New RTE programme "How to be Good with Money"

Not sure what to make of this weeks show, they seem like a normal family that just needs a small bit of financial housekeeping and they will continue to trudge along like any other family in their position
What isn't adding up for me is Eoin's financial independence assessment that they can reduce it in 14 years from 73 to 59 and be "Financial independent" with two kids under the age of 20
I know we are only getting a snap shot of the whole story but I would have like to see more of the calculations that allowed Eoin to make this claim because to me it just doesn't add up
One second Eoin mentioned x amount of money in pension should the guy work to 65 and then hands him an envelope showing him to be financially independent at 59. I too would have like to see more of the calculations.
 
I viewed the programme for the first time last night. I have to say I found it very disappointing overall. Outside of the lack of numbers & calculations (which does not make good tv), I found the following to be very one-sided
1. The family loans were really treated with disrespect. Chances are they have come from her parents, and while they may not need the money immediately, there is no point kicking the repayment schedule down the road. Chances are by dropping the repayment by 40%, one of both of the parents will have passed away by the time the repayments come to an end. The 'parents' done a very generous thing by loaning the money interest free - but it is still debt with commitments attached to it. Personally, I would have preferred the programme to say if you wish to loan money to your children, offer it at a tracker rate of ECB +x%, so there is an incentive to pay it back
2. They talked about moving money from post office to investment account and making 17k more over the term. But it did not talk about the downsides. No mention of whether this was before or after tax and the fact that you can also lose money in the process, or losses on one fund can not be offset against gains on the other. I think it was a good opportunity to explain where its good to use investments, what type to look at (index or managed), the types of funds out there and the charges you would expect to pay on them. Should also have suggested the concept of a investment broker - fee based or commission based etc. A lost opportunity I thought
3. Similarly re pension - it was a good option to explain how a pension works, the advantage of compounding etc, and explaining it works in your favour for pensions/investments but against you for debt
4. I also believe that for 80% of people, they should pay down their mortgage before considering private investments. Anyone paying 3% on mortgage interest needs to be 6% before tax, and this money is not risk free. The best way to save for university is to clear the mortgage prior to this (if possible), so the mortgage payments can be redirected to university costs.
5. Financial Independence should have been explained as the age where your pensions, investments & savings mean you no longer need to work to support your lifestyle. I think this was not really explained sufficiently

I also wondered about ages of the people - is there any change that they will be able to draw down their pension BEFORE the children start/finish university. If so, and given the fact that you can draw down your pension without actually retiring, was there any merits in investing 450 into a pension (instead of 280 into an investment) and draw down the pension lump sum to pay for university !! I think some 'left field' ideas like that may resonate more with people.

The one good thing I got from the programme was there are disadvantages with being too financially conservative and a balance is definitely needed.

Finally, I thought it would have been a great opportunity to mention the concept of an ISA and why it would be a good idea in Ireland for things like saving for university. Unless someone starts the discussion, its never going to gain any traction. Saving a max of 250 a month (after tax) into a tax free savings plan would be huge for someone saving towards university.
 
I think the days of ISA are gone we have a good tax break in place for Contributing over your working life to fund your retirement ,

The problem is we have lots of people coming to Ireland who will be working on or below the average industrial wage ,

these are the people who will need to be looked after and a system put in place to ensure they will be able to retire when they reach pension age,or hit health Issues

lots of people on low incomes may finish up unable to work until the reach retirement because of underline health issues ,

I think Eoin was nudging us to start changing our ways and plan for retirement,there will be lots who plan to retire at 65 who finished up having to retire a few years earlier,
Only a certain % of people well be in a position to pay down there mortgages ,
I think Eoin was more interested in advising people to save who are never going to be in the above group,
Note Eoin said Financial Independent at 59,not retired but having a plan if you had to,
 
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Turned off mid programme-very nice couple but found it a bit boring. I couldn’t really relate to them as they spent so little on treats
 
Note Eoin said Financial Independent at 59,not retired but having a plan if you had to,

Eoin's understanding of "Financial independence" is
"Every person has a day in their life when they have created enough wealth, where they don't have to worry about money again and don't have to work"
Eoin did the "maths" for this couple and he came up with 73 at the beginning of the show but by the end of the show he some how got that down to 59

Eoin is not advising this couple that if they "had" to retire they could but rather that they are going to able to retire at 59 or at least that was my understanding of the show
 
Eoin's understanding of "Financial independence" is
"Every person has a day in their life when they have created enough wealth, where they don't have to worry about money again and don't have to work"
Eoin did the "maths" for this couple and he came up with 73 at the beginning of the show but by the end of the show he some how got that down to 59

Eoin is not advising this couple that if they "had" to retire they could but rather that they are going to able to retire at 59 or at least that was my understanding of the show
I think the point Eoin was making was if the changed the way they were living/saving and took advantage of the pension contributions tax break of course they will be in a better position to retire years earlier,


I don't expecting Eoin be able to forecast the future or any other Financial advisor for that matter, people who put a plan in place early in there working lives along the lines the couple are now following have a better chance of creating enough wealth to retire early if the want to,
 
He has a very nice manner. I enjoyed it. I also like (and agree with) his point that it does not make sense to pay down one’s mortgage too aggressively and at the expense of pension funding.

e.g. two people, one who owes €600k and the other who owes €700k but has €100k in cash

The first person is in greater danger
 
He has a very nice manner. I enjoyed it. I also like (and agree with) his point that it does not make sense to pay down one’s mortgage too aggressively and at the expense of pension funding.

e.g. two people, one who owes €600k and the other who owes €700k but has €100k in cash

The first person is in greater danger
I agree ,
I know back around 1985 They Company I worked for put in a pension scheme for people on average industrial wage, there were some people who were not in favour of it because they did not think they could afford it, I do be talking to some of the people who were against paying into a pension back then,

Every single one of them are glad pension scheme went ahead ,

This advice of paying down mortgage ahead of starting a pension is advice from the well off who are out of touch with your average worker,
 
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I’ve heard too many sad stories lately of people who plan for a retirement that never happens.

If you’ve two grand to spare, take your kids to Disney World.

Sage advice Gordon but unfortunately most either save as if their going to live forever or spend like there's no tomorrow o_O
 
You should be winding down from 50 on maybe 4 days a week 60 maybe 3 days 70 maybe 2 and keep doing a bit. met a 70 year old man who is starting new job on Monday he delighted with himself. He only retired 3 months ago he couldn't hack it at all.
 
You should be winding down from 50 on maybe 4 days a week 60 maybe 3 days 70 maybe 2 and keep doing a bit. met a 70 year old man who is starting new job on Monday he delighted with himself. He only retired 3 months ago he couldn't hack it at all.
He should take time out to find out what the people coming behind him are up to, :D
I suspect he could stay retire from a money point of view if he wanted to ,



If you find work you enjoy you are already retired,
 
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What I thought was unusual, was that at the start Eoin informed us that the couple have a second property with a mortgage of only 70k on it.

Never at any point did they discuss disposing of it to pay back the family loan or mortgage and invest any balance then into a pension.

Quite a good programme and Eoin is an excellent presenter but it’s a pity that it doesn’t offer more in-depth information.
 
I’ve found the format overall just too short at 30 minutes with sound bites for financial advise rather than actually seeing them in action.

The episode just gone I did find the most enjoyable of the series so far. The other were really(or seems to me at least) extreme cases where people have no sense of the value 9f money at all.

This weeks was a family that’s we’re earning well and tried to look after their money but he pointed out how a few changes could be of huge benefit to them in the medium to long term.
Most of the other episodes were a case of “stop spending all your income and put some structure in place”

The half hour format really doesn’t work at all though.
 
I think the days of ISA are gone we have a good tax break in place for Contributing over your working life to fund your retirement ,

You bring up two points here, and I would like to address both of them.

Firstly I am not talking about SSIA where the government 'topped up' the money deposited into the savings accounts. I am talking of an ISA scheme, similar to the UK where a capped amount of money goes into the fund net of tax and the funds grow in the fund tax free - so no DIRT, Exit Tax or CGT. This would be the perfect type of vehicle for the couple like this who wish to be financially sensible and plan for their future kids education, as well as someone saving a deposit for a house or wish to have a cushion to fall back on if something happens.

Its all well and good saying there are decent tax breaks for those investing in pensions - but a large cohort of people are not willing to put away money for that length of time. People need to have reasonable cushions before thinking of pension plans and this is part of the whole issue with it. The tax breaks for pensions are too generous - the 2 million limit is simply too high to impact most people. It needs to be reduced to 1 million, and any savings outside of that for retirement needs to be part of personal savings options complementing pensions.
However, to offset this there should be an alternative vehicle put in place that allows people to save and grow their savings tax free (to a limit - even say 250 euro a month) and allows them access it when they need to - say child's education, house purchase deposit or whatever.
I have no doubt that the next bump in the road is less than 3 years away - and I have no doubt there are a large chunk of people currently living pay cheque to pay cheque with little to no savings. These are not necessarily the low incomes, but also chucks of middle income as well. I firmly believe an ISA type structure would encourage a portion of those to put some funds away for the rainy day - long before pension age kicks in.


The problem is we have lots of people coming to Ireland who will be working on or below the average industrial wage ,
these are the people who will need to be looked after and a system put in place to ensure they will be able to retire when they reach pension age,or hit health Issues

I will ignore the element of "people coming into Ireland" and focus on the low income element of your statement. Absolutely, we have a pension time bomb going off, but not only for lower income groups. Lots of middle income groups are in the same category with little to know pension pot in place. This was no different to the couple in the programme - the reasons their financial independence age was so high was because their pension pot was so under funded. 33% of private sector workers have a private pension and the average pension payout is less than 6k per annum (journal source so taken with a pinch of salt). A pension of this size is simply a top-up on the state pension, not a replacement for it. I would be amazed if the retirement age was not raised to 70 by the time I am due to retire (I am 43). The question is how many will be in a position to work, and be able to get a job at 70 !!!

I believe the entire system needs an overhaul, and compulsory pensions need to be introduced across the board. I also think the amounts needs to be increased from 6% by both to 15% from employers and 10% from employees, with the employee permitted to add additional AVC's of 10%. But 35% should be the limit, regardless of age or pension type, and full alignment should be done across all pension types (PRSA, Occupational, Executive etc). There should be no reason for having different types of pensions - they are all just a savings account for retirement.

I also believe that all defined benefit pensions in the private sector should be closed down, turned into defined contribution and the employer should be 35% of the salary per year into the fund. There are too many underfunded pension pots, and these need to be separated and properly funded. The company should not be permitted to pay dividends until the pension transfer is adequately funded.
The public sector pensions are another matter - personally I would like to see minimum of 25% of the public sector salaries paid into the National Pension Reserve Fund which is constitutionally protected from raiding so the pension entitlements of current employees are adequately funded for, and not simply a liability on our children. I think we have put enough of debt on them to date.

https://www.independent.ie/business...on-do-not-know-how-to-start-one-35456462.html
https://www.thejournal.ie/pension-cover-ireland-2565427-Jan2016/
 
I see Eoin is MD of enough.ie and they seem to be running seminars etc. aimed at the general public who want to learn more

€50 for 2 hours is a bit pricey though for what seems like basic information imo - you could probably get the same from one of those personal finance books
https://www.eventbrite.ie/e/enough-finance-seminar-tickets-55044185641

Personally I think these types of courses should be available free, run in conjunction with MABS. They have an education function, but don't appear to be anything similar to this and really do not understand why...
https://www.mabs.ie/en/how_we_help/education/
 
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