Wednesday, 17 April 2013

Aviva's predictions about Irish commercial property

I participated in an Aviva webinar earlier this week about "The Case for Irish Commercial Real Estate" as an investment.  One of the quotable quotes from the end was

"We believe the prospects for the Irish real estate market for the five-year period from the start of 2013 look attractive; indeed we are forecasting an overall annualised total return of over 12% pa, supported by robust income returns and capital growth.  In short, although risks remain – including economic uncertainty in the euro zone, ongoing weakness in the banking sector and a lack of clarity from NAMA – we believe that now is an opportune time to reappraise the merits of Irish commercial real estate as part of a diversified investment portfolio."
With respect to the clever people at Aviva, I'm very sceptical about forecasts of growth rates for an asset class too far into the future.  Although such forecasts are presumably based on sound scientific research and methodology, there are far too many utterly unpredictable variables than affect the movements of any real asset class, property included, to enable anyone to come up with a reliable figure of "over 12% per annum". 

There's also a risk that, taken out of context, people could base important financial decisions around an expectation of "over 12% growth" per year for the next 5 years.  In fairness to Aviva, the webinar offering this prediction was for investment professionals only, so I'd hope that none of the participants would give their clients this expectation. 

On the positive side, I have a certain level of admiration for an investment analyst who is willing to come off the fence and make such a specific growth forecast, in this era when electronic diaries make it so easy to set up a reminder for 5 years' time to check how the forecast turned out. 

Despite all my misgivings, I do agree with Aviva on the important point - that the fundamentals for Irish Commercial Property would suggest that 2013 is indeed a good time to consider investing in this asset class again.  I'm just too long in the tooth to start making predictions about future growth rates. 

Saturday, 9 March 2013

Enda's million-euro pension in just two years

I generally steer clear of commenting on politicians on the grounds that I don't believe I could do better myself, so therefore I won't criticise someone else's attempts.  I don't have any connection to any political party either.  But I couldn't resist crunching the numbers from this article from The published online today.

After two years in Government, ministers receive an entitlement to a pension.  The current Government is two years in office today, so that triggers this entitlement. 

According to the article, Enda Kenny's entitlement is a pension of €21,466 per year if he was to retire today.  Let's be clear - that €21,466 is an entitlement that has accrued solely from his two years in Government.  It's in addition to any other pensions he has accrued over the rest of his career. 

For those of you who don't know - Public Service (including Government) pensions are not pre-funded - they're paid out of current Exchequer resources.  In other words, the taxes that you and I pay today go towards paying the pensions of retired Public Servants.  This is a different system to the Private Sector, where pension contributions are used over a person's career to build up a fund from which their pension is paid when they retire. 

But how much would a Private Sector individual need to put into a pension fund in order to provide a pension of €21,466 per year for life?  Mr Kenny is 61 years old and his wife Fionnuala is 6 years younger.  Public service pensions provide for increases in payment and a widow's pension of 50% to be paid for the rest of the spouse's life in the event that the pensioner dies before their spouse. 

A Private Sector individual would need to accumulate a fund of over €989,000 in oder to provide them with a pension of €21,466 per year for life on the same terms, using current annuity rates. 

Let me repeat - that entitlement has been accrued solely in the last two years.  Mr Kenny's total pension when he retires will be a multiple of this, adding in the pensions from the rest of his career. 

Not bad for two years' work!


Monday, 3 December 2012

Zurich unbundles insurance from pensions - at last!

I'm pleased to see that from 14th December 2012, Zurich Life are ceasing to offer life insurance, specified serious illness cover, waiver of premium and income protection benefits bundled into the one pension policy.  If you want these benefits, you'll have to buy them in a separate product. 

Why is this a good thing?  Because bundling of insurance products into investment or pension policies is not at all transparent in terms of cost.  You pay one premium (usually per month) into the pension policy and with this premium, you buy units in your chosen fund(s).  If there are insurance benefits bundled with the policy, each month units are cancelled to pay for the insurances. 

The sting in the tail is that the cost of the insurances is not fixed - the numbers of units cancelled can and will get bigger as you get older.  Worse, you're not notified as the cost of the insurance is increasing.  So if you continue paying the same pension premium year in, year out, a smaller and smaller percentage of the premium is actually going towards your eventual pension. 

Credit to Zurich Life for finally getting rid of this opaque practice. 

A far better idea is to have a separate policy for your insurances which is a fixed cost so at all times you know what your insurances are costing and how much is going into your pension and never the twain shall meet. 

Friday, 5 October 2012

Featured Client / Guest Blog Post - Jane Hogan

Jane Hogan is an international award winning Business Coach and co-owner of The Business Practice.  She specialises in business growth and personal development for Business Owners and Executive Teams. Jane is passionate about helping people and businesses focus on what’s important, remove obstacles to growth and realise their potential.

Getting more bang for your Marketing buck

Many of the business owners I speak to complain that Marketing is a waste of time and money as they don’t get any results from it.  Others just don’t bother doing any at all, either because they have had bad results in the past or because they are afraid to invest in something that may or may not work.
Marketing in any business should be an investment rather than an expense. i.e. for every euro you spend on Marketing you should get more euro back in return.  This gives you an unlimited Marketing budget, because any money you invest gains you more.  Marketing is only an expense when you spend money on strategies which don’t get you any results.
So how can you improve your chances of getting good results from Marketing?  The key to this is to be targeted in your Marketing.  By answering these 5 questions in order, you will greatly increase your chance of getting a good return on your Marketing investment.
  1. Who are your target markets?  Define all of your different target markets as separate groups as they all have different reasons for being interested in your product or service.  E.g. older people, couples with young children, accountants, rugby players.  The more specific you are the better…and it doesn’t matter if you have lots of different target groups.
  2. Where will you find them in highest concentration?  Think about where each of target groups hang out in large numbers.  E.g. couples with young children will be found in schools, crèches, sports clubs etc.
  3. What do they want to buy and what is your offer?  If you sell holidays, different people will want to buy different things.  A couple with young children will most likely want some place with a kids club and children’s menus in the restaurant.  An older couple might want a quiet resort where they can play golf and not be disturbed by a lot of noisy children.  You need to be offering them different products.
  4. Why do they want to buy it?  What are the benefits to them?  Your customers don’t care about the features or technical specification of your product or service.  They care about what it will do for them and how they will benefit from it.  If you sell cars, they don’t care about the technical details of how the brakes work, but they care very much about how quickly they will be able to stop if a child runs out in front of them.
  5. How will you communicate your offer to them?  Now that you know who your target audiences are and where they congregate, you can think about the most appropriate way to get in contact with them.  If you have a very tightly defined target market, there is no point in spending a lot of money advertising in a national newspaper or radio station, because the majority of their audience aren’t looking for your product or service. For couples with young children, you might choose to advertise on websites which provide information for families or even put posters in schools, clubs etc.  For older people, you might choose to advertise in a magazine aimed at the over 50s.  Wherever you choose to do your marketing to your target group, you now need to ensure that your message focuses on what they want to buy and especially on the benefits to them of having your product or service. 

If you would like to have a complimentary business coaching session to find out how you could make your Marketing investment go further, please contact me at or on 087-6479521. 
Check out my linked in profile at

Monday, 6 February 2012

Are You Due a PRSI Refund?

There was a fair bit of publicity recently surrounding a news story that the State has refunded €10 million to taxpayers who were overcharged in 2010. We've had several calls about this.

Just to be clear - this relates to the Health Levy. If your overall income in 2010 was less than €26,000 you were exempt from the Health Levy. If you earned more than €500 in one week in a PAYE employment, the Health Levy would have been deducted for that week.

So anyone who earned more than €500 in a week during 2010 AND earned a total of less than €26,000 for the year should reclaim their Health Levy.

Wednesday, 25 January 2012

Two Months' Cash Back on Life Insurance & Income Protection

If Life Insurance or Income Protection has been something you've been planning to get around to for a while, here's an offer that might motivate you to get it sorted once and for all.

Anyone who applies for a new life insurance policy (including Mortgage Protection life insurance) or an Income Protection policy before the end of February 2012 will receive a refund of their first two months' premiums. The policy must be issued before 27th April 2012, all premiums must be paid on time and the refund will be paid within 60 working days of paying the second month's premium. Maximum cash-back is €1,000.00.

As always, part of our Protection service includes a comprehensive Needs Analysis. We don't recommend that you take out a protection policy with a randomly-selected level of cover. Instead we calculate and show you the correct amount of cover for your needs.

For a no-obligation free quote, just contact us at

Monday, 3 October 2011

Free €10,000 life cover offer

A recent survey by Irish Life discovered that 2 out of 3 people who have life cover only have enough to protect their mortgage and have none to protect their children or dependants in the event of their death.

As a way of raising awareness, Irish Life are giving away €10,000 of free life cover for year to the first 20,000 people who sign up. There's no catch - the cover is free and anyone can apply provided that they're under 55 and have at least one child aged 13 and under.

Click here to get more information or apply. Or if you know people who might be interested, send them this link.

If you have any queries just drop me an e-mail to