For most of us the New Year heralds plans to get fit, eat better and generally be a better human. But have you thought about what you could do to improve your finances in 2020? There are a several simple steps that could make you significantly better off next New Year’s Eve.
Firstly, this is a good time to reassess your investment portfolio. Gauge whether the spread between different asset classes still suits your appetite for risk and the time you intend to be invested. The asset classes you choose to invest in will ultimately determine how your portfolio performs, usually more so than the specific investments you choose.
While you are at it check what fees you are paying; these can greatly reduce long-term returns. You may be able to save thousands by the time you retire by switching to a cheaper investment platform, in which case it would be daft not to do it. When it comes to your household finances, plan to tackle one bill at a time. Millions of people have lapsed from their initial-offer rates onto standard rate for all manner of bills, from electricity and gas to TV services and the gym. Pick one bill each month and cut the cost.
Your mortgage is likely to be your biggest monthly expense so take strides towards paying it off. Plunging interest rates mean now is the time to strike to knock years off your home loan term or save thousands in interest. Find out what interest rate you are currently paying and whether you would pay any charges to switch now.
Then look to see if you could get a lower-rate deal. If you can get a lower rate – which you probably can in the current market – switch, but keep your mortgage repayments the same. Moving from a rate of 4.24% to 1.39% but keeping your repayments the same would allow you to shave seven years off a £150,000 mortgage, saving £8,871 in interest. Finally, keep an eye on your credit-card statements. It’s so easy to sign up for things on trial, then forget to cancel. Check your spending, cancel any subscriptions you no longer use and raise any suspicious activity with your card provider.
Testing Your Business Idea
Just read an article by Jason Cohen, founder of Smart Bear Software, which reminded me of something incredibly important for anyone thinking of launching a business.
Cohen says that many would-be entrepreneurs invest huge amounts of time money and effort into their business idea without doing something very fundamental – they don’t ask people whether they would buy from them. He argues that if you can’t find ten people who say they would buy from you, you don’t have anything. Most would be entrepreneurs simply don’t ask the question before committing to the business they’re scared of getting a negative response.
I think Cohen is right up to a point, but he doesn’t really go far enough. In my experience, it’s not enough to have someone say that they would buy if the product/service was available – you need them to make a real commitment. It’s very easy to tell someone what they want to hear, but less easy when there’s real money at stake.
I can’t pretend this is easy for all businesses, but if you can find some way to get a real financial commitment from your perspective customers, you’ll get a far better idea of the potential of your business idea than by merely asking a question.
Today’s National Day
NATIONAL NO ONE EATS ALONE DAY!
PUBLISHERS NOTICE
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Best Wishes
John Harrison