Are You a Short-Term or Long-Term Investor?

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Posted by MJTM | Posted in Investment | Posted on 21-04-2013

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Do you like to invest your money? What do you typically invest in? Stocks? Bonds? Real estate? Precious metals? Do you think you’re a long-term investor or a short-term investor? Let’s explore the various types of investing and decide whether you are attempting to make short-term gains or whether you’re truly looking to prosper in the distant future from your investments today.

Long Term Investments

Many of you work in corporate jobs that offer 401(k) plans. Some of your companies even offer a match up to a certain perfect of what you put into your retirement fund. If you are contributing some of your earnings into a 401(k) account, this is most definitely a long-term investment. Your money is put into this account with the expectation that it won’t come out before you reach the age of 59 ½ years of age. If you do, then you will be penalized a percentage of your fund’s current value. If you are putting money into this account for a short term gain, please don’t because it won’t pay off for you.

Real estate is another great form of a long-term investment. Well, as long as you’re purchasing it as a rental that is. At this time, real estate can still be purchased for a reasonable rate. Let’s say a property is valued at $100,000 (just to keep things simple). The rent for this property will most likely be $1,000 per month, or $12,000 a year. So, even if you have the absolute perfect renter that pays every month and stays for an entire year, you’ll still only collect 12% of your investment for that year. But, as a long term thinker, you realize that not only are you gaining a return on your investment, but the equity in your rental home is also increasing. So, you could actually be earning 17% or more on your house instead of just 12%. If you earn that over the course of 30 years, you’ll have quite the chunk of change!

Short Term Investments

If you head to the bank, they have a few short term investment options available to you. For starters, you could invest your money into a simple checking account that pays interest (my credit union pays 3%). They also offer CDs that pay just a little more than 1%, but if you don’t plan on doing anything with your money for the next year anyway, then it might be a decent way to make a quick buck.

The stock market is a great place for people that like to make short term gains. In fact, spread betting is one of the most popular ways to earn money fast. If you believe that a stock price will move up or down from its current state, you could place a spread bet for more money than you’re actually putting down, and you don’t even have to buy the stock to do it! A great deal of money can be made in a short period of time, but of course a great deal could be lost as well. Invest wisely.

How to Trade in the Forex Market

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Posted by MJTM | Posted in Investment | Posted on 26-03-2013

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Trading on the Forex market is something most of us have never ever deemed as a means of making money. The field of professional finance typically seems extremely distant from the real world, and quite often it is, yet it’s actually much easier to get involved than you might think.

If you think of an investor, a traditional bank or prosperous businessperson likely comes to mind. The truth is, it can be you or me. Exchanging currency to make money doesn’t require a huge capital expense. While you will obviously make more money the more you have available to put in, a lot of brokers will permit you to begin with as little as $10. Many offer a demo forex account, so that you can trade with virtual cash to see how the whole thing works. You simply need a working computer and an account with an fx broker.

In their simplest terms, the currency market is all about buying and selling currency in order to make a nice gain. This revenue is created because the value of one currency versus another continually fluctuates. The idea is to speculate on whether or not the currency pair, e.g. GBP/USD, will improve or deteriorate. You ‘buy’ a currency whenever you expect it to increase, or ‘sell’ if you expect it to fall.

There are several influencing factors and complicated charts that can help you choose how to buy and sell, but one of the most effective ways of analyzing the direction of a currency is to utilize the news. When the news sounds like the market of one currency is suffering, then it’s fair to assume this will be mirrored in the value of the currency.

When you finally become secure predicting patterns in line with the news, you can consider all other varieties of signals, like those you can view in charts and simple analysis. Seasoned investors utilize a large number of sources to help them trade fx .

Foreign exchange trading like it is done at UK Forex brokers is accessible to everyone because, unlike the stock exchange, you are able to deposit a small amount of cash which allows you to hold a position of a higher value. A number of broker agents offer you leverage of 100:1 so that if you deposit $10, you’ll be able to reap the benefits of trading with $1000. Keep in mind though, that as the current market changes you can actually generate losses, and this could exceed your initial deposit.

Trading on the foreign exchange market may not be for every individual; there’s an inherent risk, but with experience and careful methods, earning profits is certainly feasible. There is a great deal of in-depth information available on the internet free of charge, so even learning doesn’t have to cost you anything at all. If it sounds like something you’d be interested in, maybe you should out a trial account? They cost nothing and you could really acquire a feel for the market. It’s not only a method of earning profits either; forex trading is exciting.

 

Strategies in the Market

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Posted by MJTM | Posted in Investment | Posted on 25-03-2013

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I’m sure you’ve heard the advice, “buy low and sell high”, but how many times have you actually been successful at this? To be an effective investor, you have to be willing to buy stocks when the market is going down and selling it while it’s still going up.

Face it, this is the way people usually invest in the stock market:  At the point we’re ready to invest in various shares of the market, we carefully watch our stocks of choice, just waiting for one of them to jump so we can quickly get in on the upward trend. So, when is it that we’re investing? Either when the stock is halfway to its peak or at the peak! Then, we might leave our investment in that stock for a while until we look at how it’s doing later in life. We then notice that all this time, the stock price has not gone up, it has actually gone down! We hate to take our investment out now, so we wait for a little while with hopes that it will soon skyrocket once again. But nope, the value continues to fall. Then, in fear that the stock is going to go bankrupt, we quickly pull out our investment to protect what we have left!

So, what have we done? We’ve bought high and sold low, which is exactly the opposite of what we’re supposed to do. While sometimes this is necessary (to cut our losses and move on), it’s certainly not going to make us rich in the future. In fact, it’s going to make us more broke than before!

If you are wise, you would research strategies online (from reputable sources of course) and put them into practice. Some individuals have chosen to learn market trading strategies at Alpari, which is also a wise move.

Many investors know that they should look at the up and down trends of the market, but few actually know what they should be looking for. Have you ever heard of the phrase, “double dip”? No, I’m not talking about double dipping a chip, but I suppose the visual is somewhat accurate.

When you take a look at historical trends in an individual share price of most any company, the stock price tends to start low (at any given point in time) and then it goes up to a peak (or high price in the market). Then, it inevitably falls again, to a low point almost where it first started. This is a double dip in the market (since it went down to its low point twice). This is when you should jump into the market. Obviously, this isn’t going to work 100% of the time, but the odds are now in your favor to make more of a profit on that particular stock.

5 Ways to Get Money During a Financial Hardship

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Posted by MJTM | Posted in Financial | Posted on 18-02-2013

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If you’ve fallen behind on your payments, you’ve likely had to deal with creditors calling.  While fielding these phone calls (or avoiding them, as the case may be) is annoying and stressful, they likely aren’t your greatest concern.

If you have trouble keeping up with bills thanks to a pay cut, job loss or an injury, you’re probably even more likely worried about bigger problems–paying your mortgage and keeping your home, paying your car payment so you can keep your vehicle and continue looking for a better job, paying your taxes so you don’t owe Uncle Sam and face having your wages garnished.  Besides these pressing concerns, you also need to worry about keeping your family fed and keeping the lights on at home.

If you’re in this financial bind, there are steps you can take to relieve the financial pressure.

1.  Borrow from family and friends.  If you’re not uncomfortable doing this, you can borrow money from family and friends to meet immediate pressing financial needs such as paying for housing and food.  Just make sure you have a plan for paying back the money when you get on your feet.  To make the borrower feel more comfortable, sign an agreement, have a repayment schedule, and have a notary public witness it.

2.  Take a cash advance on your credit card.  If you can’t borrow from family and friends, you could take a cash advance on your credit card.  Only do this to meet your most basic expenses, though, because the interest rate can be high.

3.  Take a payday loan.  Sometimes payday loans can be a life saver if you’re in a truly desperate position.  Applying online for a loans has never been easier, and in many cases you can have the money in your account within 15 minutes.

4.  Borrow from your 401(k).  This is truly the last resort.   Borrowing from your 401(k) is only a good idea if your money crunch is temporary and you can see a time in the not so distant future when you’ll be able to pay back the money.

5.  File for Bankruptcy Protection.  If you’re at the place where you need to borrow from your 401(k), you may want to consider bankruptcy instead.  If you leave your retirement savings intact and file for bankruptcy instead, in most cases you will be able to keep both your home and your retirement.

If you’re in a difficult financial position, you have a number of options available to survive this rough patch.  Which option you choose depends on the severity of your situation and when you think you’ll be back on your feet again.

Credit card security: Fraudulent scams to look out for

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Posted by MJTM | Posted in Personal Finance | Posted on 10-02-2013

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These days, many people rely on credit cards to make significant purchases. Electronic payments are quick and simple, but you must protect your account from fraudulent activity. There are many scams out there designed to steal your details and money, so here are a few to look out for.

Card not present fraud

Believe it or not, your card doesn’t have to be physically stolen for criminal activity to take place. That’s right, crooks can access confidential information from receipts and use it to buy high value items over the internet or on the phone. This is called card not present fraud and can leave a big dent in your bank balance. Fortunately, the UK’s Serious Organised Crime Agency is one the case and recently teamed up with the FBI and US Department of Justice to shut down over 30 websites selling stolen card details.

To protect yourself: Always dispose of personal details carefully (preferably by shredding) and never throw receipts into a public bin. If you do hold onto them, keep all paperwork in a safe place.

Cash machine (ATM) fraud

According to the UK Cards Association there are three main ways in which cards and card details are stolen at cash machines. Firstly, a trapping device is used to retain the card inside the cash machine. The criminal then offers to help and encourages the victim to retype their PIN. When they give up and walk away, the thief releases the card and reuses it at a late date. Secondly, a skimming device is used to copy electronic details and transfer them onto a fake card. The PIN is stolen using a secret camera. Thirdly, criminals shoulder surf and watch people typing in their PIN. They then steal the card using distraction techniques.

To protect yourself: Cash machines often contain a picture of what they should look like. Use this for reference and go somewhere else if there are signs of interference.

Counterfeit fraud

Some criminals manufacture fake credit cards. The details of genuine cards are then duplicated onto the counterfeit card via the magnetic stripe. They then enter circulation making it very hard for shop owners and sales assistants to spot if anything’s wrong. Cash machine fraud tends to fuel this kind of activity, as personal details can be easily stolen. Luckily, this type of fraud has dropped by 79 per cent over the past couple of years (as reported by the UK Cards Association), thanks to Chip and PIN technology and sophisticated fraud protection software.

To protect yourself: While counterfeit fraud appears to be decreasing, you must always apply for a credit card from a reputable banking group. If you work in a store, always double check with other staff members or contact the police, if you suspect anything suspicious.

A wallet wouldn’t be complete without a low interest credit card, but try to protect your privacy and banking details whenever possible.

 

How tricky is it to send a parcel to USA?

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Posted by MJTM | Posted in Financial | Posted on 17-12-2012

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Packages

If you’re unfamiliar with the nuts and bolts of sending parcels overseas the entire process can seem just a little confusing at best; or worrying at worst. Even if we set the problem of finding a good deal for a reliable service aside for a moment, getting a firm grip on details of a delivery can leave you considering the idea of buying a plane ticket and taking the package yourself. -Nearly.

Many online couriers have recognised that we don’t want to become trained experts in global logistics before we can send a parcel to USA and this realisation has been a key factor in the evolution of the services they provide. With the right courier arranging a delivery ought to be relatively straight forward, possibly not as simple as posting letter – but not far off.

As long as you take a few moments to make sure you have any relevant information to hand, you shouldn’t encounter any real issues. So, what counts as relevant?

Two addresses – the point of collection and the point of delivery. No real surprises here; ensure you have the post or zip code for both locations.

Measurements – if you’re getting a quick quote online you’ll need to tell the courier how large and how heavy it is before they can collect it as each will have restrictions on the size of items they are able to carry. Accurate measurements are also necessary for generating an accurate price of course.

Details – packages sent within the borders of the EU do not require customs documentation; deliveries going outside of the EU do though. Any self-respecting online courier will make producing any and all paperwork easy – for customs invoices you’ll need a reason for exporting the package (“gift” for example) as well as a brief description of the items being sent and an estimate their value.

Other than that, all you need to do is pay and wait for the collection to take place.

How to Retire Debt Free

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Posted by MJTM | Posted in Business Products & Services | Posted on 23-07-2012

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The great recession of 2008 will undoubtedly become an historic moment across all generations as many hardworking families face cuts in employment and income in coordination with challenging consumer markets and the rising costs of living. Traditionally in this model of family finance, retirement provides that beautiful moment of release alongside a healthy retirement fund and pool of sustainable assets.

However with the level of family debt rising steadily over the past decade, many have been found questioning their previous financial management choices and seeking new ways to balance the books through a healthier lifestyle. Avoiding debt in retirement is entirely possible with good planning; here are five great ways to enhance your financial situation.

1.      Construct a Budget.

Prepare an annualised budget and methodological strategy based around your incomings and outgoings which should provide the estimation of disposable income and monetary investments. This can also shed light on where money could be transferred or reduced and to further identify how your cash flow changes over a significant period of time.

2.      Tax Efficiency.

Tax undoubtedly has an effect on debt levels and should be heavily monitored to make reductions. Business debt and rental property can be removed from taxable income and should be a slimmer priority for those in the higher tax bracket.  As an extra tip to help better prepare yourself for retirement, consider taking courses in a graduate tax program.

3.      Preparation.

A very good measure for savings is to budget 10% of shared gross income as this provides a great fall back for an unexpected scenario such as business failure, divorce or illness. If an unexpected situation occurs, seeking immediate financial cover is both challenging and costly in the longer term. Living within ones means also requires a contingency plan of this nature and if avoidable, provides you with a useful savings trust.

4.      Prioritizing Debt.

All debt is bad debt but there are ways to categorise the importance of each debt based on interest and deductible earnings. Paying off the smallest bill first can allow you to avoid interest on future payments so a debt reduction strategy based on this method can be successful.

5.      Prioritize Importance.

A philosophical approach for the investment of capital should be utilized after covering the necessary areas of education, food, and maintenance. Whilst there is the pressing urge to acquire that new widescreen TV, a weekend away with your partner could become a far more valuable investment for the relationship strength it provides.

 

Author Bio – James Barnett is a writer on behalf of CooperMatthews analysing contemporary wealth management for families across the UK.

5 Reasons a Lender May Reject Your Mortgage Application

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Posted by MJTM | Posted in Home Products & Services, Real Estate | Posted on 18-05-2012

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The necessary paperwork that is mandatory to complete for a mortgage application can often be a difficult task to undertake. After finding your dream home, the last thing you want is to then find yourself receiving a call from the lender stating that they have declined the loan. You may even ask yourself what could have caused this to happen. Mortgage applications haven’t changed over the years but the current lending requirements have.

Today’s financial institutions have strict guidelines in place making it difficult for consumers to obtain a loan. The following are five factors that could have an impact on whether a financial institution will lend money for a mortgage.  

1. Changing Employment

Switching jobs may not have an impact on a person’s ability to qualify for a mortgage, but you may be at a disadvantage if you have recently changed companies. If you make a move within the company to a position with the same or greater pay scale, you shouldn’t need to worry.  People who are dependent on commissions or bonuses may suffer a greater risk of getting rejected by the lender. Financial institutions find applicants who have been with the company for two or more years more favourable when lending money. Those with the greatest disadvantage are people who leave a salaried position and start a business venture on their own. Lenders like to see stability and records from a two year period, so they can plan future income appropriately. Furthermore, an applicant that is self-employed could have more expenses to write off, and their income taxes reflect the minimal net income that is reported.

2. Changes in your Credit that have an Impact on Your Credit Score

Equifax, Experian or Transunion are a few of the companies that the lender may use to check the applicants credit history. It can take anywhere from one to three months for a home loan to go through, and the lender may do a final credit check before fully committing to a loan. It’s important to not do anything that could have a negative impact on your credit score during this time. The activities that could prevent your loan from going through include making a late payment, or applying for another type of loan or credit card. It’s in the consumer’s best interest to obtain a copy of their credit report and correct any items that are wrong.  

3. Failing to make your Current Mortgage or other Payments

People who fail to make their monthly mortgage payments or cannot pay their other bills are showing the lender that they are a poor credit risk. If an applicant is having a hard time paying their current mortgage, they should consult with the mortgage holder and see if there are any other options in place, so they can meet the repayment terms on their loan.

4. Too Much Credit Card Debt and Numerous Outstanding Loans

Lenders will take into account an individual’s consumer debt and the mortgage payment, and see how it correlates with their income. The basic rule most lenders follow is approximately 33 percent of an applicant’s gross income with an added five percent for consumer debt. The lender will also look into the available credit a borrower has to utilize, so you may want to think about closing a credit card account or reducing the maximum limit that is allowed.

5. Failure to Complete the Basics

Some financial institutions make it easy and are able to complete the loan application process over the phone. However, many institutions require the individual to physically fill out the form. It’s simple to make mistakes or leave items blank when an applicant rushes through the process and hasn’t filled out the necessary paperwork properly. A lending institution can refuse an application based on these mistakes, so you need to make sure to take the time and go over everything thoroughly. It’s also possible to hire a mortgage broker, attorney or financial adviser to help with the application process and have it all checked before presenting everything to the lender.  These are the primary reasons a lender may refuse an applicant’s mortgage. To make sure this doesn’t happen, an individual should maintain good credit and keep their debt ratio as low as possible. This will have a positive impact on whether their home mortgage is approved.

Bio

Andrew Potter is a finance and property expert and writes for www.myonlineestateagent.com. My Online Estate Agent provides a new alternative to your standard high-street estate agent.

What Is Boosting The New Zealand Dollar On The Foreign Exchange Market?

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Posted by MJTM | Posted in Investment | Posted on 02-03-2012

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Europe is going to hell in a hand basket. Iran is poised to hold the world to ransom for its oil. So what’s giving the New Zealand dollar a boost?

 

Last night, EU officials agreed a bailout for Greece that no one seriously believes is going to save it. In Iran, Mahmoud Ahmadinejad is turning off the pipelines to the West for daring to interfere with his nuclear weapons programme. In the world in general, developed economies are still struggling to recover from a global crisis that almost spelt the end of capitalism as we know it.

 

You might not think these are circumstances that would encourage riskier investments, including in small economies like New Zealand. Nonetheless, the New Zealand dollar is doing brisk business, presently at a 5-month high against the US dollar and a 3-month high against the pound. So what’s the deal?

 

Glass-Half-Fullism Among Foreign Exchange Investors

 

One reason the NZ dollar is flying high is that foreign exchange investors are glass-half-full kind of people. They spot good news, and they latch onto it like it’s the last turkey on the shelf at Christmas.

 

For instance then, reports that the US recovery is picking up pace have buoyed the New Zealand dollar. For the past three months, job creation in the US has exceeded the wildest dreams of investors, helping to boost consumer confidence and retail sales. This encourages investors to stop nervously biting their fingernails, and get buying. Hence the rising New Zealand dollar.

 

New Zealand Is Rising (And Foreign Exchange Investors Know It)

 

Second of all, there is NZD strength because New Zealand is a rising star. In the past decade or so, New Zealand has become the premier distributor to China for milk products (I kid ye not) creating a behemoth new source of revenue for its dairy industry. This is giving its economy a huge boost.

 

In addition, New Zealand is enjoying a strong job market and consumer confidence, in spite of the earthquakes in Christchurch 12 months ago. Unemployment fell –0.2% to just 6.3% last month for instance, putting its unemployment rate among the lowest in the developed world. Retail sales meanwhile jumped 2.2%, also indicating optimism among consumers.

 

This guest post was contributed by Michael Smith from foreign exchange specialists Pure FX.

 

12 Steps to Financially Safe-Guard Your Home and your Kitten

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Posted by MJTM | Posted in Family Life | Posted on 01-02-2012

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Start by looking at your home from the eyes of a curious, playful fur ball and consider what’s worth protecting

You will certainly be excited when you first bring your cute, net kitten home. However, owning a kitten is like having a newborn around the house—one that gets into everything and one that can, potentially, cost you a bundle! Having a new pet involves is a huge responsibility and cost, especially if that pet is an active, playful, curious and mischievous kitten. Unfortunately, a kitten’s natural curiosity can be fatal and costly to it’s new owner if you don’t kitten-proof your home ahead of their arrival to safe-guard your belongings and kitten’s wellbeing.

The key to kitten-proofing is to look at your home through the eyes of a curious cat. Pick out everything that looks like a fun toy—it could include needles and thread, electrical cords, etc.—and if it’s something that could be dangerous put it out of kitten’s reach or get rid of it. Or else you can expect your kitten will need to be rushed to the veterinarian to dislodge something from its throat. Emergency vet surgery is not only extremely costly, ranging from $600 to $1,600 for an obstruction in the throat or bowel, plus the Canadian drugs to treat your kitten, which can cost hundreds of dollars, even when purchased online. Unfortunately, strewn objects left around the home can also end in the tragic death of your beloved new pet.

Each room in your home will have dangers in store for a curious, playful feline. That’s why I’ve put together the following 12-step guide to kitten proofing your home…

Step 1

Explore your home for items that kitty might break and for harmful substances that he or she could eat. Don’t forget to look on high shelves and in hidden nooks. Don’t underestimate a high spot a kitten can jump to or squeeze into—if you can see it; they can reach it!

Step 2

Keep small items that kitten might ingest locked away in air-tight containers. This includes items like needles and thread, holiday ribbon, hair ties, and anything stringy that might appear a plaything to a small cat.

Step 3

Tuck away the cords to your window blinds or curtains. Your cat will jump to play with these and will be strangled if he or she gets tangled up. Simply tuck and tie cords using a rubber band so they don’t’ hang down.

Step 4

Trust me when I say that air-tight wastebaskets and kitchen garbage cans will be your saving grace—that’s if you don’t want kitten littering through your garbage and eating whatever he or she finds. Or else kitten may end up in emergency getting his or her tummy pumped or taking a costly remedy for indigestion.

Step 5

Keep your dryer door closed. Kittens seek out dark, warm places to hide and to sleep because it makes them feel secure. However, if your kitten hides in the dryer and can’t get out, they could die.

Step 6

Same goes for your cupboard doors and dresser drawers—if a cat can get inside to snoop, he or she will. Kittens limbs can be broken or injured you close a drawer and they can eat toxic cleaners kept under your sink. Use baby-safe fasteners if your cabinets don’t shut tight.

Step 7

You know that the toilet is not for drinking, but kitty doesn’t. So keep the lid down to stop kitten from falling in and drowning or injuring him or herself.

Step 8

Keep things like antifreeze in a separate shed or garage with the door closed. Anti-freeze, although tasty to cats and dogs is fatal when ingested. Plus fomepizole, the drug used to treat antifreeze toxicity in pets costs about $240 per vial (with multiple vials required based on toxicity levels and pet weight).

Step 9

Cover or tuck electric cords under the wall trim to avoid any playful bites from kitten.

Step 10

Check online to see if your household plants are toxic to cats. If there are green leaves, your kitten will chew on these, but plants like lilies and poinsettias are poisonous.

Step 11

Change to animal-safe household products—such as insect repellant, floor cleaner, window cleaner and counter-top sanitizer.

Step 12

If your kitten is a little too curious for his or her own good, use a natural, animal-friendly bitter Apple or lemon scented spray, which cats dislike, to deter them.

Post by Brenda