I couldn't convince my mother to move her savings out of measly Irish deposit rates into something better on Raisin because it's too risky, so there's even less chance of her moving to this PIA.
I couldn't convince my mother to move her savings out of measly Irish deposit rates into something better on Raisin because it's too risky, so there's even less chance of her moving to this PIA.It’s slow to wait for the generations to turn over but just think trying to teach a 50 year old who’s spent their whole life thinking investing = buying bank of Ireland shares and risk = bad is unlikely to bare much fruit.
Well, they need to be saved from themselves.Will investors in these new accounts be very disappointed that there are very few options left if they want to invest in irish equities
Savings often means that regular payments are put away for use at some point in the future. Look at the SSIA for example, the second S stand for savings. The pillar banks all offer regular saver accounts, but their other products are called term deposits, instant access deposits, or some such, and never savings accounts.but one should not be confused with the other.
Yes Corola, that’s it, I thought it was a savings scheme, until today. Now I know it’s an investment scheme. Nothing wrong with either, but one should not be confused with the other.
What happens after 3 years, your 36 is worth double *, so you pay tax, you cash out in year 4 and it’s worth 20k.
Maybe AIB will sell her one, so there's even less chance of her moving to this PIA.
Heck Duke, I only looked at it properly today after I read this thread, there was a load of kite flying before the budget and I just assumed it was a savings scheme. It’s not. It’s an investment vehicle, of unknown returns, with risk, no guarantees, unknown costs and the only thing we actually know is you can out in 12k a year, and if you go above 50k your max tax is 1%% of the excess. Which makes it marvellous somehow.
When they say 'your 36k is worth double' I assume they mean that it doubled to 72k so in year 3 they would pay a tax of 220 euro. Then in year 4 their investments collapse and are worth only 20k. This is all correct and it is a downside of the account but @Bronte - I would say if that puts someone off then that is just how investing in more volatile assets like shares works. It should always be seen as a long term investment where the bad years will be more than made up for with the good years. Also, you can invest in funds that invest in lots of shares which should be less volatile.There is no tax on any holdings worth under €50,000.
And lots more such as employment and working capital to enable quoted and even private companies to grow or sustain them through down times. If more of the SIA nay saying politicians, so called financial experts and media commentators could comprehend the basics of this I'm sure they would be on the other side of the fence. I imagine the existing brokers and fund managers will resist, turkeys and christmas, they have their own reasons of course.Investment is defined very specifically as expenditure on new capital stock, e.g factories, plant, equipment, etc.
Indeed and we are very much an open economy. The vast bulk of the savings generated by Simonsaver will be used to buy foreign assets off foreign investors on the second hand market. Might be good for the savers but bad macro economicallySo in economics, saving = investment (in a closed economy)
My background is Life Assurance. Savings meant relatively small regular premiums and Investment meant large single premiums but both were invested in the same “real” assets.You are right though, "savings" should not have been used in the coverage about this scheme. Savings means zero-risk cash/deposits.
HOWEVER,
the general public think as follows:
saving = holding cash deposits in banks
investing = holding savings in any other financial asset
What about government borrowing, alot of those bank deposits end up as government bonds. Ive long suspected that the irish treasury have ulterior motives in maintaining high bank deposits. It creates a large reserve for them to borrow from at low interest rates. If banks were lending out more money for businesses or if depositers were investing more of their money rather than depositing it with banks then the interest rates that the government had to issue their bonds at would be higher.a nation saves €10bn, then the nation invests €10bn.
Households save the 10bn into banks, PO, CU, pensions, funds, etc., and those savings become investment expenditure by firms.
Yes, but I'm sad to say the name isn't getting much traction on r/irishpersonalfinanceI think it was @Fortune who christened this the Simonsaver.
But you have the intellectual rightsYes, but I'm sad to say the name isn't getting much traction on r/irishpersonalfinance
I wonder if low cost providers will put a cap on the amount in the fund, so they don't have deal with tax.I personally am not sure yet whether I will take full advantage of the scheme for all my investments or leave it at 46k or so every year to tax harvest.
Average daily NAV.Has there been any indication on how the taxable amount will be calculated. There was some talk of taking the max for each quarter.
That is crazy. The whole point was to keep it simple.Average daily NAV.