Wealth Creation

By Pushkala Aripaka and Muvija M

(Reuters) -British online trading group CMC Markets on Thursday set out plans to launch a wealth management platform, going head to head with existing players such as Hargreaves and AJ Bell, after reporting a doubling in annual profits.

Peter Cruddas, Chief Executive of the London-listed company, told Reuters he expects the new platform to be live by this time next year.

“We are going to disrupt the market, we are going to push down commissions and execution costs,” he said.

CMC, which facilitates the trade of complex financial instruments, raised its outlook multiple times this year as a retail trading boom fuelled volumes.

The company’s active clients in contracts for difference (CFD) surged by 19,389 to 76,591, while pretax profit more than doubled to 224 million pounds ($315.80 million) for the year ended March 31.

“We have been encouraged by the growing interest in equities, not just because of the ‘meme’ stocks, also because of the drive towards tech stocks as well,” CMC deputy CEO David Fineberg told Reuters.

Rivals IG and Plus500 have also reported strong results, powered partly by the “GameStonk” retail trading phenomenon. Gamestonk is named after U.S. video game retailer GameStop which is believed to have been the starting point for the trend.

‘UNDERCUT THE MARKET’

The GameStonk effect has been most visible in the United States, where online brokers such as Robinhood have thrived on the back of a retail trading boom.

CMC pointed towards a moderation in client trading activity, but also said existing active client levels were likely to be sustainable.

The company did not disclose further details on its planned wealth platform, first reported by Sky News, but Cruddas was confident of its prospects.

“We know what competitors charge. We are definitely going to undercut the market.” he said.

($1 = 0.7093 pounds)

(Reporting by Pushkala Aripaka and Muvija M in Bengaluru; Editing by Devika Syamnath and Jane Merriman)

By: Nicholas R. Fernandes-CreditSage Founder Smart Credit Rebuilding

People often say they build their wealth by investing early but one thing they leave out is credit.
Credit is absolutely important in building wealth. If your student loans aren’t paid off or any debt
you owe, it’s going to constantly affect your credit. Your future purchases depend on your credit.
Want to invest in real estate? you need good credit! Want to rent a future office for your
company, you need good credit! Want to open a credit card and get reward points for your
purchases? guess what? you need good credit!

Everything you do from the time you turn 18 is dedicated by credit. Having good credit can give
you the leverage you need to get ahead in life. Several landlords check your credit to see if you
are dependable. Several employers check your credit before hiring you as well, having good
credit can be the last straw in why you should get that position compared to other candidates.
Making purchases on a credit card gives you the freedom to utilise the bank’s money and gain
reward points that can be used to make additional purchases or even go towards your next flight
ticket.

Before you start investing with your additional funds, pay off all existing debt. You can have
thousand dollars in stocks but still owe two thousand dollars in credit card debt, which puts your
net worth at negative thousand dollars.

Follow the 50/20/20/10 rule, budget and try to live on 50 percent of earned income. The 50
percent should cover your rent/mortgage, monthly expenses, subscriptions,etc. The next 20
percent should be invested in index funds, the other 20 percent should be tucked away in your
savings, this money is for future major purchases and the rainy day funds. The rainy day fund is
a sum of liquid cash for unforeseen circumstances. The last 10 percent is for riskier
investments, like crypto for example. This 10 percent shouldn’t exceed the 10 percent of your
monthly income. The main reason is if it completely crashes and you won’t be affected by it but
if it pays off then your risk pays off.

If your work offers a 401K then, try and max that out first, your 20 percent of safe investments
can be counted via your 401K. Your 401K account is money that isn’t taxed and is only taxed if
you choose to pull out the money before 59 years of age. That money can be used towards
mortgage or medical bills as well so it’s safe. Most companies match your contribution up to a
certain amount so take advantage of that. If your company doesn’t offer a 401K, make your
investment via a Roth IRA. A Roth IRA is pretty similar to a 401K except you are taxed ahead
rather than later.

If you have debt, use the 20 percent meant for investment to pay off your debt first before
investing, as mentioned above focus on clearing your debt and getting your credit score up.
Having bad credit puts you back several steps in building wealth, you get the worst interest
rates and will end up paying thousands of dollars more over your lifetime.

Knowing how your credit score is calculated is the first step in getting good credit. Here is how
your credit score is calculated.
-35% is based on payment history
-30% is based on amount owed

-15% is based on length of credit history
-10% is based on types of credit
-10% is based on new credit

The most important factor in your credit score history is how you pay back the credit you
borrowed, that is why we emphasize paying the debt/credit back first before investing. It
accounts for 35 percent of your score. The second most important factor that Banks use to
judge you as a lender is credit utilization.
For example if they lend you 100 dollars , they only want you to use 30 percent of that, which is
30 dollars. Anything more is considered high leverage in their eyes.
The third fact which accounts for 15 percent is how long you have a certain type of credit, we
suggest never closing your credit cards, even if you don’t use them just keep them active
because they help you build credit every month and the longer you have a line of credit offered
to you really affects the 15 percent.

Ten percent is based on types of credit, if you have a car loan and credit cards and mortgage
and you’re paying them off monthly, it shows them you are reliable and more likely to get
approved on lower interest rates to refinance your loan or restructure your credit. If you don’t
have multiple different types of credit lines, you can always substitute it by having credit lines
offered to you from different banks.

The last ten percent is based on if you open new lines of credit in a short time, this is to regulate
how much time you should spend on getting new lines of credit.

You now have the knowledge to start with your wealth building journey with the first hidden step
that isn’t mentioned by most wealth experts. Credit is used everywhere and needs to be given

more importance, high schools should teach children about credit and taxes to equip them
better for adulthood. It’s never too late to learn about your finances, it might feel overwhelming
at first but exposing yourself to it as early as you can help you build the future you want.

By Harel Tayeb, CEO, Kryon

Bots can carry out a huge and increasing number of manual tasks in finance. Their ability to save time and money while boosting accuracy and compliance is unparalleled. Many CFOs are yet to embed the power of Robotic Process Automation (RPA) in their departments, but in this case they should take the plunge. This time the hype is real.

As they view the post-pandemic world, an increasing number of CFOs are planning to digitise processes, future-proof workflows and make their finance teams as productive as possible. One area of technology becoming a focal point in the finance industry is Robotic Process Automation (RPA). According to the latest “The Forrester Wave™: Robotic Process Automation, Q1 2021” report : “Customers want to scale existing bot environments and extend the scope of their automation projects beyond classic desktop-based tasks to more complex processes.”

Harel Tayeb, CEO, Kryon

The reality is that finance teams are engulfed in hugely complex processes on a day-to-day basis, and the vast majority of these are ripe for automation. RPA allows finance teams to deploy software bots to support automation of manually intensive processes, creating a new era of digital working.

What are bots and what are they doing in finance settings?

Bots are essentially digital assistants that augment human intelligence. They adapt themselves automatically by learning from their previous mistakes and so come to understand the ongoing analysis of structured and unstructured data. This optimises efficiency in workflows to do with loan processing, financial reporting, supplier invoicing, policy administration, billings and collections. Intelligent bot assistants can discover specific patterns, predict decisions and eventually offer recommendations to the user.

Bots are now designed to target a wide range of manually-intensive processes, such as procure-to-pay, order-to-cash and record-to-report. RPA is also used by CFOs to retrieve budget approval, incorporate mergers, manage talent and meet compliance requirements. All this saves employee time for the bigger analytical tasks, and therefore makes finance teams more productive. There are also benefits for CFOs in terms of accuracy and compliance.

According to Gartner: “Around 80% of finance leaders have implemented or are planning to implement RPA.” Tech giants Google and Microsoft  have recently said that they are attempting to move into the RPA space, suggesting the lucrative opportunities that they think will come from enterprise-wide RPA adoption, although their technologies remain unproven in an enterprise setting.

I forecast that very soon every member of a finance team will have a digital assistant automating previously manually-intensive processes. But while RPA’s features are enticing for finance teams, they need to step back and consider the best ways to scale the technology before they automate.

How to get there

As a first step to achieving the best results from RPA, CFOs need to optimise their chosen business processes internally. Taking the time to evaluate existing processes will allow companies to pinpoint the areas that need development to scale at volume. Putting in place the right foundations — including senior management sponsorship, robust process management to select and prioritise the right processes, and agile business practices — is a must.

In my experience, typically 30% of the time dedicated to introducing RPA should be dedicated to process identification, and 70% focused on implementation and value realisation. But in the initial stages, it’s likely that the majority of time will be spent purely on process identification until the RPA project gains momentum internally. Mapping each step in a particular process is critical when supporting the process identification cycle. It’s important to have a clear overview of your organisation and the business processes that are being carried out. The good news is that the technology now exists to map the activities in a business and identify those processes that are ripe for automation within days. The management team can then base automation decisions on data that’s been extracted internally.

For successful RPA implementation it’s important to advocate a holistic, end-to-end approach, from process discovery through implementation to ROI and impact evaluation for the best results. Ultimately, RPA can ingest any type of data, process it, run it, and make it use more efficient. RPA undeniably has real benefits for finance teams. This time the hype is real.

By: Antonia Mitchell, Director, Aurelia Philanthropy

The trouble with Wills
Wills are tricky subjects at the best of times, with the living trying their best to navigate either the legacy, they are leaving or to understand the untold story of the deceased, through the legacy left behind. Well publicised disputes, particularly amongst the wealthy, become public fodder as we all salivate at the airing of complex interpersonal relationships. A child left destitute in favour of the family pet, a sister ignored whilst an acquaintance is rewarded, and a charity receiving a stellar donation instead of their relatives expected riches.

Advisers are well versed in all these issues, carefully explaining the risks to those making a bequest, documenting what they can and encouraging discussions with the living, to prevent future conflict. There is another area though, which brings its own form of complexity and stress but is rarely discussed. A wealthy parent dies, they leave sufficient funds for their family and out of a desire to either promote philanthropy, encourage their children to work together or a wish to leave a beneficial legacy – funds are reserved for a charitable foundation, to be distributed by living relatives. The aims are lofty but when the dust settles and the reality of trying to give the money away comes to the forefront, it can feel more like a heavy burden to those left behind, and one advisers are poorly set up to support.

Busy, middle-aged children, often with careers, children and their own life pressures are suddenly thrust into the centre of a philanthropic world they do not understand. The structure of the trust is managed by their lawyers and accountants but what about the other sides? Suddenly their inbox is filled with desperate requests for funds, each with a story more terrible that the last. They differ from their siblings as to what the most important causes to give to are, and in addition to this, there is an overwhelming pressure to achieve something fantastic in their parent’s honour.

The question therefore is how to avoid these complexities and ensure that gifts in legacy are a joy for the recipients, the givers and those leaving the bequest – a way for families to connect and the deceased to be honoured.

Antonia Mitchell, Director, Aurelia Philanthropy

Thinking about your philanthropy
As with the initial wealth, the first thoughts must begin with the person leaving the legacy. It is imperative they speak to their family, not just about leaving a gift to charitable causes but about their expectations on their surviving relatives to fulfil their wishes. If this is not something the next generation are keen on, individuals can look to leave money directly to not-for-profits in their Will, naming their preferred recipients. They can talk to the charities, understanding what they would do with a donation and even seeking to confirm naming rights, if they want this to form part of their gift. In this way many will have the added benefit of feeling the joy of giving, during their lifetime.

If it is felt a charitable trust is the best way to progress, then the parent may still wish to consider the criteria around this. Do they want their children to have free reign for giving and what about the generations afterwards? It is a tricky question. To define too tightly can risk the foundation becoming obsolete; as in the case of a 19 th century Australian widow who left her largesse to fund vests for orphans – critical in 1821, less so in 2021. To be too open though, means future generations could give money away to causes the founder might find shocking or upsetting. It is therefore prudent to consider not only the criteria, but also the lifespan of a charitable trust and whether it is best to wind down in a generation or to continue in perpetuity.

The next generation
For those who are the next generation there is a different challenge. Grieving the loss of their parent(s) they are now faced with a large sum of money to distribute, often divides in focus and a lack of time in which to achieve their parents bidding. I met with a family who had just that issue – the sister wanted to give to children in poverty/distress, the older brother cared about advancing leading educational establishments, and the younger brother was focused on changing public policy and advancing ideas. These disparate visions had caused inertia for a year, with the money weighing on them all heavily, as they felt they were failing their parents. This story is not an uncommon one, the initial joy of being able to make a difference becomes a heavy stone as children try to take the plunge into a little understood philanthropy pool and worry about making an error and letting their motherand father’s memories down.

In the case of the siblings mentioned above, as with so many of these issues, the solution is to put the question to the charities. Very few of those who are new to giving realise you can talk to charities. It does not need to be a fait-accompli, you can arrive with a list of needs and seek to understand from the not-for-profit what they are able to deliver on. In this situation, by approaching major universities with a list of their interests, they were able to locate an area which matched all their criteria and could leave an ongoing naming right in memory of their parents. Those who are new to giving need to open those dialogues, ask for proposals from the charities, meet with them and visit after they have given. In doing so, they should experience the connection they are looking for and most importantly be able to feel passionate about the legacy left by the generation above.

Advising the wealthy
For advisers it is imperative they develop their knowledge not just on the structures of philanthropic legacies but the emotional side too. People give for a range of reasons, but I have never met someone whose primary driver was not deeply emotional, personal and connected to either family or upbringing. Too many advisers overlook this side of the story, scared off by the emotions involved or worried they might be prying into a personal area.  The truth though is that many clients need support to ask the questions and get the help they need, in this common area of high net worth work.

For the good of those leaving a legacy and those who are inheriting one, it is essential we hold these discussions and improve our support.

About the author
Antonia Mitchell is the Director of Aurelia Philanthropy, she specialises in supporting high- net-worth individuals and families in their charitable giving.

By: Tony Gallacher, Head of Jewellery Retail, Ramsdens Jewellery 
In recent years, sustainability has become incredibly important to the average consumer — particularly in the fashion and jewellery industry. The pace at which trends come and go has been steadily whipping up into a frenzy over the past few decades, so that concerns about the environmental impact of ‘fast fashion’ have reached all-time highs.

Fast fashion jewellery that is cheaply made and on a huge scale usually comes with a large carbon footprint, among other issues. What’s more, you have no doubt found that the pieces you buy from fast fashion outlets tend to fall apart or tarnish easily. They likely go out of style quickly too, which means that more of them will go to waste rather than be resold.

Choosing investment pieces for your jewellery collections is’t just good for the environment. Good jewellery is timeless, and it tends to contain valuable materials such as gold and diamonds that have fantastic resale value. So, by building a capsule jewellery collection of staple pieces, you can look incredible, save money, do your bit for the planet, and make a great investment all at the same time. Below, I’ll share my tips for finding jewellery that fits the bill.

Staple jewellery pieces to look out for
The first step towards building a capsule jewellery collection is to identify which jewellery trends are here to stay and which aren’t. That way, you won’t have to keep adding to your jewellery box in order to keep up with the latest styles, and you know you can resell your jewellery further down the line. Fine chain jewellery, either plain or customised with pendants, is a good example of a staple piece, as are stud and hoop earrings. All kinds of diamond jewellery, whether studded or solitaire, have been highly popular since the 1800s, so if in doubt, dazzle with diamonds.

While one tone in particular usually takes the top spot, precious metals never really go out of fashion. So, you’ ll always be able to resell good quality metals. If you prefer yellow, white, or even rose-gold, it’s better to stick to that kind of jewellery than buy an assortment of pieces you won’t end up wearing.

Identifying quality pieces
Once you’ve identified key jewellery types that you know you’ll wear time and time again, you’ll need to find high quality pieces in these styles. This is to ensure that what you buy is long lasting, saving you money in the long run and reducing your carbon footprint while ensuring your jewellery can be resold far into the future.

Cheap jewellery may be brittle and break easily, or it could tarnish and lose its lustre, but jewellery made from the best materials can last your entire life and beyond — particularly if it is cleaned and maintained well. Precious metals such as gold, silver, and platinum are among the best options for long-lasting jewellery, so look out for hallmarks stamped into your pieces. Fake gold, silver, and platinum jewellery won’t have hallmarks, so it’s a good indicator of quality.

Where to buy jewellery from

The better quality the materials your jewellery is made from, the more of an investment piece it is. The problem is that fine, well-made jewellery is much more expensive than mass produced pieces, so you need to be smart about where you shop. Pre-owned collections are a great way to find precious jewellery made from fine materials for great prices, and as reputable second-hand jewellery shops have exceptionally high standards, its usually difficult to tell the difference between a new and pre-owned piece.

It’s important to remember that in most cases, the more you spend on jewellery that will last your whole life, the more you will save over time on repairs and replacements. Choosing real gold, silver, and gemstones means that any piece you buy will have a high resale value, so you can make your money back if you need to. All you’ll need to do is keep your jewellery in great condition. If you do, someone else can buy your jewellery instead of wasting money on a fast-fashion piece, so you can help keep the cycle going.

The tips in this guide can help you find more high-quality, long lasting jewellery. Whether you want to be more sustainableor make sure you earn your money back later on in life, why not give capsule jewellery collections a go?

In today’s climate, and in the face of the pandemic, wealth management continues to grow in importance. While the world’s UHNWI population grew by 2.4% between 2020 and 2021, this expansion  in wealth was not universal; regions like North America, Europe and Asia saw growth, but with that also came a fall in the numbers in Latin America, Russia and the Middle East. (Source: The Wealth Report 2021, Knight Frank)

In this article, Prashant Tandon, Chief Executive Officer of Lighthouse Canton Capital (DIFC) Pte. Ltd., outlines the 3 stages of the financial lifecycle and the importance of wealth management in the context of the pandemic.

The concept of money and the advent of wealth management
The concept of money has been in existence for over 4000 years when Barley was used as a means of exchange in early Sumerian period. Since then, it has continued to evolve through the millennia; from silver shekels of ancient Mesopotamia, the minting of the first coin in 640 BC in Lydia, the use of gold and silver denarii in the Roman empire, to the modern day, where only about 10% of the $38Trillion that is out for circulation is represented by hard currency, with the rest being just electronic entries in financial ledgers.

Wealth itself was only conceived somewhere in the mid-19 th century. It started off by being measured in dollar amounts when the industrialized nations like the United States of America, England and Germany began to measure progress tabulating social welfare based on income generating capacity of individuals, corporations and countries.

The concept of wealth management is newer still. Almost a century ago, banks began segregating their regular customers from wealthy ones, thus creating a distinguished suite of services that went beyond the mere processing of receipts, payments, or taking of deposits. This concept was provided with several shots in the arm through events like departure from the gold standard in the 1970s, Black Monday in the 1980s, the dot com bubble, and the great financial crisis where the need for active and professional management of one’s wealth became very important.

What is wealth management?
The Cambridge dictionary defines wealth management as “the business or activity of advising people, especially rich people, on how to invest and manage their money and property”. However, the industry has evolved significantly over the past decades and Wealth management has now become a financial service, provided to those seeking advice on their entire financial or family footprint as they progress through the financial lifecycle of wealth creation and allocation, wealth preservation, succession planning and the transfer of wealth to the next generation. Wealth management should also be distinguished from asset management with the latter being primarily concerned with maximizing the value of assets under management whereas the former being of a wider remit with fiduciary responsibility thrown in the mix.

The financial lifecycle
a) Wealth Creation
This is the first stage in the financial lifecycle where one accumulates wealth through either employment, business or vocation. At this stage one might be focused on building a financial foundation, getting into the right ecosystem, and maybe raising capital for a startup. With the requirements at this stage of the financial lifecycle being very distinct, the services of a wealth management expert can be extremely important for several reasons – ranging from deciding upon the right business structure and domicile, through to evaluating and deciding upon the right allocation of savings or surpluses that are generated over time Whether a business needs to be established in the United Kingdom, Singapore, Dubai or China for example, what is the most efficient structure, what are the pockets of capital that one can tap into, what are the asset classes that one needs to consider for deployment of surpluses and how to oversee the allocation, execution and efficient management of the portfolio. These all fall under the purview of wealth management.

b) Wealth Preservation
As important it is to rely on expert advice during the stage of wealth creation, it is equally important to pay attention on the deployment of wealth so as to ensure that it both multiplies and is also preserved during times of stress. The quality of advice and resultant management of wealth determines whether one can navigate during uncertain times, and if one is able to take advantage of market dislocations that appear as a result of disruptive events. The importance of effective wealth management and advice came to fore during the recent stress that COVID-19 caused in the early months of 2020. Left to their own, most wealthy individuals and families suffered due to severe depletion of their portfolios, compounded by their impulsive reaction to liquidate at the depth of the crises. Whereas if advised properly, they should not only have held on to those positions but acquired more at fire sale prices. These times and situations have proven how important it is to have professional advice to sustain the growth of wealth, and to ensure that the wealth accumulated is also preserved in times of volatility and market stress.

c) Wealth Transfer/Succession planning
Maintaining generational wealth and keeping wealth within the family has been the focus of many families. Once a wealthy family has put in place an effective plan for managing their accumulated wealth, successful transition of the same to the  next generation becomes an important part of their overall wealth management exercise. This is where wealth planning plays an important part in the journey. One may need to achieve the most tax efficient, seamless and acceptable ways to transfer their legacy to the next generation, where the advice they seek transcends mere financial considerations. Families need to consider several factors like the family composition, needs and aspirations of the next generation, and how they fit into the existing structure, wealth and estate equalization etc.

What wealth management means today & the rise of a new breed of wealth managers
While traditional wealth managers continue to support and play a key role in the lives of wealthy clients, as outlined above, the need for a new breed of wealth managers is becoming apparent. Wealth management today has evolved from being a mere asset allocation exercise to become an over-arching framework for the entire financial lifecycle and the lifestyle aspirations of a client. This evolutionary process has further been accelerated by the pandemic.

Many wealthy individuals and families today, particularly the next generation, place a growing emphasis on the impact and sustainability of their activities. As such, Environmental, Social and Governance (ESG) concerns in allocating capital and philanthropic causes are just some of the areas new age wealth managers can help provide clarity on. These wealth managers are distinguished by their ability to adopt cutting-edge technological tools which help clients track and make informed decisions on their portfolio allocations, the existence of robust institutional infrastructure that can support dispersed teams and clients, and an ability to efficiently allocate capital yet adhere to ESG norms, all while also ensuring that the strategies align with their client’s investment philosophy; these are just some of the many additional factors which will distinguish quality wealth managers from the also-rans.

Discerning clients very well understand the importance of the following phrase in Idowu Koyenikan’s book “Wealth for All”: When money realizes that it is in good hands, it wants to stay and multiply in those hands.

Since the inception of trading and banking, people have constantly been looking for new ways to increase their wealth through investment. Whether it’s the FTSE, cryptocurrencies, or classic cars – if there’s money to be made investing in these products and stocks, you can guarantee someone’s already added it to their investment portfolio.

However, one type of investment which is still yet to really break into the mainstream media is luxury product investments. As we’ve seen over the past century, different types of products from some of the world’s most luxurious brands not only retain their value, but increase in value over time – from Birkin bags to a Rolex, there are hundreds of products which could turn out to be a fantastic investment in the long run. To help prospective investors make an informed choice when it comes to expanding their luxury investment portfolio, luxury experts from HushHush have compiled a list of their favourite investment products in 2021.

1. Hermès Birkin bag – with demand for these luxury bags at an all time high, the cost of getting your hands on one is continuing to rise, with many people already paying more than three times the RRP for one of Hermès’ legendary bags. If the current climate remains the same for Birkin bags, we estimate people could make around 12-20% more on their original
investment in the next 6-12 months.

2. Rolex watches – probably the most iconic watch manufacturer of all time, a Rolex can be a fantastic product to add to your investment portfolio. We recommend investing in a vintage Rolex, as they have a lower price threshold, and therefore are more accessible and give you more chance to make profit on your investment in the future – this may go without saying, but the rarer the watch the better the investment. It’s also worth noting that almost all luxury watch brands have the potential to be a worthwhile investment, as long as the selected watch is desirable and in good condition. We estimate that people could make between 40-65% on their original investment in 12-24 months.

3. Modern art – art has long been one of the staples of luxury product investment, with one of the largest reselling communities in the world. However, while most of this trading focuses on vintage and antique art, we’ve begun to see a trend in people paying over-the-odds for modern and contemporary pieces, created by widely unknown artists. Keeping an eye out for new and upcoming artists in the modern art space can be a great way to find your next investment piece. We estimate people could make anywhere between 200-250% on their investment in 12-18 months if they find an artist before they garner mainstream attention.

4. Cartier & Tiffany jewellery – jewellery investments have always been popular, and while it isn’t a new concept, it’s still a great profit avenue for prospective investors. Similar to watches, the potential profit on specific brands like Cartier and Tiffany is always higher with vintage and unique pieces, particularly if a twin piece has been famously worn by a celebrity.
We estimate that people could make around 20-35% for standard pieces of jewellery, and upwards of 110% within 12 months if a piece has notoriety or a famous connection.

5. Classic sports or super cars – classic car prices are at an all-time-high, and this rise doesn’t look like it’s going to slow down anytime soon. The last 10-15 years have seen the biggest change in demand and prices for classic cars, with classic German, Japanese and Italian brands seeing the highest price increase. Our favourite brands to invest in are; Nissan, Honda,
Volkswagen and Lotus – while Ferrari, Lamborghini and Porsche offer great investment opportunities for those with more to spend. We estimate people could make around 45-50% on their investments in the next 12 months, and around 120% for more patient investors in the next 5 years.

6. Vintage wine – vintage wine is a no-brainer from an investment point-of- view, and represents one of the only investments you’re practically guaranteed not to lose money on – unless you drop the bottle… The good thing about investing in vintage wine is that the particular bottle you buy will no longer be in production, meaning that demand for the product should only go up, as bottles become ever-more rare. We recommend buying wine made between 1996 – 2002 – as many of these vintages offer a fantastic opportunity for future price rises, and have a more accessible entry price point for new investors. We estimate that investors could make between 60-75% on their original investment.

7. Classic Japanese superbikes – similar to classic cars, the market for Japanese superbikes has never been so busy, with some bikes fetching tens of thousands of pounds. Our best picks are the; Honda Dream MF350, Kawasaki Z1 900, Honda CBR900RR – these represent some of the more affordable options which could fetch a pretty penny in the near future. We
estimate collectors could make around 20-25% in the next 6-12 months, and more patient investors could cash in an extra 75-80% in the next 3-5 years.

8. Fashion brands – while watches, bags and jewellery are our top recommendations for investing in particular fashion brands, there’s also plenty of money to be made in other fashion items, such as shoes, sunglasses and jackets. Our favourite brands for future investments are; Chanel, Louis Vuitton and Gucci. We estimate that people could make around 65-75% on their investments, however on certain items this number could be much higher.

These are just some of the items and brands we’ve selected to invest in, however there are hundreds of different items currently available that have the potential to go up in value. One general piece of advice we like to follow is to invest in things you’re already passionate in – using the knowledge you already have on a certain brand, sector or product will always give you an edge over more casual investors, and can even help you spot a ‘future valuable’ which is yet to be recognised as a potential money-maker by other investors.

Offering one of the most exclusive marketplaces for high-net-worth individuals and VIP concierge services, HushHush.com connects a growing list of the world’s most wealthy consumers with luxury brands and products. HushHush.com collates some of the best unique luxury products available, from superyachts and hypercars to luxury villas and private islands, and partners with sellers to reach their audience.

“Offering one of the most exclusive marketplaces for high-net-worth individuals and VIP concierge services, HushHush connects a growing list of the world’s most wealthy consumers with luxury brands and products. HushHush.com collates some of the best unique luxury products available, from superyachts and hypercars to luxury villas and private islands, and partners with sellers to reach their audience.”

By: Eddie Ortiz, Founder & CEO of PressPlay Finance

With the world starting to open up slowly post-pandemic, it can be very confusing on what to do with your money now. People generally fell into one of two categories during the pandemic: (1) Those whose earnings were affected or (2) Those whose earnings were not affected.

For those with earnings affected, there has been a renewed focus on basic budgeting to get them back to a place of having the dispensable income needed to continue wealth creation. For those whose earnings were not affected, they saved their money given the fact that the world was shut down so commuting costs were zero, general entertainment spending was small, etc. Regardless of category, people restrained themselves the first half of the year and are now behind on financial moves that should have already been taken care of by the halfway point of 2021.

So, what do you do if you fit into one of these categories to catch up/have a successful second half of the year?
I recommend that each category take inventory of the following things:

1. Back-to-Basics Budgeting: This sounds trivial, but I highly recommend it just to give you peace of mind. Do the simple exercise of jotting down what your total income is AFTER taxes, what you have already saved, what your fixed expenses are, and what your discretionary expenses are. Fixed expenses are things like housing, food (not eating out, more like groceries), transportation, etc. Discretionary expenses are things like eating out, clothing, entertainment, personal travel, subscriptions, etc. Then take your income and subtract your expenses. What’s left is what you can put into savings as well as discretionary spending. If you have nothing left over or worse, you’re already overspending, consider looking at your discretionary spending and reducing appropriately. I recommend to clients the 50/30/20 budgeting plan where you spend 50% of your budget on needs, 30% on wants, and 20% on saving. You can find a free version of this budget plan with a simple search engine search.
2. If in debt, pay it down: I recommend living as lean as possible if in debt after you’ve cut discretionary spending down significantly and use all that money towards paying obligations. I would also stop contributing to any investments if you’re doing that and turn those monies over to paying off your debt. You may THINK you’re saving money but you’re actually losing it as most loans are charging you more interest than what you’re making in gains from your investments. Also, inquire with a financial planner on how to capitalize on other market conditions.
3. If not in debt, play catchup with your investments: Find out how many pay periods are left in the year from your employer and then divide the amount you want to contribute for the year by the amount of pay periods you have left. Once you have that number make sure those contributions are being taken out of your paycheck and put into your country’s version of a 401k/IRA (ISA, LISA, etc.). For example, in the U.S., if you’re wanting to contribute $19,500 (the max contribution for 2021) to a 401k, there are around 13 pay periods left in a 26 pay period schedule (meaning you’re somewhere in June when you calculate this). That means you’ll need to set aside $1500 per pay period to get to the max contribution for the year of $19,500. You can adjust this as needed and can do this with an IRA too which, in the context of this example. $6,000 is max for IRA contributions and you would need to save $461.53 per pay period to reach that goal.
4. Maintain an emergency fund: If this pandemic has taught us anything it’s that anything can happen at a moment’s notice, and you must be prepared financially. I always suggest at least 3 months of expenses for your emergency fund. I would focus on getting at least 1 month as quickly as possible and then you can take a little time getting to 3 months as you prioritize your other financial goals.
5. Focus on efforts that improve your credit score: Do everything in your power to pay bills on time, perform an Experian Credit Boost, and do not close any credit card accounts, even if you don’t use the credit card and have paid it off. This will ensure you have a long credit history. Performing an Experian Credit Boost is a good way to give your credit a boost in the short-term and paying bills on-time is a great way to help it continue to climb long-term. If you are in good financial positioning, consider paying off a personal loan early; this will also give your credit a boost as it improves your credit worthiness.

Going through these five steps can be a useful exercise to ensure you’re on track to having a great second half of 2021 and positioning yourself to have an even better 2022.

By: Stephanie Spies, CFP

When you think of collectibles, the first things that may come to mind are your baseball card collection, the Persian rug in your living room, or the 1967 Ford Mustang in the garage. While these items may have sentimental value, they may also have monetary value.

If you are a collector, here are a few things you should consider:

Insurance Considerations

Two of the main risks with collectibles are the potential for theft, or damage resulting from an event such as a fire or flood. Since many collectibles are stored in your home, it is often assumed that they are covered under homeowners or renters insurance policies. However, this is not always the case. Many of these policies contain exceptions or low limits for collectibles and valuable items. For example, a traditional homeowners policy may limit coverage to $1,500 for artwork. Certain items such as memorabilia may be ineligible for replacement cost coverage, meaning that you will only receive the amount that you paid for the memorabilia and not what it is currently worth.

Based on the type of item and its value, a valuables rider or a separate valuables policy may provide sufficient coverage for your items. Some insurance companies may require an appraisal based on the perceived value. There are even some carriers that focus specifically on insuring collectibles if coverage is not available through your current carrier.

Tax Planning Considerations

At some point, you may decide to sell a collectible. If you do decide to sell, there may be tax implications:

• If you sell an item for more than you purchased it for, you have a capital gain.
• The tax rate for capital gains on the sale of collectibles may be higher than your personal tax rate on other capital gains, such as gains from investments.
• If the item has been held for more than one year, the capital gain tax rate is 28%¹.
• If the item has been held for less than one year, it is subject to taxation at ordinary income rates.
• If a collectible is now worth less than the amount you paid for it, you may have a capital loss. However, this type of capital loss is often not deductible for Federal tax purposes.
• There may also be additional tax implications at the state level.

Estate Planning Considerations

Your estate planning documents provide instructions on how your assets will be divided upon your passing, including your collectibles. There may be emotional implications to dividing your collection as part of your estate plan. As a collector, you may be passionate about the collection you have built and maintained over the years.

Your intentions may be to pass your collection on to your family members or friends with the intention that they continue to maintain it in the future. This could be a great fit if your heirs have an interest and share your passion. There may also be ongoing costs to consider, such as storage costs for a vehicle, or insurance considerations as mentioned earlier.

If you choose to leave a collection to one heir, there could be an unequal estate distribution. This could cause complications and tensions among your heirs, even for items that do not have a large monetary value but are sentimental.

You may instead choose to instruct your executor to sell the collection, and provide guidance around seeking counsel from a dealer, or require an appraisal before the collection is sold. You can also consider donating your collection to a museum or a charity. If this is an option you would like to pursue, it may require additional planning and coordination in advance.

To ensure that your wishes are met, and your intentions are better understood, you may want to share your goals with your family in advance (in addition to the instructions in your estate plan). This can help to better inform your heirs and lessen the probability that there are surprises and tension in the future.

So, whether you collect baseball cards or Basquiat’s paintings or anything in between, it’s important to understand some of the financial implications involved. We can assist you in coordinating with your insurance agent, tax preparer, or estate planner to ensure that you have all the financial boxes checked. We’re happy to help you keep your assets protected and aligned with your overall objectives.

Collecting Collectibles? Consider This