Thursday, June 18, 2009

Blogger Interview - Miriam Ahern

What is the best business/investment decision you ever made? Setting up my own organisation development and human resources consultancy practice, Align Management Solutions, in 2001.

What kind of car do you drive? Jaguar XJ8

What is the worst financial advice that you ever received? To take out an endowment mortgage in 1987 – Thankfully I didn’t!

Do you own property abroad? Yes

How does the economic slowdown effect you? Like any other industry, in professional services it’s now harder to get new business and harder to get paid.

Do you contribute to a pension plan? Yes

What's your favourite film of all time? Billy Elliott because it shows what can be done against the odds when you have an unshakable vision and the passion to back it up.

Have you ever won money? Not yet but I’m ever hopeful!

Do you own your own home? Yes

Do you invest directly in the stock market, through funds or both? I had fantastic share options at one point during the dot com frenzy but they lost their value before I could exercise them. That reality check put me off the stock market somewhat.

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

What financial product/s do you consider to be bad value for money? Car loans, some credit cards, critical illness insurance (sounds good in principal but very tricky when you try to make a claim)

Do you trust your bank? I trust them but it really annoys me that having had personal and business accounts with them for twenty years, they still don’t know me when I visit.

Miriam Ahern is Managing Partner of Align Management Solutions

Tuesday, June 16, 2009

Pension & Investment Calculators

I have been flirting with the idea of providing Pension & Investment Calculators on my websites for a while and I have come to the conclusion that they may not be as reliable as some may believe them to be.

The natural tendency for an individual would be to rely on the information generated as absolute. However, I feel that the following points are worth bearing in mind should you decide to use them.

# The information generated can be based on multiple assumptions. The results are therefore obsolete when one of these assumptions changes and you need to recalculate on a regular basis.
# The assumptions used vary; depending on the calculator provider.
# The 'result' generated may deter an individual from making savings/pension provisions as they may deem the result to be impractical or unaffordable.
# Not all investment calculators are equal. The assumptions and results can vary depending on what Country the investment company is Regulated in.
# Variables, such as Taxation, are constantly changing.
# Calculators do not pay too much attention to Investment Strategy.
# Estimators of levels of Life Insurance cover are generic. Every ones circumstances and requirements are not the same.
# Calculators are generally provided by product providers that can weigh the premium/contribution in their favour ie. quoting an unrealistically high level of benefit.

In isolation, calculators/quotes/estimators are no better than the general rules of thumb that are put forward by product providers or intermediaries. They may be a required starting point for some, but I would not bet the house on them fulfilling reasonable lifetime expectations for the average saver/investor. They are not a substitute for specific advice; that incorporates a common sense approach, from Financial Advisors.

Wednesday, June 10, 2009

'Two Ideas of Government'

There was alot of talk about 'Democracy' in the Dáil Éireann yesterday. It reminded me of part of a speech made by US Presidential Candidate William Jennings Bryan on the 9th of July 1896 :

"Mr. Carlisle {Secretary of the Treasury} said in 1878 that this was a struggle between the idle holders of idle capital and the struggling masses who produce the wealth and pay the taxes of the country; and my friends, it is simply a question that we shall decide upon which side shall the Democratic Party fight. Upon the side of the idle holders of idle capital, or upon the side of the struggling masses? That is the question that the party must answer first; and then it must be answered by each individual hereafter. The sympathies of the Democratic Party, as described by the platform, are on the side of the struggling masses, who have ever been the foundation of the Democratic Party.

There are two ideas of government. There are those who believe that if you just legislate to make the well-to-do prosperous, that their prosperity will leak through on those below. The Democratic idea has been that if you legislate to make the masses prosperous their prosperity will find its way up and through every class that rests upon it."

Which 'idea' are you weighted in favour of?

Tuesday, June 2, 2009

Direct Investment in Stockmarket V's Unit Linked Funds

Individual investors who are between two minds as to whether they would be better off investing in a diversified portfolio of individual stocks or unit linked managed/index tracking funds may find this article of interest.

The author is of the opinion that :
....the decision to go with stocks or funds comes down to a realistic assessment of how much you want to make your own investing decisions and your ability to handle that responsibility. Walter Updegrave

If you allow for the Regional differences in terminology, resources and taxation the principles are basically the same. The 3 questions posed are very relevant.

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