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5 ways to increase your income today

By MPI6th February 2018Smart moneyaffiliate, income, increase, invest

We’re going to make a prediction that the majority of people reading this have no more than 2 sources of income, namely from employment and your investment portfolio. Have you ever considered yourself as an entrepreneur? The English Oxford dictionary defines an entrepreneur as “A person who sets up a business or businesses, taking on financial risks in the hope of profit”. The part of that definition that sings to us is the first half, and the good news is that you don’t need to start a multi-national corporation or an innovative tech company to create an alternative income source for yourself.

One of the most important rules any seasoned investor will tell you is to diversify, diversify, diversify to manage your risk. It’s the same with your income. With all of your commitments, family and future goals on the line, should you really only rely on the money you receive from your day job to support that? Other than the obvious benefits of having more money in your pocket, an alternative income stream can act as an insurance policy in case your employer makes some unexpected changes. And if you think you’ve got even a little bit of an entrepreneurial spirit in you, you can do it for the outright fun.

Let’s talk about 5 alternative income sources you can get started with today.

Side hustle

What are you good at? What do your friends and family come to you for when they need a favour? What has been a lifelong hobby of yours? The truth is, most people don’t realise they have something unique to offer and will cross off the possibility of a side hustle almost immediately. You might be a fantastic swimmer; adults and children alike both want to learn how to swim and you could be the person that leads a class to help them once a week. Or maybe you have more technical skills than most, we’re sure if you walk down the high street in your local town you will find some independent businesses in need of a website, social media presence and help with SEO. If you love to paint, try selling some of your beloved pieces of art online. There are literally 100’s of side hustles you can start up today with little to no cash required.

Affiliate Programmes

Since the dot com boom, millions of people all over the world have started blogging about a variety of different topics and industries. In finance, some make a comfortable living by blogging about their experiences in investing in different types of assets and platforms. Most companies have what is called an Affiliate Program, which compensates people for referring others to their business whether it’s through a blog or even just to your friends and family. This is the same for most industries including fashion, transport and accommodation to name a few.

Sell your stuff

Introverts might shudder at this, but fear not. Traditionally people went to markets, festivals and events to set up a stall and sell a variety of things to those in attendance. Thankfully, a few bright sparks had the idea of setting up companies like Ebay, Shpock, Gumtree and Osta to sell anything from the comfort of your home. Take a look around your house this weekend, are you going to hold on to that smoothie maker you’ve never used for the next 10 years or sell it to get some cash?

Sharing economy

Airbnb, Uber, Task Rabbit, you’ve heard of them all. Despite this, most of us stay on the consumer side of the transaction and let’s face it, they are great services. It’s a great opportunity for anyone with their own place to become a host, even if it’s once in a while when you’re planning a weekend away. Business Insider has compiled a list of 25 places you need to visit in 2018, do you live in one of these places? If so, then this year might be a great time to start and capitalize on a growing number of tourists in your area. With companies like Uber and Taxify, you could try working only the busy periods like Saturday nights or the morning rush hour to make the most of your time.

Invest

We expect most of our readers to already be doing this, but it’s worth mentioning. Whether it’s in P2P, real estate, stocks or something else, generating a monthly income from your investments is a very real possibility that you should take advantage of. Recently, we wrote a post on how this is possible in the miracle that is compound interest and the importance of setting goals in achieving financial freedom.

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If you’re serious about increasing your income, you could even try putting all of these sources together and make a significant change to your financial standing. If you’re already doing this, we’d love to hear how it’s working for you. Leave us a comment below and let us know how many alternative income sources you have.

Source: www.bondora.com

The Ultimate Guide to your mortgage

By MPI6th February 2018Smart moneyapplying, mortgage, overpayment, repayment, term

Mortgages. The word itself comes from the French ‘Mort-gage’, which literally translates to ‘death-pledge’. On a lighter note, having a mortgage has for many decades been viewed as the first step into the adult world for many people as you move away from your family home or rented accommodation. While a mortgage is not for everyone (especially those who relocate often or have other commitments), financially it is indeed a fantastic way to reap the rewards of capital growth over time and create a nest egg to leave to your relatives in the future.

So other than finally being able to turn your basement into a miniature bar or build that greenhouse you’ve always wanted, there are a few things you should know to make sure you’re not paying any more than you need to and what to expect over the long-term.

Applying for a mortgage

If you’re reading this, you might not even have a mortgage yet and you’re thinking about how you can get started. While there are several new alternative finance platforms cropping up who offer residential mortgages, it’s highly like that most people will still go to their local bank (for now). Trying to break through the jargon and ancient systems used by the banks can make applying for a mortgage feel like trying to solve a Rubik’s Cube. To get started, try using a comparison site to filter a few potential mortgage providers for you. Enter your income and expenses details as well as the price of the property and your deposit, then most should show you an indication of what interest rate and product you can expect to get.

After that, you can either fill out an application online or set up an appointment either via video link, phone or face to face if there is anything you are unsure about. This is most likely going to be the biggest financial commitment of your life, so make sure you take the time to understand the financial provider you will be using to help you with it.

Repayment type

In general, one of the first things a bank will ask you when applying for a mortgage is what type of repayment option you want. Huh? Don’t worry, in general there are only two separate options that you need to know about:

Principal and interest (Repayment) – Each month you pay the principal that you borrowed on the property plus the interest that the bank charges, at the end of your loan term you own the property outright with no extra payments due.
Interest only – Each month you only pay the interest that the bank charges (Meaning you have a significantly lower monthly payment than you would on a principal and interest repayment basis), the whole principal amount is due at the end of the loan term. Overall, you will pay significantly more interest over the loan term with this option.

Over the past couple of decades, a lot of people using the interest only repayment option have got in to financial difficulty at the end of their schedule and ultimately had their home repossessed by the bank. A lot of banks and financial regulators are now imposing much stricter regulations for people who request an interest only repayment due to this. In contrast, it can be an extremely lucrative option for people buying a property to rent it out.

Mortgage Term

Another important thing you need to decide is how long you are going to take out your mortgage for, known as the ‘mortgage term’. 10 years? 20 years? 40 years? The answer really depends on you and your personal and financial circumstances.

If you’re expecting a few life events over the next 5 years, such as getting married or having children, then you might consider extending the mortgage term to keep your monthly repayments lower. Or maybe you are in the middle of a training induction period at work and you know you are going to receive a considerable pay rise in the next 12 months (Lucky you!), in this case you might choose a lower mortgage term with higher monthly repayments.

Bear in mind, the length of your mortgage term has a significant impact on how much interest you will pay overall.

Product

Possibly the most crucial aspect of your mortgage is the product that you choose. In general, this can be separated in to two types of products; fixed rate and variable rate.

Fixed – Your monthly repayment will remain the same for an agreed period of time, for example, 2 or 5 years. This can be very useful for budgeting and for the risk-averse person who does not want to take any chances with rising interest rates.
Variable – A variable rate can change on a monthly basis, either in line with the banks own rate, EURIBOR or the rates issued by your national bank. You may benefit from lower rates especially in a booming economic environment, however it can be harder to budget on a monthly basis.

The length of time you can have one of the products for completely depends on your bank, ranging from 1 year to a lifetime product offered by some providers.

If you’re thinking you don’t have either of these products, you may be on the standard default option product issued by your bank. This is usually the rate you roll on to after your fixed or variable rate ends (and if you don’t arrange a new one), it is usually much higher than the other products available and most people see their payment increase once and completely forget about it. If this sounds familiar, check with your bank immediately because you have the potential to save yourself €100’s per month!

Overpayment

One of the most valuable tips we can give you is to make the occasional overpayment on your mortgage, it has the potential to save you a colossal amount of interest over the term of your mortgage. Money Saving Expert has a fantastic overpayment calculator you can use to test the impact of making an overpayment, we’ll add an example below for you.

Let’s say you have a mortgage of €100,000 on a repayment basis with a 35 year term at 3.5% interest. Each month, you give the bank €413 which pays back the principal and interest. Let’s also say that from your investment portfolio, you are generating a very realistic minimum figure of €100 per month in interest for yourself. You then decide to put this €100 to use and make a regular overpayment each month on your mortgage, this is what happens:

Overpaying would save you €25,594 in interest alone
You will pay off your mortgage in full 10 years and 11 months earlier than originally planned

Wow! For some, that means retiring from work over a decade earlier and having a nice amount of savings each month to spend on whatever you want. Go ahead, test it yourself and play around with the figures.

Remember, this is all realistically possible by generating a cash flow from your investments and setting yourself a goal.

Now you know

Hopefully this guide will be of use to anyone who has a mortgage or is looking to get one in the near future, make sure to read over these points a few times and take it all in, it could save you €€€’s.

Source: www.bondora.com

The Ultimate Guide to Buying a Car

By MPI6th February 2018Smart moneybuy, car, cash, compound interest, finance, guide, insurance, lease

Nowadays, having a car is a necessity in everyday life. Whether it’s for commuting to work, going to your local food store or visiting your family in another town, there’s no denying that having a car makes your life easier. Other than the expense of buying a home, owning a car is typically the second largest expense you will have in your lifetime and since it is a depreciating asset, you want to make sure you get it right.

What car?

There are literally millions of cars out there and hundreds of different manufacturers, this makes it even more difficult to decide which car is the best for you. The good news is, most online car sales sites like auto24.ee, autotrader.co.uk and mobile.de allow you to enter your filters and search for vehicles across the marketplace. Even an extremely good car salesman might be able to help you in a similar way. A few things you should take in to consideration:

Type – SUV, Sports car, Van, Estate, Saloon? This depends on where you live and the terrain you will be driving on, your family size and the main purpose you will use your car for. For example, if you live in northern Europe then a sports car may not be the most practical option for the icy winter conditions, in comparison it might be perfect for those living somewhere like sunny Spain.
Mileage– Generally, this has a huge impact on price as it’s commonly said the moment you drive your brand new car out of the dealership it decreases in value.
Fuel– Petrol, diesel, hybrid or electric. If you’re environmentally conscious then the electric option may be your first choice, for others using a van for trade purposes you might find a diesel engine more suited with your daily routine.
Age – While older cars are likely to be cheaper, you should check a few things like the chassis, any evidence of rust and the engine to see if it has been taken care of by the previous owner.
And of course, price…

Price

Before anything, you should first work out exactly how much you can afford whether it’s on a monthly basis or a full cash payment (We’ll get to this). After you’ve come to a figure, remember that when purchasing a car your emotions and impulses will often try to take over, especially if you are in the presence of a car salesman.

Yes, you may be able to buy a new Mercedes for an extra €10,000 but think about how much you actually need it and what restrictions it might impose on your financial standing (and ultimately your personal/social life) if you were to buy it.

If you’re still not sure, a good place to start is by either looking at the total amount of your savings balance or the net free income you have each month after your investments, bills and social life. Decide on a percentage of this to put towards a car and stick to it.

Cash, lease or finance?

This is an interesting one. A small percentage of people will have the spare cash lying around to purchase a brand new car that’s priced at over 5 figures, and with this option you will certainly pay less money overall for the car. When leasing a car, your repayments will usually be much lower than financing because you are essentially paying for the value of the depreciation in the car. At the end of an agreed term, you then have the option to make a lump sum payment and buy the car outright or hand it back to the dealer and take out a new similar deal. If you choose to take out finance for the car, your payments will be higher than the leasing option but you will own the car in full once the loan term has ended.

But, even if you have the cash available this does not necessarily mean it is the most cost effective option. Why? Well, if you have a good credit score and can obtain a low rate of finance on the car (e.g. 3%) and you know that you can make 10% per annum when you invest that large lump sum, this option works in your favour and pays for the interest due on the loan with some left over for you to compound.

Insurance and tax

It’s surprising how much the price of insurance varies significantly between providers. Based on their internal models and data, one insurer may quote you a price 3 times higher than another and offer pretty much the same package. Similar to taking out a mortgage, we suggest you use a comparison website to get an idea of which providers can give you the best price and overall cover. Usually, you can find some providers that will give you free extras like breakdown cover, legal cover and even unique quirky offers like theatre tickets. It’s important to point out here that when it comes to renewing your policy, it’s likely that your existing provider will not give you the best price out there since you are already a customer so make sure to shop around.

n most countries, the tax payment due for your car is heavily influenced by the age, type of fuel and the level of emissions it produces. If you have an old diesel SUV that pumps out Co2 emissions like there’s no tomorrow, prepare for a hefty tax bill. On the other hand, if you have an electric car then some governments have imposed a rule of no tax due on these cars. You should get an idea of the insurance and tax payments you will be responsible for before finalizing the purchase of a car and review this against your overall budget.

Beware of the extras!

So you have decided on the car you love, you’ve found a dealership and you’ve agreed on a (hopefully discounted) price, congrats! At this point you will be introduced to the ‘After Sales’ manager who is responsible for closing the deal and ensuring you buy as many optional extras as they can cram on to a piece of A4 paper. A typical extra might be a warranty offered by the dealerships themselves, this will be presented in gold wrapping paper and sprinkles but the truth is it’s not any different to the warranty already in place that the car manufacturer offers on a complimentary basis.

You can also expect a number of gadgets to be thrown your way as luxury options, such as three 12V sockets in the boot of your car that only cost an extra €499. Unless you are a frequent camper or the type of person who carries around a portable kettle for emergencies, then you probably don’t need it.

Drive away happy

Now you know the facts and you’ve done your research, you can feel confident in your decision knowing you have a great car that won’t negatively impact your financial well-being.

Source: www.bondora.com

Mintos Refer-a-Friend campaign is back!

By MPI1st November 2017News, Peer-to-Peer Lending, Smart moneybonus, Mintos, peer-to-peer lending, Promo code, refer-a-friend

Mintos Refer-a-Friend code can not be used on blogs (for general public) anymore, instead please use the affiliate link. If you invest for the first time on Mintos don’t forget that you can get 1% cashback bonus for your investment made in the first 90 days. To get the 1% bonus please use THIS LINK.

Mintos peer-to-peer lending marketplace announce today that they have re-launched the Refer-a-Friend Program for a limited period of time.

How the program works?

In order to get the 1% bonus a promo code must be entered in the “Promo code” field during registration.

The promo code is: MINTOSCLUB.B7B9D7

Mintos will then reward both us and you with 1% of your invested amount. The reward will be calculated based on your average daily invested balance over a 3-month period – 30, 60, and 90 days after the registration date – and paid in three instalments.

More details on how this work can be found here.

For other bonuses visit our Cash-back & Bonuses page.

5 criteria to identify the best investment for you

By MPI19th October 2017Smart moneyinvestment, long term, money, shares

We are all interested in identifying a good investment, that’s for sure.
But some of us are not content with just that.
There are enough people who are looking for the absolute superlative and want to find out what is the “best” investment.
So, as far as investments are concerned, the notion of “best investment” – in general terms – simply does not exist!
Because in this area everything is relative and depends very much on the preferences and peculiarities of each of us.

In other words, it’s like going to a restaurant and asking the waiter to recommend you their best meal …
Obviously, he does not know your tastes and preferences, so he would not know if you like meals based on meat (and what kind meat) or vegetarian, if you want something more consistent or a salad would be enough. In the end, the decision is largely subjective because it depends only on your particularities.
Exactly the same is true of investment.

No one can tell you from the start what is “the best investment” for the simple reason that it depends exclusively on YOU.
However, there are some criteria that you can determine if a particular investment is or is not right for you.

Here are 5 criteria according to which you can determine which is the best investment for YOU:

1. The degree of risk of the investment

The first thing we think about a certain investment is its degree of risk.
Therefore, in order to know what kind of investment we are going to (and of what kind of investment to keep away) it is very useful to know our own risk profile.
For example, if we reject the idea of risk from the start, it is best to focus on the guaranteed investments, such as bank deposits and government securities. But if we are willing to accept a certain risk, but a small one, we have low-risk investment funds.
On the other hand, if we can accept capital markets fluctuations in hopes of achieving greater long-term profits, we can opt for investment in stock exchanges or different kinds of commodities.

2. The investment profit level

We must always keep in mind the reasonable profit level that a certain type of investment can realistically bring, in order to match the degree of risk of that investment.
Only in this way can we determine the risk / reward ratio for a particular investment and thus compare different types of investments.

3. Duration of the investment

It is very important to establish from the beginning what is the minimum time interval that we are willing to stay with that amount in a certain investment.
In this way we can match the duration of an investment with its degree of risk, so we will not to get into the situation where we have to withdraw that money at a time that is less favorable.
For example, for a short or medium term, usually the most useful financial instruments are those that are guaranteed or low risk. Because the particularities of capital markets or real estate are acceptable only if we are considering a long or very long term.

4. The amount invested

However attractive it may be at one time to invest in building a block of flats or a mall, this would probably exceed our financial availability.
So finding an investment that fits both in size and flexibility with our budget is more important than just considering the profit it can bring us.

5. Location of the investment

There may be enough types of investments that seem interesting to us, at least at first glance, but some may not be accessible to everyone.
For example, if we were interested – let’s say – investing in government securities issued by India (with an annual yield of nearly 7%), we will find it hard to find a broker that have them available in its offer.
So the physical location for a particular investment as well as its availability are important elements to consider when trying to find the best investment for us.

5 pitfalls for your prosperity: here’s how to avoid them

By MPI26th September 2017Smart moneyavoid, financial education, money, personal finance, pitfall, prosperity

No one knows what tomorrow can bring. So it is possible that some of the decisions you make today have positive outcomes and others do not. We have all made mistakes with our money at some point and have fallen into different traps.
If we go back to that moment, we realize that there were indications that things might not work well, but we ignored them.
So the next time you make a decision about your money, think about whether you’re about to make a mistake and fall into one of the big traps of personal finances.

Here are 5 big pitfalls that you have to avoid in order to have a more prosperous future:

1. You get influenced by someone who does not know what is all about:

Often people do not make the wrong decisions just “on their own”. They are influenced by someone close: husband / wife, parent, friend or colleague. It may happen to ask for an opinion and get a total misconception. Or get the advice without asking for one. It’s one of the big traps where you can fall even if you do not realize it.

Just because someone close to you is making a certain investment does not necessarily mean it’s a good decision. Or, more than that, it does not mean that you should do exactly the same thing. Sure, it does not even mean that the advice of those around you is totally wrong only because they are not finance specialists. But it is important to think about who is the one who tells you what to do with your money and what confidence you can have in his opinion.

2. You are not informing yourself

If you do not take into consideration what can happen if things DO NOT go the way you think, then you are about to fall into one of the big pitfalls.

People would have much to gain by improving their financial education. A study conducted in the US in 2014 shows that 41% of those surveyed believe the correct score for their knowledge of personal finances is the maximum mark of 7. Moreover, 69% of Americans aged 18-34 have never done a course or seminar on money management.

In other words, many people have major deficiencies in knowing about money and how they “work”. “Some spend more time looking for a new barbecue than informing about what type of mortgage they should do for the home they want to buy,” says Randy Kurtz, the manager of a Chicago financial advisory firm.

3. Buy things without practical justification

You have to realize the great difference that exists between what you “want” and what you really need. Regardless of the nature of the object we are talking about, whether it’s a refrigerator, a CD player, a mobile phone or a car, the temptations you’re undergoing are big traps and it’s not always easy to resist them.

However, you must keep in mind the reason why you need that object, that is its practical utility. Do you really need all the features and facilities that it offers you, or do you just like it because it’s the hottest? Because, if so, you are about to fall into one of the great pitfalls for your prosperity.

4. Get into panic and do something under pressure

You’re never compelled to react for the moment. You can be stressed and still make good decisions. But if you feel that your heart is crazy and your mind can not focus on anything, you should probably delay the decision you need to take and remember that “the night is a good counselor.”

Whether there is a negative or a positive event (both can put tremendous pressure on you), try not to make a financial decision on the spot. It is good to distance yourself a little bit, see things in perspective, and find out what people you trust are thinking. Emotions can distort your perception, and it’s easy to fall into traps you could otherwise have avoided.

5. The instinct tells you “no”

Just think a little: why does your instinct tell you that spending money in this way is a mistake? Is not that one of those traps you should avoid? It might be so … So do not ignore it and think again if what you are going to do is really a good idea.

5 helpful tips on how to get rid of debt

By MPI4th August 2017Smart moneydebt, financial education, money, personal finance, smart, tips

There are no more stressful things than debts, worries about monthly spending and insistence of creditors. Did you think maybe you just do not know how to get rid of these debts? Well, you’re not the only one! Fortunately, there are experts who can show you some practical ways that can help you pay your debts in time.

First, there are periods when debt is inevitable. For example, you can buy a house, a car, pay for medical fees or school for your child. If you do not have the money to make a full purchase, then taking a loan can often be a move even indicated.

However, there are situations where you borrow more money than you can afford and you are unable to repay them. This is the time when problems arise. However, it is important not to panic. You can always find solutions to help you get rid of debt.

Here are some practical tips that will help you better manage your debt:

1. Perform a financial reassessment

It begins by always looking at both the mistakes and the financial successes of the previous year. What can you learn from this? What did you do well? What could you do better? Draw up a budget for the next year, using what you learned from the previous year and use it to guide your spending in the future.

2. Plan and buy smartly

Make a list of the items you need to buy before shopping. Knowing just in advance what you need and limiting only to purchasing these items will allow you to fit into the budget. Try to establish with your family and friends and buy together what you need in larger quantities. This can help save you in the long run.

If, for example, you tend to exaggerate with Christmas gifts, and this is important for you, prepare yourself early. Consider budgeting and buying gifts throughout the year to avoid last-minute spending and debt.

3. Take a part-time job

One of the best ways to get rid of debt is choosing a part-time job. The extra money you will earn is an excellent way to pay your bills. Normally, if the time permits you and your current job is not very demanding.

4. Sell what is no longer useful

Another recommended way to get some extra money to pay your debts is by selling items that you no longer need or you no longer use.

5. Consider the advice of a specialist

If you realize that you simply can not manage your own budget and personal expenses, then you can call on a financial specialist. It does not have to be a professional you need to pay. Instead, he can be a friend with money management experience that can provide you with financial education, guidance and counseling.

Salary too small? Here’s how you can handle it more easily

By MPI2nd August 2017Smart moneybudget, money, pay chek, salary, save, small, smart

Almost all of us have been through a period of financial instability when you have a too small salary and you can not pay your bills anymore. However, there are people who can handle such situations. An impressive number of people have a small salary and they live from one month to the next with just that money. If you want to know what you should do when you have too little money, read the tips below:

Follow a monthly budget

Try to watchevery month the way you spend your money and sources of income. Once you have an idea, manage your expenses carefully and exclude those that are unnecessary. Every month analyze how much money you have and what are the possible costs that may occur. Prioritize your bills and debts.

Be prepared for unprepared urgings

We know that when you have too little wages, you do not want financial emergencies, but such things happen to us all. Besides the monthly budget, from the little you are trying to put aside the month after the month, you must save for the financial urgencyes. Saved money will help you get over heavy times without spending too much of your personal budget.

Try to reduce your monthly expenses

You may not have realized, but the services you call monthly may be cheaper than you have now. Change your TV and even electricity suppliers if you can. In the long run these changes will feel in your pocket.

Borrow smartly

If you need money to pay an emergency bill take an online loan. However, try to borrow only in urgent situations, when you have to pay bills that do not support postponement, such as when you have ruined your household appliances, or at other similar moments. Making a credit to buy a perfume or to make a gift to a person is not necessarily the best idea. Make sure the reason for the loan is good and real and be objective when making this decision.

Find long-term solutions

It is very nice to know that you have a big amount of money when your monthly salary is low. Even if the temptation is great, do not resort to methods that will leave you without money in the coming period. For example, do not pawn your personal objects that you are very sentimental off. You will want them to be returned, but you may not have enough money to take repossession of them. Rather, look for another part-time job or do something that you are good at, but well payed.

Which of the above ideas seems the most appropriate to you when you have too little a salary?

Why is it important to have a financial education?

By MPI2nd August 2017Smart moneydevelopment, financial education, money, spending

Financial education refers to having a set of knowledge to help you effectively manage not just your spendings but also your investments. Few of us take into account practices that make you more thoughtful with your monthly budget and so forget to allocate certain capital and resources to areas of their life that require more attention. However, the general public tends to be reticent to complex financial terms and overlooks the fact that a preventive attitude is more effective than solving problems. Read about how this attitude can help you in the next lines.

Make a balance sheet and solve urgent issues

First of all, you need to figure out what your current situation is: give yourself an hour or two and identify your sources of incomes and spendings this month. You would be surprised to find out how much money you’re spending in things you do not really need. The next step is to figure out the urgent issues to which more capital must be allocated. For example, if your home has problems with the water installation and you do not have money for the moment, we recommend you take a microcredit. Especially when you have a stable income and your problems have to be solved, the smartest one prevents even greater damage by dealing with it as quickly as you can.

Smartly avoid future spendings

Once you’ve made the balance to see your immediate incomes and expenses, you have to focus on spending on what you can actively optimize. Specifically, this means replacing objects or habits that consume money with some more economical one’s. Imagine that you have a plot of 100 hectars planted with corn and must be harvested in the next 2 weeks. Instead of using a modified tractor that you already have and consuming 30 liters of diesel per hectare, you better buy a new machine.

More opportunities for your development

One of the most common and inefficient practices is not to invest money in your own person. Especially if you set up, for example, certain professional goals based on learning a new set of abilities, you should take advantage of this opportunity as soon as possible. The ability to weld various metals and alloys of different compositions under the water is one of the most lucrative jobs, but to get it you need an expensive intensive course. All you have to do is invest in yourself to get the accreditation of a professional welder and that will help you in the long run.

Rent or own? The advantages and disadvantages of each case

By MPI31st July 2017Real estate, Smart moneyinvest, money, real estate, rent, smart

“I’m tired of paying money on rent!”
Have you heard that phrase?
If not … maybe on this one:
“Money on rent is money thrown out the window.”
There are many who claim that being the owner of the house and not just a tenant is the best option.
But there are plenty of people who are on the other side of the barricade and prefer to pay the rent monthly instead of getting tired for paying for decades to the bank.
Have you ever heard your friends say, “I’m not crazy to pay for 30 years to the bank! Who knows what can happen in the mean time? It’s just too long!!!”

The question is:

Who is right? How is it best: to own or pay rent?

We will try to find the answer to this question in this article.
What I want to clarify, however, from the very beginning is this: the information I will provide further, will not make you permanently pass on either side of the barricade and to be pro or against rent for the rest of your life .
That’s because, in our decisions we have to take alongside our lives, and there are, besides our preferences, a number of other factors. Some of these factors are static.
There are also dynamic factors. And these dynamic factors makes that what seems to be the perfect choice now, over the next 5 years will no longer be a good idea.
That is why, I’m proposing to address both the owner and tenant in terms of the advantages and disadvantages offered by each of them.
So, anytime, during your life, reading this article, you can review all these advantages and disadvantages according to your situation at that time, and as a result, you will be able to make the best possible decision.

Why buy a house or apartment?

You buy a house once in your life

A house is more than a roof over your head.
The feelings you associate with your home can be even stronger if they mark a new beginning.
For example, if you just married and together with your half bought a house, you think at it as your home, the home that, over the years, will shelter countless dreams, hopes, but it will also witness many events in live through which every man passes, at some point in his life.
That is why a word from the old says: “In a man’s life you must make a child, build a house and plant a tree.”
Whether you agree or disagree with this phrase, I’m sure you understand the point of having a home. That’s because this house is the foundation for everything that’s going to happen.

It provides stability

You know that you have where to come back every night; a place where you can put your head down and rest after a full day.
You know that you are not at the owner’s mercy that can ask you anytime to leave the house within … or change the terms and conditions whenever he wants or … even worse, maybe sell the property if he is offered a tempting sum of money.
In this situation, you are the one who decides.
And as most of the owners do, if you’ve chosen to pay a 25-30-year credit to the bank, you know that with every single payment you make, every passing month, you’re a step closer to owning 100% of of your house.

There are no surprises

Even if small incidents can occur from time to time (for example: the neighbor above has flooded you and you have to paint again), that does not mean that this will happen every month. Normally, the expenses for your home remain the same.
This will help you to keep track of your expenses, forecasts and financial goals.

Diversification of income sources

Although investing in buying a house to live in, in the long run, does not necessarily prove to be a profitable one, the fact that you own a house can help you a lot in getting new loans from the bank if, from the situation your account, resides that you are a good payer.
If instead, you’re thinking about buying a house, in order to rent it is a good idea. Real estate is nothing but another source from which you can receive passive income month by month from the people you rent it.

Why rent a house or apartment?

You do not need the bank’s approval

There are people who, for various reasons (theirs or the employer) can not go to the bank to opt for a credit for buying a home.
For them, this second option works best. That’s because the system is simple, fast and works in 3 steps: Seen. Pleased. Rent. No more months of running and dozens of approvals and of course … without the burden of thinking that they will have to pay 25-30 years to the bank, no matter what.

Flexibility

And when I say flexibility, I do not necessarily mean the flexibility of the location but also the budget.
Think about it this way: maybe you want to live in the capital city today because, why not … here are the most interesting events?
Later, the agglomeration and madness of the capital don’t feel no longer so good, and you decide to move to a smaller town.
To the retirement age, you may want to live out of town for a simple and quiet life in the country to be closer to nature.
All of these changes can be done quite quickly, because you do not have a real estate already bought to keep you moving from where you want, when you want.
This is perfect for you if your job or business forces you to travel a lot and as a result you have to move often.
We also talk about cost flexibility. If you want to stay in a central area you will pay a price. If, then, for various reasons, you want to pay less, you can rent a property on the outskirts of the city.
Your family is growing up and the studio you lived in until yesterday, has now become a snap? No problem. You can rent a house or apartment with 2 or 3 rooms at any time.
As you see, as a tenant, you have a very high flexibility, both in terms of location and in terms of the amount paid for the rent and the size of the rented dwelling that can be changed, as said above, consistent with the changes that occurs in your family.

Avoid extra expenses

Do not imagine that if he owns the house, the owner of the house has escaped other expenses. Not at all. There are a lot of expences that gather in time and need to be resolved, so you can still live in good conditions in that house and continue to pay rent.
That’s not to mention the taxes that the landlord has to pay annually. You, as a tenant, do not have to take out any money from your pocket for that.
As a tenant, you avoid the costs of removing the furniture, redecorating the new home, etc.

Access to liquidity

A house can not be converted into cash from one day to the next. From this perspective, it is illogical to put your lifetime savings in one thing: in a building.
That’s because it cannot be turned easy into liquidity and also, depending on the evolution of the real estate market at that moment, no one can guarantee you that the real estate you own will be sold over the years at a price above acquisition.

Instead of a conclusion

Now, at the end of the article, I’d like to know your opinion. From your point of view, if you have the choice now: to rent or to buy a house, what would you choose and why?

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