Money

An interesting lack of interest

Good news for those of us (most of us!) ratcheting up student loan debts.  From September this year, students will pay no interest on their loans.  Woo!

How long that will last, I don’t know, but it’s good news for now.

photo by jfg

Okay, some of you might know that the current scheme would have meant an interest rate of minus 0.4% (meaning we’d have money paid off the debt each month for free), but the likelihood of that happening was almost non-existent.

So we’ve got the next best thing.  I’m sure most of us will be fine with that.  Shame we’ve got such huge loans to pay off, but at least they won’t attract interest for a while.

Small beans, but I’m not going to knock it.

Textbooks: How do you get around the issue of cost?

Reading lists come and go, but the books you buy are likely to stay with you for a while.

Some of the books I bought in my first year are still mine and I’m glad I was told to buy them.  Other books seemed a waste of time and money.  Another set of books served a purpose, but didn’t need to be kept after their initial use.

photo by marzbars

photo by marzbars

Academic books often cost a lot more than a brand new work of fiction in hardback.  Worse, they are almost never discounted like the fiction books.  But we still need them to get through our studies.

One alternative option is to grab a downloaded version of the textbook you need.  A lot of these publications cost almost as much as the physical product anyway, so what’s the point in saving a pint’s worth of month when you were hoping for enough to afford a bottle of fine malt whisky?  Perhaps electronic book publishing needs a new approach.

There is a growing culture of downloading electronic versions of textbooks illegally for free, but even that doesn’t impress many students to the point of satisfaction.  It isn’t great working from a computer screen and electronic books aren’t easy to browse in the same way a hard copy is.

Given the choice, many students still want a physical book in their hands.  No matter how much reading material I find online, the greatest satisfaction is through a product I can actually flick through.  @seawolf and @amy_runner agreed when I asked on Twitter how students prefer to work…from traditional textbooks and face-to-face lectures, or from electronic resources and virtual seminars:

seawolf – “Real always.  Paper and face-to-face.”

amy_runner – “I prefer traditional textbooks and face-face lectures, easier to read and more interaction makes it more engaging.”

Manchester Metropolitan University’s Institute of Education also discovered that teenagers prefer traditional teaching methods, which includes using physical textbooks, rather than electronic alternatives.  It seems that while we love making use of technology, there is a tendency to go back to basics when studying.  Technology complements traditional methods of learning, it doesn’t replace it.

So what can you do to get the actual textbook without having to spend big time?

  1. Buy secondhand – You don’t have to buy new.  There is a lot of choice on sites like Amazon and abebooks.  There are others, but these two sites have generally found me what I need.
  2. Use other students – Speak to people in the year above who may have finished with certain textbooks and offer to buy them cheaply.  If you don’t need to own the book, ask to borrow it until the end of the module or academic year…you never know!
  3. Ask for a discount – As a student, your NUS Extra card can help you find discounts at some bookshops.  Even when you’ve got a definite discount like this, there’s no harm in asking for an extra discount.  Some shops are able to offer more money off when you ask, and you haven’t lost anything if they say ‘no’.  Worth a go.  Remember to smile sweetly…
  4. To the library – When you don’t need to keep your own copy of a book, see if the library holds a copy.  Best do this early on, before all copies of the book get taken out.  If it’s a very popular title, see how long you can keep the book.  If it’s only going to be in your hands for a week, but your module lasts a term, you clearly need a different plan!
  5. Try local libraries –  It might be a long shot in some cases, but you never know what a local library can do if you don’t try.  Most local libraries have stock searches on the web, so you can see if they have a copy without even leaving your seat.
  6. Consider an old edition of the textbook – If you don’t need the most up to date edition (unfortunately, sometimes you do), then you can save money by opting for the previous edition.  There’s more chance that book will be available secondhand too (see No. 1).

Other than this, how do we get around the issue of cost?  Not easily, is the unfortunate answer.  I don’t dare think how much money I had to spend on books at uni.  Too much is all I know.  And I didn’t even have it bad. None of my books were more than about £40.  I know people who had to spend more than £100 on a single tome!

If you’ve managed to get a physical textbook at a great discount (or even free), help us out with your tips in the comments.  You could make some skint students happy!

photo by Wesley Fryer

photo by Wesley Fryer

Student loans & broke graduates

I’m amazed at news that around a third of graduates who took out student loans are still not paying them back.  The payback threshold is £15,000.  So there are around 400,000 graduates out there with loans, earning less than £15,000 a year.

photo by svilen001

photo by svilen001

As I’ve said before, university isn’t just about the piece of paper at the end of three years to help you find the perfect job.  Neither is it an excuse to have fun and forget the ‘real world’ for a bit longer.  Higher Education is full of opportunity, but you have to be ready to find it and to take it.  It doesn’t always come to you.  Without some conviction on your part, it’s easy for the university dream to fall apart and come to nothing.

That said, I’m still truly amazed that so many graduates are still earning lower than the £15,000 a year required before the student loan begins to be paid off.  I dread to think how much interest is piling up as the years go by (more on that below).

To make real sense of the data, we need more than the numbers.  A third of graduates who have taken out a loan sounds incredibly high.  But would it make more sense if the figures were broken down by each university, the degree taken, the grade each student received…?

Far less surprising to me was NUS President Wes Streeting‘s mention of a graduate with £12,000 in loans to pay off.  In one year, the graduate paid £650 on loan repayments, just to find that £580 of that was just interest payment.  That leaves a paltry £70 off the original debt.  Chipping £70 a year off a £12,000 (or, worse, £20,000) loan is madness, but I’m used to that myself.

I’ve been paying my debt off and it feels like I’ve achieved precious little.  I don’t notice the money coming out of my pay packet, sure, but I wish more of the money went toward the actual payment.  When you consider that you start paying interest as soon as the loan hits your bank account, your final account balance will be higher than the amount you borrowed, even if you pay it all back pretty sharpish.

Student loans are adjusted by the Retail Prices Index (RPI), but the interest rate isn’t based on an average RPI over the year; it’s whatever the RPI stands at every March.  Last year, the RPI was at an unusually high level in March (4.8%), so interest on loans was also high.

I’m now antsy to pay back my loan more quickly, despite what the brilliant Martin Lewis may say…

Do you think I’m right or wrong in wanting to try and pay the debt back more quickly?

Starting your own business? Then care for it!

As we approach the summer, some of you will be thinking about the future and where you want to be headed.

Not all of you are focused on becoming employed with a company, no matter how respected it is.  Some of you are going straight to building up your own business.

Good for you and best of luck.  I have an interest in new startups and the wonderful ways in which others invest in their future.  It’s good to see how passion can inspire people so creatively.

email (photo by clix)

Along the way, I have picked up various pearls of wisdom that have made the difference to others in the past.  Go beyond the fun, the thrill, and the initial drive and you will find much to consider if you want to keep a sustained growth for your business.

Here are some nuggets of advice for you to consider as you step into uncharted territory:

1. Business is about business…not just you

You may well be the brainchild of the next big thing.  You might be sitting on the best idea ever imagined.  But you still need to rely on others and delegate jobs in order to achieve a wonderful end result.  Keeping all the tough work to yourself is not productive and it could end in your downfall, no matter how good your plans.  And selfishly giving yourself only the ‘good tasks’ is equally stupid.  While you are blindly enjoying the high life, you had better beware the people below you who are doing a half-hearted job and don’t much care about your dreams any more.

2. Standard Operating Procedures

A good business should keep a focus on even the smallest functions to be found within.  The only way you can be guaranteed to set things out the way you want them done is by writing out each procedure as a matter of course.  These ‘Standard Operating Procedures’ (SOPs) enable everyone to learn how to go about each task, and also ensure that actions are being dealt with correctly.  If the SOP is correct, mistakes will only come from not having read the SOP properly.  You will also benefit from having greater ease in changing small aspects of each procedure if and when the time comes.

3. Separate business from social

There are times when business and pleasure invariably come together.  The occasional clouding doesn’t matter and can’t be avoided if starting your own business.  But as soon as you start spending every waking hour obsessed with the business, the cloud becomes an impenetrable fog.  In no time, you’ll lose direction as the pressure gets on top of you.  In other words, find plenty time to relax on anything that doesn’t revolve around your business.

4. Set clear, specific goals from the outset

An idea isn’t clear until it has grown into a goal, or a solution, or a structured plan.  Never start a business on the basis of a brief idea and a general business plan, even if it gets backing.  Set targets and build a detailed framework around the idea.  For this you must do your homework, avidly research, consider competing companies, look to future collaborations, work toward an understanding of the bigger picture, and so on.  The world isn’t static, so have you prepared for changes outside your power that could turn your idea from something workable, to something pointless?  It all matters.  You must go further than a short business plan, even if you think it’s foolproof.

5. Time management is vital

Bouncing from one good thing to the next is fine, but only if you can manage to choreograph the bouncing.  You will no doubt be working on enthusiasm and adrenalin in the initial stages, but it’s not enough to keep the momentum going…especially if things don’t turn out as perfectly as you imagine.  Take stock of your position on a regular basis and manage your time, as well as being aware of the time spent by other people engaged in your business.

6. Choose everything carefully

Choose a good name (do the corresponding domain names exist? Is it unique? Does it steer clear from any potentially embarrassing legal issues with similarly named companies?), choose a good base (physical or virtual), choose the right partners (can you trust them? Are they as committed to the project as you?  Do you know what drives them? Do they have any other outside interests to help or hinder?).  No matter how small your considerations are, you are in the driving seat and it’s crucial that you take each step seriously.

7. Find a niche, even if your business has a general basis

The whole point of starting a new company is because you have a killer idea that isn’t currently being serviced as well as you can achieve.  So even if there are a thousand other companies on your doorstep that offer a similar service, what impact and value can you give to others that will get customers knocking only at your door?  Where is your niche?  What is your authentic position?

8. Network outside your niche

You may have your own niche, but you needn’t limit your networking to a specific field.  There will come a time (probably sooner than you think) when you want to branch out or do something that requires a different type of expertise.  By keeping abreast with a wide range of contacts, you have the upper hand when you need advice, favours, jobs at mates rates, etc.  This needn’t be stuffy either…I can’t remember the source (I’m sure I didn’t pen this one), but the following comment seemed well worth remembering:

“Business is personal.  Informality is professional.”

9. It’s not as easy as some people think

As with any project, setbacks can stop the momentum.  Business presents setbacks at many junctions and when you least expect them.  But if your ideas are sound, remain persistent and strive to get through the difficulties with as much vigour as when you are succeeding.  To put it simply, don’t give up!

10. Have enough finance to fall back on, at least temporarily

Times can be tough.  And while you shouldn’t give up (as mentioned above), you do need to be prepared to weather the storms.  The early days especially can pose a cashflow problem unless you’re heavily backed and covered to the hilt.  Keep your focus away from further loans and promises, making sure to have a solid contingency plan should urgent action be needed.  You don’t want to have to use it, but it’s better to be prepared than to sink when it’s too late.

11. Enjoy

You clearly have to take such ambitious goals seriously, as deadly serious as you can muster.  But that shouldn’t stop you from enjoying the process.  If you can’t feel passionate and positive, communicating your enthusiasm and joy to all that you speak to about your business, how can you make the best of the service you’re offering?  And if it’s such a slog for you, why did you start this up in the first place?  In life, whether it’s pleasure, business, or otherwise…Love what you do.

—

Just before I go today, I’d just like to ask all current uni students one thing:

If you have a strong business idea right now, what is stopping you from taking the first steps toward a successful business future today?

Even if you’re only just finishing your Fresher year, where is the harm in boosting your future outlook?  There’s no time like the present.  If the fire is burning in you right now, it’s better to strike now rather than wait until the idea is just a fizzle.  And the sooner you start, the quicker you’ll find the ways in, the contacts, the knowledge, the possibilities.

Just remember, as I noted in Friday’s post:

Enquire Within Upon Everything

business graph (photo by evobrained)