Shona Prophett in 2016

Frugal Entrepreneurs 01

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Shared with the Frugaleur (Frugal Entrepreneur) blog

 

Time to find out what everyone's doing to make extra savings and investments, other than by being frugal with the household shopping, being economical with energy use and quitting spending on non-essentials. Are you debt free? Is your financial future secure? Have you protected your 'cyberdosh'?

 

 

Here at NYK Media HQ, we run annual money saving challenges (see Frugal Forums) and also regular money making ones, like the frugaleur or cyberdosh micro-business challenges, but what is everyone actually doing by way of investing in their own futures? Can frugaleurs AFFORD to invest, as by its very nature, investment can reduce savings as well as increase them.

 

In 2008, my challenge was to earn an extra £15 per month (not quite 50p per day) and save it into a 10-year, tax-free savings bond with life assurance attached. That's £15 per month, every month for 10 years - a total of £1,800 paid out for a guarantee of only £1,500 life assurance or around £1,500 cash back at the end of it. If I remember correctly, there was cash back award of around £45 plus, I think, some Marks & Spencer shopping vouchers, but is it really worth it?

 

At the moment, the £25 'Scottish Bond' from Scottish Widows is offering £50 cash back plus a £25 'My Rewards Card' when you have paid a minimum of 2 monthly instalments into your plan. But then you are paying £25 a month for 10 years in the hope of getting your £3,000 back - no guarantees.

 

At the time, being guaranteed £1,500 of death benefits appealed to me. I had nothing set aside for that eventuality and it's one that I know can break family finances and create horrible psychological scarring for those guilt-ridden at not being able to afford to bury family members, lost suddenly and unexpectedly. So I went with the £15/month and stuck with it. I'm now paying it from my basic £4,000 per year budget, as prices on other things have reduced and I no longer have rent to pay. However... I may not get back what I put in after the 10 years - that's the risk we take with investments. For me, the little bit extra peace of mind was worth it and I still have the £1500 guaranteed lump sum due back in May 2018.

 

Back in 2002, I began learning a bit more about trading from home on the stock market and had some fun for a few years doing that, while being in what I considered to be a fairly well-paid job. (It was about £7 per hour and that was a huge amount of money to me back then, even allowing for £500+ a month rent, and still is to this day.) In all these years, I have continued to live on £4,000 per year and save everything else that was left after household bills and clearing debts. When rent became obsolete (on accounts of buying a small house for cash) I still continued to live on £4,000 per year, regardless of my income. Can you see the potential for savings when it costs £4,000 to run a household of 3 when all 3 are earning at least minimum wage each year?

 

The moral of this tale is that once you have learned to live on little and achieved your debt free status, there is no need to change your frugal routine just because your income doubles, trebles or quadruples, your household running costs drop, or a combination of both. While I had children home paying 'dig money' it all got saved, so when they finally moved into their own places, the drop in my household income didn't affect the budget at all, it simply meant the household running costs dropped slightly and the regular savings amounts were reduced.

 

Now what? I have a £4,000 + council tax annual budget but real costs are much less than that because I share the house and bills. I'm not money-orientated in a way that I wish for vast financial wealth - but the thrill of investments, even the most microscopic of them, is worth pursuing. It's what being a frugal entrepreneur is all about - playing a game of chance that can improve your future financial prospects while still being aware of the potential for it all to go wrong at any minute.

 

If we can weather our money storms, then we can learn from our own experiences that enable us to make better-informed guesses at what's right for us in the future. If we need to do it penny by penny, then so be it... the pounds will take care of themselves as long as we aren't foolish in spending our savings.

 

I want to be Shona Prophett by the end of 2016, so it's time to up the ante and make a few more decisions about what's going to be hot and what's not!

There's Profit in Porridge

It's Scotland, it's cold, it's wet, it's windy, it's June and we're still doing porridge for breakfast, so here's how to turn a pound into a tenner, if you are feeling charitable and sociable.

Porridge oats currently cost as little as 75p per kilo and one kilo will make 20 portions at 50g per person (3.75p per serving). For now, we are making only 10 portions, so call it 37.5p

I'm very cynical about recommended serving sizes as these, in my opinion, cannot possibly be true; there are far too many different lifestyles to cover for anyone to make such a generalisation with regards to calorific or nutritional intake. You're going to get fat if you eat more than you burn and you're going to starve yourself to death if you follow the recommended 2,000 or 2,500 per day when your daily lifestyle is burning up over 3,000+ calories!
But back to the porridge project:
Per person
1 x small cup (50g) of porridge oats per person
2.5 x small cups of water per person
Pinch of salt per person
This takes about 5 minutes to cook a portion of porridge in a microwave, slightly longer if you are doing a pot of it on the cooker top, perhaps 10 minutes in total, but chances are the electricity costs will be similar. To make one person one bowl of porridge would use approximately 2p of electricity but to make ten people a bowl each in a big pan would NOT cost 20p, it would probably cost less than half of that. This is what I call quantitative easing in the cooking department.

OK, so we have arrived at 10p for cooking and I'm not even going to count in the pinch of salt, as it's cheaper than chips and some may prefer to leave it out the porridge in the first place.

Most people like a splash of milk and a sprinkle of sugar and both of those items are fairly cheap at the moment - 49p per kilo for sugar (10 teaspoonfuls costs about 2.5p) and around £1.00 for a cheap 2 litre carton of milk, which should be enough for 20 servings of porridge, but we need only half of that, so 50p.

Are you adding it all up?

• 37.5p for oats
• 10.0p for electricity
• 2.5p for sugar
• 50p for milk

Total amount to prepare 10 servings of porridge = £1.00

If you can find 10 friends, family members, neighbours or work mates to bring a bowl and pay you £1.00 each for homemade porridge, you will have turned your pound investment into £10.00 and all in the space of about quarter of an hour.

So there you have it! You can feed 10 people a warm and filling breakfast for £1.00 but if you just happened to be charging them £1.00 each for the luxury of having their breakfast made and provided for them, that's shown a profit of 900%
Would you pay £1.00 for a bowl of freshly made porridge?  Or perhaps you already have, if you've ever bought one of those 'just add boiling water' concoctions that supermarkets now sell in waxed cardboard cups.

Shona Prophett at NYK Media
www.shonaprophett.com

Scottish Multimedia | There's Profit in Porridge

Teaching Money Matters in Schools - WHY?

Home Economics + Basic Arithmetic = Good Kousekeeping!

I've been watching the recent news and developments with regards to the petitions that are floating around the place. They are plying us with reasons to pledge our support to their cause, asking us to help bring money matters into schools as part of our basic education system. To be frank, I just don't get it!

School is a place for children learning the basics needed for their future adult lives, isn't it? These lessons are simple, they establish an elementary understanding of subjects that are important to everyone during future careers, regardless of what that career may or may not be. We can choose to listen and learn or we can tolerate these 'lessons' up until the point we have the freedom of choice to leave school and learn in another capacity - through life itself.

Some may see school simply as a place where children get sent during the day so they aren't wandering the streets with nothing better to do, biding their time until they are old enough to earn. School, like nursery, could even be seen as a place where children go so their parents can carry out activities other than childcare, like earning an income or anything else they see fit to do in the absence of their offspring.

Whatever any of us thinks of school, it is our right to have a basic education and our duty to provide similar for future generations. But it is not our duty to accept responsibility for the bad spending habits of others. We each receive a basic understanding of reading, writing and arithmetic, along with the simple concept of economics, be they home or otherwise, so common sense should prevail. But it doesn't!

Those who should know more than us have burdened this society with false beliefs that we should all be classed as equals, that we should all be able to partake of a decent meal, own designer labels, buy the most up to date gadgetry and possess all manner of luxury items. We should all be able to afford hobbies, pastimes and holidays, convenience and luxury should be readily available, en masse.

They led us to believe that we could all own our own homes and have the basic skills necessary to turn us into entrepreneurs or even just start our own businesses. But they overlooked one fundamental flaw in the plan - the fact that money is not a living entity. It cannot grow naturally, it cannot adapt to its surroundings and it cannot learn right from wrong. It is nothing more than paper, plastic and metal developed, manufactured and controlled by the chosen few who, to their disgrace, have been unable to balance the nations' books.

The concept is simple - take one pile of money, divide it be any number to whom you see fit to lend, then sit back and watch them pay dividends, by way of interest. If those payments fail, charge even more, add on penalties and drive the borrowers further into debt. Offer an array of incentives and promises of a better future, more security, better choices and the potential to feel good and then sit back, watch the borrowers borrow more and spend more, lining the pockets of the chosen few or those who chose to become one of them by sheer grit and determination. They all seem to have one thing in common - a total disregard for others when things, not surprisigly, go wrong. But there are always the get out clauses of insolvency and bankruptcy!

This continual building of debt has now escalated to such a height that even they cannot fathom out an agreeable method to stopping it, let alone putting it right. Their solutions are to print more money, cut back on what they think is 'unneccessary' spending and make it ven more difficult for 'normal' people to build real, reputable businesses that can grow to prosper and employ others.

They price ordinary people out of the market with legislation governing maternity pay, paternity pay, pension schemes, insurances, restricted working hours and minimum wage thresholds, then sit back and await the next emergency move.

But where do they go when all the previous options fail? They need to cast blame further and wider, so now we see the blame being laid on the children... If the youth of today and the common people had learned more, this may never have happened.

Well that is bullshit!

Those who dragged this nation to its proverbial knees were the very people who allegedly benefited from extra education. All their accumulated wealth of wisdom and expertise led us to where we are now, watching and waiting for the next global catastrophe that can quickly be assigned a few billion that adds to the amassed debt. They need huge tragedies, wars and disasters, so future generations can look back on history and point the finger of blame in any direction except that which is true. Nobody appears to have shoulders broad enough to support the burden of controlling what really cannot be controlled, so let's start again - educate the young.

To whom should we look for this teaching?

How and why are the current teaching methods allegedly failing us so badly?

Controlling a company, household or personal budget is nothing more than a combination of basic arithmetic and home economics, so why are so many people so bad at it?

Why isn't a closer look being taken at the education system itself?

Why are teachers failing to teach the basic principles of addition, subtraction, multiplication and division?

Why are parents failing to teach their children the basic skills necessary for survival in a capitalist society?

Is it not possible that some form of brainwashing has swept through our entire Western civilisatio, engulfing an entire generation, and that generation is not the youth of today! Nor even is it their parents' nor their grand parents' generations.

There has always been poverty, unrest, unfair division and class differences. YES! I dare to suggest that we still live within a 'Class' system and I dare to deny the existence of this so-called 'classless society' or equality that was dreamt up by some 'numpty' who thought the only way to cast off blame from those who should have known better, would be to invite society's minions into their lifestyle of wanton greed and waste - offer them more credit, hold them down by debt, if they come out fighting, let them take the blame when it all goes wrong.

So, I guess what I am trying to say here is that, in my humble opinion, people won't learn lessons that they don't want to learn, even if it is taught in schools. Brainwashing is everywhere - it's called advertising! Unless we ignore all of that and accept that debt is caused by spending more than we have, then what gets taught in our schools matters not one jot.

It is up to us, as idividuals, to challenge ourselves to live within our means and if speculative investments need to be made, have a back up plan in the event you don't quite pull it off in time.

Shona Prophett
www.shonaprophett.co.uk

Shona Prophett in the Eurozone? Don't be Ridiculous!

The Chancellor's 3 Rs:

Ring-fencing. Recapitalisation. Resolution

Very funny! But I still think reading, writing and arithmetic are the foundation stones for a successful future and cannot really see how investing in a school curriculum that includes financial awareness of any description will produce any long term benefits. Let's face it, how many teachers do you know who love their jobs, have zero debts and absolutely no money worries? I despair!

So let's get back to the Chancellor's Rs!

On 10^th October, Rt Hon. George Osborne stated,

“Since July, stock markets are down by 11% in the UK, 12% in America, 23% in France, and 24% in Germany.”

(He thinks that's good because we have the least 'down' at that point.) He then went on to say that bank shares had lost a quarter of their value over the past three months and that his proposed solution to the overall financial problem was the implementation of his three Rs:

Ring-fencing, recapitalisation and resolution.

Correct me if I am wrong, but by 'ring-fencing', does he mean protecting the UK from being dragged further down by the collapsing Eurozone? His statement that we will not be part of the permanent bail-out must surely mean we are unprotected, because the word 'permanently' obviously leaves us open to extended temporary measures!

What about 'recapitalise'?

Is this a fancy word for printing money and another term that could be used for quantitative easing? On the one hand, the Chancellor is stating that all the major banks within the UK economy compare favourably with their European peers (hardly great!) then in the next breath he states that Moody's, the credit rating agency, has downgraded no fewer than 12 UK banks. I'm not even sure if I could name 12 UK banks, let alone all of those that have been included in the downgrading! Where his 'recapitalisation' is going to come from, I haven't a clue.

Resolution – not to be confused with 'resolving' the problem, yet he used the word in such a way as to suggest that resolving the problem with Greece would be the solution.

Well, that and the release of a further £75 billion for “asset purchases”, whatever the hell they might be.

Unlike Mr Osborne's belief that credit easing by way of making the banks lend more money to more small and medium sized business will help avoid a further 'credit crunch', I believe that all it will do is bring more and more companies into more and moredebt. But why worry? With interest rates at an all-time low, we can all afford the repayments! (We can? What if they start climbing before we've amalgamated the old debts and paid off the new ones? One word springs to mind - UNSUSTAINABLE!)

Despite his bravado about the UK having been, “leading the International effort to help the Eurozone find that solution”, our dear Chancellor still states that steps have been taken to ensure we can “ride out the storm”. (No mention of how ferocious this storm really is, nor was there mention of any timeframe for how long we're expected to ride the beast.)

All very confusing in a gloriously simplified way, basically saying that he hasn't a clue what the answer is, but he'll have a good old think about the problem and bring it up again at the G20 summit.

Oh, and by the way, it's looking like we'll come out of the G20 with the biggest structural deficit, but don't worry about it... Georgie boy will resolve to rescue and reform, ring-fence, recapitalise, reshuffle, redistribute and reorganise things so that we may all sleep easy, knowing that any savings we have are rotting in the banks, being eroded by interest rates of less than half the current rate of inflation and that we'd all be better off spending our own money then borrowing more.

With a freeze on council tax and TV licenses, what more could we possibly ask?

Shona Prophett / NYK Media

www.scottishmultimedia.co.uk

Shona Prophett on Writing

Vowels and Consonants are the Pennies that Make up the Literary Pounds

Article writing seems to be the way to go, even if it is just to prove to yourself that you can earn a few pounds from your writing.

It may not be the most lucrative work, as the paid hours involved are usually short, but with so many millions of websites and so much time spent on marketing and social media, there are plenty of people out there prepared to pay for site content - good, bad and indifferent!

You would probably be amazed at how many sites are generating their content from third party sources. Even more amazing, many of these newspaper, magazine and TV forums you visit may have people who are paid to do nothing more than post online comments.

Please note - The Frugaldom forums are NOT like this, they cannot afford to pay me minimum wage to post. It's just not frugal! 

£6-£10 an hour seems pretty usual and £15-£20 per short article is a fair target to aim for in the early days. It may sound quite a sum of money, considering many can produce a dozen articles per day while sitting at home, sipping coffee and running the household, but others tend to forget that many freelancers may average only a few hours of paid work each week. (Do not confuse this type of writing with true journalism, which is more likely to pay on word count, or else an hourly rate of about £20-£25.)

I have seen many writing projects advertised at well below UK minimum wage, but I refuse to apply for them. I would prefer to write here for nothing than churn out automatically plagiarised copy for 25p per page!

Only last week, I found one of MY ARTICLES spun and published on another content provider's site. I was livid! Not only was it really badly reworded, the person who had spun the article was obviously NOT a native English speaker.

How did I know it was my article? The translator/article spinning software had no equivalent for the words 'Frugaldom' or 'frugaleur'!

The Internet is awash with copyright infringements and plagiarism, but there isn't a jot of a lot any of us can do about it, unless we have very deep pockets and are prepared to fight our corner. You need to be able to prove that the negligent party is actually profiting by stealing your work.

NYK has taken a stance on this in the past. On one occasion, we discovered someone producing DVDs carrying one of H's paintings as its main cover image! Although the 'producer' had to cease printing and redesign his labels and was temporarily suspended from eBay, no apology was ever received and eBay officials were hard-pushed to even become involved!

Copyright law is a quag-mire. If you are worried about others stealing your work, try using something like 'Copyscape', but even that isn't infallible. With so many people writing about so many similar subjects, there will always be a case for them claiming it is their original work - basically their word against yours.

I disapprove of article spinning software, I disapprove of automated script writing, novel writing, character development and story writing software - it all makes a mockery of what being a writer is supposed to be, in my opinion.

That opinion may change, if I can be convinced to the contrary. Perhaps the entire publishing industry is in dire need of diversification in order to survive the ravages of technological advancement and the explosion in electronic publishing. My guess is, however, that the glorious publishing industry is already well ahead of the game and will have it within their grasps to control it, too.

Just as newspaper, magazine and book distribution is controlled, so too will be the new writers of the day. We are, afterall, still all little fish in a huge ocean of words and pictures.

My way of dealing with this, especially when losing out on work to non native english speaking individuals, is to concentrate on the home truths:-

I write for me
I write about genuine experiences
I do my own research
I write in English as my first language, Scots as my second
I write for the pleasure of writing
I write in the hope that I may, one day, call myself a professional writer and feel no shame in how I derive my income
I strive to write to the best of my ability
I read as much as I write
I learn something new every day

Sorry for the rant, but I don't think £15 is too much to expect for a 200-word, carefully written article on a specialist subject. (Can you tell I had a haggler?)

I don't care if I'm never asked to produce another article for this particular person again; there's a principal involved.

Word of caution - this is not a good sample article for the 'don't cut off your nose to spite your face' brigade.

Soap box gone now. 

Shona Prophett
www.scottishmultimedia.co.uk

Shona Prophett in the Frugaldom 2012 Challenge

It's the Final Quarter of 2011


As a long-standing fan of the Frugaldom lifestyle, I find myself gearing up for the next great money-saving challenge, as set by NYK Media in the Frugaldom forum.


For the past five years, a household budget of £4,000 has been set as the target. This excluded rent/mortgage, council tax or work-related expenses. For 2012, we are looking at setting the challenge budget at an average of £15 per day for absolutely everything, council tax included. 2012 being a leap year means the Frugaldom annual budget will be £5,490.00


I should add that this lifestyle has paid dividends, as the savings made over the past five years bought the house outright, so no rent or mortgage to worry about, only the council tax. (For anyone with children, the challenge allows for whatever extra Child Benefit provides.)


The cost of living is extremely 'way out' if we incorporate the costs associated with how we earn our living. Before setting out on this 2012 epic journey, I would recommend you all assess how much it costs you to earn an income.


It has often been discovered that the cost of working far outweighs any previously preconceived ideas about how much benefit it brings the household. A prime example is the low-paid, second income. Often, the person earning that meagre income can save more money by being home running the household as their business than they can financially contribute in extra cash from the job. A penny saved is a penny earned. Do you really need two cars, for example?

Expenses (work-related) that we seldom take into account include:

• transport
• clothing
• footwear
• lunches, snacks, drinks and hot beverages
• social activities
• gifts for fellow workmates
• increased costs for groceries, when there's insufficient time to bake and cook from scratch at home
• takeaways, when there's insufficient time to cook at home
• nursery care and/or out of school hours care for offspring
• extra wear and tear on a car that you possibly wouldn't need if you didn't go out to work
• bus, train or taxi fares
• a family holiday that seems necessary in order to convince yourself that work is worth it
• gym membership because you haven't the time of day to keep fit in more usual ways...

The list is endless, the costs phenomenal, so start counting up your non-household costs and weigh them up against the overall benefits. Include the stress factor and any other health-related issues.

If I tell you that it is possible to run a household on an average budget of £1000 per person, can you tell me how much it costs if I include the costs of working to pay a mortgage and all that entails? I realise that it's dependant on where you live and work, but commuting looks like a complete nightmare to me.


Of course, sharing your household with others is usually much less expensive than living alone, so it pays to have someone else sharing your space. Letting out a spare room can net you enough to live off for a full year and that extra income, through the rent a room scheme, is tax free! One need never worry about being alone and penniless while that policy is in force.


Here in Prophett HQ, the work costs are minimal - we work from home because we can and because we don't need all that much income in order to survive and enjoy a simple lifestyle. 'We' are 3 adults. I run the household on my own income and anything else gets banked. I don't charge my son the equivalent of room rent, but he does contribute around half the allowable amount. When he chooses to leave home, the option will be there to take advantage of the rent a room scheme. I don't charge 'the other' any housekeeping or rent, as he is the completely independent other with whom I pooled my savings to buy a property.


For anyone who has followed the Shona Prophett updates in the past, you will know that I've ventured into such weird and wonderful challenges as 'comparative investments', involving gambling in all its forms.


For those of you who followed me through my 'Penny Shares' challenge, you will have witnessed the trials and tribulations of watching my Tadpoles (TAD) emerge from the murk, before that murk sank into the LSE mud pile, never to be seen again. A lucky escape, if ever there was one!


Going back further, you might even remember the NYK challenge involving owning a racehorse and getting that out onto a racecourse, more as a stunt to show that it could be done, than for any other reason. That was fun!


All of these things can be done on a tight budget, you just need to be prepared to leap at every opportunity that can help you on your way. You need to adopt an obsession with numbers, a love for number crunching, an eye for a bargain and the attitude that nothing is beyond your reach.


The only certainty in life is death, so make the most of the breathing times.


(c) Shona Prophett
01 October, 2011
Scottish Multimedia