Monday, August 25, 2008

Learning about the Treasury

When it comes to knowledge, always better to go to the source - as far as the Treasury goes, they have a part of their site dedicated just to this.

and a section for kids.

Clearly they have expended some effort to set this up - very interesting - and straight from the source!

Sunday, August 24, 2008

Government spending is the key to tax costs

There is a very interesting article this weekend in Barron's magazine (subscriber or purchase at newsstand) on tax cuts entitled 'When Is a Tax Cut Really a Tax Hike? Usually' by Gene Epstein which highlights how tax cuts are not really tax cuts if they are accompanied by a rise in inflation-adjusted spending (which is what we currently have) - that spending will have to be recaptured by the government at some point through higher taxes. In other words, although tax cuts at first glance might be popular, the ultimate tax burden might be rising at the same time because of the more fundamental driver: spending. Makes sense - but so important to bear in mind especially with populist tax cuts that can be proposed at a time when the US governments budget situation is poor - and spending is the real item to watch.

Thursday, August 21, 2008

The Trickle-Down Effect

As the housing crisis becomes more pervasive in the US and UK, unfortunately it trickles through a large part of the economy. The banks have taken a big hit in their sub-prime investments, which in some cases have meant significant layoffs and certainly lower compensation. As homeowner equity declines, equity refinancing and desire to spend both decline affecting consumption. For homeowners that have high leverage, in some cases bankruptcy is the only option, meaning that it will take a while for their spending to come back - for those that decide to hang on and try to continue to make the mortgage payments, spending on other things declines. Less house purchases and less moving is bad for home retailers (as is less spending). These are some of the reasons why this might take a while as the overall issue trickles down through other parts of the economy.

Saturday, August 9, 2008

UK: How to Beat the Credit Crunch

We thought you may be interested to know that TaxCafe has just published a brand new tax guide called How to Beat the Credit Crunch, by Toby Hone.

This new guide is packed with practical ideas and tips to help you survive and make money during the Credit Crunch. To learn more click on title of post or use link below.


This unique new guide is packed with practical ideas and tips to help you survive and make money during the Credit Crunch.

Itís essential reading for ALL property investors and landlords.

The advice and strategies contained in this timely publication will help you drastically increase your rental income, slash your expenses and turn your property portfolio into a well-oiled cash generating machine!

The author also reveals his secrets for making lucrative new investments in the current climate.

What Information is Contained in the Guide

The guide contains numerous real-life examples from the authorís extensive experience in buying, selling, renovating, developing and managing a big portfolio of investment properties.

Subjects covered include:

Creative ways to boost your rental income by over 50%.
How to overcome the mortgage drought and find the best deals.
18 practical ways to slash ALL your property expenses.
...some of these tips will save you £100s, others will save you £1,000s!
How to tap into the fastest growing rental market with the highest rental yields.
6 ways you can seriously improve the health of your property portfolio.
How to protect yourself from rising interest rates.
How to improve your credit record and keep it squeaky clean.
The biggest threats to your property portfolio NOW and how to handle them.
Ways to boost your emergency cash reserves and shield yourself from the Credit Crunch.
How to virtually eliminate losses through effective deposit management.
How to avoid giving away up to 32% of your rental income without even knowing it.
Practical ways to eliminate void periods completely.
Ways to rent out problem properties quickly.
The outlook for the UK property market and a comparison with the US mark
The 1990s crash... will it be as bad this time round?
A detailed look at the benefits and drawbacks of selling property now.
How to source property at a 25% discount.
Innovative money-making strategies that work in the current climate.
... including buying below market value properties and
... creating potential goldmines within your portfolio.

About the Author

The Author of How to Beat the Credit Crunch is Toby Hone. Toby Hone is a professional property investor. Over the last 10 years he has built a portfolio of 30 properties worth around £3 million. He is also an active property developer, specializing in sourcing below market value properties, as well as properties requiring refurbishment and also development projects, and adding value to them using various techniques revealed in this book.

Sunday, August 3, 2008

Realistic Expectations

There was a story on Barron's website last Friday by Randall Forsyth entitled 'Finance Has Become The Business of America' which was very interesting and thought provoking. An illustration of this would be that the financial sector as a percentage of the broad stock market indices has been rising over multiple decades. Furthermore, clearly the economy has been moving from a product and manufacturing one to a services (including financial services) one. That is a real risk of course when financial markets turn sour - and it makes a case for making sure that markets are functioning - sometimes at a high cost.

For us as savers and investors, what is important to remember is that saving and investing is a complement to working and making money (and not a replacement) - as ultimately it should provide a means of setting aside money, perhaps and ideally even tax free, and letting it grow. It is not about getting rich quickly in most cases - and taking on too much risk with this short-term goal in mind, as opposed to the facts about saving and investing definitely a bad idea with potentially very bad consequences, as market corrections like the one in housing right now can demonstrate.