Today’s session we’ll look and the simple things you can do to get your spending under control during this crisis (or at any time).
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Immanuel is a property developer and personal finance specialist who authored the book – The 6 Steps to Financial Freedom Download your copy of his book at https://www.the6stepstofinancialfreedom.com
Alright so hey guys how are you? Welcome to personal finance rant and so I guess some we Immanuel and I were chatting and we just thought what would be really good is to actually you know really what would at this time sitting at home you know contemplating our thoughts to actually think about you know our relationship to personal finances and the type of things we can do to not only you know, sort through things now in this time of sort of you know crisis and change and all sorts of things. But also how we can relate going forwards so what we thought we’d do is you know just I am you know sessions full of information. And I guess today was recovering the government of the UK government stimulus packages. So any thoughts on those Immanuel? Yeah you know we are in unprecedented, unchartered, unparallel times right now and things are changing on a daily basis sometimes even an hourly basis and what’s really being amazing is how the world, the communities are coming together and how we’re going to come through this by pooling our knowledge and our resources and our information and taking stock of where we are right now.
And the UK government specifically have done some amazing things over the last week or so and continue to do so. It’s really explaining how those packages are going to help and stimulate the economy right now and going forward in the future and how we can take advantage of them so a lot of people don’t understand just how amazing these packages are. What’s available to them? What they can do? How they can speak to their current employer obviously the government haven’t been able to help every single person they’re trying to help as many people as possible. So it’s really casting this net likely doing the fishermen with the sea and they’re casting its net out and seeing how many people they can encompass at the same time so all I can do is commend it the UK government for everything they’ve done and continue to do and I’m sure there’ll be some additional support packages that come through as probably over the next few days.
I think you know the amazingly you think we have almost taken the lead for the rest of the world you know you sort of expected places like Sweden and Finland and Norway in the sort of Scandinavian countries to do that anyway but you don’t normally expect it from the UK. You know and I think that’s where actually Boris got his majority in December and since then you know I would love to say he’s you know he’s made mistakes but actually do you know what on balance he’s done a bloody good job. And I have to say you know looking at these packages and how wide the net is cast it is pretty good at it you know and they’ve freely admitted that they’re going to miss people out and then actually you know they’ve had troubles and how they’re gonna pay people, how they’re gonna get this out you know and that’s an issue with the data sort of things that you know there’s certainly done the best job they possibly can I think.
I think a couple of things have really been highlighted here one is what an amazing job both Boris and the chants have actually done so far. Secondly, I think we’ve got some muscle memory to do with the financial crisis in 2007, 2008 & 2009 where they acted not as quick as they should have done whereas this time around there are certainly acting to protect what we have and to make sure that we come out and the strongest possible scenario coming at the end of it. So there are lots of different measures being put in place and I think the measure they’re put in place is certainly being unparalleled I’ve ever seen before and I still can’t believe some of the packages they’ve put in place because they are so amazing when you take into account how many people they’re looking to cover it simultaneously.
I think the amazing thing is normally when we go into a recession they’ll sort of bailout the big you know the banks last time and that’s the stuff that the individuals are left to themselves but actually this is almost its new unchartered territory that they’re moving into. I’ve never seen it in my lifetime before but the amazing thing and I was doing you another video today about this particular thing why it’s different from you know post-war post corona is because what they’ve actually won big things have done is normally have huge unemployment after a war. Whereas actually do doing their keeping people in jobs they’ve almost pressed pause on the economy but that and what I what we all hope is that that allows us to come out really quickly which is you know certainly the intention and that way the people that are made redundant and don’t have jobs I actually have a better chance of getting into jobs because businesses still exist. You know it’s a bold move but actually I think it’ll my personal feeling is it will work I don’t know about you it will work. You’re right they press pause on the economy and I think the difference this time around is that in 2007-2008 the government and the UK taxpayer-supported all the banking institutions and now the role is actually reversed they do have the finances. That’s not to say that we all don’t have a job and a responsibility to make sure that these institutions survive because they’re also going to suffer through this as well at the same time and whatever the government puts in place for us now there is going to be a payback afterwards. It’s like you know if it’s like you’re training and you have you you have your cheat meal there’s going to be some consequences. I think once we come out the other end of it again as a nation we’re gonna have to find a way of repaying the debt over time this is gonna be a debt that’s going to be having to be paid for quite some time. So there’s going to be an after the bite at the end of it but right now let’s get through where we need to right now.
Yeah and you know there’s no free lunches the thing that I find interesting is it’s one of these things where if they don’t if they stimulate too much then afterwards we end up with inflation. Because basically there’s too much money chasing too few goods. If they don’t stimulate enough we can end up in deflation where there’s no money they’re trying to go after the goods of you know available. And I think that’s an interesting thing it’s almost like driving a car when you know if you’re thin you’re I’m learning to drive and where you’ve got to get the clutch and the accelerator right otherwise you stall the car. This stimulus package they’ve got to really do that but in some ways now’s not the time to be thinking no let’s hold back a bit I think they needed assertive action they needed us right away interestingly I mean following Australia – and Australia I think started by getting it wrong they actually effectively didn’t support the individuals. So lots of businesses just like you know what a business has died I’m just getting rid of all my staff, so then everybody went over the welfare line and literally a million people in the first week went on welfare. And they’ve clawed that back I think somewhat in that there now you know I think they’re paying 15,000 a fortnight.
It’s interesting to see how the different countries around the world coping with this, but we’re all in the same boat realistically it’s in that same virus everywhere. For the government it really is a tricky situation it is a fine balance and I like the analogy you gave about the clutch and the accelerator it is trying to find that balance so you don’t go backwards you don’t go forward you stay still for the moment and then when things change you really can take your foot off the pedal and accelerate and stop moving forward. And that’s where I think we need to be and it really is important but people understand that we really are in this together. Small businesses, employees large companies because there any way we’re going to come out of this and really gonna propel in Excel is by working together by having compromised by looking at each other situation so how can we help in the best possible way that we can. Just you know the National help that we talked about you know a few days ago the number of volunteers and then we’re going to come into that a little bit later is that we really are finding this community spirit again of helping and supporting each other and recognising who is really important for us to move forward with.
I think that’s really important to, because if you look at how decimating Brexit was and how polarizing Brexit was to actually come back now to have start-finish done the Brexit if you like not obviously finish the whole thing. Now to have something that brings us all together and it is amazing now you know after three years with Brexit everything was about the differences and now everything’s about similarities. You know that’s a great thing. I mean as much as it’s in the backdrop of a human tragedy and you know medical tragedy and you know if you had an economic potential tragedy you know it’s amazing and I think this will be very good for the country to almost healing or put behind some of the wings because realize Brexit at such a small thing when you compare it to say coronavirus and you know the number of deaths and things like that.
Today we’re talking about the stimulus packages and that but what the real goal here is with their personal finance frames is really about getting you guys confident in a whole range of things around personal finances. Whether that is that their discipline savings, whether that is about planning for the future, whether the cost savings, whether that is how to negotiate a higher income whether that is you know whatever it is buying working on assets great you know creating assets whichever know whatever it is about that’s you know they’re the topics we’ll cover. Now and obviously one of the things we really love me to do is subscribe to our YouTube channels and if you know if you’ve got questions send them through to us because then we can deal with them in subsequent videos because obviously know we’re here for you guys and I think it’s really important that you know if you guys can interact no we’re happy to give freely I mean this is the whole idea behind this you know both Immanuel and I. You know that years of experience working with people in this theme and I think you know it’s great because that amount of knowledge it’s so easy when you sit down explains people it makes sense. This stuff should be taught in schools but it’s not you know because our school system is still built for you know building the pennies or the team model for them and you know unfortunately it hasn’t adapted. I think it is slowly and certainly, the university with a school system is having to go online now has been a big change. For everyone you know it is a big change but yeah but um yeah so that’s the if you like that the rationale behind this so you know it’s a carte blanche whatever you guys want to cover you know we’re happy to address it and we’re happy to deal with it we are happy to give our thoughts on it, you know an interesting we both have different views on things they’re very similar that you know Immanuel may do something for three months I may do it for 30 days you know so you’ll see the differences it doesn’t mean that one approach is better than the other you know it’s what we’ve found works for us and for the people we work with.
One of the comments I like has come out quite often is nobody has a monopoly on great ideas and that the whole point of having different people with different experiences, a different knowledge, different skill sets will come up with different things that help people in different ways. Again one of them allergies I had which was quite good is can you imagine going to a shop you see a whole load of clothes you try some of the clothes on the ones that you like you to keep the ones that you don’t you throw away you disregard. Same with information and knowledge and financial IQ you take on board the ones that sit with you if they work with you you keep them if they don’t you discard them and try something else and that’s the whole beauty of having different people different knowledge we have that ability to share in a different way. I will precaution against this is that we’ve got lots of ideas and yes some of them may or may not work for you but the reality is you know listening to us talk about them and doing them is a big difference you know it’s great for us to talk about them you know we love talking about it we love talking but if you can take them and go on implementing that’s where the real master is and that’s where the real results will be seen so I think you know don’t just sit here and take what we say you know to go and put it in place and try it out and you know to test if it works.
You know implementation there taking the action it is massive you know we’re all at home now we’re trying to find different ways to do things at home and it’s you know I see your TV screen behind you in just the same way you can look on the TV to see all about fitness but if you don’t do the exercise yourself you’re not going to get the benefit and the same with what we’re doing here we can share the information but if you don’t take it on board you don’t do it you’re not going to see the results. We want you to get the results we’ve been given and most amazing opportunity to be at home and to find new creative ways of how to create money, to create income, to create cash flow to increase our knowledge and for a lot of people that are going to be furloughed workers and we’re going to talk about that in a minute you’ll get having the opportunity to be paid and to learn new skills at the same time. Absolutely you know it’s one of the things, in fact, I did another video today which was all about you know once-in-a-lifetime opportunity to redefine your relationship with work, with health, with finances with whatever it is I mean the whole reason behind this here now we’re sitting here is because you know we wanted to get across the opportunity to redefine your relationship with whatever it is.
Let’s get into it so we want to do a daily just a quick summary of where we are at in terms of growing a virus so you’ll see on the screen you know 785,000 people cases thirty-seven thousand deaths you know I’ve put they’re the only countries with ten thousand or more cases now interestingly turkeys been added today from yesterday but the reality is I started with a hundred I then went to a thousand now changed it to ten thousand because they just wouldn’t fit on the screen and that’s over the course of ten days that I’ve had to change that so you know things are moving rapidly. One of the good things about a lot of the finance stuff is that a lot of the four things that we talked about are not things that change these are universal principles and they stay there forever but yep anyway that’s just sort of updating brain-wise when you talk about the UK you know 22,000 cases where we got 14,000 deaths 180 from yesterday it’s too soon to say but to be fair it’s not I mean we need that in case of their increasing that’s for sure but I hope that with all these spans you know the lockdown, the social distancing you know that’s the stuff that we were able to shorten that curve you know there’s certainly increased capacity he’s been pretty impressive but I was pretty pressed when I heard China talking about you know two hospitals in ten days and then we’re gonna pulled you know I think it’s five different hospitals with the eight or nine thousand capacity you know just welding two weeks pretty much. You know it’s a pretty good thing and I think it just shows you how when there’s a singularity of purpose in we can achieve anything. In terms of finances, if you focus on what you want and you put your energy towards that, that’s what you’ll achieve, and that is part of the goal-setting that we will talk about. What we’ve done with the hospitals in that short period of time there’s been nothing other than spectacular and the people coming together, again the community spirit its if we are at war with the invisible enemy that really is true we can’t see the enemy and we’re all pulling together to see how we can help each and every one of us in one shape or form. Whether to be with our finances to with food, the support we’re all doing a little bit along the way to try and make a difference. Yeah 100%.
Let’s get into the government support schemes and have a look at them. So we’ve broken them into pretty much employed, self-employed and company invested owners if you like. It’s interesting with my business we have about 40 employees and of that, I think about 25 of them are still working full-time and actually working even harder now and with furloughed about 15. The sales business that I have the property business we were furloughed all but one employee there because realistically property sales aren’t happening right now there’s not a lot happening there so you know we took advantage of the thing. I think maybe before we talk about that I think there are some people have given this stigma that you shouldn’t be using these things and it’s almost like the welfare you know should be it’s like no these are here for these circumstances. You know I’m not being for abuse but actually it’s amazing you know these things are here for you to use so that’s why we want you to get you up to date with them and it’s very hard to put down a huge detail there because they’re changing all the time and there’s more information coming out and you know the government will say one thing I mean the banks will implement that you know and depending on which bank you bank with will determine you know-how. The truth what the government are trying to do they understand that they do not want people to be massively unemployed it changes the sentiment of the country, the confidence of each individual. What they’re trying to do is what you said is put it on pause. So effectively the people are still employed on a reduced salary and if they’re at home they’re not going to be spending as much anyway because they’re going to have you know that will be the things that you do normally. So when we come out at the end of this crisis out of this pandemic, they will have the resources to re-start again their businesses as if it will start going on a summer holiday you know you go on holiday for two three four weeks you come back you start work again so take look at this as an extended holiday where you’re able to do the things that you couldn’t normally do spend time on your home tell me your finances on your family and your relationships in lots of different areas when you come back refreshed because you haven’t worked all this amount of time that you can actually start sprinting when we come back into the business. That’s what the government wants to see that’s why they’re putting these measures in place to allow us to come out of this really strong and really fast. And that’s why they put this unprecedented kind of support in place. And that’s what people need to understand it’s to allow us this pause and to then get started very fast again and that’s why they put this measures in place whether you’re an employee with yourself employed or with your businesses and I said previously it will be a few people that fall outside of that and I’m one of those people and however, the vast majority are going to be looked after and covered and that’s the most important part.
I think you know use these systems get to know these systems and the other thing is just because you’re furloughed doesn’t mean for instance you don’t have access to maybe Universal credits or you know it’s not a case of there’s one solution that will make up you know everything. It may be multiple things you may have a business and you’re employed you know and you can access this for your business and that here for yourself. I mean there are people missing I mean Immanuel’s missing out, I’m missing out you know because technically I’m in Singapore you know not the UK great but actually my businesses can benefit from that so we will still benefit indirectly. The furlough for me when they come out with that I just I mean I must admit I almost jumped for joy for me it was a masterstrike because what it did it as a business owner who employs people I was sitting in the own Wow and if you think about it in our sale business we made sales last month most of those sales were pulled out now. So we had all the expenses but the income is gone then this month we haven’t made any sales there’s a few bit but realistically compared to what any sales but and there’s still the expense. So I’ve got two months of expenses you know and we’re talking hundreds of thousands of pounds there that potentially is down the drain now I would be sitting there going if that continues I can’t fund that indefinitely so I wouldn’t need to let people go but what the government did by furloughing they basically changed my mind so I mean actually I don’t need to let him go I can keep them on further an amazing thing. And you know I mean that’s the same thinking that I’m sure was going through hundreds of entrepreneurs thousands of entrepreneurs around the country and what it meant was that you didn’t have this massive weight on the welfare system that you’ve actually people in job awesome but anyway it’s 80%up to two and a half grand you know and the amazing thing there is that you know that for most people I think it’s I can’t believe the statistic but it’s that covers quite a few people you know in that situation which is great. You know but you know actually the torch you really got it you continue working I mean we’ve got most of more than half our staff are actually working full-time and a normal employment contract nothing’s changed apart from the fact that their business has changed a little bit because they’re dealing more with tenants and landlords and investments that were concerned and worried and don’t know what to do and that sort of thing, whereas normally they’d be doing work like viewings and move in’s and move-outs and things like that’s not happening so their jobs changed and I’m sure your job has changed too if you’re still working but then the other side of the fellow side and you’ve also an employee got the universal credits.
You know now what I’d say with all of these things go on read the detail the government website is there it gets updated you know what we don’t want to do is go into the detail here too much and then tomorrow they come with new stuff and it’s totally defunct. Go to the government websites in the bottom of this thing when we post it will give the links to various places you can go to if you’re worried about debts if you’re worried about you to know to have to negotiate with your tenant-landlord those sort of things there are lots of resources that have been produced now.
Another side from the employee you know the time to pay so you know if your tax bill due then you know they’re allowing you time to pay that one of the things I think the big thing here there are no free lunches they’re not giving away free money some industries are getting grants and things but not so much. Most of it is either you gonna loan it or and you’re still gonna have to pay it back but it’s deferred. Certainly as a business we’re looking at the you know it’s all about the CBILS and a sec but those are the CBILS is the incentive screen we’re looking at that but it’s aligned and we have to pay it back so I’m going to be conscious that if I take it I have to pay it back which means it’s going to come out of future profits. You know there’s a couple of bits I wanted to talk about in terms of the self-employed in terms of the tax bill and if they’re VAT registered and that’s quite massive so your tax bill if your due a tax bill in July you can actually defer that until January next year so if you have accounted for the tax which most self-employed people hopefully have, you’ve got that money sitting or part of it sitting ready to be paid in July. What the government is saying you don’t have to pay that so it gives you the ability to use some of that resource that you’ve had to help your cash flow. The other part that’s really important is your VAT return again they’re allowing you to defer the VAT so again you can use part of that resource to help you and your business during that period of time. As we go through these different videos we’re going to talk about how they can actually tap into those resources and how they can use them more effectively to actually grow income as well as savings doing this sort of period of time, but it’s really important that people understand that money they’ve made available for you to tap into that however as you quite rightly say that’s not a free lunch it’s money that’s going to be repaid back but for a now they can use it as an emergency fund like an emergency overdraft I guess they’re given you your own overdraft through the through the VAT and through your income tax to allow you over this really difficult period of time.
The great thing about it wasn’t just one thing you know they’ve looked at multiple things and really now there’s a real picture it’s interesting I live-streamed the budget when Rishi come out and gave the budget and I was live streaming and it was amazing because I was kind of like wow that’s amazing, that’s wow geez and it was kind of like you know it was my face you know was telling all. What they basically said and what he was saying was we’ll do whatever it takes to you know keep the economy moving and keep going whatever it takes and when a politician says they’ll do whatever it takes most of the time you go whatever you know ignore that comment. But actually, to be fair looking at what they’ve done they’ve actually backed it up. I have to say you know bloody impressively to do that you know.
Let’s look more in this set to the self-employed side of things so the CBILS basically so that is Coronavirus Business Interruption Loan Scheme okay and basically what that means is that you can apply to your not it’ll probably be your normal bank that you go to because they will know you best and then what the thing you’ve got a proven this is the big thing is you to prove that you need the money because of the coronavirus interruption. If your business was shattered anyway then the likelihood is you’re not going to get the funding and I’ll probably let you pass into you know liquidation or administration whichever. So it’s not a case that bad businesses will get funding for nothing but good businesses that have been affected by this are likely to get funding. You know and what I recommend is I mean I do say you know if you don’t need the cash it’s open until September 1, I think it’s 1st September so you’ve got time you know saying straight away but I’m always one that says you know what I’d rather have a war chest now and know I’ve got it in my bank sitting there than waiting until I need it and then finding out the criteria chance or whatever. So you know and that was the same with the mortgage payment holidays and other things like that you know I want to build that war chest and have that there that is just the way I’m built a lot of people are you know a lot of people happy just to chill out and I go on with it yes so it’s really important people understand what this loan is it’s exactly what it says on the team it’s a business interruption loan. So if your business was already profitable it was surviving and thriving and the coronavirus COVID19 actually has prevented that from happening the government and the banks want to support that so the beauty of it two things one you can have interest free for 12 months and more importantly you can also have with certain banks 12 months repayment deferral. So you can actually not have to pay any monthly payments as well as interest for 12 months that’s massive now the term again we put a link at the bottom is between one and six years there are 40 mainstream banks they’re going to be able to do it for you. More importantly, the first port of call is your bank because they already know you, they know your banking habits they know your business and they’re more likely to make me that loan to you than another institution so it’s really important that people know first and foremost.
But the same credit there’s still new credit checks if somebody goes through this process you but you what I found what I’ve got the application there it’s a much simpler application. It’s not like you know forty pages or anything like that but you still have to provide details so you submit a business plan you sort of show you know how you’re gonna pay this back effectively. One of my businesses already applied for so what we’ve done is we put one business in to see how it turns and learn the lessons from there and then basically the other businesses in if we need to. So you know we’ll see how we go but you know it’s very simple and now I’m making simple because they want you to get that. The other side of it is that with this thing is that it’s 80% secured by the government that doesn’t mean that if I borrow the money there’s security for me there’s security for the bank in other words if I don’t pay the bank gets up to 80% security yeah so that doesn’t mean that the bank won’t ask the security from you for the other 20% or potentially you know more. We haven’t worked that out and even they have an action said too much about that but you know they probably will still ask for security yeah personal guarantee.
It’s very likely that a bank will still ask for some sort of security part of the loan application you’re going to send in your assets and liability proof of payment and how you anticipate your business will be able to make the payments after COVID virus actually over so that’s really importantly you put that as part of your business plan as part of the actual need to be the question and your first point of call is your business relationship manager at your bank. They are the ones that will have the forms they’re the ones that actually help you to complete them and to submit the application for you and guide you through the application at the same time so whichever bank that you’re with that’s where you need to go through Lloyds, Barclays, Natwest that is your first point of call.
Definitely and so just maybe on the other side my self-employed there are lots of specific industry grants that are available you know so one of our mates is in hotels and so he’s actually he’s been there are grants for entertainment I think it’s entertainment tourism and hospitality you know there are grants there between ten and twenty-five and you know there are all those things I’m going to detail lots of those because obviously, you know they may not apply to you but go online and check them out because it may be a case of just a simple request and you get ten grand sent to your bank you know which isn’t a bad thing.
You know the other side of it is you know business rates you know fantastic business rates you know at the end of day you know I’ve got another mate who he was saying he pays a million dollars he’s got multiple sites a million dollars in business rates and we’ve been given free for next year yeah so that’s a million can stay in the business it doesn’t need to be paid out. It’s a huge thing especially lots of businesses have been complaining about business rates and unfairness of them and lots of stuff to get a year off them you know it’s a huge thing you know and you know that only lasts three months this thing to have another nine months you know that is a good way to get back onto your feet you know at dinner CBILS and these sort of things you know this you know there’s some real stimulus so when it does women when the virus is done when the medical side is done and you know where the human tragedy is done the economics you know it can come back quickly and that’s really what everybody’s aiming for and everybody wants.
I mean as you and I talking about this the more we’re talking about it the more it’s like unbelievable all these different incentives the government put in place and I just want to talk about what you just said about the business rates there are two parts so if you have business rates even if you’re not even if your business is business zero-rating the fact that it would have had business rates you can qualify up to 10,000-pound grant as a small business and lots of pay addresses greengrocer shops all of those businesses will have that as well as the benefit of not paying business rates for a year. So that really is an unbelievable package for the small business owners and shop owners so that’s really quite massive. Absolutely, I mean and just on that slide too I mean one of the things we’re doing you know we’ve got two sites we got a Lincoln and London site so both those we’ve gone to the landlord and because we’re not using the office so they’re not using services and not costing as much so we’ve asked them for either rent-free food which is obviously the first part of negotiation which was promptly you know frowned upon. But we’ve said well what are you know what’s the response and so we’re waiting now, but potentially we may get 30%, 40%, 50% off I don’t know about off our rent that we owe you know by negotiation or it may be deferred that we get three months off or you know who knows what they’re going to come back with. Hopefully, they’re not watching but uh but you know the great thing about that is and this is one thing I’m finding is you know everybody’s in this together and so everybody’s dealing with in a different way and for the most part we find people being reasonable. Especially the tenants and landlords we deal with and the investors we deal with you know most people being you know reasonable about this yes it’s quite good.
Everybody’s suffering in one shape or form you know just like the virus that has no you know agenda other than anybody whether you race, your colour, your religion, ethnicity it doesn’t really care and as a multicultural society as we are that’s one of the great strengths about the UK is that we have so many different races, religions all in this melting hotpot you know where we all come together this is a time where we all shine in our different ways to find different ways to help each other in different ways. We’re all going to have to be flexible to be able to come to survive right now to come out the other side into some thriving when we do come out the other side. Because this is not just about surviving, surviving is just right now but it’s also about thriving when we come out the other side. And I think that’s a really important point too because if you were just sitting there and you’re stressing and worried about today and tomorrow then the problem is it’s going to take you longer to come out. One of the things I’m saying to all you know all my the business clients we have and you know the guys that I work with and their businesses and the various businesses that I own and that is I’m saying use this time now to work out what happens when we come out of this and have that plan ready and if you need to pivot if you need to create systems or structures or train people or whatever it is get that happening now at the time so you know you’re straight out with money. You know I mean it’s an amazing me but you know so many people you know they’re afraid of the social media but they know they need to learn it for their business you know well now’s the time to learn it, now it’s time to do it, now is the time to take that time and do it actually may be as you said before our time to actually just sit back and relax and take some time out so you’ve got the energy to fire again as soon as you come out. Because let’s face it we’ve all been running so friggin hard for the past 10, 20 years whatever it is you know and getting more and more busy, busy, busy and I think that’s part of the redefining the relationship with whatever career, health, wealth whatever.
So the company sites that companies are a bit of a mixed pot because obviously you’ve gotta look at company profits over the previous three years I’ve been going for 2 years then two years and the problem with that, not a problem with that’s great you know it’s up to 250 that’s up to two thousand five hundred pounds and it’s at 80% again so it’s the same as the employed one well very similar except it’s on profits. And the other side of it is that you can only access it if you’re a director as page right so if you own dividends they’re not counted that’s one of the areas where you fall through the net which unfortunately for most company directors they have a small pay-as-you-earn and the rest they pay in dividends because that’s the most efficient way of doing it. So you know that’s where you know if your boss is walking around and you’re part of a small business you might have is head-down going on this piece is like bloody hell they miss me out. That may change you know that one of the things they have said it’s so difficult for them to work out what a business is where the businesses are or less and stuff you know but yeah.
There are two parts of that so the first part is that you’ve got to be earning profits of fifty thousand or less that’s quite important. The second part is that you’re not going to get paid that grant for three months so they’re going to pay as a lump sum so if it is two and a half thousand contrary to what most people think you don’t get two and a half thousand in three months time you get paid a lump sum of seven and a half thousand in three months times. That’s really quite important but there are thresholds and you’re quite correct if you actually have an income on the payee and the vast majority of your income is through dividends then you’re not going to be covered on this also if your income is more than fifty thousand you know going to be covered on this. They haven’t prorated it to say well we’ll cover the first fifty thousand the rest of it we won’t so that might change again. There’s a lot of things in here there are still moving however if you are a company director we’ve now had confirmation that you can make yourself a furloughed worker so what you do pay yourself and pay ye you could take 80% of that as a furloughed worker so you’ve still got some income in addition to that you’ve got the other benefits you’ve got the universal credits you’ve got the other links that government actually put in and we’re going to put these different links at the bottom so you can read the ones specific to you. But the measures are changing and the support package is changing on a daily basis so every day I go on I refresh it I look at the most up-to-date see what else has been added what other for clarification so I got through yesterday whole government 22-page report all to do with the support to do with landlords and tenants. As they’re updating this as they’re defining all the terms and terminologies and the rules and regulations they’re updating it accordingly and I suggest that everybody does that on a regular basis but areas that concern them specifically because it will change on a daily basis.
I think one of the good things with the difference between the furlough of an employed person and a company is it in a furlough of an employed person you no matter work but as a company, you’re allowed to continue working so you can fill it yourself and still work. Which is really obvious because if without you you’re probably not the business I work but I am yes so that that’s quite good but I think you know to look that you know for me that’s fantastic.
Let’s just work so with someone a mortgage holiday so you know this has been a great thing for those with mortgages okay. There was a bit of misunderstanding and that I think lots of tenants thought that it was a meant day you can get rent-free. There’s nothing free about it, yeah what happens is the three months payments are just simply added to the loan and then if your loan is over the next 20 years you’ll repay that over the next 20 year years obviously with interest because the interest bit will add to your balance, your balance will increase so you don’t even pay that amount back but the interest on that now over the entire period. So you know you got to decide whether you want it but from myself, I thought you know what I’d rather have the money in the bank right now or over there looks three months of payments that I don’t have to make and also it allows me to be flexible too if the tenants are calling saying I’m being made redundant I can’t make the payment can we come to an arrangement you know. The important part with that is that you know the average mortgage in the view case about five to six hundred pounds so if we work on five hundred pounds a month as a mortgage payment if you’re making a payment the holiday for three months you’re adding fifteen hundred to be overall mortgage balance and as you quite rightly said the interest will then be recalculated then that new balance over the remaining term of your mortgage however there’s nothing stopping in six or twelve months time when you do get back on your feet again to make an overpayment to repay that back down again so you stop paying interest. Quite rightly the amount of interest that you’re paying and if you’ve got a mortgage of 2% to 3% you’re paying 2% to 3% on the fifteen hundred pounds within the scheme of things is minuscule compared to the benefit of having that fifteen hundred pounds in your bank right now to help you with really important it’s sensual expenditure like heat and food and shelter.
I went through all my mortgages it took a bit of time it took me about five hours all that to be fair you know I’ve got quite a few more meters that the reality was going through the process there were really easy ones which I actually did a video where I was shocked myself. I started out doing it and the first one I did in under three minutes and I literally recorded it and here you’ll see my face I’m like literally going oh my god like you know what’s going on here and it was literally that easy. I feel the backend ones work so easy I had to find them up and then ever told actually you’re not urgent so therefore they’ll get back to you sometime this month because I’m going to miss my payment this next one if April and so they’ll do May is the first one but they have to pull me back and go through whatever you know so there’s a varying range they’re really easy. Because most of the lenders have been inundated what I would suggest if your mortgage payment isn’t due for another five or six days you leave it. It’s only in the last five or six days that allows the phones to be free, the internet to be free for them to take on board the people whose mortgage payments are coming up right now in the next few days. So if you can wait until you’ve got five or six days before your next mortgage payment that would be the ideal time to do it.
The other part that’s really important to understand because this is an initiative with the government if you do take advantage of the payment holiday remember it’s not a freebie payment holiday it will not affect your credit. So Experian, Equifax similar credit agencies because it’s being agreed with the government it won’t affect your credit and your credit and your credit rating is specifically for times like this when things are difficult. So by adding it to your mortgage won’t have an impact that’s really important you understand that so you can take avail of this if you need to obviously if you’re earning income your salary hasn’t reduced then just carry on paying everything is normal you’re one of the lucky ones. If you’re in you know the NHS and you’re earning income or your other kind of businesses where you’re being paid and it has been affected you then just carry on playing as normal.
The interesting thing is with that whole price like I went through that whole process it actually was relatively easy I mean I was expecting to get a lot more questions in a lot more detail but literally it was so easy. The other side is that we needed around if you’re currently behind in your mortgages you can’t get a payment holiday through this facility but you still have the payment difficulties avenue. So that the payment avenue we may affect your credit rating, yeah but the payment holiday one won’t affect your credit rating. So that’s you know there are two different strains the payment difficulties why is always about that has always available in fact the most, for the most part, the payment holiday has always been available to you know just maybe once a month or once a sorry once a year. Once it has been there so you know I mean it’s I think years ago I took one with northern rock you know and I just get what it was that they offered it to I was really mad about something else is better to remortgage and they said rather than remortgage why don’t we just give you a payment holiday and I was like you don’t give me a payment holiday and then I did the remortgage anyway.
These facilities are here so definitely use them. Let’s move on the other side of the thing which is rent holidays okay so I think this one this one what you realize is as a tenant you’re in a contract with the landlord through the agent. So actually the two parties if you like to the thing to the contract other tenant and the landlord those they’re not changing yeah so the reality is if you want to have a rent holiday because you’re in difficulty you’ve been made redundant, whatever or furloughed then it has to be a negotiation. So it’s a negotiated holiday but you still have to pay it back you know so whatever that rent is is going to be added and you know the landlord may give you three months may give you six months may give you whatever they negotiate but obviously our mortgage is over 20 years whereas a tenancy agreement might only be over a year so you’ve got to be careful that you don’t go yeah I want to paint in holiday and then you know that 500 a month you paying rent all of a sudden has to be paid off over the next three months and you’re now paying $1,000 rent you know per month to catch up. Because the evictions still there everything’s still there all it changed was the notice from two months to exchange the three months have to be human now. Can I add something to this is really quite important the government announcement was very specific, so it was specific that no tenant should avail themselves of a rental payment holiday unless they were adversely affected by COVID19 now what that actually means is because of all the different support systems have put in place like furloughed workers to give support for the self-employed to help businesses put in places the different grants to change the Universal Credit and how quickly you can apply and the different loans that you can get. The vast majority of people will not be affected in terms of their rent that’s why they did it the government have been very measured in all the things they’ve done because they don’t want a knock-on effect in every different area. So as you quite rightly say the tenant and they’ll order land will have to negotiate it between them it does get added to the remainder of the mortgage of their rental terms so if their rent is 500 a month and they’ve got six months left on the rental after it finishes that 1,500 pounds gonna have to be spread over the remaining six months so that’s the first thing. So it’s not a freebie or they might have to extend the contract. Secondly, the tenant actually has to prove financial difficulty by either a letter from the employer or their payee or direct result of COVID19 having an impact to not pay all of their rent it might have an impact pay some of the rent but not necessarily all the rent. So it’s very important that landlords and tenants know that is what’s in place and as you quite rightly said it doesn’t mean eviction won’t happen it just means it’s been extended by another month at this moment in time.
In the other you know is there’s the money claim on loans now so it used to be very hard you had submission to go to court if you want to claim the money back to the courts now with the main claim online if you leave a tendency in you owe money at the end of that the landlord for about 60 bucks can make an application online to claim that money back. Assuming you don’t show up when you lose that but you’re likely to because most agents will have the ability or the evidence to do that then that will cause the CCJ which could create a record remaining. So you’ve got to be careful about what you do here and that’s what I think there’s this has to be a conversation you know and I you know be very careful about doing that because even if that 500 rent you’ll say you are able 250 I’ll pay and see if we feel that on that still means you’ll be paying 750 you know afterwards.
So the government again are being very indicative and what they would actually like so they’ve said they want the Landlord and Tenant to be pragmatic and they want them to work together during this process. We’ve talked about this in all areas the only way we’re going to get through this as a country as a nation as businesses is to work together and not take advantage in each and every area. So landlords will have in addition to the mortgage other bills that they have to service they’ll have the gasification ectric or certificates maintenance repairs lots of other things that allow you to stay in the comfort of your home and by you not paying the rent and they might have more than one property so that’s happening to multiple properties rather than just one which you have it’s going to have a really massive knock-on detrimental effect and that’s why the government I put these packages in we said you need to contact your landlord at the earliest possible opportunity to make them aware that you might have some financial difficulty that you come up with some sort of payment plan and not just not pay altogether. The support packages I’ve been put in place to help every single home owner or renter so the mortgage payment of holidays on your mortgage for the renter if they can’t afford to pay all or part their rent they’ve got the ability to take the rental holiday after they’ve saw all the benefits that the government have put in place not instead of.
Yeah, 100% and and and that’s so key of the point you made you know communication and communicating as soon as possible. Because you know landlords I mean as much as a lot of people in the media of sort of making all this money and so easy and you know the reality is there are a lot of bills, a lot of regulations, a lot of points that they have to pay bills for you know and if have not got that rent coming in it’s unlikely they can afford to pay all these things including their mortgages. So you know I mean in most cases the mortgage might be 70% there’s a 30% more bill you know there yeah its not huge profits that are certainly not this is my real fear at the end of COVID19 is if the landlord attempts don’t work together during this process you’re going to find an influx of properties coming on the market from landlords that don’t want to be in the business anymore. Because it doesn’t it’s not worth their while so we’re gonna have a supply shortage of properties at the same time. It’s really important that we work together so we come out of this as best as we can. And I have to say you know we managed over 1215 properties and I have to say there’s a lot of fear, there’s a lot of uncertainty but when we sit down and when my team sits down and talks to both parties landlords and tenants it’s amazing the compassion and the understanding and the understanding that we need to work together you know I think that’s really impressive. The unfortunate thing is a lot there are people out there and there are lobbyists out there the almost pitch landlords versus tenants and that is not the case you know to be fair that landlords we have but you know maybe we’re just gifted in having great landlords but you know we have a great set of landlords and we have a great set of tenants and sure right now we’re getting into some you know some emotional people who are you know you know yelling at staff and doing things like that you know and that that’s not just from the tenant side that’s from the landlord side you know who don’t understand that the tenants lost their job. But you know normally when you know to talk it through they calm down and we sorted out you know there’s always a way to work this out and I think that’s really important.
I think on that note anybody else that you know what I want to do is finished I guess the session on a bit of inspiration and I think you know we’re sort of been talking about a bit you know now and I think you know the real you know I mentioned the sense of community you know there’s a massive sense of community now and I love that. You know the fact that anyone was out clapping for the NHS the other day you know what that sort of stuff is fantastic because Brexit has been very damaging to the sense of self you know and I think that this is a great way you know the crisis is always a good way to bring people back to what’s important and that’s what we’re seeing now which is fantastic. I think one other point which is the virtual culture you know it’s amazing how we’re very quickly adding to adapt talking to each other through zoom and through you know webinars and through live streams and all sorts of things like that you know I mean for a few of us that have been using this for a while it’s relatively easy but for a lot of people I mean I love some of the men’s coming out live people were you know going to the toilet with their laptop and forgetting that they’re actually but they’re you know that’s going to happen you know it’s amazing how people move to adapt. Mind you my internet hasn’t adapted yet to the fact there are so many people on the internet you know anyway that’s fine.
You know the government’s behind us with their support you know volunteers you know five hundred sixty thousand volunteers in just a few days to help the NHS out that’s amazing to get that level. I mean we cannot get people out to vote but we can get them out to help you know other people which is fantastic and I think you know companies tenants, landlords, agents we’re all you know working hard at this you know and most people haven’t got the exact answers because the exact answers that are still coming you know from the government down but they are getting there and they are today say they’re moving pretty quickly from what was a big bureaucratic dinosaur that have been you know ten years of austerity. It’s amazing how they mean out of pivot and really perform you know very quickly you know so yeah it’s amazing as a society as a country when push comes to shove when our backs against the wall we come out helping and support each other and fighting for everything that we believe in you know in our society, our culture, our finances but we’re just here to help and support each other and the amount of messages that are coming through you know I’m in a really nice block of flats we’ve set up a community whatsapp everybody’s trying to help each other what can we get you this amount of people in our home that can go out at all. So you’ve got this sense of community that we haven’t really experienced really since probably Charles and Diana got married I mean you know that’s a long time ago and that poor guys got the COVID19 to now. It’s the first time we’re really coming together as a nation to wanna help and support each other look out after each other it’s and hopefully, even after this, this is going to be something that’s gonna stay because we’re gonna create friendships and allegiances and alliances that we’ve never had before.
I think you know you’re right I mean I would argue that it’s amazing to see how actually the UK comes together when there’s a sporting competition. You know and you know there’s a soul focus on one goal and it’s a bit like this now you know so yeah Charles and Diana I am a big fan of that I was probably a teenager back then. Hopefully, that gives you a bit of a broad-strokes look at everything you know you know any questions send them through make sure you go on our channels and subscribe. This is supposed to be live-streamed what happened we are basically couldn’t get the live stream working so we’ll swap that out overnight and we’ll do that on Thursday but yet so you know subscribe, ask questions you know you know anything you mean we can cover that you know personal finance oh yeah well next we’ll get down and dirty with more of the disciplines and the saving, cost savings and the ways to do those sorts things in the structure isn’t that they’re thinking the mindset and the fun stuff about saving money, making money, spending money it’s all gonna still be there yep 100% yeah all right guys so we’ll leave it there fantastic have a great day member stay safe, stay healthy and stay at home see you soon take care you guys bye bye