"£10,200 in ISA's, Darling"

On 27 May, there was clarification on Mr. Darling's confusing announcement in his Budget recently about the increase to the ISA limits. The rules have been amended so that a qualifying investor aged 50 or over on 5 April 2010 can invest up to £10,200 - from 6 October 2009. In other words, if you reach age 50 at any time in tax year 2009/10 you can subscribe up to £10,200 on or after 6 October 2009. This is of course the maximum amount for 2009/10. So if you have already got £7,200 in, you have an extra £3,000.

Why oh why do they see the need to make things needlessly complicated? Why not just increase to £10,200 from 6th April for everyone? Come to that, what about a nice round number like £10,000 or £10,500 - where did the '£200' chappy come from? Anyway, it's still sunny so I'm off to sit in the garden with a Stella.

(Important: please see disclaimer below)

A Powerful Question

I asked for great questions on Twitter and Trevor Lever of Trevor Leaver Consulting (http://www.trevorleverconsulting.com/) came up with this extremely powerful and empowering question for us:

"If you could do one thing incredbily well, that you are not doing now, that would change your life, what would it be?"

Go ahead...see what happens when you ask this of yourself.

A much needed walk and why wasps sting!

Blagdon Lake in the distance

I was complaining recently that I felt pretty exhausted, headaches, tired etc and my friend Nicky Wilkins (Armada Finance in Bristol) asked me, "Do you excercise?" I had to admit that I did not any longer, having foolishly thought that I could keep up with teenagers (and a very fit 60+ year old) playing a full game of football two weeks ago, I injured my knees, which put paid to the running...not that I was actively running...perhaps I should say, put paid to my planned re-attempt to re-start running! Well, when Nicky is not acting, juggling, swinging from a circus trapeze and lending money, he's also a fitness expert having coached gymnastics professionally...so I thought I'd be wise to take his advice and start to at least walk for 15 minutes a day with a bottle of water in hand. As he so rightly pointed out, living in Blagdon, I have beautiful countryside to walk in (the pictures above were actually taken in October - today was just like that, very warm, very sunny). So that's what I did this morning: we walked to the lake and back which is about 5,000 steps. On the way back, we bumped into John Smythe who is well known in Blagdon for keeping bees. I mentioned Terry Andrews who's also a renowned beekeeper in the Mendips (John says hello, Terry). We talked to him about wasps and their purpose apart from to sting you...he gave us an education on wasps, their purpose and why they're a nuisance in the later part of the summer. Thanks, John. And thanks Nicky...I'll do this every morning...and who knows, may start to train for that marathon again!

31 million light years away

One light year is 5,878,630,000,000 miles in distance. That is over 5.8 trillion miles away. That's a huge distance away. The Earth is a tiny speck in the Milky Way Galaxy - and the Milky Way is 'only' 100,000 x 5.8 trillion miles across. This is found 31 million x 5.8 trillion miles away! This image was captured with The Hubble Telescope and is the "X" Structure at Core of Whirlpool Galaxy (M51). More on light years? See this 'You Tube' video: http://www.youtube.com/watch?v=Rj1sDWjvgjM

What is a budget?

Simply put, a budget is a tool that tells you the truth. It tells you what is coming in, what is going out (and where it's going) and what is left over (or not). When used well, it is an extremely effective tool to help you achieve your goals for your reasons. It serves you in actualising what's on your Financial Road Map and generally getting your financial house in order and keeping it that way.

A Life Changing Question

Dan Sullivan of The Strategic Coach taught me this question:

"If we were sat here today, three years from now, looking back over that three year period, back to today, what would have to happen for you to be happy with your progress?"

Take 30 minutes and pose that question to yourself. You may begin to feel 'unstuck'. There is a follow-up excercise to this. I'll be posting it soon. If you want to have the follow-up emailed sooner, please email me by going to Contact Us on my website http://www.integrity-financial.co.uk/

18% or 50%?

With the rate of capital gains tax at 18% many believe that receiving returns primarily through capital gains is better that through income and as such this ought to affect investment decisions. Add to that the 50% rate of income tax for income over £150,000, and you can see why this message could make sense. However, is there a 'catch'? Well, there could be...while tax is an important factor in the investment decision I don't believe it is the most important factor in most cases. Seeking capital growth (over income) can increase the risk in a portfolio: the recent evidence is all around us: extreme volatility in capital values. Both the Barclays Equity/Gilt report and the Credit Suisse Global Investment Report have stressed the importance of reinvested dividends/ income as a significant factor. So, in looking to mitigate tax, we don't forget to keep an eye on risk and make sure that there's a match between your attitude to risk, your values and your goals. By the way, you may notice arrangements being invented suggesting that income is converted to capital gains in the hands of the investor which will then be taxed at the lower 18% rate: you can bet your boots that these will come under increasing HM Revenue and Customs scrutiny.