British people were told yesterday that the personal data of nearly half the nation has “gone missing”. In the newly merged department of Inland Revenue and Customs, a “junior official” downloaded the personal details, including bank account data and National Insurance numbers, of 25 million people and placed all of it on two unencrypted CDs.

The official then put the CDs in an envelope and posted it. The package wasn’t even registered so couldn’t be tracked or traced. It’s now officially “lost in the post”.

Alternatively, it may have been stolen to order by organized crime. We have been told, the official is now under guard in a “safe house” to protect him or her against the media, and presumably criminals seeking “to make him an offer he can’t refuse”.

This morning there’s huge panic all over the UK as people wake to find their bank accounts and personal identities compromised in the most dangerous way possible.

Once again we see the perils of allowing a central administration to accumulate vast quantities of information through a system of universal benefits more in tune with the Soviet era than the distributed nature of data in the age of the internet.

What can you do to protect yourself against the kind of scam everyone in the UK is now worried about?

1. Check your bank and credit card statements for the next 5 to 10 years. Criminals can lie low and strike when banks get sloppy again.

2. Change your online banking password, especially if you use family data as a memorable word.

3. Look at your credit report. The information in the Child Benefit Agency records is enough for a criminal to apply for loans, credit cards and even mortgages in your name, as well as other forms of credit such as mobile telephone and catalogue accounts. Your credit report lists all your credit commitments and recent applications for credit, so you can instantly see if someone has been trying to use your ID.

Apart from that, you are at the mercy of Government officials and your bank’s security measures. Ultimately, they must take responsibility for protecting their customer’s data.

Unfortunately, British Government agencies routinely break its own Data Protection Act. The shambles goes on.

Dividends are a welcome addition to investor’s returns on their shares. they represent the portion of profits that companies distribute to shareholders.

However, it’s not widely known that reinvesting them can greatly increase returns on share investment. Growth in dividends from Footsie 100 shares in the UK has outpaced inflation over the last 20 years, according to M&G. Indeed, they have grown by 31 percent over the past three years.

Ben Willis, Head of Research at Whitechurch Securities said, “Volatility in the market can benefit the long-term investor. If you reinvest dividends you get more units for your money, which puts you in a stronger position when markets rebound.”

Reinvesting rising dividends often bring handsome returns. Anyone who invested in, for example, the M&G Extra Income fund 20 years ago will have doubled their capital and would have received total net income payments of 176 percent of their original investment. Those who reinvested those same dividends would have seen their investment increase fivefold in the same period.

Venture capitalist, Paul Graham has written another excellent piece on web startups. His message is that there will be more and more of them.

So my first prediction about the future of web startups is pretty straightforward: there will be a lot of them. When starting a startup was expensive, you had to get the permission of investors to do it. Now the only threshold you have to get over is whether you have the courage to. Even that threshold is getting lower, as people watch others take the plunge and survive. In the last batch of startups we funded, we had several founders who said they’d thought of applying before, but weren’t sure and got jobs instead. It was only after hearing reports of friends who’d done it that they decided to try it themselves.

He believes that, although, starting a web business is difficult, it’s nothing like as soul-destroying as a 9-5 job.

In a startup you have lots of worries, but you don’t have that feeling that your life is flying by like you do in a big company. Plus in a startup you could make orders of magnitude more money. If the number of startups increases dramatically, then the people whose job is to judge startups are going to have to get better at it. I’m thinking particularly of investors and acquirers. We now get on the order of 1000 applications a year. What are we going to do if we get 10,000?

It’s hard to imagine the internet ever getting full up, so the prospects are there for anyone with a good idea, technical know-how and the initiative to carry it through.

Read the whole of the article.

Ever dreamed of quitting the day job to forge a new business online? It sounds simple enough : working from the comfort of your own home, low costs and master of your own time?

But what about the complications? The technical side, for example. The long lead-ins to a sustainable income. And, of course, the intense competition for a large, but limited pot of money on the internet.

John Evans, who founded Syntagma Media — an internet content provider — has given an interview about the trials of creating an online business to Gerry Reynolds, business consultant and retail analyst.

Here’s a sneak preview :

Gerry : What are the economics of an online income stream? […]

John : If you set no upper limits, you’re really at the mercy of events. It’s no good having a $10m business if your costs are $11m. Mr Micawber defined that problem 150 years ago.

The trick is to set an upper boundary that gives you the best split between receipts and obligations, building in the vagaries of the tax system, of course, and depending on the amount of effort you can comfortably provide. Everyone will reach a different conclusion, but it has to be within your comfort zone. You are, after all, in this for the long haul.

Read both posts here : #