101 things to do with a Pound Coin!!

Many people who follow me in property know that I am promoting Rick Otton’s strategies for buying property using no bank financing and none of my own money (except a pound)!  I recently bought a house for £1 in London and I thinking back to the mental obstacle that I first had to overcome to do this.

So I set up myself a funny challenge where I have written a list for the current economic crisis, of what you CAN actually do with £1 just to illustrate what is possible if you have an open mind! If you really can’t wait just go straight to number 101… or look at www.1poundhouse.co.uk

I had great fun writing this list and asking people around me for their input. Enjoy It !

To find out how go to  www.1poundhouse.co.uk

Conveyancing and mortgages in 2009

This time last year almost every lunchtime and evening news headline featured another bank or building society struggling with spiraling debts, asking for additional funding from shareholders or the government. The UK’s financial institutions have since cut back on lending and we’ve all seen the consequences in the conveyancing, mortgage and property markets over the last 12 months.With very little or no mortgage lending taking place consumer confidence in the property market collapsed and house prices took a tumble by around an average of 30% in the UK. In the begining interest rates were cut to try and encourage consumer spending and bolster the economy. Then house prices fell; next mortgage products were pulled off the high streets by lenders worried about their lack of funding and losses in the adverse mortgage market. 60 per cent of all UK mortgages disapeared within a matter of weeks.Today you’re unlikely to get a mortgage unless you have a deposit of at least 10 per cent. If your deposit is less than 5 per cent unfortunately you will have a very restricted choice of mortgage lenders and interest rates. With mortgage lenders suddenly tightening their lending criteria, house prices started stalling and then fell by around 20 to 30 per cent over the last 12 months. In the last 3 months, since early August 2009, house prices and mortgage lending has started to increase month on month. Industry experts are indicating that these are the first ‘green shoots’ – signs of a recovery.Conveyancing falls hand in hand with the mortgage and property markets; after all if no-one is buying or selling property there is no need for conveyancing services! Cheap conveyancing quotes are getting easier to find especially with web sites like http://www.cheapconveyancingquotes.co.uk offering FREE online conveyancing quotes from leading UK law firms in just 10 seconds!

Conveyancing Solicitors

In law, conveyancing is the transfer of title of property from one person to another, or the granting of an encumbrance such as a mortgage or a lien.

The term conveyancing may also be used in the context of the movement of bulk commodities or other products such as water, sewerage, electricity, or gas.

A typical conveyancing transaction contains two major landmarks: the exchange of contracts (whereby equitable title passes) and completion (whereby legal title passes). Conveyancing occurs in three stages: before contract, before completion and after completion.

A buyer of real property must ensure that he or she obtains a good and marketable ‘title’ to the land; i.e., that the seller is the owner, has the right to sell the property, and there is no factor which would impede a mortgage or re-sale.

A system of conveyancing is usually designed to ensure that the buyer secures title to the land together with all the rights that run with the land, and is notified of any restrictions in advance of purchase. In most mature jurisdictions, conveyancing is facilitated by a system of land registration which is designed to encourage reliance on public records and assure purchasers of land that they are taking good title.

In England and Wales, this is usually done by a conveyancing solicitors or a licensed conveyancer. Either may employ or supervise an unqualified conveyancer. The domestic conveyancing market is price competitive, with a high number of firms of solicitors and conveyancing companies offering a similar service. It is possible for someone to carry out their own conveyancing.

Under English and Welsh law agreements are not legally binding until contracts are exchanged. This affords both the advantage of freedom before contract, but also the disadvantage of wasted time and expense in the event the deal is not done.

The normal practice is for the buyer to negotiate an agreed price with the seller then organise a survey and have the solicitor (or conveyancer) carry out their searches and pre-contract enquiries. The seller’s solicitor or conveyancer will prepare the draft contract to be approved by the buyer’s solicitor. The seller’s solicitor will also collect and prepare property information to be provided to the buyer’s solicitors, in line with the Law Society’s National Protocol for domestic conveyancing.

It takes on average 10–12 weeks to complete a conveyancing transaction, but some transactions are quicker, many take longer. The timescale is determined by a host of factors – legal, personal, social and financial. During this period prior to exchange of contracts (exchange being the point at which the transaction becomes legally-binding) either party can pull out of the transaction at any time and for any reason, with no legal obligation to the other. This gives rise to a risk of gazumping and its converse, gazundering.

The position in Scotland under Scots law is that the contract is generally concluded at a much earlier stage, and the initial offer, once accepted by the seller, is legally binding. This results in a system of conveyancing where buyers get their survey done before making a bid through their solicitor to the seller’s solicitor. If there is competing interest for a property, sellers will normally set a closing date for the initial offers. The contract is normally formed by letters between the solicitors on behalf of each of the seller and purchaser, called missives. Once all the terms of the contract are agreed, the missives are said to be concluded, and there is then a binding contract for the sale of the property. Normally the contract is conditional upon matters such as the sellers being able, before completion of the transaction, to prove that they have good title to the property and to exhibit clear searches from the property registers and the local authority. The fact that there is a binding contract at a relatively early stage, compared with the normal practice in England and Wales, makes the problem of gazumping a rarity. The disadvantage for the buyer is that they usually have to bear the cost of the survey for unsuccessful bids, though trials have been made of a system where the seller arranges for one survey available to all bidders. From 1 December 2008 properties for sale will have to be marketed with information, now branded as the ‘Home Report’. This is a pack of three documents: a Single Survey, an Energy Report and a Property Questionnaire. The Home Report will be made available on request to prospective buyers of the home. The date of final settlement (the “completion date” in England) is in Scotland known as the “date of entry”.

HayatandCo offers fast and cost-effective service in all types of Conveyancing matters. Whether you are buying or selling property, we can help in making your purchase or sale as smooth and as stress-free as possible.

 Source: Wikipedia                                                                                   

 

Best Way to Stop Repossession and Achieve Financial Freedom!

The global meltdown has adversely impacted the UK economy and people are now facing the aftermath in the form of troubled finances, mounting debts and job loss resulting into home repossessions. The instances of house repossession are increasing day by day as more and more people are not able to keep up with their mortgage payments. People are desperately looking for ways to stop repossession. If you are in arrears of your monthly mortgage payments your lender can take action to reclaim the property through home repossession. You should try to stop repossession at all costs as it can have an adverse effect on your social status and quality of life.  Why you should stop repossession?House repossession is not a solution to get rid of your mortgage loans. If your house gets repossessed by the lender, it does not mean that you are free from all the debt. If you lender sells your house at a price lower than your outstanding loan, they will still chase you for the differential amount of money. Moreover, your credit rating will be spoiled which will make it difficult for you to get credit loans in future. Plus, if someone has the right to sell your house, it is only you! So stop repossession by taking action at the right time. How to Stop Repossession?The best way to stop repossession is to sell your property before it gets repossessed by the lender. When you sell your property quickly, you can pay off your loans and save yourself from the dreaded experience of repossession. Now the question arises that how to sell your house fast to stop repossession? Selling property fast is not easy if you choose to go for the conventional methods of selling through estate agents. Estate agents can take many months time to sell your property. Plus, there is no guarantee of sale as buyers sometimes back out from the deal.   If you need to stop repossession it is best to avoid selling property through estate agents. You should consider the smart way of selling your property through cash buyers. Cash Buyers are property investors who can help you stop repossession by buying your house directly from you. A reputed quick buying company consists of a network of reliable cash buyers who can help you stop repossession with their efficient and steadfast solutions. A quick buying company not only helps you stop repossession but also provide you expert guidance and advice on every aspect of home repossession. Whether you have missed a couple of mortgage payments or you have received a court’s hearing date or you have received an eviction order, a quick buying company can stop repossession no matter which stage you have reached.  A reputed quick buying company will help you stop repossession without charging any fees or commissions. They also manage the legal side of the deal covering the legal fees and paperwork. In fact, they will also pay for your solicitor’s fees. Do not stress yourself pondering on how to stop repossession. Just contact cash buyers to stop repossession today.

Buying Gas Fires, Electric Fires and Woodburning Stoves in the UK

Once upon a time, an open fire was as much a necessity as a treat, providing not only easy access down the chimney for Santa on his yearly visit, but much-needed warmth to a chilly home too. The fireplace has transcended its oringinal purely functional role as a heat provider to reach its present position as the focal point in many interior design projects. With innovative and regular features in lifestyle TV programmes and magazines, the fireplace has become an aspirational furniture purchase designed to enhance any home. There´s a whole host of sexyfires and stoves to choose from, but the kind offlue you have will determine the type of appliance you can install. Many homes don´t have aflue so first find out whether you have one. If so, what type of flue is it, and is it clean and sturdy? It needs to be in a good state of repair to allow fumes to escape safely. A traditional chimney, or Class 1 flue as it´s known (usually found in pre-Sixties houses), gives the most heating options.

A Class 2 Pre-Fabricated Flue is a metal flue box that is situated behind the fire connecting to a series of metal flue pipes running up through the house terminating with a pipe and terminal through the roof.

Class 2 Pre-Cast Flue are commonly found in more modern homes. Constructed using hollow concrete flue blocks which create a flue up through the property usually terminating with a ridge vent on the roof.

If you don´t have a chimney, don´t worry! You can still create that much needed focal point with a balanced flue, powerflue, flueless or electric fire. How much heat? Thankfully, the majority of modern homes are now blessed with a sufficient central heating system to ward off that winter chill and, as a result, many modern fires are designed to be more decorative than to pump out huge waves of warmth. Even so, the cosy glow of real flames ensures that any form of fire instantly becomes a focal point, not to mention a real selling point.

Solid-Fuel FiresNothing beats crackling logs or glowing coals on a cold winter night, but if you live in a smoke-controlled area, you´ll need to use smokeless fuel and be prepared to clean the grate between fires. Also think about the practicalities, ie: where are you going to buy seasoned wood or smokeless fuel, and how will you store it? If wood or coal is your fuel of choice, you could also opt for a stove. A Class 1 flue is a necessity for solid fuel fires.

Gas FiresGas fires can be fitted into most existing fireplaces, while a new hole-in-the-wall style fireplace can give a really modern look. Moving a fire up off the floor creates a contemporary style statement and can work well in a period property. There are gas fires available forall kinds of flues. Remember, too, that all gas fires should be fitted by a CORGI-registered installer.

Electric FiresElectric fires have really moved on in recent years. They are now great value for money and have all the benefits of a decorative gas fire. They´re also a great way to incorporate a fire into a room without a flue and are really easy to install. A world away from old-fashioned bar models, modern electric fires look good, but heat output can be limited.

Flueless FiresA relatively recent innovation, flueless fires don´t require a chimney as they use a catalytic converter to remove fumes. Flueless fires are an expanding market. The great thing is that none of the heat is lost up a chimney, so they´re 100 per cent energy efficient, and they only use 25 per cent of the gas consumed by other decorative models. Flueless fires require a minimum room size and additional ventilation into the room.

StovesOnce the preserve of country cottages, stoves are appearing in modern homes, thanks to new, sleek, contemporary designs. Most use wood, a renewable source of energy and an eco-friendly option, but some models can also be fuelled by coal, gas or even electricity. There´s a trend towards woodburning stoves, the European, rustic feel is becoming really popular. In terms of the size and output of your stove, choose one slightly more powerful that you think you´ll need, in case of a cold snap. But don´t assume that bigger is always better. You shouldn´t under-run a stove as this can cause problems, such as creating creosote and tar in the flue, which are highly flammable. As with other fires, get your flue checked to see whether it´s the right size and in good condition. If it isn´t, you can get a liner fitted. An appliance is only as good as the flue it´s connected to.Modern stoves needn´t be in an inglenook. They can be freestanding, sit proud from a wall or even hang from the ceiling. If you do have a large alcove, don´t automatically buy a huge stove to fill it. The size of the appliance should be dictated by the size of the room, not the hole it fits into. If the stove sits on a surface, that needs to be non-combustible and at least 5cm thick.

FireplacesSelect your surround Marble, limestone or cast iron; wall-mounted, traditional or contemporary – the fireplace you choose is very much down to personal taste, but do take into consideration the style and period of your home when making your decision. Scale and proportion are everything, make sure you go for a surround that sits well in the room, to ensure your scheme doesn´t feel unbalanced. Luxury materials are becoming key in fireplaces design. Now stainless steel and aluminium are the norm, designers are using surfaces such as mirror, bronze and stone, and finish is all-important, too. It´s like investing in the best-quality tailoring, but for your fireplace!

Day Trading On-Line in the UK

How big is your tolerance for risk? Normally the more risk you are willing to take, the higher the returns (and sometimes losses) you will potentially receive.

If you have nerves of steel, then Day Trading Online in the UK is probably for you.

If you know the slightest thing about the English economy, then you will know that England has maintained a strong, stable currency for centuries, even through wars and times of economic distress.

It is one of the strongest currencies in the world, but the whole economy is not as powerful. It fluctuates up and down, along with trends in privately and publicly-owned companies. England’s economy has experienced some very high points, but has also experienced some low points as well.

Unlike investing in property, where as landlords you can have some modicum of control over the performance of your investments, with stocks and shares you are totally a the whim of other people’s trust and performance.

No matter where you live, you must carefully consider your options before you try to earn a return on your investment; and England is no exception to that rule. But some people in the UK still like to take a risk with their money and one of these risks is day trading online.

Day trading online involves the process of buying and selling shares over the Internet at short notice. Day trading online has been seen by many as a way to get rich quick, but that isn’t the half of it. Statistics show that online day traders are having a rough ride, with 70% of online day traders losing money. So if you are looking at getting into the world of online day trading, then you should know the risks that are attached to the service.

But when you are in the world of online day trading then you will get some excellent services given to you. One of these services is a chat room, where you can talk to other buyers and sellers. This is a good way to find out what the next big time company might be, but you have to know if this person is “share ramping,” which is the process of talking up the shares artificially. So you have to take the risk of guessing if this person is correct or not and if the information hasn’t been authorized.

As with many things in this complex and sometimes unruly world we live in, if you are going to trust your money in some other person’s hands, please, please make sure that the person you are wishing to deal with is not only suitably qualified, but also has made their own fortune from following their own advice. I know this is difficult sometimes , with all the restrictions on ‘Insider Trading’ (and quiet rightly so) , but if a person plays the game according to the rules, and wins, then those rules if applied to you should give you a better confidence in a successful outcome.

The other thing is, too, is to start with small investments, and see if they are successful. If possible, try and trade such that your stake money is pulled out as soon as you can after a few investments, so that you are then using ‘other people’s’ money to trade with.

These days, online trading websites are somewhat risky and can be dangerous. But if you can adopt a professional attitude when it comes to buying and selling shares, then you will know all about the risks and you can make yourself a tidy profit. Day trading online should not be used by beginners, but more used by people that are heavily experienced in the stock market world.

How DIY Work Can Improve the Look and Value of Your Property and Why Safety is So Important

In our current harsh economic times, many people are turning shy of selling in the property market – leaving potential buyers without potential homes to buy. Therefore, many of these potential buyers are turning their interests to using their previously redundant DIY skills to improve and renovate their current homes; A simple ‘lick of paint’ can easily (to use a cliché) “make a house, a home”. Not only are these proactive DIY-ers improving the aesthetics of their homes, but they are also maximizing their home’s value for when they do eventually sell when the market picks up again.

Many ‘weekend projects’ can satisfy this lust for decorative desire; whether it’s painting the spare room, creating something marvelously creative from a sheet of MDF or even just a assembling a flat-pack wardrobe bought from the nearest department store. Progressing from those small beginnings, the larger projects are the one that change a house’s value. In fact, According to a recent article published in the UK newspaper ‘The Independent‘, serious value can be added from the introduction of a conservatory. It stated: “A ten per cent increase in round floor space adds an average of five per cent to value or seven per cent if the home is detached.” So, If your house is currently worth around £200,000 (approx. $325,000) – the addition of a conservatory could mean that your house is worth as much as £30,000 ($48,000) extra than without. An excellent return when considering that on average, conservatories cost around £5,000 ($8,000) when bought from a specialist building company. Other projects could include adding double glazing to your property if it doesn’t already have it; Double glazed windows can improve your home’s security and decrease heating bills. Alternatively, adding an extension to your property can offer benefits of both increased living space and property value.

Whilst all these home improvements entice excitement among any homeowner, it’s important to remember some of the practicalities of these projects. Many people can often find themselves over-budget and left with an unsightly DIY disaster that they cannot afford to remove or carry on with. Therefore, it’s always a good idea before a major project to have a clear path to follow set out by clear schedules and designs. Such planning offers the ability to ‘take check’ of a project and make sure that dates are being adhered to.

Health and safety should always be a forefront issue to be remembered whilst planning a project; According to figures released by RoSPA (The Royal Society for the Prevention of Accidents) in 2005, accidents from tools and machinery caused 87,000 people to be injured out of the 220,000 people whom took part in home improvement themselves. Such high numbers means that caution MUST be taken. When taking on projects, it’s always important to remember your own DIY skills, and limitations of those skills; You should never ‘bite off more than you can chew’ remembering that sometimes, jobs need to be left to professionals. One key example of this need to outsource work to local experts, is when you may need access to high areas of your property. From the aforementioned 2005 RoSPA statistics, Ladder accidents send 41,000 people to hospital annually, often resulting in some of the most serious injuries and even death when people fall from high heights – Such a lingering thought makes one wonder the true value of some of the more ‘risky’ DIY projects.

A much safer way to access such a high places is to enlist the services of a cherry picker – similar to the vehicles that engineers from telephone companies use to access telegraph poles. Cherry pickers allow access to heights as high as 10 meters (much more than conventional ladders) and offer a safe platform in which to carry out work and rest tools upon.

So it’s important to remember that a DIY project can bring exponential value to your property and improve your quality of life whilst living in there. Despite these impressive points, it’s also important to remember that caution must be followed whilst carrying out DIY projects and care must be ensured whilst dealing with any potentially dangerous situations or pieces of equipment.

Overseas Property Fractional Ownership from €20,000 with International Hot Property

 

 

With the worldwide second home and holiday home market in total crisis could the advent of Fractional Ownership save the day for international property developers and overseas property buyers alike?

 

So what is Fractional Ownership and how can it help? Very simply the concept is that of shared ownership without the drawbacks of Timeshare.  The first question you need to ask yourself is do why should I buy a property overseas when I only use it for  normally a maximum of 4 weeks a year.  Wouldn’t it be good to get together with a group of like minded individuals and share the cost of the purchase and he cost of the upkeep of the property. This is where Fractional Ownership comes in and unlike Timeshare the owners own an equal share of the company that owns the property unlike Timeshare where in most cases it is worthless after you have bought it well that is the view of Simon Jones, market analyst at http://www.internationalhotproperty.co.uk/. 

 

“Things are a changing for the holiday property market and once the UK public can get over the not wanting to share their house with anyone train of thought then Fractional Ownership is very logical indeed especially in Holiday Resort type of properties.  Fractional Ownership is normally split into shares of 4 up to a maximum of 12 equal shares giving an owner between 1 and 3 months usage of the property. However the great thing about this is we currently have Fractional Ownership product in the Canary Islands and Greece starting from as little as €20,000 which actually makes it cheaper than most Timeshare resort but with an asset that you can actually sell at a later date.  Fractional Ownership makes a lot of sense and could very well transform the second home and holiday home International property market” explained Simon.

 

 

Property investors wishing to find out more about Overseas Fractional Ownership should contact International Hot Property by email or phone.

How Do You Sell Options To Generate Amazing Returns?

In this article we will look at how to effectively implement this strategy to increase your wealth. But before we do it’s important to recognize that this strategy offers you the benefit of cash returns and easy access to your capital. Why are these things so important?
Cash returns:
Let’s look at cash returns first. The best way is probably to use a comparison to another investment alternative such as property. Too many investments don’t offer you good cash returns (only good capital returns), but your ability to generate cash is essential to achieving the freedom you need to pursue attractive wealth creation opportunities. In the UK at the moment the average rental property will generate approximately 5% return. Let’s say you need $50,000 to live each year and you have managed to accumulate $100,000 in savings.
If you decide to buy a $200,000 property and you invest your $100,000 and borrow the balance at 5% you would generate a positive $5,000 net cash return every year (assuming no other property related costs such as management fees, repairs, etc). In essence you’d have to by 10 properties to generate the $50,000 annual cash you’d need to survive. That could take a long time and in the mean time you’re spending your productive hours working for someone else to earn a paycheck to live off…and missing loads of opportunities. I love property as an investment and own numerous rental properties but it is not a great method of generating cash flow…well not without a great deal of work!
Selling options on the other hand can pay you a cash flow in the terms of a premium every month or two. It’s a regular cash flow that you can use to help you quit your job and spend your time building your own wealth rather than your employers. Using effective options strategies that generate between 30% and 50% returns per year would earn you $30,000 to $50,000 per year off your $100,000 savings in a regular monthly income. This would give you incredible freedom and independence to spend your productive hours working for you not an employer. This is the importance of cash flow.
Access to capital:
The second key thing to remember is that options allow you quick access to your cash. Property in contrast takes many months and large costs to realize your cash investment. Your option investments require you to place initial margin with your broker to cover the risk of potential losses, but since your options expire every month or two you receive your initial margin cash back each time. Also it is really easy to buy or sell your options back at anytime at a very small cost (commission) to gain immediate access to your cash if you need it. This is often one of the main benefits cited by Wall Street to investing in stocks.
So now that you know two crucial reasons why options are vital to your wealth creation arsenal it is time to examine option selling strategies…
Option selling:
I like to use an example as a way of illustrating the strategy of selling options as a means to generate brilliant returns. I’ll assume you are familiar with selling calls and puts and that you know your returns are limited to the option premium you receive and that your losses are theoretically unlimited. Though I will elaborate on what this really means as we work through the example.
On the 28th March 2008 gold was trading at $932 an ounce. The June 1 $700 put was bid $0.90 which means that each option is trading at $90 (i.e. 100*$0.90). Now at this stage it helps to actually have a view on the instrument you are trading. In the case of gold I have been extremely bullish for a long time due to a number of factors including the high U.S. inflation rate, collapsing U.S. dollar, poor current account, falling interest rates, huge government and private sector debt etc which all indicates that investors will move their money to a “safe” investment…gold! Now the point here is that I don’t know when gold will rally nor do I know that it will rally really at all…what I’m confident on is that it won’t fall very far. This means I can sell put options confident that fundamentals mean that the price of gold should not fall from current levels…and even if it does it’s not going to fall to $700 an ounce by 1st June.
Each gold option is worth $93,320 (i.e. $932*100) so selling one option and earning $90 in two months might not sound like much but we need to look at it from a few different angles. A $90 return over two months on $93,320 is an annual 0.6% return which quite frankly is rubbish, but this is not the way to really look at this investment. The notional (face value) of the option really doesn’t matter. Why? Well because that is not what you are paying for the option. You are not really buying $93,320 worth of gold (or even $70,000 worth at the strike price), but rather a way out-of-the-money put which requires you to only pay a small initial margin.
The initial margin on one gold $700 option is about $900 which means that over a two month period I would be able to generate a $90 return on a $900 investment. Viewed this way my return would be 60% per year (i.e. 10% every 2 months)! Now that’s an amazing return…so does this mean I should rush out and sell 100 puts and generate a $9,000 cash flow over the next two months? Well not unless you were worth millions I wouldn’t recommend it. Why? Because the unforeseen can happen. Selling 100 $700 put options means that for every dollar the price of gold falls below $700 you would lose $10,000 (i.e. 100 options * $100). So if the price fell to $650 you would lose $500,000. Ouch. So what do you do?
You strike a balance. You never expose yourself beyond what your can afford to lose in an individual trade and you manage your risks via stops. Taking the $100,000 cash worth example what would happen if you sold 5 options. Well you could earn $450 in two months (i.e.5*$90) equating to $2,700 per year in income. Your initial margin to the broker would be $4,500 (i.e. 5*$90) still giving you a 60% annual return. Your risk is now $500 per dollar below $700, which is a fully manageable exposure on your $100,000 capital given the extremely unlikely possibility of gold falling that far.
The second way of managing your exposure is through stops and the KISS method is always the best method. Easy to understand and easy to implement. The two best methods I know of are:
1. to stop out when your option doubles in value against you (or triples for the more adventurous). This method is simple and effective for the more risk adverse investor. I’ve found that it’s not always the best when you are selling way out of the money options as you can be stopped out but still never really be at risk of your options being exercised, thus forcing you to take losses unnecessarily. But it is the safest route.
2. to stop out when the price of the underlying reaches your strike price. In our example your stop would be at $700. The problem with this method is that your losses would be much higher than the first method but obviously the likelihood of your stop being breached are much lower.
The strategy I usually use is to find many of these attractive deals and never expose myself too much to one trade (a lesson I’ve learned the hard way!), which will ensure you will sleep peacefully at night…just as I do! So if you take the above scenario how many trades should you place at any one time? Well you need to find a balance between putting your capital to work (i.e. your $100,00) which is used it as initial margin on trades and saving enough of it such that you can meet margin calls if positions go against you in the short term, so you are not forced to close positions or make margin calls. Again applying the KISS method is easiest and the simplest way is to put no more than 50% of your capital as margin at any one point in time. Any more than this could lead to unnecessary stress of margin calls if positions go wrong and means your positions are too large.
Taking our gold example and replicating it to other trades we could place $50,000 as initial margin which would generate a $30,000 annual return ($90*$50,000/$900*6) or a 30% annual return. I now enjoy a fantastic regular income on my cash capital through options investments and non-stressfully earn a comfortable 30% to 50% annual return on my cash capital.
The final word on gold…
Was I right about the price direction of gold? Yes and no. The price of gold (at the time of writing) has actually fallen to $882 (it has been as low as $850) so my expectation that gold would rally from $932 proved slightly wrong (or at least premature!), but was i really wrong? Well the price of my options have fallen over the past month and a half from the $0.90 I sold them to be worth virtually nothing. So even though the price of gold has actually fallen I’ve made money…wrong and still right! Options are truly an effective wealth tool.

Housing Market in the UK

Other countries are faring no better, the once booming Australian market is now suffering very serious problems, in some areas all that is keeping the market going is people fleeing from other country’s, mainly the UK, to Australia, and buying a house.

 

Nearer to home the Spanish housing decline has been far more gradual, over priced ruins and low quality apartments were selling at rates that were clearly much higher than the local Spanish markets could stand. Now with Brit’s and Germans abandoning the Spanish property market it has ground to a halt, selling Spanish property in any tourist orientated area of Spain is now a near impossibility.

 

All of this will not necessarily make UK home owners feel any better, knowing that Americans are suffering in the same way doesn’t mean that one families personal crisis is any easier to deal with. The UK is a little unique though, it has a strange history of an economy that seems to revolve around the cost of a semi in Wolverhampton.

 

This is not the first time that the UK housing market has ridden a huge wave of crazy property values that rise faster than peoples incomes can dream of catching. It is just history repeating its self it happened in the 70’s and even more dramatically at the end of the 80’s when the massive housing boom came to an absolute halt on Black Friday.

 

It took well over ten years to recover from that crash only to immediately take off again and boom out of control from the end of the nineties until the US “credit crunch” sent mortgage lenders running for cover sparking yet another brick wall for house sales in the UK.

 

This time it feels even worse than before, construction jobs have all but disappeared with builders heading for the dole rather than to huge Barratt construction sites. The knock on effects seem to be enormous, Northern Rock now doesn’t seem so bad as even bigger companies such as The Bank of Scotland face huge problems brought on by mortgage difficulties and a predicted downturn in the economy that will be the worst since the war.

 

There seems little chance of any kind of improvement in the housing crisis any time soon, the prices will remain lower for years to come, but as with previous downturns its not the price a of a home it is a matter of can it be sold at any price when lenders only want to give money to Doctors and Judges and other “solid” prospects that will not have problems as the crisis gets worse. Rather than selling seems most people may be turning to alteration services.