Monday, December 15, 2008

Savings/Investment/Pension 'Tips' for 2009

The Question : If you had just one 'tip' for the general public on savings/investments/pensions for 2009, what would it be?

The Answers :

"Make the most of your pension entitlements. There's no guarantee they'll remain so generous - especially as the national finances are so stretched. Pension tax breaks are the best "cushion" against volatile investment conditions." Niall Brady - Money Editor The Sunday-Times

"Educate yourself on personal finance issues, so that when it comes to buying a product you have a better understanding of what constitutes good value for money. I would recommend and as good free starting points. If you want to buy a book on the subject, you can't go far wrong with 'Loot' by Eddie Hobbs." Gerard Sheehy

"Property prices have fallen by at least 25% from their 2006/2007 high (based on transactions, not Asking Price!). This brings us back to around 2003 levels. The market is starved of capital. First-time buyers do not have the deposit necessary to secure the limited funding available, so they are continuing to rent. Rental levels in the better provincial towns are being maintained. If you have access to cash, then I see prices for good quality homes in central areas as being cheap. Interest rates are falling, while rental returns are now 4.5-5% in many areas of Clonmel, where a 3-bed semi, bought for €200k incl. legal and stamp, provides annual rental of €9,000 (€750 per month easily achievable)." Pat Quirke - PF Quirke & Co. Ltd.

"If people actually want to have a small punt next year I would personally suggest €5k in each of the following shares: McDonalds, Nestle, France Telecom and Eon. I would avoid financial shares and stick with food, telecoms and energy. These views are personal and anyone investing in shares needs to get the appropriate advice. Shares can go up as well a plummet!!!!!" - Eanna McCloskey - Managing Director Wealth Options Ltd.

"Be a hard saver." Charlie Weston - Personal Finance Editor Irish Independent

"Don’t let your long-term financial plans be altered by short-term events. If you signed up for a medium-risk pension fund three years ago and were comfortable with the fund’s profile and composition, don’t switch to cash just because it has gone down in 2008. You run the risk of missing the recovery, whenever that might be." Liam D. Ferguson - Ferguson & Associates

"First of all, markets are often strong in January not least because of pension flows in the US - do not mistake this for "the turn" you may have been waiting for. Secondly,be willing to look beyond the obvious when you think the worst has passed - corporate bonds could be a better recovery play than equities." Paul McCarville - Partner Clarus Investment Solutions

These are the personal opinions of the respondents. Do not confuse these 'Tips' with Advice.

Thursday, December 11, 2008

Jiangxi Orphanage Assistance‏

Those of you that are familiar with the 'Execution Only' Services that I offer through , and will be aware that there is a 'Donation Feature' available on the sites which allows consumers to make a voluntary donation that goes towards helping the abandoned children in some of the Orphanages in Jiangxi Province, China; if they consider the service being offered through the websites, is good value for money.

Currently, any funds raised,through the websites and by other methods, are paying for a good quality milk formula for infants at Fengcheng Orphanage. Previous funds have been used to buy air conditioners/heaters, an incubator, and rehab equipment for kids with cerebral palsy.

For those of you reading about this for the first time, the following is brief description of how it works. My fundraising efforts are not a 'registered charity'. I thought about it at the outset but I made the decision not to register as it would have eaten into some of the funds raised. I just wanted to find the most cost effective and secure way of getting the money to the orphanages. I set up a specific account with Permanent TSB (Clonmel) in the name of 'Fengcheng Social Welfare Institute Fund' and all money raised (by Cheque and PayPal) is lodged to this account.

Permanent TSB charge me for the transfers but then refund these charges. The money is paid to Amity Foundation in Nanjing and they look after the administration. I receive receipts from them and they insist on receipts from the orphanages. They also do random orphanage visits to make sure that the money is being used for the intended purpose. Amity deduct 7% for administration, but I believe this is fair and reasonable.

The current worldwide economic downturn has led to a decrease in the amounts being donated. When you combine this with the unfavourable (Yuan) exchange rate available at present, this has made it difficult to fund some of the ongoing projects at the orphanages. You can get a good overview of these projects on this website .

If you are interested in helping with a donation, however small, you can do so (via Paypal) through any of my .ie websites listed above. If you would like to donate by another payment method or if you need clarification on any of the above, just let me know.

Tuesday, December 9, 2008

Blogger Interview - Brendan Johnston

What is the best business/investment decision you ever made? Concentrating on pensions business.

What kind of car do you drive? Saab 95.

What is the worst financial advice that you ever received? That individuals can make better returns that professional managers

Do you own property abroad? If a holiday home in Antrim counts.

How does the economic slowdown effect you? It affects our business partners in that total market sales volumes are down. Our sales volumes are solid and we are increasing market share.

Do you contribute to a pension plan? Yes

What's your favourite film of all time? Moulin Rouge

Have you ever won money? Not that I can remember

Do you own your own home? Yes

Do you invest directly in the stock market, through funds or both? Yes

What is your preferred method/system of saving (Deposits, Funds,Shares, Property)? Managed funds

What financial product/s do you consider to be bad value for money? Products where the source of profit is unclear

Do you trust your bank? Yes

Brendan Johnston is Pensions Director at Eagle Star Life (Zurich Ireland)

Monday, December 8, 2008

School Songs Nostalgia

I was thinking back, over the weekend, to my days spent in the Boys National School in Ballyporeen and in particular to the songs that we used to learn in 5th and 6th Class.

Bearing in mind that this was about 34 years ago, I was curious as to whether they were common to all primary schools at that time or whether they were more influenced by the teacher that we had?

The most memorable one was a song about 'Ballyporeen' and this was written by a relative of mine, Fr. Ned Sheehy, who was sent to the US as part of his work. Obviously, this one was specific to the area.

There is a spot that I adore
It lies not far from Galteemore,
It nestles in a valley grand
A beauty spot in Ireland.

They talk about their deep blue skies
Of scenes of beauty and sunrise,
In other lands but have you seen
The country round old Ballyporeen.....
Others would have included the following:

God Save Ireland

High upon the gallows tree swung the noble-hearted three.
By the vengeful tyrant stricken in their bloom;
But they met him face to face, with the courage of their race,
And they went with souls undaunted to their doom.....
Hail, Glorious St. Patrick
Hail, glorious Saint Patrick, dear saint of our Isle,
On us thy poor children bestow a sweet smile;
And now thou art high in the mansions above,
On Erin's green valleys look down in thy love.....
The Rising of The Moon
O then, tell me Sean O'Farrell, tell me why you hurry so?
"Hush a bhuachaill, hush and listen", and his cheeks were all aglow,
"I bear orders from the captain:- get you ready quick and soon
For the pikes must be together at the rising of the moon"...
I must admit that I am struggling with the following one and the words may not be right or spelt correctly. I can't find any reference to this particular 'song'.

An Leipreachán

Ar mo thaisteal dom aon oíche amháin
Ag gabháil liom síos tre gleann
Cé ciafinn úim ach leipreachán
Is é faoi scáth na gcrann....

Does anyone know if the songs were left to the discretion of the teacher?

Thursday, December 4, 2008

Financial Myths

I have life cover through work so I don't need any more - The 'Death-In-Service' benefit through work can be as little as 1 X Basic Salary. If you have dependents, this level of cover would be paltry.

A policy that combines life cover and savings is a good idea - The charging structure on these policies is penal, so it is better to keep your 'protection' and 'savings' products separate.

10%pa of income is enough to save
- It probably might be if a) you achieve a very healthy annual return on your investment b) your lifestyle needs are modest and c) you have a good few years to go before you stop 'earning' an income.

Jewellery is an investment - It is not a good idea to buy jewellery primarily as an investment. The retail margin plus VAT will make it extremely difficult to recover your costs, when selling. The chances of finding a piece of FABERGÉ, at a knock-down price, is very remote.

Property always goes up in value - Recent events will have put paid to that notion but you will still have the die hards that refuse to diversify away from residential property is one location.

Rental property is a great investment - It might be if a) there is the potential for capital growth b) interest rates are low c) you have more than one type of property in more than one country/location d) it is occupied and e) repairs/maintenance/agents fees etc. are kept under control.

I don't need a pension, I have an investment property - Hitching your 'retirement wagon' to a single property in one market would not make financial sense to me, as there would be no diversification of assets.

Saving for the kids education is more important than saving for retirement - Look after your retirement planning first as it is unlikely that your kids will fund it for you. I am au fait with 'Student Loans' but not 'Retirement Loans'.

You cannot lose money in a deposit account - If the rate of interest (less DIRT) is less than the rate of inflation, your money is being devalued.

I need to earn more money before I can start saving - If the SSIA Scheme was available again tomorrow, how many of the people that did not take part because they 'could not afford to' would, in hindsight, now be able to 'afford' the minimum €12.70 per month?

I need a relatively large amount of money to start investing - You can gain access to unit-linked investment funds for as little as €50 per month.

Tracker Bonds are equity investments with no risk - While you may have capital 'security', there may be a limit to the return you receive from the investment.

Fund performance is THE deciding factor on which pension/investment to choose - What's gone before has no bearing on what may happen in the future. The charging structure of the product is a more beneficial starting point: the leaner it is the better.

I am too young to start a pension - The earlier you start in your working life, the more likely it will be that you will have an adequate pension 'pot' at retirement.

You can time the market to get a better return - If your are reading this statement and you agree with it, please post your future predictions below.

By dealing directly with an investment company, I will get better value for money - You will get better terms from a Discount-Broker.

Life Insurance does not cover suicide - It covers this event once the policy has been in force for a period of 12/13 months.

I can only have one pension - Depending on your employment status, it is possible to have more than one pension. For example; i) a company director or sole trader can take out different pensions with as many product providers as they like ii) a person with more than one source of earned income can have a pension for each source iii) an employee can make their AVC contributions to a product provider of their own choice.

I am sure that there are may others that could be added to the list, so feel free to add them.

Tuesday, December 2, 2008

Blogger Interview - Paul McCarville

What is the best business/investment decision you ever made? Decision to put 40% of pension fund into cash in May 07

What kind of car do you drive? Volvo S40

What is the worst financial advice that you ever received? To borrow as much as I could and invest in Equitable Life's With Profit fund (I ignored!)

Do you own property abroad? No

How does the economic slowdown effect you? Clients are less willing to commit to spending and slower to pay.

Do you contribute to a pension plan? Yes.

What's your favourite film of all time? Cinema Paradiso

Have you ever won money? An Ante Post double on Burrough Hill Lad & Dawn Run in 1984 is still remembered fondly.

Do you own your own home? Yes.

Do you invest directly in the stock market, through funds or both? Both

What is your preferred method/system of saving (Deposits, Funds,Shares, Property)?Funds & Shares.

What financial product/s do you consider to be bad value for money? Tracker Bonds.

Do you trust your bank? Don't trust any financial institution much.

Paul McCarville is one of the principals with Clarus Investment Solutions.