[kayrome]

YOUR 10 BIGGEST FINANCIAL
MISTAKES......
AND HOW TO CORRECT THEM

Mistake No. 1

25 YEAR MORTGAGE: why? You pay œ270,000 for
each œ100,000 of mortgage at 10% interest.

CORRECTION: get a 15 year mortgage and
increase you payments by only 18%.

RESULT: You pay œ192,240 for each œ100,000 of
mortgage. You save œ77,760.


Mistake No. 2

BUYING WHOLE LIFE INSURANCE POLICIES: why?
The most expensive type of life insurance.

CORRECTION: Buy level premium term insurance.

RESULTS: Save up to 70% on premiums.


Mistake No. 3

BUYING ENDOWMENT INSURANCE AS AN INVESTMENT:
why? Poor investment returns due to high
charges and poor tax efficiency.

CORRECTION: Keep life insurance seperate from
savings and investments.

Results: Save on life insurance premiums and
improve returns.



Page 1
Mistake No. 4

BUYING NEW CARS: why? Car's depreciate 30% to 50%
in the first two years.

CORRECTION: Buy a 2-3 year old car.
Result: Save thousends of pounds.


Mistake No. 5

NO RETIREMENT PLANNING: why? Over reliance on
government pension.

CORRECTION: Join your company scheme after a
thorough check. Or set up a private pension
scheme after taking advise.

RESULT: Because pensions have more tax advantages
than any other investment, the government is
subsidizing your retirement. Contributions are
tax deductible and investment profits are free of
tax.


Mistake No. 6

PAYING ALLOWANCES TO CHILDREN FROM AFTER TAX
INCOME: why? Allowances are taxed at the parents
tax rate.

CORRECTION: Pay children wages from your small
business, subject to hours and age limits.

RESULT: Save up to 40% of every œ1,000 of
allowances

Mistake No. 7

NON DEDUCTIBLE COMPUTER AND CAR: Why? Its an
expense. Used in a small business,it can be
deducted.
Page 2
CORRECTION: Depreciate within the small business.

RESULT: Assets for business are deductible over
time.


Mistake No. 8

BUYING INDERVIDUAL SHARES, GILTS, PRECIOUS METALS
OR COMMODITIES: why? Risky.

CORRECTION: Invest in equities or gilts through
Unit Trusts to ensure spread of risk.

RESULT: Lower risk investments and ability to
switch between cash equities or gilts to match
economic cycle. Benifit from professional
management.


Mistake No. 9

NO ACCESSIBLE CASH: why? Urgent cash requirements
can interrupt investment or require expensive
borrowing against investments.

CORRECTION: Build up cash reserve of 3 months
income in a TESSA or building society.

RESULT: Avoid forced liquidation of investments
or higher interest loans.


Mistake No. 10

SURPLUS SAVINGS IN BUILDING SOCIETY: why? Low
return.

CORRECTION: Beyond 3 month's cash reserve, invest
additional funds according to Flexible Investment
Strategy.
RESULT: Gain reliable long term returns on your
funds.