WHAT THE BANKS DONT TELL YOU

PRINT THIS OUT AND KEEP! I have had too many people emailing me over the past few weeks asking about budgeting and there seems to be hundreds of people searching on how to budget and how to save money etc. There seems to be a trend and people want to know how to deal with the banks. So I have decided to give away a whole chapter of an e-course I developed about a year ago that I sell on the internet to my subscribers list but I think there is a need for it and here you can have it for nothing.

Traditionally in New Zealand we have had savings banks (designed to cater mainly for the public’s everyday banking) and commercial banks (designed to handle commercial businesses and international transactions). The distinction between the banks has become almost non-existent as different banks merged and competition has meant they have to do everything.

Banks consider themselves a profit centre and so make no apologies for making a profit when looking after your money. They are very aggressive when charging fees and marketing their “add on” sales such as insurance’s and bank services. In some banks, these “add on” sales can make up 25% of their profit.

Banks are also becoming more technical utilising electronic means of paying (such as EFTPOS) and transferring money between accounts and to pay creditors (such as telephone transfers). Whichever way we look at it, banks are becoming less personal all the time and only seem interested in you if they can make money from you through fees or additional products.

Bank managers have a great deal of autonomy and how you are treated in a branch can be largely determined by the relationship you have with the key people in it. If you are getting on well with the loans officer or you have an understanding bank manager then that person is worth keeping in contact with – even if they change branches.

Within the rules laid down for business by the banks the bank manager has a great deal of discretion when it comes to applying those rules on things such as overdrafts, clearing cheques quickly or being more lenient when you are a few dollars short of making an automatic payment work.

FEES

It is not at all unusual for the average person to be faced with $240 worth of fees per annum! Check your own bank charges – you could be surprised.

So how do we avoid fees? As a rule Savings and Loans Societies and Credit Unions have less fees but offer less services.

When you conduct a transaction at a bank counter, as many as 17 people handle that piece of paper before it is finally filed and forgotten. This is why transactions by staff members are so much more expensive than using the electronic and automated systems. Here are some do’s and don’ts:

Do’s:

· Use the ATM machines whenever possible for less fees.

· Use EFTPOS transactions and get cash out while buying goods – two transactions at once saves fees.

· Use automatic payments or direct debits when possible.

· Utilise telephone transfers to move money between accounts and to get account balances.

· Use telephone transfers to pay bills.

· Ensure there is money to action all your automatic payments as the charges from the bank if you fail to leave sufficient money in your account are often $25 every time.

Don’ts:

· Make cash withdrawals at the bank.

· Make cash deposits at the bank.

· Use any teller transaction at all such as getting printouts or moving money from one account to another.

· Leave insufficient funds to cover your automatic payments and telephone transfers. This will incur fees at the bank and penalty interest on loans.

In summary, avoid using personal services whenever possible and make maximum use of electronic and automated systems.

The reality is the banks will be very hard on any small customer that does not keep their account in good order. If you talk to a bank manager they will tell you that if you bounce too many cheques or fail to let too many automatic payments fire then they will happily close your account down and see you on your way.

WHAT TYPE OF ACCOUNTS SHOULD YOU USE?

· Current / cheque accounts – the bank has designed these accounts to handle the majority of your transactions and money movements.

Fees charged are on a “per transaction” basis to reflect the high usage on the account. Interest earned on this account is usually low.

These accounts are ideally suited for telephone transfers, automatic payments, direct debits and other forms of money movement activity.

· Ordinary savings accounts – these accounts will pay more interest than a current/cheque account as they are designed for savings but they will also allow a fair amount of activity on the account e.g. telephone transfers, automatic payments, cash movements in and out.

As a result, you still get charged a reasonably hefty fee per month and possibly a higher fee per transaction to discourage you from moving your money in and out too often.

These are very useful accounts if you are saving money for things such as car repairs, house maintenance, school fees, and other short term saving goals.

· Incentive savers – these savings accounts are designed to reward you for putting money in but not taking money out. For example, if you put money in during a month but make no withdrawals they will often pay you a higher interest rate for that month. If you take your money out, you will often get far less or no interest paid that month.

Also to discourage you from moving your money, the transaction fees are highest on incentive savers while monthly account fees are often very low.

This account is excellent if you are saving for a holiday in a couple of year’s time, a deposit on a house or any long term savings project.

SETTING UP YOUR BANK ACCOUNTS

When we set up bank accounts we are trying to achieve certain things:

· To set them up in such a way that our bills are paid as a natural progression of our bank accounts and not something we have to remember all the time.

· To minimise bank fees and costs.

Banks will often ask you to have a sum of money when you open a bank account and this can be difficult to achieve sometimes. You could take your money from savings to start an account or borrow a small amount on a credit card or from a friend. The interest is minimal if you hand the money back as soon as you start the account and you can save a lot of money if you become more efficient in the way you handle your bill paying.

You could reduce all personal expenditure for a short period of time to get the money together or ask the people you owe money to for a period of grace and put that extra money aside.

1. All income should go into one savings account. Do not let yourself be paid in cash if you can possibly help it as cash in the hand is easily spent. If all the money goes to the savings account then you will minimise money “leaking” out of our system.

2. This savings account will end up holding all our money for:

· Extra expenses.

· Holidays and gift savings.

· Extra savings.

· $2000 as a minimum buffer.

			Savings Account # 1
									No ATM or EFTPOS access
		Transfers per pay period $………………………… $…………………..
	Savings Account # 2 For allowances						Cheque Account # 1 For committed expenses

Top up $………………. Top up $……………….

(comfort level) (to cover bank fees and

keep account in credit)

The reason we have this money going into a savings account is that when we take money out for our allowances and committed expenses, whatever is left will naturally start going towards savings – this makes savings a lot easier.

Note – there is no EFTPOS or ATM access on the first savings account or the cheque account to stop us taking money from the wrong place.

3. Every pay period we must transfer the right amount into our second savings account for allowances so that we cannot spend any more than we are allowed, as there simply isn’t anymore to spend. While we call this a savings account, you should find an account that costs the least amount possible to operate.

4. Every pay period we must transfer the right amount into our cheque account to cover our committed expenses. We put this amount in here to make sure no more is spent on our committed expenses than is necessary. By putting a limit on these expenses we have to make sure we stick to our budget.

5. Both the second savings account and the cheque account will need a sum of money transferred to cover things such as bank fees and to top up if we do overspend. Every pay period we must make sure we put in the extra we have planned in our budget to cover such costs.

6. In both savings account number 2 and the cheque account we need to have a minimum level of money to ensure that we never overdraw these accounts and fail to meet our commitments. If our automatic payments and commitments are not met then the extra bank fees (often as high as $25 for an automatic payment that doesn’t work) will soon make our budget very hard to achieve.

The number two savings account might have an amount of, say, $100 in it to make sure that we never run out of money and bank fees don’t overdraw the account. Use this $100 as your minimum balance and make sure you never go below this.

The Cheque account also needs an extra amount in there to cover fees, as this is the most active account we have. You will also have to make sure that there is extra in there to accommodate the fact that you may not have a full payment ready to go out once a month. For example, you might have to pay $100 a month on a hire purchase.

When we did our calculations we multiplied $100 a month x 12 to get an annual figure. In this case it is $1200.

We then divided this by 26 to find out how much of our fortnightly pay has to go into the account to meet that. In this case, it is $47.50 a fortnight.

If you only have 2 pay periods until your monthly automatic payment is due then you will have a total of $95.00 in the account – this is obviously not enough. We need to put a little more in right at the beginning to make sure that there is enough there to take into account the fact that there are 4.3 weeks in a month.

Likewise, the cost of setting up automatic payments etc. is something else the bank will deduct from the account so that if we are setting up our bank account system and we are setting up 4 or 5 automatic payments we must allow money for the bank charges. If we do not, our whole system will fail right from the beginning.

It is worth noting that automatic payments will come out in a certain order. Some banks pay the largest first. Others will pay them in the order they are loaded.

This means if you move into a new flat, for example, if you load new automatic payments for your rent, it will be the last thing paid when it should be the first. Ask the bank to rearrange the order.

It could well be necessary to calculate an amount of money that needs to be put into the accounts when you first open them, as a lump sum, to ensure that you will always be able to pay your bills on time.

7. What if you do not have a lump sum or you simply find it too difficult to calculate the extra amount that you need to make sure your bank accounts stay in order?

We can change the amount we put aside each week or fortnight towards our payments to make sure there is always a little more going in than is actually necessary. When we calculated how to work out our weekly and fortnightly payments before we used the following formula:

For weekly payments divide the annual amount by 52 – for example, $520 per annum divided by 52 = $10 per week.

For fortnightly payments we took the annual payment and divided it by 26. For example, $520 per annum divided by 26 = $20 per fortnight.

We can replace these two formulas with ones that give us a months payment every 4 weeks:

For the new weekly payment we divide the annual amount by 48. For example $520 per annum divided by 48 = $10.83 per week.

For fortnightly payments we will now divide the annual amount by 24. For example, $520 per annum divided by 24 = $21.67 a fortnight.

What this will do is make sure that you have the full months payment every four weeks. This means that you will always have enough money by the end of the month to pay all your bills. You will also build up an extra amount going into the accounts (1 month of extra bills) by the end of the year. This will help leave extra in the accounts for unexpected fees or forgotten payments and will mean that you are far less likely to miss any automated payments – why would you, you will actually have too much money in the account.

This way of calculating your weekly or fortnightly payments is an excellent way of simplifying your budget down and making if far more likely to work because of the extra amounts going into the accounts.

The problem with this way of doing things is that if your budget is so tight that every cent counts, you may well not be able to put the extra small amounts aside. You can’t move money to accounts if you simply don’t have it to move!

If you have got the extra money then this is a very good way of helping your budget stay on track and is recommended highly.

8. We have used two savings accounts and one cheque account because savings accounts have less fees and so they are more economical to run. Most banks will not let you have automatic payments coming out regularly from a savings account and so you will need one cheque account to do this.

If the bank does allow automatic payments from a savings account then you can combine savings account #1 and cheque account #1 to save more fees. This also has the advantage of increasing the amount you have in savings because every cent not spent stays in your savings account automatically.

The disadvantage of combining the two accounts is that you have to be very careful that you do not take too much of your savings out each time you withdraw money – you could be spending your automatic payment money.

People often prefer to have their income split between two different accounts (or even two different banks) to make sure the savings and/or automatic payment account is truly out of sight and out of mind. It is a good idea.

9. By setting the system up this way it doesn’t matter whether your automatic payments and hire purchase payments etc. come out monthly and you are paid fortnightly, this system will accommodate this difference.

You must remember that if you finish paying off a hire purchase or put another commitment on that you have to change the transfers from the first savings account to the cheque account to make sure that the right amount is being transferred. If you do not, you will run short of money or have too much in the wrong place.

If you succeed in paying a bill off and therefore have extra money you can start to leave extra money in the savings account or keep the money going to the cheque account and pay more off one of your other bills. Either way, you will have to remember to change the automatic payments that are in place.

10. We have all your pay going into the savings account at first because it means that every cent you don’t spend on allowances and committed expenses is saved. This is how you will eventually manage to become more financially independent.

Check your calculations every two or three months to make sure that everything is running smoothly – review your systems regularly. If you find that a regular commitment did not get paid on time – find out why because it may be an error that will happen again.

DIRECT DEBIT VERSUS AUTOMATIC PAYMENTS

An Automatic Payment is a more traditional form of making a payment automatically. Once it is set up it will keep going until an expiry date or until you cancel it.

The advantage is that you have control over it and can alter or stop it whenever you want. If you miss a payment it will often fire next attempt.

The disadvantage is that if your payment changes (for example a change in an insurance policy premium) you must remember to alter the payment or you soon fall behind on your commitments.

With a Direct Debit only the company that puts it in place can stop it – you cannot, even though it is your account. (In truth some banks will do it for you but they are not meant to!)

Organisations like Insurance Companies use direct debits because they do not need to get a new authority signed every year. This means instead of chasing clients and overdue payments they simply write you a letter and inform you of the new payment. They adjust the schedule sent to the bank and take the new amount from your account.

They can also take missed payments more easily by requesting a double payment from the bank the next month.

They usually simply send you a letter and “tell you” what they will do if you do not contact them. Most people do not bother to contact them.

There is nothing wrong with direct debits. It is simply that people do not like feeling they are not in control and do not like having others tell them how much is going to come out of their bank account.

BANK LOANS

Currently, banks are moving towards using either “blue chip” security (mortgages and term deposits) or unsecured lending. They believe that they will either give a good interest rate if the security is solid or take their chances on an unsecured loan but charge a lot more money. The difference in interest rate between a secured loan and an unsecured loan is often about 3%.

Loan Requirements

All banks have criteria that you must fulfil if you are to get a loan from them. These are:

• A good credit rating. The cleaner your credit rating is the easier it will be for you to get a loan.

• If you have had a “black mark” on your credit rating the bank will still consider your application if that credit has been paid off and this shows on a credit check. If you have been a bad risk to someone else and you still owe them money they will not consider your loan any further.

• You will be asked to explain how the bad credit rating occurred and if the story is reasonable and the loan is not too large they may well consider your application.

• Sufficient disposable income. Banks will usually use two criteria to judge whether you have enough money to pay for a loan:

Ø They will allow you 35% of your gross wage before tax towards your fixed commitments. For example, if you earn $1000 a fortnight they would allow $350 a fortnight towards fixed commitments.
A fixed commitment is an obligation you have to pay money on a regular basis and will usually be either a loan of some sort (such as a credit card, hire purchase, store card) or an obligation (such as rent). If you do not pay your fixed commitment then someone will bring it to your attention and act to obtain the money from you.
Included in this fixed commitment will be the amount that you will be paying for the loan that you are currently applying for.

Ø You must have a “net surplus” after you have paid all your fixed commitments. Banks will use an indicator such as $800 a month net surplus after all fixed commitments for an individual, $1300 per month for a couple plus $120 for every child.

For example: if Joe earns $2000 a month the bank will allow him 35% of that towards fixed commitments – this is $700 a month.

If Joe is currently paying $250 a month in board and a credit card, then $750 less $250 means the bank will allow $500 towards future loans. If Joe’s loan is $300 a month, then he will meet this requirement.

Joe must also have $800 surplus funds when we take the tax and the fixed commitments off his $2000 a month. If Joe’s tax is $400 a month and his fixed commitments are $550 ($250 board and a credit card + $300 loan) then we can see that Joe also meets this criteria. $2000 – $400 tax – $550 fixed commitments = $1150 surplus per month.

• How long you have had accounts with the bank and how you have conducted those accounts (e.g. have they been overdrawn, are you late with your payments, are they always chasing you for arrears) also play a major part in whether they will lend you the money or not.

• The security you offer can make a difference. If it is good security then it will make it easier for the bank to lend you money.

• All banks will charge a minimum fee of, say, $250 for a loan but can charge as much as 1% of the amount that you borrow.

SECURED LOANS

Banks look for mortgages and term deposits as their best form of security. They will also consider things such as shares, insurance policies and personal guarantees but they will modify the rate to accommodate for the fact that they don’t consider this class of security to be as good. As a general rule, banks will no longer use motor vehicles as security.

Advantages of a secured loan are:

• A better interest rate – probably 3% lower than unsecured lending.

• It is easier for the bank manager to lend you money if it is secured.

• If you have security in place with the bank (e.g. a mortgage) then it will also make future loans easier to obtain.

• Fees are higher and you do need to have the security.

On the whole banks are more comfortable with secured lending because they feel that if the customer has something to lose (such as a house), they are less likely to default on the loan. They will be more committed.

UNSECURED LOANS

Banks are quite happy to take the risk on unsecured lending because they charge a higher interest rate. These days it is cheaper to sue the few people who default on their loan than it is to put securities on every loan. Unsecured lending can include credit cards, overdrafts and unsecured loans.

If you are new at the bank you will often find a $200 overdraft or credit card is an automatic part of opening an account at the bank. Getting more unsecured lending will rely very heavily on how long you have been with the bank, how much money you have going into the bank and how you have conducted your accounts in the past.

A lot of bank managers will start with a smaller limit such as $500 and work up as you prove yourself but will set maximums depending on your income and the amount of money coming into the bank. For example, you may find that the bank will not lend more than 10% of your income or that they will not give you more in the way of an overdraft than you have money coming in every pay day – this means you clear your overdraft every pay day.

Advantages of unsecured lending:

• Fees are often less, as you do not have to pay for things such as mortgage documentation and lawyers fees.

• You can still obtain money when you have no security to offer.

• Unsecured lending is often for a smaller amount and therefore you have less to pay back.

• If you default on the loan you will not lose any of your personal possessions – although you will have a bad credit rating and possibly be taken to the debt collectors and courts if needed.

It is not unusual for banks to insist that you have some form of risk protection such as life cover or income protection if they are doing an unsecured loan. The reason for this is that they have no car, house or term deposit to cash in should the loan fail if you were to die or become unable to work. What they do is cover themselves with life insurance policies and income protection plans.

From a legal point of view they cannot insist that you have this insurance to cover the loan. Unfortunately, most banks will not lend you the money if you decide you do not want to put this sort of cover on a loan. As a result, while they cannot legally insist that you have this cover they can decline your loan if you don’t take it.

Banks often use a point scoring system to determine how much they will lend you. They look at a number of areas such as:

- How long you have lived at your last address?

- How long you have been in your last jobs?

- Have you had loans before? How did they go?

- Are you married?

- Is your credit rating good?

They score you on each area, the less points the better. They then have a chart they rate you against and this says how much they can lend you.

For example, if you have had 3 jobs in 2 years, have moved 4 times, no stable relationship and already defaulted on a loan – you will not get much of a loan if any loan at all.

If you have held a job for 5 years, lived at the same address for over 7 and are married and your previous loans have run well, the bank will score a loan application more kindly.

Banks will lend $15,000 or more unsecured these days.

Banks often score you on a points system to see how much unsecured lending you can have. The lower the score, the better.

For example, if you are in a rental property, are an unemployed teenager with bad credit and never saved any money with the bank, you would score highly.

If you owned your own home and were happily married in your late 30’s with 2 children and had all you wages deposited along with regular savings, you obviously have a better (lower) score and will receive more credit.

If you have just changed jobs or houses but been in the previous one for a long period of time, make sure you let the bank officer know as this effects the score.

CREDIT CARDS

Credit cards have got more people into trouble then any other form of lending. They are the most expensive form of lending with interest rates often in the 20% range and they are designed to trap you into using your credit card right up to the limit and leaving it there.

In New Zealand, more than 60% of people who have a credit card always have it at the maximum limit. If you cannot control your spending then you are better to apply for overdrafts and small loans to make sure you do not over commit yourself. It can be cheaper in the long run.

If you buy goods on your credit card then you will have up to 55 days to pay the card off completely before incurring any interest. If you only pay the minimum 5% each month it can take 7 years to pay off and you will pay 3.5 times what you spent.

If you get a cash advance on your credit card then you will pay interest from the day that you took the money off your credit card. There are some advantages:

• You pay approximately $20 a year as an administration fee and you do not have a $250 up front administration fee as you do for a loan.

• Once you have a credit card limit you can use it repeatedly without having to reapply for further funds from the bank.

If you lose a credit card (or cheque book) report it straight away and you will probably not be responsible for fraudulent use (except perhaps the first $50 or so).

If you find a card missing and do not report it, you could have to pay some or all of the fraudulently taken funds.

HOW TO USE A CREDIT CARD TO YOUR BEST ADVANTAGE

Because of the lack of upfront fees, the credit card can be useful for small purchases/bills that you can pay off in a couple of pay days.

Credit cards tend to have a 55 day billing cycle. This means that you use your credit card and every 30 days you are sent a bill. You have 25 days to pay at least the minimum amount.

30 days plus 25 days + 55 days

If you clear the whole debt before the 55 days, you pay no interest. Plan your purchases so you buy on the first day of the billing cycle. This allows you the maximum time to pay the bill completely.

For example – you need to buy a $150 tyre for your car to get a warrant of fitness. Suppose your billing cycle is the 1st day of each month, then buy the tyre on the first of the month. If you are paid fortnightly you will have 3 paydays in the 55 day cycle. If you pay $50 each payday you will pay the card off before the minimum payment is due.

This means you will pay no interest because the card is paid off before the due day on day 55.

This is the best way to use your card. If you have some money still owing on the 55th day you will usually only pay interest on the outstanding balance. But watch out if you do not clear the whole card – read their rules carefully.

WHAT ABOUT CAR LOANS?

Most banks are interested in doing small, unsecured loans (up to $5000) or large long term loans (such as mortgages) – they are not particularly interested in things such as car finance.

It is usual for banks to have a relationship with an established finance company that caters for the loans between $5000 and $25000 that are most common for car loans. For example, Westpac Bank owns AGC Finance: BNZ Bank has created BNZ Finance and National Bank has a working relationship with UDC Finance.

In this way, their clients are able to obtain car loans but they do not have to be party to an area of lending they do not want to be involved in. Banks rarely use cars for loans any more.

GUARANTORS

If someone acts as a guarantor on your behalf they have an equal amount of responsibility for the payment of the loan. It is very important that you make a guarantor aware of their responsibilities.

If you do not pay your loan and your guarantor has far more substantial assets (such as a house, car etc.) then the bank has the right to pursue the guarantor instead of you if they feel they have more chance of getting their money back.

Most banks will not take a guarantors unsecured signature and will require some sort of security from the guarantor to use on the loan.

A bank usually uses personal guarantees when a well-established customer asks the bank to allow a less established customer a loan facility.

For example, if mum and dad have been at a bank for 20 years and they ask the bank manager to help their son with a car loan, the bank may ask the parents to go guarantor on this first loan. The bank manager usually entertains this as a favour to the parents as he might not normally do this loan for a newcomer to the bank.

The majority of guarantor secured loans are not successful – if the bank will not lend you the money there could be a good reason. Many people who act as a guarantor swear they will never do so again!

PERSONAL GUARANTEES

Be very careful when a bank asks you to sign a personal guarantee. This is one of the most all-encompassing documents that you are ever likely to see!

On the front of a personal guarantee a bank normally puts a waiver that you are required to sign. This waiver says that you have foregone the opportunity to take that guarantee to your lawyer and have them look at it and give you advice. The reason this is here is because the guarantee is so complete that they are required to suggest you get legal advice.

It’s probably a good idea!

A bank will often ask a director of a company to sign a personal guarantee over the company’s undertakings. If the director does this, then they have no more protection from having a limited liability company.

A personal guarantee will not just guarantee the transaction that you signed it for (for example, the purchase of a car) but will mean that you have personally guaranteed every transaction and every loan on all your accounts from that point onwards – not just that first transaction. You could now be responsible for every overdraft, bounced cheque, or other loans, etc.

Not only that, but personal guarantees live on after your death. This means the bank has the right to pursue your estate for any money owing.

If you must sign a personal guarantee then ensure you get a letter from the bank saying that you can have that guarantee released upon the successful payment of the loan that they used it for. It is far too powerful and gives the bank too much control to just let it keep going.

Ideally, never sign them in the first place!

WHAT TO DO IF YOU LOSE A CHEQUE BOOK OR CARD

It is important to let the bank know as soon as you realise that your chequebook, credit card or ATM card have been lost or stolen.

Look up the bank in the phone book and ring their 0800 number (you can do this whether you have a telephone service or not) and report the loss.

If you report it straight away you will not be responsible for any fraudulent spending or use. This is because you have told them as soon as you know. This means that you have acted in the best way possible and done what you can to minimize the bank’s loss.

If you delay then you could well be responsible for any card usage or cheques written after you know about it.

For example, suppose you notice that you have lost your cheque book on the 10^th, but do not ring the bank straight away thinking you might have it in the car or at home. Having looked, you ring the bank on the 12^th. You could be responsible for any spending between the 10^th and 12^th because you are meant to ring them straight away so they can cancel the card or cheque book to minimise the loss.

The bank will ask you when you noticed the loss – It is important NOT to admit it was a couple of days ago. Always say that you have just noticed.

Thieves can be clever. They may do something like steal just your credit card but leave the rest of your wallet where they found it. This means they have the time between stealing your card and you noticing it to spend on it – it could be weeks before you notice!

BE CAREFUL

February 21 2009 | Uncategorized | 9 Comments »

Bloggers, Social Networkers and Marketing Stratergies. Help Is Here.

As you are probably aware by now I am very interesting in Social Networking and online marketing. This interest is leading me to some awesome contacts around the globe and opening my eyes to many different stratergies when it comes to marketing online and also in the offline world. If you look at my post about where 2009 is taking us and also if you look at my post about marketing real estate in 2009 you will see my opinion on the topic.

I will keep this post short and swet but I am asking for your help. This medium isnt the best source to ask on but I will try it anyway.

what I want is to create some small tutorials via web and video and blogs. Just to assist you hopefully. This is mainly targeted at the many agents that view this blog but also the sellers and buyers. This is a little project I am working on so please ask any question you like.

The more questons the better really – dont worry how silly they may seem. One topic is on how to embed a picture to a blog page. I will not be selling the stuff I do. It will be made avaliable freely through youtube and this blog. The things I am looking at pointed towards the online marketing world, but as I have said the online marketing is very much able to be used in the offline world. I thankyou in advance.

January 13 2009 | Uncategorized | 3 Comments »

How to Put Video Onto Your Blog

Quite a number of fellow bloggers have asked me how I put the video into my blog at the top in the left hand side. This is how you do it.

First of all you need to create a video of something that you want featured. Then you need to host it somewhere. I have used Youtube to host the video. You will need to create a Youtube account so that you can upload videos and broadcast them. (if you haven’t got one yet I strongly suggest you get one and use it in your marketing) – Its free to use.

Now once you have a video made, and its uploaded to Youtube (or another place where you can create embedding code) you almost there. But if you are using youtube then its very easy and straightforward.

Go to your videos in your profile. And click to watch the video you want in your blog. (If you have just uploaded the video it takes a few minutes for the video to process before you can view it). You then need to go to the section marked ( 1) in the picture. You then need to go to the embed section marked (2) in the picture. Left click the words and then right click to copy the text.  Now your finished on Youtube for the time being.

Now go to your voices blog and log into the control panel where you would check your stats etc. Now to get the right things you need to paste the Youtube text into follow this step. On the picture below I have numbered the steps so you can follow visually as well. Now

1.       Click on DESIGN

2.       Click on WIDGETS

3.       In the drop down menu on the left hand side and go to TEXT and click on ADD

On the right hand side the widget will have been added and can now be found at the bottom of all the widgets on the left hand side.  This is the widget you will need to add the text to. 

In my picture this is numbered (4).  Now to open the text box  click the EDIT button numbered (5).

From here you need to paste the text you copied from Youtube into this box. This will then look like the picture below.

There is one last thing you need to do. In the picture below I have 4 red circles. READ CAREFULLY This is the most important part. Look at the code you have pasted in and you need to change it. It needs to look like mine.  You will need to change the width from 425 to 220 and the height from 329 to 170. (This is the best fit I have found to work in this way.) Once you have done that you need to click the CHANGE button at the bottom of the text box and then SAVE CHANGES which is at the bottom of the widgets. Then view your bog and the video should be playing.

November 22 2008 | Uncategorized | 10 Comments »

How To Make Blogging Enjoyable, Fulfilling and Get The Most From The Experience.

After an enlightening rum with some fellow bloggers I think it is pertinent to mention one of the things that we all had a cry about and it is one of the things that we all agree that makes blogging and if done with passion will be just as important and will grow your blog just as much as the methods I mentioned in the post “How will Blogging Grow Your Business”.

The thing we are talking about is Commenting!

When you join up to any blog you have effectively entered into a community. A community of likeminded people who share the same view and the same passion as you do. And if you are active in this community blogging on your own blog or not you should participate and liven the blog up.

Think about it for a second. When I go to a blog and read an article on their I get information. BUT. If you go to a blog and there are many comments on their I always find myself reading the comments more than the article itself as the comments are really interesting sometimes and hearing people’s opinions and viewpoints on any topic are sometimes more beneficial than just reading the article itself. Think of it like having a fire that’s just starting up that doesn’t heat much, but by adding the comments your adding fuel to make it burn bright and when its burns bright it can then heat more. Thus being more useful.

How will this help your blog and your business. Well I go back to the title and explain from there.  How to make blogging enjoyable? Well by commenting on other peoples blogs you give the blogger a greater sense that they are being noticed. There is a great sense of achievement when you get a comment on your blog from someone. If you have one I know you will agree. This will then motivate the blogger to do two things. Write more blogs and they will comment back on your blog and then participate more within the community as well. So this answers the second part, How to get the most from the experience?

One thing Kerry said to me is that she sometimes doesn’t comment because it doesn’t add value or it might sound silly. SO WHAT! Put it down anyway. Just do it!!!!! Adding value comes in many forms, whether this is by saying good post or by giving your opinion on the matter it all adds to the validity and quality of the blog. And guess what. If you have a blog or a website you can leave a link to your site in your name and this is links as I discussed in the previous post that will just grow your site you link.

I will basically conclude to say you must comment. If you want to help grow the blogs your participate in and establish yourself or just plain old say thanks. It goes a long way in growing the overall value of the blog. So comment away to your heart’s content. If you’ve read the post take 30 seconds to write something below in the little shaded box \/ down there \/

October 06 2008 | Uncategorized | 20 Comments »

How Can Blogging Help Your Business

Don’t think that blogging or having a website is the magic pill that will turn your business around. But do expect if done well to work for you in terms of exposure and credibility. This is the 21st Century. We have to realise what is now. And we are in an online revolution. The Fact is for any Generation Y person the internet is joined to us at the hip, to Gen X its widely used and is increasingly used by Baby Boomers. We have connection in our homes, our offices, in our cars and on our cell phones. Heck you can even go to MacDonald’s and go online.

There are many ways of participating on the internet. You can be a reader which absorbs the mass amounts of information available. You can have a stagnant website that promotes your business or you can have an active social platform that is constantly updated with new content that the reader absorbs and possibly comments on.

With these varying means of participation on the web what will give you the best results that you want. Well having a website is a great start. But what’s the purpose of it? Most websites for Real Estate Agents are just promoting themselves and their material and has little content that is updated. From time to time you may change the look of the properties order but in essence they stay the same. SO by themselves are fairly useless for delivering traffic of viewers. Unless you’re doing a vigorous marketing campaign with promoting the link to your website through online articles, Blog and forum posts the only time you’re likely to get someone visit your website is a current client and you have asked them to take a look at your stuff. Don’t get me wrong this in itself is still a very powerful tool as an agent. But for building new business it’s probably very limited.

So we move onto the next things that you can do on the internet and this is blogging and forums. I am mainly going to focus on blogging as your blog is yours and you control it, on a forum you don’t control it. Now don’t get me wrong but just having a blog will not mean you get success for the sake of having one. It actually does take a little effort. But the great thing about it being on the internet is that once it is there it will stay and the more you grow it the easier it becomes.

Blogs. Firstly what are they. Well it’s like a journal. The big aspect to these fore being seen on the internet is that the search engines love them. They are easy to read and the content is updated regularly(when the owner posts a new post). But how do you use them to the best of their ability.

Well your blog should help you in your business and accommodate your website. Linking is the key here but I’ll talk about that soon. The key is that you need to update your blog often. Keep the content relevant and new. The first step is to start one. So you have done this what next. Well get writing. Actually it’s not that simple but you do need to put content on there. But this can be hard. The need for content is to get traffic. The visitors are what is going to in the future bring you enquiry. If you like me you get excited about the thought of people reading the things you write. And the thought of more traffic is thrilling. To get this traffic you need to use the search engines to see them and the content. Now if you do start a blog and add 2 or 3 posts a week your on the right track. But if after a month you start to notice that there is very little search engine traffic coming your way don’t get disappointed. At this point you may start finding yourself wanting to give up, or slowing down in your posts. But PLEASE don’t give up. Just keep plodding on with relevant and rich content and you will be noticed.

Google – which is the biggest search engine and the one I focus on indexes websites every three months. This means if you have a new blog it may take up to three months before its recognised. But when it comes to indexing time if you have a rich content filled blog that’s looks to be updated frequently Google will index it higher than one that isn’t the above. Once it is indexed and ranked you will then probably start to receive more and more traffic from the search engines. And with more content you deliver and more searches made the more frequent the search engines will rank your sites keywords and the more traffic you will receive. When someone searches say for example for my blog “New Plymouth Real Estate” and from the search engine click on my blog that search engine regards my site as linked to this key word or phrase. And the more it gets clicked for this phrase that’s typed in the search engine “bots” think it’s more important and up the scale you go.

When you start to run out of things to write which will happen. There are a number of things you can do to get you thinking. Here are a few hints and tips: One of the things I do is I have “Google alerts” set for key phrases like Real Estate New Zealand, Real Estate Market, New Plymouth etc. What this does is every time something is posted on the internet with those keywords you get an alert to the email address you assign to them. A great way to keep in the loop with what’s going on. You can then create articles relating to the stories, put your spin on it. This also means your content is up to date and in the medias eye, so of public interest, which will generate traffic for you.

The other way which will quickly turn you into a perceived expert is use forums and site such as yahoo answers to find questions that people are asking in real time. When you find a question or a topic you know something about write up an article and put it on your blog. What you then do is go back to the place where the question was asked and post a link to your blog there. But also attempt to answer the question so your seen to be adding value so that the reader trusts your link. This will help the people asking the question. You will get targeted traffic from the link and the search engines will love you for it.

WOW! A lot to take in isn’t there. But this is the bread and butter stuff to creating a powerful blog that works for you. Now to get it really working for you there are some other things that you can do. Above I mentioned about linking to your website if you have one. Now that your blog is giving you great search engine response and you have regular visits every day you can start to use this traffic to the highly visible blog to the less visible website. What you can do is put links on each of your pages to go to your website. So when a visitor is on your blog reading through it and come to a word with a link and they click this they will be taken straight to your website. Now this has two great effects for your website. The first is that you will get traffic from your blog going to your website. Going from a content rich site that makes you look as an expert to your maybe promotional website about you. This is very powerful if done right. The second is the links to your website from your highly raked blog make it look to the search engine that your website is also important. Because your important blog is linking out it gives your website great exposure and credibility. How good is that!

There is a lot to take in here and to get the results you do first need to put the effort in. I think that if you do these you will be on the right track to having a great blog. To help your business you will become more exposed to the general public. Even if you get to 100 unique views per day you could have up to 700 people viewing your blog each and every week.

Blogging is still a relatively new concept in New Zealand so the participation is a little on the sad side in terms of numbers. But don’t be worried on this. People will be reading it. They will know it’s from you and if you keep doing it when they do have a question on the topic of some of your blog posts they will ask you. And this is when the rewards come. This means they respect your opinion and want your advice.

I wish you all the best with your blogging. If you do have any questions on this stuff please contact me.

Deon Swiggs

Property Profits

September 30 2008 | Uncategorized | 13 Comments »

How to Buy Real Estate in New Zealand

This is a question I have been asked via email a few times over the past few weeks from buyers out of New Zealand looking to invest here. And even dealing with some people in my line of duty at the floor front I have come accross a number of people unsure of the process of buying property in New Zealand. So here I am trying to explain how it is done.

By New Zealand Law all Contracts for the sale of land and property must be Negotiated in Writing. Most Licensed Real Estate Companies will use the standard form which is prepared by the Real Estate Institute of New Zealand and the Auckland Law Society. This contract covers the legal issues necessary to protect both parties and enable a satisfactory Real Estate Transaction.

Contracts can be written up subject to various conditions that the purchaser or seller need to have to satisfy their own needs. An example of the most common ones are.

• Subject to Finance. This allows the buyer time to confirm or arrange their finance from the banks or any other lending company. Generally this codition isnt more than a week, but in any case has to have an end date for satifaction, upon this date been reached you can apply to have an extension through your Solicitor.
• Subject to the sale of another property. This condition also needs to have a time limit on it. Generally this is negotiated between the parties. This will give the person buying the property to have enough time to sell their own house in order to buy. This condition is usually followed by an escape clause. This allows the seller to continue marketing their property and being able to accept another offer that is better to the seller( this can be a lower price, it doesn’t matter). This is then called a cashing out contract. The original contract then has the agreed on working days to go unconditional. If they do not then their contract is void and the cashing out contract is executed and closed.
• Subject to a report of the building or land. This gives the purchaser to do any homework on the property once a price has been agreed to. This could include a builder, a plumber, an electritition or any other thing that the purchaser wants to do their homework on. But things you want to be investigated must be stated on the contract before it is accepted.

Once all conditions are met the contract becomes Unconditional and binding on both parties. This means the sale must settle as detailed in the contract. The payment of any deposit mentioned is payable upon this time. If you buy through a real estate agencey the deposit is usually held in a trust account for 10 working days.

You can bypass the conditions part and put what we call a cash unconditional contract in to the seller. This means that you are happy with the house and if the seller accepts your price you submit you will then have bought the property. being unconditional you will then pay the deposit and settle on the date in the contract. Unlike many parts of the world you do not need to get surveys etc on every property. In New Zealand a property cant be sold with out a title and its generally the duty of the seller to get everything in order.

The day of settlement is the day when the balance of the payment is made, this being the total purchase price minus the deposit which was payed at the unconditional date. The money is usually transfered via the solicitor. This is the day you pick up your keys to the property and take over the legal rights to the property. You can move in this day

A solicior is a lawyer. When you deal with them in terms of a property sale they look after the legal aspects of the sale like transfer of money, transfer of title and things like that. Basicly when the contracts are agreed on, sent to the solicitor, and becomes unconditional the job of the real estate agent is all but complete. A good agen should keep in touch with both parties, bring them together, and make sure that a smooth transition ofsetlement takes place.

The fees associated with buying a property in New Zealand are very minimal. The only fees that you need to pay are the solicitos fees for buying, which can be anywhere betwen $500 – $1000. But could be more or less depending on the area your buying. Also if you want to have any inspections done or a LIM report done you will also need to pay for those. Costs on these are minimal though. So really for buying residential property in New Zealand what you put on the contract is what you pay. So in fact there is no charge to you for getting your friendly real estate agent to help you and negotiate on your behalf.

There is other things associated with buying property in New Zealand but the general layout is this and it answers all the questions I have had so far. Other ways of buying such as tender and auction are avaliable but the princible is the same. For more questions or to find out more call or email an agent. They will be able to assist you with your questions. Remember that to have the agent sell you a hiuse as a buyer its not costing you anything, and you get their knowledge and support the whole way through.

Deon Swiggs

Property Profits

August 19 2008 | Buyers | 1 Comment »