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Expat Investor : September 2007
expatinvestor.com 4 EXPAT INVESTOR September 2007 Fast Facts 77003 GROSS PA/AER VARIABLE A top online savings rate is just a click away Full terms and conditions available on our website. Account must be applied for and operated online. E-mail address is compulsory. Minimum opening deposit £1,000. Account must be opened with money that is not already deposited with the bank. Maximum balance £1,000,000. Withdrawals available without notice or penalty. Minimum withdrawal £1,000. Withdrawals may be made free to a UK bank account by BACS payment (up to 5 working days). Charges apply for other types of withdrawal. No cash or cheques. Interest paid annually in arrears on 31 March. Interest rate is 6.40% gross p.a./AER Variable. Gross is before any deductions. AER - Annual Equivalent Rate illustrates the interest rate if interest was paid and compounded each year. Interest may be paid free from tax offshore depending on your country of residence. EU Savings Tax Directive rules apply to EU resident customers. Alliance & Leicester is the registered trade mark of Alliance & Leicester plc. Alliance & Leicester International Limited, PO Box 226, 19/21 Prospect Hill, Douglas, Isle of Man, IM99 1RY, British Isles. Incorporated in the Isle of Man (No. 81918C). Licensed by the Isle of Man Financial Supervision Commission for banking business. Offshore Savings Online Click www.greatoffshorerates.co.im Apply online now NEWS AND VIEWS Carpe diem -- seize the day! It's a well known adage and it is certainly one that is relied on widely by people working in marketing or advertising. Buy now while stocks last! Be the first on your block to own this new gadget. Don't be the one left out when everyone else is discussing the new book, film, or whatever. In short, seize the day. And it is no surprise that the same flavour-of-the-month marketing is used by the sharp characters who inhabit the fringes of the investment world. Show them a bandwagon and they will climb aboard and grab the controls. Take recycling, undoubtedly an important issue. Some substances, like paper and metal, can be recycled over and over again. Plastic presents a bigger problem so, hey presto, here comes a specialist recycling business called Newlife Plastics. And you can invest in what will surely be a big stock market hit by buying shares in this London company at just 17p apiece from brokers GS Anguilla. Well, that was the story. But Newlife Plastics did not even last long enough to file its first set of accounts with Companies House, and it has been dissolved. The shares were never traded on any stock exchange. And brokers GS Anguilla were supposed to be based in the West Indies but proved impossible to track down in the flesh, while the firm's website turned out to be registered to a company based in the Slovak Republic. More recently, Worldwide Bio Refineries, based in County Durham, has been sucking in investors anxious to cash in on its use of new technology to turn vegetables into diesel oil, producing eco-friendly fuel at a low price. Shares in the company have been marketed at up to 50p each, with the assurance that they would rocket in value within a few months as they were about to be listed on the stock exchange in either London or Frankfurt. However, all this sounded horribly familiar to shareholders in a very similar company called Alternative Diesel Investments. They had heard the same story two or three years ago, but their shares were never listed anywhere and eventually they were told they were being switched into Wo rldwide Bio Refineries instead. Now, the Serious Fraud Office (SFO) in London is investigating trading in the shares involving several million pounds. SFO lawyers have had a receiver appointed to take control of the company and its assets. And shareholders are left wondering just how much the company is really worth, which is a tricky questions since, like Newlife Plastics, it has also failed to file its accounts. The brokers who sold the shares are, of course, proving reclusive. Along with recycling and green fuels, terrorism is undoubtedly a big issue. And in this area, 'Viaspace has the answers to homeland security issues', with a hand-held machine that can sniff out anything from plastic explosives to cocaine, and poison gas to nuclear bombs. A glossy brochure issued in the wake of the 2005 London tube bombings invited investors to turn £1,000 into £100,000 by buying shares in the California company at about £2.50p. What it did not say was that Viaspace's own bosses in the US had warned that the business might never show a profit. Since then, in trading on the US's barely-regulated Over The Counter market, the shares have nosedived to around 15p. What all these examples have in common is that they identified a widespread problem and claimed to have the solution. But they gave little or no information about their own accounts or finances. Even with bandwagons, the wheels can come off. Readers are invited to contact Tony Hetherington via the editor at firstname.lastname@example.org Seize the day and lose your money Financial investigator Tony Hetherington exposes a marketing ploy that is ruining gullible investors. To fix or not to fix? Tim Harvey, Managing Director, Offshoreonline.ORG asks the eternal mortgage question. With UK base rates at their highest level since 2001, this question vexes many mortgage holders. UK Base Rates rose to 5.75% in June and, whilst some lenders have still to declare their hand, it is likely that the average standard variable mortgage rate for the majority will be around the 7.75% mark. If you are currently buying a house you need to consider whether to opt for a fixed rate mortgage, or if you have an existing loan, should you remortgage and fix the rate to protect yourself against future rises? Tim Harvey, managing director, Offshoreonline.ORG feels that, "Ultimately it will be a personal decision based not only on the competitiveness of the fixed rate on offer, but also the peace of mind having a guaranteed rate brings. "It is true that opting for a fixed rate loan brings a certainty to your budgeting. Switching to a fixed rate allows you to take stock and budget much more effectively, providing a certain level of protection even if rates do rise. This peace of mind argument can be very powerful and persuasive for many, which is why Offshoreonline's commitment to a truly personal level of mortgage service is so important. With our panel of mortgage lenders and ability to give expatriates a fast track mortgage application service, we can help with this eternal question. Our personal approach allows us to take the time to understand our client's specific financial position, feelings towards risk and interest rate rises and to understand their household budget. As specialist expatriate advisers, regulated in the UK, we can use our unique knowledge and choose from a range of competitive products to suit our client's personal circumstances." www.Offshoreonline.ORG
July August 2007