Irish Financial Review

12 Money Tips for Christmas Bliss

With little over a month to go until Christmas, now is the perfect time to plan for the big spend.

12 Money Tips for Christmas Bliss

12 Money Tips for Christmas Bliss

The following 12 Financial Tips for Christmas Bliss are developed to make the festive season a truly family one and less of a debt-filled one.

  1. Ban the guilt gifts – OK, we all know how much gift giving has expanded over the years but often, we are as much influenced by savvy advertising as we are by our own convictions. Forget the advertisers; they won’t pay your bills when they arrive after the holidays, be prudent and buy smart and don’t buy out of guilt.
  2. Gift List – Having a list completed early means that every time you see an item on the Gift List, you may be able to grab it for less than you might closer to Christmas, when you may be under more pressure to buy, the item may be sold out or you have to seek more expensive options to acquire it.
  3. Time Tricks – This is key, starting early means that you will have plenty of time to not only shop around but also avoid any last minute express shipping costs if you buy online.
  4. Vanishing Vouchers – Vouchers can sound like a convenient means of expressing Christmas wishes but they have experienced problems in recent years where issuing retailers have gone belly-up. And while some retailers have been great, do you really want to take the chance of a voucher becoming as worthless as Zimbabwean dollars?
  5. Spread the Joy – why not consider buying some token gifts for your Gift List before Christmas and having a family fun day after Christmas to bag some bargains at the post-Christmas sales to secure some of the more expensive items, it’s a great way to show you care…without depleting your finances.
  6. Kid Kraft – unlike adults, young kids can have an amazing appreciation for unwrapping gifts and before you think you might just get away with a nicely wrapped box, not so fast. However, kids aren’t the retail snobs that adults can sometimes be. The point here is that it can be OK to hold back on buying certain branded items and go with more practical options, the level of appreciation can be just as great! HOW FINANCIALLY SAVVY ARE YOU – TAKE OUR 5 MINUTE TEST
  7. Web Wonders – There isn’t a whole pile you won’t find on the web these days, and I am not just talking about buying. Every good purchase begins with good research and the web provides a world of analysis, from best products to deals. A simple trick is to begin with your list and use some of the top comparison sites, like and to check out what deals are to be had (including local ones). You might just find that your local retailer can match the best deals, before or after any shipping costs are added on. Also, if you are planning gifts on the expensive side, check out what reviews they receive. This is especially true of weekend-breaks, hotels, travel gift vouchers and even electronics. Better to pay once for quality than several times over for questionable quality!
  8. Crimbo Cash – You might want to consider becoming a bit of a retailer yourself. Why not dust off some old ‘stuff’ and see if there is a market for it. Check out eBay or DoneDeal.
  9. Centsense – this year, you can make a real difference in the financial literacy space. With the one and two-cent round-up (and round-down), use the ‘unwanted’ cash to teach your kids about money. Develop a reward based incentive for young kids that you and they can interact with and use to teach the value of money – yes, pennies really can add up.
  10. Return Rewards – Make sure you have all of your receipts in order. You never know, your receiving party may just want to switch that jumper for a different colour. So, they will need to act quickly and having receipts ensures a fast and secure return experience for them.
  11. Move the Moneylenders – Moneylenders are the most expensive form of borrowing in Ireland today so families should do all they can to avoid using them as a means of funding their Christmas spend. So, when it comes to Moneylenders – move them out of the equation!
  12. Open a Credit Union account – Credit Unions have been in operation in Ireland for almost 60 years and are not-for-profit focused. For families, they continue to provide locally operated savings and loans at low costs and have staff on hand to provide a personal service. Credit Unions put the financial well-being of families and the communities in which they operate first.

Frank Conway is a qualified financial adviser and founder of MoneyWhizz, the financial literacy initiative. He is co-author of Cents & Sensibility – A Financial Guide for Young Adults. He works with leading global brands delivering financial fitness seminars. 

A united Ireland by 2018

If you can’t beat then, join them.

In the case of Northern Ireland, this is precisely what it has agreed to do as it joins the Republic of Ireland…in corporate taxation!

Corporate Tax

It has now emerged that Northern Ireland has been granted the authority to reduce the corporate rate of taxation to 12.5%, from April 2018, matching that of the Republic of Ireland.

Competitive challenge

But, unfortunately, instead of this being an amicable union, it is a strategic drive to compete for global foreign direct investment (FDI) with the Republic of Ireland.

The current rate of corporate tax rate in Northern Ireland is 20% and the reduction will make Northern Ireland home to the lowest rate of corporate taxation across the UK.

New KDB tax at 6.25%

In anticipation of the lowering of the corporate tax rate in Northern Ireland, the Irish Government has just launched a 6.25% Knowledge Development Box (KDB) tax where qualifying income would be subject to a reduced rate of corporation tax of 6.25%, half the regular corporate tax rate of 12.5%.

It’s about a lot more than tax

The Republic of Ireland has set the trend in FDI attraction. In addition to its multi-tier competitive tax rates, it is also a leading provider of a host of other service offerings, especially market entry strategies for many global corporates seeking EU market entry opportunities. This is a major point for up-and-coming high growth companies, especially in the financial technology (FinTech) space. Such companies are highly innovative and disruptive in the delivery of a wide range of financial services, including payments, lending and investing. So, while the 12.5% and 6.25% tax rates will serve as major incentives, it is the elevated service package that the Republic of Ireland currently offers that makes it such an ideal partner in the global growth plans for many brands.

Changing global landscape

Over the course of the next few years, the completion of the EU / US TTIP and ISDS will have a major impact on how trade is conducted across the largest economic space in the world. Conceived to abolish a massive amount to trade tariffs and other trade barriers, under TTIP (ISDS) the new trade landscape will make it easier to trade and access markets on both sides of the Atlantic. But the need for lower corporate taxation will not go away and in some cases, the proven skills of the IDA are likely to be in greater demand as more US brands look to expand across the EU.

Just in time

For the Republic of Ireland and Northern Ireland, the changing trade landscape combined with new and lower corporate tax rates must serve as a catalyst for sustained long-term growth. So perhaps in that sense, maybe the island can be united in economic growth and sustainable prosperity.

Why passive management is winning investment cash

During the month of October, Vanguard Group pulled in US$196 billion of new investor cash.


Passive investment winning investment cash

Passive investment winning investment cash

Vanguard is the largest provider of index-tracking investment products and its October figures represents a rise of $33 billion from a year earlier. The Pennsylvania based investment giant’s growth is an indication of the growing preference of investors’ for index-tracking funds over those that rely on stock pickers.

Vanguard’s strong investor growth highlights the changing face of investing and mirrors those of Warren Buffet who has advocated for greater use of index trackers over more traditional active fund investment.

In fact, the growth of Vanguard combined with the consistent strong index-fund performance highlight the dilemma for active fund managers globally who have lower growth track records but higher fee structures.

Devastating impact of fees

Highly managed funds incur higher fees on client accounts. And it is fees that have a devastating impact on long-term fund growth. Analysis conducted by Ablata reveals fees costing 3% – 4% annually can reduce the overall value of client fund balance by 30% or more over the full term of an investment period. So, on a fund valued at $600,000, fees can reduce it by $200,000 or more.

Passive Vs Active investing

Passive management (also called passive investing) is an investing strategy that tracks a market-weighted index or portfolio. The idea is to minimise investing fees and to avoid the adverse consequences of failing to correctly anticipate the future.

Active management (also called active investing) refers to a portfolio management strategy where the manager makes specific investments with the goal of outperforming an investment benchmark. However, this particular strategy requires a lot of guess-work along with buying and selling and amending of fund construction – all of which costs money but which clients ultimately pay for.

A broad dilemma for active investment managers is a long-term lack of ability to truly outperform benchmarks. So, while some active fund managers may outperform an index for a period of time, history shows their capacity to do so on a long-term basis is extremely limited. This is a fact that investors must consider as they evaluate their long term investment strategy.

Consistent growth and low fees

The biggest components of fund growth are driven by the overall rate of fund growth on year-on-year basis in addition to the fees applied to having their investment managed. So far, it is the Vanguard model that offers investors the greatest rate of wealth growth over the long term. And it seems that investors in general are buying into the Vanguard model in increasing numbers.


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