Archive for the ‘Finance’ Category
Normally, I don’t go off on a rant on my blog, but I really don’t think that I can leave this one alone…
I just got off the phone with a Manager at American Express (who refused to give me her name, but I have her employee ID Number) because I just got some absolutely ridiculous news.
American Express just cut the available credit limits on one of my credit cards by 95%. I’ve had this card for 23 years, without missing a payment and for most of the past 23 years, have paid the card in full each month.
About a year ago, I took a AMEX Blue for Business Card Offer from them for one of my businesses. They offered me a card with a $40,000 limit and 0% for the first 6 months, so I took it. Then in the past 90 days, they arbitrarily cut the credit limit to $100 over my balance, and then this week, cut it again because I paid down the balance.
Posted in 
Tags: 
Now could be just about the time to invest in property, either by home buying as Cash House Buyers or by investing in a home buying or similar property company that has a watertight survival plan to carry it through the Downturn
It’s ironic that falling property values have at least partially led to the current Downturn. This is in turn causing a crisis in confidence amongst Bank Shareholders, because they know that if they hang on to those shares too long when others flee, the share value will inevitably dip below the critical value which renders the bank’s capital inadequate for loans and deposits on its books.
At this moment a rescue package has to be put in place, and that means either nationalisation or takeover by a competitor. At this point the ill fated shareholders have forfeited all negotiating rights. The sale has to go to completion, and the government or the purchasing Bank won’t pay more than the then current distress value of the shares.
So, where can you safely set your hard earned cash to work for you in these troubled times?
Well if you make sure you have more than enough ready cash to get you through anything the next 2 years may throw at you; why not use some of the rest in becoming or investing in home buying either as Cash House Buyers or by investing in a home buying or similar property company that has a positive survival plan to take it through the Downturn
If this looks like foolishness, consider this; in the UK, just to keep the Market stable over the next ten years; three million new houses are required. At the current rate of building, we’re unlikely to see more than a third of those put up. This shows that the medium and long term prospects are very good for investing in property, because it’s much more likely that demand will outstrip supply than the reverse happening.
Cash House Buyers and Home Buying Companies usually buy homes at 80% of market value, because the vendors are more than happy just to find somebody to “sell my house”. This ensures that they have a reasonable margin to pay for all their own costs, insulate them from the market falling a few more percent in the short time they own the property, and allowing a discount to make the sale happen quickly.
If you don’t fancy the Cash House Buyers role for yourself; you’ll see lots of good opportunities turning up to invest in Home Buying Companies. Many Home Buying Companies have used loans to enable them to maximise their property portfolio, and so hugely improve their Return On Capital Employed. Now they need to decrease borrowings, and they require an injection of cash to do that and to make sure they can service their remaining debts until the market stabilises and begins to grow again.
If you’re considering such a move for your cash; do all the due diligence, and in particular make sure that your investment will be enough to ensure the company’s survival, and will give you enough of a voice to make sure that it does just that.
