At the end of his month, Charlie’s third book, entitled ‘Entrepreneurial Happiness’ will be released. To celebrate, we will be hosting a virtual launch party on Tuesday 2nd June 2020 at 6pm.
Over the years working alongside a wide range of business owners in his capacity as a Financial Planner, and as an entrepreneur, time and time again he saw company owners struggle with their profits, time and wellbeing. The burning question was, why did their passion turn into their punishment?
The business owners we’ve worked with over the years often face the same issues: They are all working every hour God sends, they aren’t earning as much as they think their effort deserves, and the fun of being the master of their own destiny is draining away. Sadly, there’s no time or money to have fun and create memories with their loved ones, and we can empathize, as Charlie also had all of these feelings over the years.
Lack of profit, lack of time, and serious lack of love for what they are doing, results in 80% of businesses failing in the first 5 years. Across the world, millions of entrepreneurs started their businesses with a passion to create a better life. Whether they wanted a better work / life balance, or they wanted to spend their time doing what they love, business owners once had that fire inside them. But, it isn’t working, so we wanted to help.
Filled with practical advice, tips and tested methodologies, Entrepreneurial Happiness has been created to redress the balance and give people the tools to reclaim the profit, free time and fun they deserve.
Our virtual book launch, Charlie, plus a guest speaker will be giving a short talk about the new book and exploring the ways in which it can help business owners, entrepreneurs and anyone who wants to become their own boss to create a fulfilling and abundant business that gives them the time, profit and enjoyment so many of us seek.
It is shame we can’t celebrate face to face, but we would be delighted if you could join us from the comfort of your home to raise a glass and toast the unveiling of ‘Entrepreneurial Happiness’. We look forward to seeing you on the 2nd June!
The Market Update
Markets rebounded during April as Coronavirus (COVID-19) cases and deaths appeared to be near or past their peaks in a number of developed markets and China continued to open up its economy. Monetary and fiscal stimulus from March was expanded further which soothed markets with volatility falling from its extremely elevated levels. Most asset classes had a good month, with the exception of energy markets. In a truly extraordinary turn of events, the price of oil futures briefly went negative, implying traders were being paid to take delivery of a commodity that used to be known as ‘black gold’.
Is Now A Good Time To Invest?
This is an impossible question to answer if your time horizon is weeks or a few months as markets are always uncertain over the short-term (and particularly now as we try to exit lockdown). But it is much easier to answer this question if your time horizon is measured in years.
We looked at UK equities going back to 1976, a period which includes 4 major sell-offs: Black Monday (1987), Tech Bubble (2000), GFC (2008/2009) and COVID-19 (2020) with the sell-off period shown below in red and the recovery until the drawdown was erased in green. It turns out that if your investment horizon is 10 years:
- The only time you’ve lost money over 10 years was if you invested just before the tech bubble burst (i.e. when markets were ridiculously expensive AND you suffered the tech bubble falls AND the GFC falls 8 years later)
- You’ve never lost money over 10 years if you invested AFTER a major market fall (i.e. after the red shaded area)
- The further the market falls, the better your long-term returns
- Even those that invested exactly 10 years before the coronavirus sell-off of March still made money in real terms from UK equities
Note: the below chart covers rolling returns over the next 10 years, so we only have data for investments made up until 2010 (grey and blue lines)
Investing In Scary Times
Investing now may sound like a scary idea, that is why in the longer term, you will likely be rewarded better for your bravery. It is easy to invest in a high and rising market, so the rewards are less attractive. But did you know that investors tend to get less than half the growth the market actually delivers because they let their head get in the way.
If you want to learn more about this, about how the world is getting better and better and how to benefit from that, you can watch our latest video called ‘Investing in Scary Times’ below.
A Little Lift...
Let's start with some good news ... Admiral, the car insurance provider has announced that they will give you £25 for every vehicle you have insured with them. Now, this may not seem very exciting or to be a lot of money but they intend to do this for all of their customers and will be giving away a total of £110 million - now that's a lot. They are doing this because there are fewer cars on the roads and that means fewer claims. They could have kept that £110 million for themselves but instead they are spreading the joy!
In the same announcement they described how they are making the lives of NHS and emergency service workers easier with regard to their insurance; they have set up a support fund of £4 million; and are prioritising the retention of their staff. This was lovely to hear when all the news these days seems to result in feelings of dismay.
Admiral aren't alone - other car insurance companies are doing the same and I am sure more will join. Also, Barclays (and I am sure other banks) have announced that customers will not be charged overdraft fees until 9th July to help with unforeseen costs during this time. Some mortgage companies are offering 3-month mortgage "holidays" to help those in financial need. The list goes on, and to write down all the little things (and yes, they are little) that companies are doing to try to help would make for a big article.
It's these little things that made me pause and reflect on how much everyone has come together during this time, how everyone is going out of their way to make the best of things, to remain positive and to support those in need. Whether it is big government announcements on aid for those in need, someone checking up on a neighbour or just staying at home, all these acts carry their own strength and meaning. We have realised that it is the little things that make the big things count, and I hope this continues long after our world rights itself again.
Small Business Support
Even MORE good news (if you are looking on the bright side)! The Chancellor, Rishi Sunak, has announced that small firms are now able to access 100%-taxpayer-backed loans of up to £50,000 within days of applying.
The previous schemes were difficult to apply for and slow to come to fruition, putting small firms at risk of liquidation without a quick injection of cash.
The loan terms are that no capital or interest repayments will be due for one year - the government will pay the interest for the first 12 months. Unlike the previous loan scheme, banks will not retain any of the risk - which could amount to billions or tens of billions of pounds depending on how long the crisis lasts.
Although Sunak came under pressure to underwrite all loans, not just those up to £50,000, he is not prepared to do so as he must balance the risk to the taxpayer with the needs of small businesses.
There will be mixed opinions about the scheme, some praising the fact that thousands of businesses could be saved by this lifeline, others concerned about future tax rises and a growing deficit, which are the likely outcomes of such colossal government borrowing.
Business Owners - Do You Have The Right Cover?
Let's learn something positive from this terrible situation. Many of our clients run their own business, so this article is for them. The current situation with Covid-19 has highlighted to smaller organisations that they are not protected for unforeseen events in ways they should be. Whilst many businesses will insure such things as equipment and premises, they overlook what the loss of key people would do to their business.
So, some of the cover you should consider when the world returns to some form of normality:
- Key person cover: This protects a business against the loss of a key employee through an event such as death or serious illness. If you take a moment to think about what the loss of some specialist skills or knowledge would do to your company, the effect is likely to be massive.
- Loan protection: If a loan guarantor within your business dies or has a serious illness and the loan is required to be repaid, it could have massive repercussions, particularly if the loan was taken out with third- party security (e.g. a director's home). Make sure to take out cover for this eventuality, to protect the business but also your employees and their
- Shareholder protection: Provisions should be put in place to protect the financial interests of remaining shareholders and to ensure the business is able to continue if a shareholder were to die. It will also ensure that the deceased's family receive the correct
- Relevant life cover: Individual life cover that would offer tax-efficient death-in-service benefits for high earners or other employees should be considered.
Whilst not all of these insurances will be relevant to your business, it is worth investigating to be sure that you have all the necessary protection in place if the worst were to happen. I believe we should all come away from this dismal period better prepared than ever for the future.
NHS Pension Scheme Update
This may not be as exciting as the previous articles, but it is still worth a read. Pensions are always in the news but recently the NHS pension scheme has received a great deal of attention, not least from us. The system was (and still is) broken in so many ways and some long-lasting fixes should have come into effect in this new tax year. However, with everything else that is going on, some of the problems will just get a sticking plaster for a while longer.
Some of the changes the NHS have had to embrace over the past few months include relaxing the rules for retirees - those returning to the NHS to help with the Covid-19 situation will not be negatively affected through their pension for their temporary return to work, which is great news! Some form of death benefits will also be reinstated for those returning to the frontline, which will bring peace of mind to those workers and their families if the worst were to happen.
The increase in the "adjusted" and "threshold" income cutovers to £240,000 and £200,000, respectively, effective 6 April, is expected to lift all but the highest earners out of the "taper trap". This does appear to be true at first sight, but it will become apparent as time goes on if the rules will continue to be adjusted in line with earnings to keep the tax trap at bay.
Watch Out, Scammers About!
Now this is definitely not good news but we thought you should know. Read the article quickly and then move on to the next where more good news awaits!
Nothing seems to stop scammers. A new scam involves Prudential. An email is received from <a person's name>@prudentiaplc.co.uk or prudentiasl.com which asks for resolution to settle an account payment.
Please do not act on such emails, including opening attachments or clicking on links they may contain. Prudential advise that the sender should be blocked - you can usually do this by right-clicking on the email address, select "Junk" and "Block sender".
If in doubt, contact Prudential by whatever means you currently can. Some providers may have closed their phone lines but many are offering web chat or email as an alternative.
Charlie’s Mini Blog
In recent years I have read close to 200 different business books, I have attended workshops that have had me walking across burning hot coals and broken glass and courses that extend from learning about business to learning to embrace my internal warrior in the jungle. I have done all this with a view to trying to learn how we can create a better business, create better financial planning for our clients, and create a better future for our industry.
A little while ago, I decided to try and identify all the best ideas these different books, courses and workshops had provided, and I quickly worked that they could be grouped into 3 different areas;
- Money: the ideas that related to making more or keeping more money, whether that be marketing to attract more clients, or ways to keep a better track of the key figures in our business. If you don’t get this area mastered, you cannot afford to invest in the projects and people you want to, and you cannot afford to live the life that you want to.
- Work/Life Balance: the ideas that allowed us to continue to go from strength to strength, whilst actually requiring less of my time. If you don’t get this bit right, you have to exchange success for missing your children grow up, doing the things in life you love, and maintaining your health.
- Fun: the ideas that have allowed me to enjoy my time at work more and more. Without this, you can find that work become a chore, and given we spend so much of our life doing it, that seems like an unsatisfactory situation.
It was pulling together these ideas that has ultimately led to my next book ‘Entrepreneurial Happiness, How to Build an Abundant Business and a Fulfilling Life’ being written. I am delighted it will be finally published 28th May; it has been around 2 years in the making. I’d love it if you could join us at the launch party (online) at 6pm on 2nd June so I can tell you more about it and introduce a guest speaker we have lined up. If you would like to pre-order your very own copy, you can do so here. There has probably never been a more important time to create a little more Entrepreneurial Happiness in the world, so let’s get started!
It would be difficult to recommend a better book to read at the moment than ‘Entrepreneurial Happiness, How to Build an Abundant Business and a Fulfilling Life’, by our very own Charlie Reading. If you, or a business owner you know, could make more money whilst working less hours and whilst enjoying more of what they do at work, surely that has got to be a good thing!
Packed full of the best ideas Charlie has found to create Efficient Portfolio, and the 2 businesses he has built and sold, as well as exercises to help the reader achieve the same in their business, this book is the ultimate how to guide to create a better and more successful work life balance. Regain the profit, free time and fun you deserve!