Guide to Finding Quality Service Businesses Online

Customers round the world use different methods to find service businesses like plumbers, builders, carpenters, home cleaners etc. Traditionally, people have found businesses and called them directly based on a newspaper advert in the classified section, or a Yellow Pages ad.

But now things are different, because of the internet. There are lots and lots of online directory services that make it easy for customers to find businesses by name, location or type of business.

But how do you know that these businesses are actually real businesses? It’s easy to create a listing in an online directory these days. Plus, it’s free, and anyone can do it. This means that there is a high likelihood of fraud and opportunistic businesses trying to make a bit of extra money on the side – with little or no experience, no licences and no insurance.

There are no checks and balances in place to make sure that the directory listing is a legitimate, quality business and when you call, you have no idea whether the business is going to do what they say they’re going to do – and no recourse to do anything about it if they don’t!

The best idea for finding service businesses online is to use a directory site that also displays reviews from previous customers. Although there is also often a high level of fraud in these comments, a good volume of positive reviews can indicate a certain level of quality.

To go one step further, there are also directories that provide a minimum level of quality from their businesses before they will display a listing in their directory. One example is a directory that shows you the businesses you’ve searched for in a prioritised way – the best businesses at the top, everyone’s lowest rated businesses at the bottom. Plus, there is at least one directory that checks Australian Business numbers for validity, and requires both licences and public liability insurance before displaying a company on their directory.

Directories or marketplaces with two things are the way of the future – quality reviews from past customers, and legitimacy checks like ABN, licenses and insurance.

Property Or Shares?

April 2010

Given the recent worldwide stock market correction, there has been increasing interest in property investment. Quite unsurprisingly the flight to intrinsic assets is very common after a stock market fall and the subject of whether shares or direct property is best has been one pondered for many decades. The truth of the matter is that in the interest of diversity, both of these growth assets should be constituents within an investor’s portfolio. The more important question is what are the benefits and costs of holding both investments and what proportion of each asset class should an investor hold?

3 simple steps to get you started:

• An often over looked step is to establish some investment goals before investing in either asset class. This will help you monitor the investment and it also helps take the emotion out of the process.

• The second step is to undertake a risk profile process – This will often reveal a person’s real attitude towards investment risk and return. Risk profiling can also highlight a preference for some asset classes over others based on identified objectives.

• Third step would be to determine how much experience you have with either asset class. If you have more experience with property, then a larger weighting to direct property might be warranted.

Tax and Ownership

The investment structure you choose, will determine the amount of tax you pay and ultimately affect your net return from the investment. There may be other personal liability and estate considerations as well as transaction costs that the right investment structures can help mitigate. The most common types of ownership structures are tenants in common or individual owner, a trust / super fund or a company. All of these structures have different tax outcomes and costs associated with them and some can minimize liability, so it is important to choose
the best structure before investing.

The basis for buying property

The fundamental argument for buying property in Australia rests on the fact that house prices are determined by supply and demand factors. In Australia unlike the US, we are faced with a growing population, low unemployment (5.9% -RBA) and an undersupply of property. These factors rightly make property a highly sought after asset.

Property never falls?
The perception however, that direct property significantly outperforms shares, or worse still, never goes down, is a very dangerous assumption to make. From 2003 to 2006, we witnessed the decline of prices on most of the eastern seaboard metropolitan areas and while the impact has not been devastating, it certainly has affected the balance sheet of many mums and dads. It is also common knowledge that the efficiency of pricing data for unlisted assets like residential real estate leaves a lot to be desired. There is no accounting for ‘added value’ that owners may contribute towards a property, an example of which is, renovations and improvements. Factors such as these can add stability to price movements, along with the fact that the average Australian typically holds onto their home for at least seven plus years.( ABS – census) The more recent practice of purchasing multiple properties was prevalent due to lose lending conditions and the perception that property is safer than any other investment. It is worthwhile noting, that when the residential property market takes a turn for the worse you can be severely disadvantaged if the majority of your assets and income sits outside of the highly tax advantaged superannuation and pension system. Most of us have heard stories or know of friends and colleagues that have overstretched their financial resources by purchasing more than one investment property at the same time. While they typically adopt a sound ‘buy and hold’ strategy, the unfortunate fact is, from 2003 to 2007,they would have sacrificed an opportunity cost in the Australian share market (e.g. ASX200 – last equity bull market) where returns were 20% plus over this period. The lesson to be learnt is that, having all of your eggs in the one basket (or asset class) can have dire effects in achieving your wealth creation goals.

Yale economist and author of Irrational Exuberance, Robert J Shiller has created a real house price index (US property market) for existing dwellings dating back to the 1890s.He points out that in the last decade there has been a tremendous, irrational growth spurt in housing asset prices. Ignoring the effects of inflation, house prices have doubled in 10 short years. In Australia since 1986, house prices have gone up more than 400%, and when the effects of inflation are removed we have seen prices more than double. Shiller’s analysis should be enough
for anyone to question if property growth is sustainable at present levels.

The Reserve bank of Australia’s governor, Glen Steven’s recently expressed similar concerns, about property investment as a “riskless” path to riches. He said “I think it is a mistake to assume that a riskless, easy, guaranteed way to prosperity is to be leveraged up into property.” This is a very popular
misconception and one hopefully that all investors will take notice of.

The only real thing that separates shares from property as far as tax goes is that the return from shares comes mostly from capital gains, but the return from property comes mostly as income. Capital gains are generally more tax efficient than income because capital gains tax can be deferred indefinitely by holding off selling and also attracts a discount for long term investors (unless you are a company); whereas income is taxed in the year
it is received. On this basis, it can be argued that shares are more tax efficient than property.

Asset Class Performance
To put this argument into perspective, let’s look at the returns for different asset classes over the last twenty years. What we know is that there were times when shares underperformed direct property, listed property trusts and even fixed interest, however, generally for over a 10 to 15 year period, shares have historically
outperformed. The research conducted by the AXA research team, upon common indices across asset classes, highlights the annualised returns from:

Cash: 5.7%
Median House Price: 8.75%
ASX 200: 10.2%
ASX 200 Property Trust: 8.1%
MSCI World Index 5.9%

Other considerations: Holding costs

So finally we come to costs. There is no doubt that the higher acquisition costs involved with property, such as stamp duty, land tax, loan application fees and the ongoing costs of council rates, utilities and property management fees, can compare unfavorably with shares and managed funds. One very important factor to consider is that property is not as liquid as a share or managed fund investment and while the disadvantage of shares, is lower borrowing ratios and higher borrowing rates, compared to property; all without the effect or fear of margin calls; the overall cost to return and time management benefits, suggest that shares might be a cheaper and easier to manage investment, than property. The reason however for the popularity of property investments can be attributed to the familiarity and intrinsic nature of property assets, compared to shares and managed funds.

Summary:

There is little doubt that any investor would be doing themselves a disservice if they were not to invest in direct property. Having said this, the price you pay and the location in which you buy, will ultimately be the difference between good and great returns. From a tax, cost and quality of asset perspective, both property and shares are equally appealing. The evidence though seems to slightly favour shares as a better holding, due to the better tax treatment of capital gains and the lower costs, compared to direct property ownership.

It must be said though that, quality research and a thorough assessment of any investment must be made when purchasing either shares or property and it is reasonable to say that, Investment property should not be ignored as part of a diversified portfolio, but it should however be treated as no more
than just a slice of the investment pie.

Written by Robert Joseph – Practice Principal Freedom Wealth Advisers

SOURCES OF DATA:
• Irrational Exuberance, 2nd Edition – Robert J Shiller
• RBA governor Glen Steven’s comments on property – AAP March 29th 11.18am
• Australian Housing figures: Australian Property Monitors
• AXA Research team
S&P/ASX 200
MSCI World Index
Cash returns – based on the 90 day bank bill rate
ASX – Listed property
• Nicholson Cartoons -

This editorial provides general information only. Before making any financial or investment decisions, we recommend you consult a financial adviser to take into account your particular investment objectives, financial situation and individual needs. (AXAFP) and its Authorised Representatives do not accept any liability for any errors or omissions of information supplied in this editorial.

Deciding On The Correct Healthy Lifestyle Choices

Your body is an absolute reflection of your healthy lifestyle choices. For the most part it is very basic to tell what someone thinks about their own health which is seen in their physical body and how they look. You are able to tell when one cares about themselves and they appear physically fit while at the other end of it you realize the people that do not care about their health seeing that they are very overweight and you should see them out at restaurants eating the absolute worst foods possible.

Before I go any further, I know there are some people out there by now yelling at the top of their lungs saying “But I’m born this way!” Unfortunately, Well, I’m not a medical professional so I cannot answer that question towards a biological standpoint. But my personal opinion is that the “genetics” reasoning is thoroughly laughable. Your skinny friend that eats everything she wants and never gains an ounce of weight is like that because she has a faster metabolism. That fast metabolism is because they are being physically active. It’s the same thing for the person that is overweight that continues to keep getting bigger and bigger. The reply to that is to start making healthy lifestyle choices. Begin consuming beneficial healthy foods rather than junk and begin exercising. Your metabolism will then increase which will also help you burn fat.

So what are these decisions that you need to make so that you can live a healthy life? As I said, start by fixing those eating habits. And this does not only mean to count how many calories you eat & drink. Even if you meet your calorie goals for the day, it doesn’t mean you’re being healthy. You should watch what foods you consume as part of those calories. If it’s made up of candy and chips, you’re not doing your body any favors. So begin by eating fresh fruits & vegetables, lean meats, and high protein foods. In fact, as you get started with a new healthy lifestyle plan, don’t even walk up and down the aisles at the supermarket. Stick to the edge of the store and you should find everything you need to eat healthy (except for the bakery section).

You should additionally get started in some sort of regular workout program to begin to improve your healthy lifestyle choices. If you’re very overweight, you obviously would not run a race tomorrow or begin doing the exercises which an athlete would do, but you have to begin somewhere. Rather than sitting on the couch today, take half an hour and go for a walk. Then tomorrow do exactly the same, but push yourself to take fifty additional steps in the same amount of time. Slowly increase the number of steps and/or minutes until you can run the entire 30 minutes. This will not happen overnight and it could actually take you several months to get to this point depending where you currently are. While continuing to work to that, add a little bit of strength training to your exercise program. This is very good for you and will be of great help to your body and increase your metabolism.

The combination of a beneficial nutrition and a little physical activity will put you on the correct track to having a life of health. Those eating habits will consist of about eighty percent of how you look, so it is obviously of great importance. Your workout routine will consist of the other 20%. This may allow you tone your body as well as giving you that extra push for weight loss and become healthy.

Your choice to live a healthy lifestyle is your own decision. No one can make you a believer of it and it has to be something you want to have. If you do not want to change how you live it just will not happen. You must desire that vision and set the goals for yourself in order to have success with these healthy lifestyle choices.

Tips to Reuse Old Home Furniture

Furniture is always being an important part of the house and it makes your house perfect. It is said that a house cannot become a home without proper furniture. But it is also true that nothing can last forever and so is your furniture. Every furniture item comes with an expiry date.

There are many reasons responsible for a furniture item not getting used any longer. The possible reasons are furniture expiry as mentioned early, user getting bored with a particular furniture item, furniture damage, destruction, etc. The thing I want to say is that a large number of furniture items are thrown away every now and then by many house owners. The reason is that most of the people do not know how to reuse their old furniture.

Here, in this post, I am going to discuss some good tips of using the old furniture.

Purchase Recyclable and Green Furniture: Though this is not the thing to tell now, but as this is the basic, so it is needed to be discussed. The best solution for preventing the wastage of items is recycling and this is also true for furniture items. Today many furniture manufacturers are introducing new recyclable and more eco friendly furniture designs so you can get a good deal online.

Reuse the Old Furniture: Instead of throwing the old furniture, you should think of all the possible uses you can make of it. There are many things you can do and many items you can make from the old furniture for example you can use top of the table as a board, tops of a stool as a frame or tray, old chair as a stool, or you can break the furniture to use its parts separately for different purpose.

Get your broken Furniture Repaired and Renovated: If it is possible to get damaged furniture repaired, go for it. You can prefer throwing a furniture item due to a minor damage and can buy a new one, but you should know that natural resources are limited and one day, they will be finished and then you will be left with no option other than reusing the old items, so why not do that from now on. You also have an option of renovating your furniture. You can find many articles on the internet on how to renovate your old furniture.

Sell it or Donate it: Though this is the last option to be followed, but I think this is the best option. There is always someone who can use your old items better. You can sell your old furniture if it is in good condition. There are many good websites that provide you with the option of selling old items for free. Other option is to donate the old furniture to a person, or an organization, a trust, etc.

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