed at 40% (36% if at least 10% of the taxable estate goes to UK-registered charities).

A Residence NRB was introduced in April 2017, which now increases the standard NRB by up to £175,000 if the share in a residence passes to a lineal descendent – basically children, including stepchildren, and all subsequent generations.

This additional NRB is capped at the value of the interest in the property or £175,000, whichever is the lower. Also, it starts to reduce by £1 for every £2 the total estate exceeds £2m.

At £2.35m, the Residence NRB has gone completely.

Unused NRBs pass from one spouse to the other, so for someone with a property valued more than £350,000, with a total estate less than £2m, the total NRB on the second death could be £1m.

The latest statistics from HMRC for the year ending 05 April 2021, show that only 3.73% of UK estates pay IHT, which has been a consistent figure in recent years. For that 3.73% IHT was onerous, with the average IHT bill being £209,000.

 

What are some common mistakes people make when it comes to planning their estate and inheritance tax, and how can they avoid them?

 

We’re back to “failing to plan”, which involves several issues. In some ways, wealth can almost “creep up” on people, particularly in later life – accumulated savings, increase in property value, pension lump sum, an inheritance – and, without realising it, IHT rears its ugly head. There is also the issue of not knowing what you don’t know, so some people, even if they are aware that they have an IHT or long-term care problem, don’t know that there are things they can do to protect their family’s inheritance.

Those that do realise they have an issue often leave it too late to seek guidance. For example, the simplest way to save IHT is to give away surplus wealth during your lifetime. At the point of making a cash gift, there are no tax implications for either the Donor or the Donee, regardless of the amount given away. However, for the gift to be fully effective for IHT purposes, the Donor must survive for 7 years from the date of the gift. If they don’t, the value of the gift is added back into the IHT calculation upon death. Consequently, seeking advice in your late 70s or later greatly limits the options.

I say, “cash gift”, because a gift of an asset subject to Capital Gains Tax (CGT) – a buy-to-let property, for example – constitutes a disposal for GGT and could trigger an immediate tax liability.

 

How has the landscape of estate planning changed in recent years, and what should people be aware of looking forward to, particularly with a likely change in government and, therefore, policies at the next election?

 

IHT was introduced in 1984 and the broad principles remain unchanged, but the key landmarks have been: 2006 limitation on the use of Trusts; the 2007 introduction of the transferable (between spouses) NRB; the 2009 freezing of the NRB; the 2017 introduction of the Residence NRB.

For many in the group known as the “Mass Affluent”, the introduction of the Residence NRB, which effectively fulfilled the Conservative Party’s promise of a £1m NRB, has lifted them out of the IHT net. However, the freezing of the main NRB against a background of increasing asset prices, particularly housing, has exacerbated the IHT issues for higher net-worth individuals.

As already mentioned, means-tested long-term care has the potential to be more detrimental to a family’s inheritance than IHT, so the repeated failure of successive Parliaments to deliver on any of the recommendations in the Dilnot Report is a key consideration in estate planning – low asset thresholds and no cap on expenditure.

As for the future, I think we can see two polar opposites emerging, with the Conservative Party toying with a manifesto promise to abolish IHT and the Labour Party likely to make it more onerous. The Treasury, for example, is keen to reform some lifetime gifting, which has remained unchanged since 1984. Annual gifts of £3,000 are exempt from IHT but if that amount had been index-linked since 1984, it would now be some £9,300. The Treasury has in mind £15,000 but with a sting in the tail – regular, affordable gifts out of income would no longer be exempt. If you are a Billionaire with an income of several million pounds a year, you can really exploit the gifts out of income exemption, with £15,000 per annum hardly noticeable. It doesn’t take much imagination to think that if Rachel Reeves is in number 11 Downing Street as Chancellor of the Exchequer, the Treasury would be pushing at an open door with such reforms.

Another reform on the Treasury’s agenda which might also benefit from that open door is a reintroduction of CGT on death. Currently, taxable assets such as shares and second properties are revalued on death for IHT purposes, but any potential CGT is forgiven whether IHT is payable.

 

Could you delve deeper into the importance of a will in the process of estate planning? Are there any prevalent misunderstandings about wills that you’ve noticed among your clients when they first contact you?

 

Fundamentally, a Will achieves two things that the Laws of Intestate Succession don’t, the appointment of an Executor or Executors to manage your finances after your death and to specify who has what and when. Remember, currently, the Laws of Intestate Succession don’t recognise the concept of a “Common Law Spouse”, even with children, so a Will is absolutely essential in this situation.

Most couples with children, the common solution is to have a Will leaving everything to each other and then on to the children on the second death, which is what most people want to happen. However, there are several factors this doesn’t address, such as:

ü Long-term Care Costs. Prior to the first death, there is a disregard for the matrimonial home for means-testing whilst the other spouse is living in the property, so the cost of care may not be so much of an issue at this point. However, following the first death, the property may have passed by survivorship and everything else via the Will, so the combined assets are available to pay for care.

ü Divorce or bankruptcy of a main beneficiary. An absolute gift to a child on the second death is just that; the inheritance immediately becomes intermingled with the existing assets of that child. Any subsequent divorce or bankruptcy could see some or all the inheritance disappear.

ü Generational IHT. Are you cascading the IHT problem down the generations alongside the wealth?

These potential problems can be overcome using suitable Trusts in the Will, accompanied by a severance of the joint tenancy on the matrimonial home, meaning that a half-share of the property falls into the Will Trust on the first death rather than passing by survivorship. With the Trust including all subsequent generations of the family, it is easy to skip a generation or two if a beneficiary already has their own IHT problem, which will only be exacerbated by an inheritance.

 

In your opinion, when should someone start thinking about their will, and what are the key factors to consider?

 

As soon as you have something to leave – cash in the bank or equity in a property – it is never too soon. My eBook, “Will Writing the dos and don’ts” has a link to a cost-effective, professional starter Will.

Having written a Will, remember it isn’t a “tablet of stone” that will stand the test of time. Your circumstances are constantly changing, and so should your Will; at minimum, it should be reviewed every 5 years.

Whilst you have young children, your Will should appoint Guardians and probably make those Guardians the Executors. Generally, Guardians will be from your generation but, as you get older, they age with you, and you really need someone from a younger generation as Executor(s).

 

Equity release is another term often associated with estate planning. Could you explain what it means and when it could be a suitable option?

 

Equity release is the process of unlocking some of the money tied-up in your home without having to downsize. The most common reasons for accessing equity release are:

ü Paying off debts, especially interest-only mortgages.

ü Home improvements

ü Helping family and friends

ü Gifting

Generally, this is achieved by way of a lifetime mortgage, which is only repayable on the sale of the property, death, or earlier entry into residential care. In the meantime, interest rolls-up on the loan, so is compounding until the loan is repaid.

At the time of writing, interest rates are over 6% per annum, fixed for the duration of the loan. At this rate, a loan of just £10,000 with interest compounding over 10-years, increases to some £18,200.

Over the years, I’ve come across numerous families who have discovered that parents have responded to a television or newspaper advertisement for equity release, gone ahead and not consulted the family and/or taken fully independent advice. In some cases, the parents had other savings or investments which should have been accessed first. In others, children or grandchildren would have been only too willing to help to protect their eventual inheritance.

Equity release is a legitimate tool in the Estate Planner’s kit but something that should only be used as a last resort.

 

 

Lastly, do you have any general advice or important points that you think everyone should know when it comes to estate planning and managing their financial legacy?

Seek professional advice; estate planning is a broad and complex area of financial planning.

Preferably, seek the views of someone you know and find out who their trusted adviser is. If you don’t know anyone who can make a recommendation, then a great starting point is the Society of Later Life Advisers (SOLLA). SOLLA is a not-for-profit consumer protection organisation set up to protect potentially vulnerable individuals from unscrupulous or inadequately qualified financial advisers. Their robust accreditation process is the most arduous test of knowledge, skills, and attitude I’ve undertaken in my 53 years in financial services. Also, it isn’t a once and for all “tick in a box”; the entire accreditation process must be undertaken every 5 years.

 

However, like any financial decision, investing comes with both benefits and risks. 

In this article, we'll explore the pros and cons of investing to help you determine if it's a good idea for you.

The Pros of Investing:

1. Potential for Growth: Investing in assets such as stocks, bonds, and real estate offers the potential for substantial long-term growth. Historically, these assets have outpaced inflation and provided attractive returns.

2. Wealth Building: Investing allows individuals to grow their wealth over time, creating financial security for retirement, education, or other significant life events.

3. Diversification: By diversifying your investments across various assets and industries, you can spread risk and reduce the impact of market volatility.

4. Compound Interest: Over time, compound interest can significantly boost your investment returns. Reinvesting earnings generates a snowball effect, leading to accelerated growth.

5. Tax Advantages: Certain investment accounts, such as ISAs and SIPPs in the UK, offer tax benefits, allowing you to keep more of your investment gains.

6. Beat Inflation: Investing can potentially outpace the rate of inflation, preserving your purchasing power and ensuring your money grows in real terms.

The Cons of Investing:

1. Risk of Loss: All investments carry some degree of risk, and there is no guarantee of positive returns. The value of investments can fluctuate, and you may lose some or all of your initial investment.

2. Time and Research: Successful investing requires time, research, and monitoring. It's essential to stay informed about market developments and make well-informed decisions.

3. Emotional Challenges: Market fluctuations and short-term volatility can evoke emotional responses, leading to impulsive decisions that may impact long-term gains.

4. Potential Complexity: Some investment options, such as individual stocks or complex financial products, may be challenging for beginners to understand and manage effectively.

5. Liquidity Constraints: Certain investments may have restrictions on when and how you can access your funds, limiting liquidity in the short term.

Get Started With Investment Apps

Investing may feel intimidating, particularly for beginners, but technological advancements have made it more approachable through investment apps. 

These apps have simplified the process, making it user-friendly and accessible. 

With investment apps, you can effortlessly monitor your investments, allocate funds to various assets, and track your portfolio's performance. 

Notably, some apps provide educational resources to enhance your understanding of investing. 

The added benefit of managing your portfolio on the go makes investment apps an appealing choice for those venturing into the investment realm. 

As outlined in this best investing apps UK guide, these platforms offer a convenient and informative way to navigate the world of investing.

Conclusion

Whether investing is a good idea depends on your financial goals, risk tolerance, and time horizon.

While investing offers potential for growth and wealth building, it comes with inherent risks and requires careful consideration. 

For individuals with a long-term outlook and willingness to weather market fluctuations, investing can be a powerful tool to achieve financial success. 

However, it's crucial to educate yourself, seek professional advice, and maintain a disciplined approach to investing. 

Ultimately, the decision to invest should align with your financial circumstances and aspirations.

 

Public Sentiment Has Power:

Why Social Media Analytics is an Essential Component of Due Diligence

Lisa Dane - Vice President, Charles River Associates

In the era of ESG and socially responsible investing, the ubiquity and virality of social media holds sway over businesses. Simply being profitable is no longer good enough, profitability must be achieved in a way that the general public agrees with. On paper, the financials of a target company could be impressive, the backgrounds of key executives could be squeaky clean. But before you breathe a sigh of relief and follow through with the investment, you must examine the most “public” of all public records—social media.

 

One controversial post, regardless of intent or accuracy, can circle the globe in an instant, and profoundly affect the business and its leadership.

 

The sheer volume of social media posts on countless topics and platforms makes analysing that sphere in a due diligence context a daunting prospect. However, sophisticated social media analytics tools allow for targeted research; information can be efficiently gathered across multiple social media platforms to identify and measure what people are saying about a company or its management, who is saying it, and how it resonates.

 

Robust due diligence in an M&A transaction should encompass a two-pronged approach to social media that focuses on what is being said about a business entity and its management, as well what the business and management are posting themselves.

 

Understanding the target company from the public’s point of view

Tools allow us to conduct “topic queries”. Those queries can be as simple as the name of the target company for any mentions of the entity or can include key words that allow the analyst to zoom in on commentary relating to a particular issue using terms such as “mismanagement” or “scam” or “accounting scandal”. The output includes graphics (see sample below), that reveal the total volume of the conversation over a period of time and on what platforms the conversation is happening (e.g., Twitter or Reddit).

 

 

The results can also be visualised by sentiment based on positive, negative or neutral coding.

 

As seen in the graph above, the software can show spikes in the conversation, which is a stark reminder of how quickly commentary can go viral. The next step is to investigate who is commenting: is it a competitor, a former employee with a grudge, a short seller, an environmental activist? Understanding the drivers of the conversation, and who is driving them can help investors refine their investment thesis and strategy.

 

Understanding the executives

As we all know, businesses are the people who run them. The social media aspect of due diligence gets you closer to understanding what makes the people of a particular company tick. It’s a window into what they believe, what they feel, and who and what is important to them.

 

In addition to conducting topic queries on the target company’s management to learn what the public may be saying about them, it’s necessary to determine whether the individuals themselves are posting content that may be relevant to your decision-making.

 

In the current global political and social environment, the public is on perpetual high alert. So, the CEO posting about a hunting vacation with friends, or the VP who endorses a politician known to have posted disparaging racial remarks can spark a social media frenzy that can alter a company’s value within days. It doesn’t matter at that point how great the target company’s product is if the public has decided they don’t want to buy “x” from someone who thinks “y.”

 

The other aspect of an executive’s social media profile that may prove relevant is who they are connected to. An executive’s connections may include people who are cause for consideration such as government officials or people at a competitor firm. Some connections could be more problematic: for example, the executive may be tied to individuals or groups espousing controversial views. Although the executive may not hold the same beliefs, the “guilty by association” factor comes into play. If a clever journalist could uncover the same connection, your prospective investment may be in peril.

 

Investors have a duty to their clients to ensure that their due diligence is as thorough as possible. More information is always better than less, especially if there is a simplified way to gather and measure it using analytical tools. Unlike financial or other company records, social media can be thought of as an evolving “record” of information which can drive sentiment in one direction, or another, affecting a company’s reputation and, in turn, its financial performance. Unlike traditional media, social media doesn’t have to be accurate or even remotely grounded in reality, but that public sentiment has power. It moves money.

 

While it is unlikely that an investment decision will ever hinge entirely on social media posts by or about an executive or the target company, using tools to efficiently distil meaningful intelligence from voluminous social data can complement and bolster traditional due diligence methods. Most importantly, it can give you a higher degree of confidence in the success of your investments.

 

Lisa Dane is Vice President with Charles River Associates. The views expressed herein are the views and opinions of the author and do not reflect or represent the views of Charles River Associates or any of the organizations with which the author is affiliated.

 

 

 

In recent years - sustainable and impact investing - are shifting the focus towards investing, with the goal of not only generating financial returns but also gaining positive social and or environmental impacts. Let's discuss what is sustainable investing and impact investing and their importance and then highlight 3 companies that shine: ICL Group, NextEra Energy, and Republic Services

Sustainable Investing: Doing Well by Doing Good

Sustainable investing refers to investing in companies that prioritize environmental, social, and governance (ESG) principles. Companies aim to integrate these principles into their core business strategy, while simultaneously providing investors with strong financial returns.

Investing sustainably represents a long-term, forward-thinking approach, focusing on companies that are prepared for future challenges and market shifts related to sustainability.

Impact Investing: Investing for Change

While similar to sustainable investing, impact investing takes the concept one step further. Impact investors actively seek to place capital in businesses, funds, and other ventures that aim to generate specific beneficial social or environmental effects, in addition to financial returns. These investments can be in sectors like renewable energy, sustainable agriculture, microfinance, and or affordable housing, and the impacts are often measurable and reported.

The UN Sustainability Goals and Their Role in Investment Decisions

The United Nations Sustainable Development Goals (UN SDGs) are a universal set of goals, targets, and indicators that UN member states use to frame their policies. They address critical global challenges, including poverty, inequality, climate change, and environmental degradation.

Investors can use the UN SDGs as a framework to assess the sustainability and impact potential of their investments. Companies that align their operations with these goals demonstrate a strong commitment to sustainability and societal impact, often making them attractive to both sustainable and impact investors.

The Win-Win of Sustainable and Impact Investing

From an investor's perspective, investing in sustainability is a win-win proposition. Companies focused on sustainability are innovative, resilient, and well-prepared for future environmental and social changes, making them potentially sound long-term investments.

Companies that embed sustainability into their operations benefit from enhanced brand reputation, improved customer and employee satisfaction, and often better financial performance. Such companies stay ahead of regulatory changes and are better equipped to mitigate risk.

Here are some examples of what makes a company Sustainable:

#1 Emphasis on Recycling or Regeneration

 An environmentally conscious company prioritizes recycling or regenerating natural resources. They strive to promote sustainability by utilizing our planet's resources judiciously.

Evaluate a company's operating procedures and production methods. If they leverage renewable power sources like solar, wind, or geothermal, they're likely an eco-friendly company. Companies focused on waste management and renewable energy often fall into this category.

#2 Promotion of Equitable Trade

Environmentally responsible companies also consider other essential aspects like human rights, worker welfare, and local community enhancement.

When selecting a company, ensure they promote fair trade practices, possibly through empowering jobs, sustainable incomes, and community welfare. These companies should aim to effect positive changes and improve local communities.

#3 Safety and Wellbeing

An environmentally reliable company will prioritize safety for employees, the environment, and consumers. Safety should also extend to the production process, with the company providing secure working environments for its workforce. They should manufacture products that meet stringent quality standards.

#4 Social Good

Every environmentally trustworthy company should aim to foster social good, enhancing local community livelihoods while also securing profits for its investors. If a company can generate profits while upholding social and environmental responsibilities, it qualifies as a good investment choice!

#5 Providing Sustainable solutions to the world's greatest challenges

Beyond their corporate operations, it’s about companies whose solutions/products are sustainable and positively impact our world. Innovative companies that offer sustainable solutions such as alternative proteins, sustainable fertilizers, green energy, and such, fall under this category. They are impacting our world at the most basic levels, they work to meet the needs of humanity, such as feeding our world and working to prevent world hunger. Below we have uncovered 3 companies that shine!

3 Companies that Shine: ICL, NEE, RSG

#1 ICL Group:

Stock Symbol: (NYSE: ICL)

ICL Group is s global specialty minerals company and one of the largest fertilizer manufacturers in the world. ICL focuses on creating sustainable solutions to some of the world's greatest challenges. This includes developing innovative fertilizers to increase crop yields while decreasing environmental impact, and recycling industrial by-products into useful resources, which aligns with several UN SDGs, highlighting their dedication to global sustainability. ICL's influence extends far beyond traditional agriculture, as they have made significant contributions to fields such as Foodtech, Agtech, and Industrial Solutions., Their extensive global presence is supported by over 24 R&D centers ensuring a constant drive for sustainable innovation.

ICL's dedication to sustainability doesn't just make it an ethical choice for investors; it also makes it a smart one.

#2 NextEra Energy

Stock Symbol: (NYSE: NEE)

NEE specializes in harnessing wind and solar energy across North America. The company has successfully powered 5 million households, making it one of the top green energy companies for investment.

Beyond renewable energy, they also engage in physical contracts, trading activities, and marketing. Their primary income source is distributing gas and electricity to Florida residents.

#3 Republic Services

Stock Symbol: (NYSE: RSG)

Republic Services (RSG) specializes in waste management and recycling. As the second-largest waste management company in the United States, its mission is to produce renewable energy through recycling.

The company focuses on non-hazardous domestic waste, considering itself a champion for environmental care. They currently serve 14 million customers across the United States.

Conclusion

Sustainable and impact investing is reshaping the investment landscape, creating a world where investing is not just about monetary gain but also positive societal change. By prioritizing companies like ICL Group, which place sustainability at the heart of their operations, investors can drive change while securing their financial future.

When taking this bold step, the organization undertakes its initial Public Offering (IPO) and sells shares of its stock to the public. If you are an investor, you can buy shares at this stage if you think the company has a high growth potential.

Investing in IPOs can be risky because they involve companies that have just gone public and lack historical performance. But with the right strategy, you can always get the best out of the investment. Here are pro tips to guide your decision to invest in newly listed stocks.

Seek Expert Training

This is a no-brainer, but sometimes, new investors overlook it. Investing in stocks has its fair share of complexities. For instance, you must tackle complicated tasks like risk assessment and market analysis.

Understanding such concepts can be difficult if you are a newbie in the industry. To ensure you know what you’re doing and are better positioned to invest prudently, start by taking stock market trading courses. Once you’re knowledgeable enough, dive in and make the best out of the resources.

#1 - Do Your Homework

IPOs are associated with private companies. Unfortunately, no set rules mandate that a private company must share all its financial information with the public. Most entities often cherry-pick details that are more likely to be favored by most investors and hide sensitive information like pending legal issues and financial projections.

To avoid making uninformed decisions regarding an IPO, research extensively before investing. You can start with an in-depth scouring of the internet and pouring through past press releases and financial statements. Don’t forget to study aspects like competitive dynamics and asset market size.

#2 - Gauge the Involved Brokers

Before investing in an IPO, you must gauge the lead broker backing it. Remember, where IPOs are involved, brokers have one indispensable role: to ensure their client raises the funds it needs to keep up and running. And reputable organizations who value their brand will always go with brokers with proven track records and sufficient experience.

If you want to make a safer investment, choose an IPO backed by a strong, established broker. That is crucial because reputable brokerage firms don't underwrite any company they come across, and vice versa is true.

#3 - Read the Prospectus

An IPO prospectus, commonly referred to as a Red Herring Prospectus, is a document that every company issues when they go public. It contains vital information like a company's history, fundamental operations, mission, and business model. A prospectus also tells potential investors how an organization plans to use its money and provides crucial financial information.

Before you purchase an IPO, read the company’s prospectus. It will help you understand the opportunity and assess all potential risks. Most importantly, it will enable you to determine how your money will be spent. 

Remember, not all companies can put your investment to good use. Whereas some may use it to make excellent moves like expanding to other regions, a few may risk your finances through poor ventures like high-risk, speculative investments.

The Bottom Line

IPOs are often riskier for investors because they involve young, private companies and don’t give investors access to much-needed trading history. But if you play your cards well, you can reap significant returns from investing in IPOs. Just ensure that, before you commit, you have sufficient knowledge of stock market trading.  

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