Alliance turning towards the financial dark sideWritten by Richard Green
Following in footsteps of many of its high street competitors, Alliance and Leicester has announced that it will no longer accept new customers onto its Online Saver and Direct ISA accounts. The interest rate for Online Savers account is also being cut from 5.35% to a straight 5%.Richard Brown of financial comparison website Moneynet ( http://www.moneynet.co.uk ) believes that Alliance and Leicester (A&L), in common with its high street competitors, has seen its costs rise as a result of recent rule changes covering things like way mortgages and general insurance are policed. He added, “Unfortunately it’s consumer who shoulders much of this additional burden” It seems to many of their loyal customers that A&L is indeed determined to make their customers pay in an effort to purge costs and boost their profits. These cuts are only latest of a series of changes that A&L have made during recent months. First to go was cashback scheme on their Moneyback credit card. The Moneyfacts (http://www.moneyfacts.co.uk) financial data website pointed out in February, that A&L had increased APR on their credit cards for all purchases up to 16.9%; as well as increasing penalty fees, and introducing punitive new clauses to current accounts. Other charges have been introduced to their mortgage products, balance transfer fees on credit cards, reductions in children’s savings accounts, whilst The Guardian (http://money.guardian.co.uk/saving/banks/story/0,12410,1509094,00.html) has revealed some suspect changes that have been implemented to their systems to increase number of customers who breach their overdraft agreements, triggering penalty charges. A&L has said that there is no hidden agenda, and that it still leads way compared with its banking rivals. A&L however, are not only financial group to be feeling pinch. Barclays, HBOS and Royal Bank of Scotland have all warned about credit arrears. An announcement concerning job losses at Scottish Widows, came alongside admissions from their owners LLOYDS TSB that there was, “An increase in number of customers experiencing repayment difficulties” with their credit card debts and unsecured personal loans. According to Lloyds' Chief Executive, Eric Daniels, we are currently experiencing, "a slowing consumer environment".
| | Invest to make money, not to get rich.Written by DPB Financial
The technology boom of ‘90s romanticized “rags-to-riches” ideal that all of us dream about when investing. For those that invested $1000 in Dell at $5 during 1990, held through seven splits, then sold in March 2000 at $59, dream was a reality. That investment would have returned an amazing $1,132,800! Image making over $1 million for every thousand dollars invested. Beyond Dell, companies like EBay, Amazon.com, and many others made their investors very wealthy. Unfortunately, ‘90s provided a different investment environment than we are use to. We experienced birth of a new technology and it required new companies, jobs and consumers to fill needs of industry. Immediately, our economy had a new demand with limited supply. This led to feeding-frenzy stock purchasing that we all witnessed. Once reality settled in, too many companies were heavily leveraged, over-extended in equity, and/or did not have revenues to support their business models. The sudden collapse of mega-companies like Webvan, online grocer that wasted over $750 million, became highly responsible for economic problems that we faced earlier this century. Moral of this story: Invest to make money, not to get rich.
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