Saturday, 4 February 2012

Britons rush for Australian visas

The threat of changes to the Australian visa application process has led to a surge in applications by Britons to move Down Under, according to a migration agency

A view of Sydney bridge and opera house
Changes to Australia's visa system could make it harder to obtain permanent residency Photo: Peter Scholey / Alamy
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6:02PM GMT 24 Jan 2012
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VisaFirst.com is using Australia Day (January 26) to launch a campaign raising awareness of the changes, urging prospective migrants to act now or risk missing out.
The latest changes, which come into effect on July 1 this year, are set to lengthen the application process and make it harder to obtain permanent residence.
Nearly 24,000 UK citizens were granted permanent resident visas for Australia in 2011, despite a toughening of the “points system” in July of that year. The prospect of further changes has already sparked a rise in applications from would-be emigrants, claims VisaFirst.com, which registered a three-fold increase in applications in January alone.
“Currently, if you meet the points requirement you can lodge your visa application,” said Edwina Shanahan, director of the company. “After July 1, applicants will have to achieve the pass mark and will then be entered into a skills pool. Australian immigration authorities will then decide which applications they want to invite for further processing from the pool. Applicants can languish here for up to two years, with no guarantee of ever receiving an invitation to apply.”
She urged would-be migrants to act quickly even if they do not plan to move soon, adding: “Once the visa is granted, applicants have a five-year window to relocate, so it's worth submitting the application now, even if you're not planning the move just yet.”
Under the new system, applicants over 32 years of age or with limited work experience are most at risk of disappointment, due to scoring less points, but families in the "middle road" category shouldn't be complacent, warned Shanahan. “The immigration process is going to be a lot more selective, based on those who score the highest number of points. The Australian government will also be setting quotas on the number of skilled workers from each sector – carpenters, for example – in the pool at any one time,” she said.
Skills in demand vary from state to state, but nursing, engineering, trades and construction are among the most sought-after.
For would-be emigrants, Australia offers a better quality of life and higher living standards but the cost of housing in the major cities can be high, while the strength of the Australian dollar against the pound sterling affects the spending power of migrants who rely on sterling income or savings.



http://www.telegraph.co.uk/finance/personalfinance/offshorefinance/9036643/Britons-rush-for-Australian-visas.html
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The Most Hated Company on Earth Is Making Investors Rich


I can't think of a stock that's more hated.

I've written about this company several times before. I've personally owned it for years. But just about every time I mention it, I end up receiving nasty emails admonishing the fact that I would cover... let alone recommend... investors own shares of this company.

In fact, it happens so often that I instruct our staff to put in a mention that this investment isn't for everyone whenever they cover it. If you don't want to invest in this stock, I can certainly understand. But if you have an open mind toward this black sheep, you're likely to appreciate what it can do for you.

Simply take a look at its performance so far in 2011...

In a year marked by credit downgrades, the European debt crisis, and stagnating growth, the most hated company on the planet -- Philip Morris International (NYSE: PM) -- is still making investors rich. And that comes when the broader market has been a roller coaster ride.

In fact, Philip Morris stock is within pennies of its 52-week high hit earlier this month.
Unfortunately, I've noticed that more and more investors seem to be tricked into thinking investing has to be complicated. But stocks like Philip Morris prove that making money doesn't have to be hard.

Philip Morris doesn't have a complicated business model. It is simply one of the most dominant and shareholder-friendly companies on the planet. The company does business in 180 countries and owns 7 of the world's top 15 global brands in its market. 

But it has also made a mission of rewarding its shareholders. In the last three years alone, it has returned more than $12 billion in dividends while increasing the payments per share by 43%. Today, the shares pay a yield of more than 4%.
Then there are the buybacks. Since May 2008 the company has repurchased more than $20 billion in stock -- or nearly 20% of the outstanding shares.

All of these moves simply make the stock more valuable, even if earnings don't rise a cent. And as you can see, that's showing up in the share price as well.

I must admit, I'm a bit biased though. I personally own Philip Morris and also selected it as one of my 10 Best Stocks to Hold Forever.

Of course, with investing there's never a surefire thing. There's no quality a company can possess that will guarantee its success.

But when you can find companies like Philip Morris that dominate their market and are returning billions to investors, these are the sort of stocks that can still deliver strong returns in nearly any market -- including this one.

http://globaldividends.com/newsletter.asp?d=5797&utm_source=outbrain&utm_medium=referral&utm_campaign=do-ob-1011
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Meet the Isa millionaires



Dozens of people have created huge pots of money by the simple act of investing in individual savings accounts.


Ivan McKay with his cattle herd
Image 1 of 2
Ivan McKay has managed to accrue an Isa pot of £1.6m  


7:00AM GMT 04 Feb 2012
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Ignore your tax-free Isa allowance at your peril – you could be missing out on a million-pound fortune. Savers who have religiously salted away their full annual Pep and Isa allowance over the past 25 years have amassed a tidy fortune; there are dozens of Isa millionaires across the country.
Brewin Dolphin, the private client investment manager, boasts nine Isa millionaires among its clients. Their investments have a combined value of £15.5m, with the highest having a combined Pep and Isa pot of £4.4m.
Charlotte Black of Brewin Dolphin said its Isa millionaires invested in individual shares, rather than funds – with many stocks at the smaller end of the FTSE scale.
Ms Black admitted that many of the shares that had made sizeable gains would have been off the average investor's radar – and too risky. But she added that everyone with spare cash should maximise their Isa allowance, which this tax year is £10,680.
"Isas and Peps [personal equity plans, Isas' predecessors] have been such a valuable savings medium over the past 25 years and we advise clients never to miss a chance to use them, either alone or as a tax-free zone within their portfolio. Our millionaires have each adopted a more risky investment strategy and it is exciting to see how that has paid off for some."

So just how easy is it to become an Isa millionaire?

It may sound a long shot but Killik & Co, the stockbroker, which has around 16 Isa millionaires among its clients, reckons that modest growth of 5pc a year and the small matter of a 25-year horizon will do the trick for a couple pooling their Isa allowances. "Assuming a 5pc rate of growth a year, this could be worth £1.074m, or £1.686m assuming 8pc growth," said a spokesman.
John Cotter of Barclays Stockbrokers (which also has 16 millionaires) said: "Some have achieved Isa millionaire status by having a lot of eggs in just a few baskets – a risky strategy. Some have backed their judgment in one or two companies and their strategies have paid off; again, risky. They have also recognised the importance of reinvestment of the dividends."

The savvy investors

Not surprisingly, few Isa millionaires want to put their head above the parapet and, like many National Lottery winners, they shun publicity. But fortunately there are a couple of savvy investors who are happy to share their Isa joy.
One such couple, John Housden and his wife, Judith, from Kent, have accrued a combined pot of £1.3m having invested around £190,000 each since the first year of Peps in 1988. It pays them a handsome income of £57,000 a year. Mr Housden kicked off his portfolio with £3,000 worth of Midland Bank shares. He has added to his holding in the company (which was taken over by HSBC in 1992) since and his stake is worth around £40,000 today.
It has not all been plain sailing for the Housdens. Among the winners there have been some losers – notably, he says, Woolworths, Yell and Jarvis. But he rates his decision to buy Rolls-Royce shares as, perhaps, his smartest move. Mr Housden, who does his own research, bought £3,500 of the shares when they were worth 147p – they are now priced at 738p.
A top tip for all would-be Isa millionaires is to be patient, even when you are gripped by fear as share prices plummet amid rumours of stock market Armageddon.
"As a rule I don't worry about fluctuations in capital value as I tend to think of the Isas as a source of retirement income," said Mr Housden. "Just as well really, because the value now (£1.34m) is much the same as in June 2007, although in March 2009 it had fallen to just £760,000."
Ivan McKay, a sheep farmer and Daily Telegraph reader from Northern Ireland, has amassed a Pep and Isa pot worth £1.6m. He uses two brokers, Barclays Stockbrokers and Walker Crips Weddle Beck. Mr McKay said he had never forgotten the advice his local accountant gave him when he was about to invest in his first Pep. "He said to me, 'be your own man'.
"If I read a paper with a star-studded share panel, I won't follow their tip if I think the price is high," said Mr McKay. "I have often been proved right."
Mr McKay said he had had two "outstanding" buys and his top secret to investors was "to take profits" along the way.
For example, he bought Babcock International when its share price was just 53p but has taken profits as it continued its climb (it is now priced at 740p). He also bought Scottish & Southern Energy in 1989 at 240p (the shares now stand at £12.35) and this year it is paying a dividend of 80p – that's a return of 33pc in itself, he says proudly.
Mr McKay added: "I'm a livestock farmer so I work long 16-hour days when the weather is dry, but can catch up on my reading about shares when it's been raining – and it has been raining a lot recently."
His most recent purchase is XP Power, the power components company, which he bought at 925p, having watched its price slide from a high of £19 since the start of the year. The price has since ticked up to 983p.
"My school never put me forward for exams so I went back to the plough when I left. But I always believed I was as clever as those who went on to university," Mr McKay said.
Another Isa millionaire is a 71-year-old reader from the Midlands who wished to remain anonymous. The former stockbroker, who uses Redmayne Bentley, said he followed the cliched mantra of "run with your profits and cut your losses". He is also not afraid to go "liquid" if he feels the market is a little choppy. He has done this only twice, before the dotcom bust of the late Nineties and just before the credit crunch got into full swing in 2008.
"You should only ever sell a share when it is overvalued, not because it has gone up by 100pc," he said.
One of his oldest holdings remains in his portfolio today. The company, FW Thorpe, a family-run business that provides lighting to the public sector, has seen its share price rise from around 100p in 2000 to 837p today. "It's a fascinating company that has always had a Thorpe at the helm," he said.
And his latest purchase? "This week I have bought Imperial Tobacco for the first time. It looks undervalued to me, has an attractive yield and is unlikely to go bust."

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Family finances will not improve until 2020 in UK

Family finances will not improve until 2020

Low to middle income earners will not see their disposable income approach pre-recession levels until 2020 at best, a report from think-tank the Resolution Foundation has warned.

A broken union jack piggy bank
Family finances won't improve until 2020 Photo: PA
8:49AM GMT 23 Jan 2012

The Squeezed Britain study said households in this bracket, which typically bring in just over £20,000 in take-home pay a year, are also facing a 22-year wait to save up enough cash to buy their first home.
The report exposed the "daily struggle" of these families, which account for 5.8 million households and nearly one third of working age homes in Britain. It suggested that incomes for this group will decline before flattening out around 2016-17.
If this is followed by strong growth, it will take until 2020 for low to middle income households to return to the levels of disposable income they had before the recession, but if growth is stagnant real incomes could be 8% lower than in 2007.
Under both scenarios, the gap between low and middle income earners and those on higher incomes will widen, the report warned.
The study also charted the "disappearing" property ladder for these households, who typically took four years to save for a first-time buyer deposit in 1991.
By 2001 this group took eight years to raise a deposit and by 2011 this wait had more than doubled to 22 years, with those aged under 35 facing being stuck in rented accommodation, perhaps forever.
Researchers put the sharp rise down to house price rises as well as bigger deposits as a percentage of house prices needing to be raised, while wages remain flat.
They based their calculations on a deposit of around 20% currently being needed to purchase a first-time buyer house, typically costing just over £124,500.
Low and middle income earners saving around 5% of their annual wages, amounting to just over £1,000 a year in savings before interest, would take 22 years to raise a deposit of just under £25,000.


http://www.telegraph.co.uk/finance/personalfinance/consumertips/9032130/Family-finances-will-not-improve-until-2020.html
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Chinese save four times as much as Britons


The average household in China has four times more savings than the average household in the UK, new research shows.


Chinese save four times as much as Britons
Currently, Britons save around 7 per cent of their disposable income. This compares with 47 per cent in China Photo: ALAMY
James Hall
By , Consumer Affairs Editor
7:00AM GMT 03 Feb 2012
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According to Lloyds TSB, the typical British household has £5,000 in savings and investments. This compares to over £19,000 in China.
German households, meanwhile, have average savings of almost £9,000.
The bank said that the “remarkable” findings reflect the fact that there is no “social safety net” in China, such as state pensions and benefits, meaning that families must provide for themselves financially.
Lloyds TSB also said that the so-called savings ratio in the UK – that is a person’s savings as a proportion of their disposable income – has been falling over the last decade.
Currently, Britons save around 7 per cent of their disposable income. This compares with 47 per cent in China.
Greg Coughlan, head of savings at Lloyds TSB, said: “Despite significantly higher income levels, today’s British and German households are both being roundly beaten in the savings stakes by urban Chinese households.”
Dr Karl Gerth, author of As China Goes, So Goes the World: How Chinese Consumers are Transforming Everything and a lecturer in modern Chinese history at Merton College, Oxford, said that Chinese people save out of necessity because they have to pay for healthcare, education, housing and their retirement.
“It has nothing to do with ancient Confucian wisdom and all to do with contemporary realities,” said Dr Gerth.
He said that savings levels among young Chinese people are far lower than among their parents’ generation.
“In China, young people are learning to spend,” he said.
Lloyds TSB’s findings were based on over 3,000 interviews with adults in the UK, China and German.

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Desperate homeowners and a dangerous bridge too far

By  Your Money Last updated: February 3rd, 2012

The Iron Bridge, over the River Severn
Bridging loans are a dangerous alternative to ordinary mortgages
Homeowners who want to move but cannot sell and others stumped by banks’ and building societies’ tighter lending criteria since the credit crunch began are turning to a dangerous alternative; bridging loans.
These can enable a second property to be bought before the existing home is sold and they can beat the mortgage famine by raising finance for buy-to-let landlords to refurbish properties at loan to value (LTV) ratios far higher than high street lenders will now allow.
Duncan Kreeger, chairman of specialist mortgage provider West One Loans, claimed: “Bridging loans net lending increased by 56pc last year, which makes the mainstream market look turgid by comparison. Borrowers are finding traditional longer-term funding harder to come by, which is making bridging finance a more attractive option.
“With high street lenders retreating even further into their shells, they won’t be able to cater for the demand for mortgage finance, particularly from buy-to-let investors, who will turn to bridging to finance their projects.”
Similarly, Ray Boulger, a director of John Charcol mortgage brokers said: “It is certainly true that the amount of bridging has expanded by a large margin over the last couple of years, filling a gap left by the banks.
“Where bridging is particularly useful in the buy-to-let market is for investors who want to refurbish a property after purchase and before letting it. The value is generally increased by well in excess of the refurbishment cost.”
But, while this form of housing finance may seem like a quick and flexible solution to the mortgage famine, it can prove ruinously expensive if a short-term fix turns into a long-term commitment.
Compound interest can prove a cruel taskmaster. With bridging loans costing at least 0.75pc of the sum advanced per month – or as much as double that rate – it can be a struggle to feed the interest meter for more than a few weeks.
David Hollingworth of London & Country Mortgages commented: “We are not a player in the bridging sector but this form of finance is useful as a short term funding option that can be arranged quickly to plug the gap between the purchase of property and later restructure to a longer term, traditional financing.
“While bridging can be used to secure the purchase of a new home before completing the sale of an old  one, it will often be used by landlords looking for quick access to funds.
“In any event it is vital to understand the limitations and cost of bridging in the longer term and important to have a viable exit route. Borrowers must have a strategy for refinancing in the longer run.”
But, as the poet Robert Burns pointed out, the best-laid schemes gang aft agley. Plans for profits can be overtaken by events and borrowing to invest is always risky because gearing not only increases gains but also boosts losses.
If that sounds somewhat theoretical, then consider the experience of a senior colleague more than 20 years ago whose wife fell in love with a property they couldn’t quite afford. Rather than waiting until they sold their existing home, they allowed her heart to rule his head and took out a bridging loan.
You can guess the rest. After several months of paying two mortgages, my former colleague put both properties up for sale in a desperate bid to bring the financial misery to an end. It nearly ruined them before they got rid of one. The resurgence of bridging loans now shows how little we have learned from the credit crunch and how quickly people forget the dangers of excessive debt.

http://blogs.telegraph.co.uk/finance/ianmcowie/100014604/desperate-homeowners-and-a-dangerous-bridge-too-far/
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The investment fund that is guaranteed to lose you money


Pension savers who hold money in cash are being charged more in fees than their money earns in interest.

Image of coins and note going down a drain - The investment fund that is guaranteed to lose you money
Clerical Medical's Cash Pension fund pays interest at 0.5pc while charging a 1pc annual management fee Photo: chris brignell / Alamy
11:39AM GMT 03 Feb 2012
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As a result, their investments are guaranteed to fall in value.
Savers often make use of cash funds within their pension plans to shelter from volatile markets or while they are deciding where to invest. But Clerical Medical's Cash Pension fund pays interest at 0.5pc while charging a 1pc annual management fee, resulting in a fall in value.
The practice came to light when a Telegraph reader wrote to our troubleshooter, Jessica Gorst-Williams, to complain about the fund.
The reader, HG from Surrey, wrote: "This fund can only result in investors losing money, as the cash fund is invested in Bank Rate securities producing 0.5pc but Clerical Medical makes a charge of 1pc.
"The fund is used to park funds when switching investments. I feel investors should be warned of this pitfall or better Clerical Medical should change its charges while the Bank Rate is so low."
Jessica replied: "This is a phenomenon that needs to be watched out for by anyone with money in a cash, or similar, fund. With interest rates as low as they are, skimming profits off such sums in the form of management charges or whatever has become much more transparent than it used to be.
"So, not only is such money being whittled away by inflation, but a higher percentage is being creamed off by some financial providers than the underlying sum is able to generate itself."
She said Clerical Medical – now under the umbrella of Scottish Widows, which is in turn owned by state-backed Lloyds Banking Group – had admitted that the returns on such cash investments had not been enough to fully offset the 1pc annual management fee. This has resulted in the unit price falling slightly.
"I cannot change things for you," Jessica said, "but at least I can fulfil your request to make others aware of this."
http://www.telegraph.co.uk/finance/personalfinance/investing/9059020/The-investment-fund-that-is-guaranteed-to-lose-you-money.html
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115 Profitable Investing Ideas by Greg Speicher


Written by  on January 31, 2012 

"My new eBook comprises a collection of ideas culled from the last two and one-half years of my investing blogs here at GregSpeicher.com. These ideas have helped me to become a better investor, and I believe they will help you too. Read them, study them, and let them inform your investing philosophy and process. And please share them with others who may benefit from them. Also, I’d love your feedback on the eBook."

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