Stocks and shares

Ush1

Tsipras wrote: »

Could you just invest money instead of having a pension? Would this ever work out better?

Yes and possibly yes.

Tsipras

Tsipras wrote: »

Could you just invest money instead of having a pension? Would this ever work out better?

Yes but you have to take into account the huge tax breaks on what you put into a pension.

BailMeOut

Tsipras wrote: »

Could you just invest money instead of having a pension? Would this ever work out better?

If you have self managed PRSA account you can invest your own retirement money in stocks, bonds, funds, etc..

razorblunt

valoren wrote: »

Yes :pac:

Ha ha g'wan the Stan. Good teacher, crap investment advice.

scooby77

I find biggest problem is tax. As a PAYE public servant, I've few (or no!) mechanisms for writing off tax on share/etf profits. Would love to dabble in markets...but hand over huge chunk of profits to revenue? I'd have to make a lot to justify risk.
Have a prsa avc in some funds...but that's boring!

please helpThank YOU

valoren wrote: »

+1

I've been saying it for years. An ISA for stocks and shares. We're backward in terms of investing in stocks.
There's two ways to look at the stock market. Investing and Trading.
Investing is where you buy ownership of the company that is earning and will continue to earn.
Trading is where you focus on price. And looking to profit from changes in the price.

All you need to do to generate substantial wealth is to invest a significant amount (I'm thinking 10k) into a tried and tested company, bought at fair value. Become a part owner, and then re-invest your dividends for more shares and to buy more shares with regular savings. Look to the kind of companies that have been and will be around forever.

Fair value is typically a price-earning ratio below 20. With the big blue chips, they usually trade at a premium, so it's best to buy in when the market is spooked and they are sold off in a panic. When Brian Dobson is giving the news of market crashes, global financial panic, that's your cue to buy.

Bust your balls at work to buy €10,000 of each of the following kind of companies; Coca Cola. Johnson & Johnson, Colgate Palmolive, Exxon Mobil and Procter & Gamble. Any dividend king will do.

When you get your dividend payment, reinvest it for more shares. Whenever you have spare cash just buy more shares. Let the $50,000 compound for 20 years+. These are the kind of companies (dividend kings) that raise their dividend every year. When you have that, plus more shares bought with savings then you have a compounding machine that will take care of your retirement. With low cost brokers coming to market, then the days of the rip off brokers here are numbered, you can now buy single shares for miniscule fee's, instead of waiting to accrue large savings to invest a lump sum.

Unfortunately, we have no culture of doing that here. Instead, we get bamboozled with metrics and financial speak, scared into investing in funds, (which are invested in these kinds of companies anyway!) the fee's of which eat away at your absolute return. You'd better hope you don't retire during a recession that way.

Re-investing your dividend.

It is one thing to save, it’s another to invest those savings, but re-investing the dividends, along with more additional savings adds an additional and powerful layer to wealth generation.

To take a real world example.

Take yourself back to 1990, Italia 90 is in full swing.

Consider The Coca Cola Company.

Two friends, looking to invest, didn't make it to Italy, so they each have $5000 to invest. They decide to play safe and understand Coke’s simple business model. So they buy some Coke shares. They know that the company pays a dividend (one that increases each year) every 3 months. They have loaned Coca Cola their permanent savings and so they get interest from them when they make profits. They are co-owners of the company.

Barry decides to invest the $5000. He astutely decides to re-invest the dividend into more Coke shares.

Gary is also astute. The dividend will be re-invested. But he decide’s, as he was diligently saving every month anyway, to use some savings to buy additional shares, whenever he receive’s the dividend. (he decides that this amount shall be $200 every 3 months)

Results as of May-2017 - Coke stock trading at $45.

Barry’s investment of $5,000 is worth $71,370. He has 1,586 Coke shares (due to the 2 for 1 stock splits in 1992, 1996 and 2012 and dividend re-investment).

Gary has made a total investment of $21,800 (the initial $5,000 + 3 monthly recurring of $200) is now worth $144,409. He has 3202 shares.


Barry’s 1,586 shares will give him a dividend of $2,283 for 2017.
Gary’s 3,202 shares will give him a dividend of $4,610 for 2017.
Gary is now receiving nearly more in one year than he initially had to invest with.

It's worth pointing out that Coke stock became wildly overvalued towards the late 90's which meant it traded in the doldrums for a long period.
It went through a bubble and was changing hands between 80 and 90 times earnings. (which means you pay $90 for $1 in earnings i.e. madness )

What if you apply the 10k scenario above for an Irish couple in 1987 investing. Remember this was before the 1987 crash that October which suggests that your investment would have dropped circa 20% in a few days. Should you have sold up? Think it was all a scam? Potentially. But what if you did nothing and thought long term?

Exxon Mobil - Invest 10k in May 1987 - Reinvest dividends - invest a further 500 every may.

Todays value - $184,000

Johnson & Johnson - Invest 10k in May 1987 - Reinvest dividends - invest a further 500 every may.

Todays value - $385,000

Colgate Palmolive - Invest 10k in May 1987 - Reinvest dividends - invest a further 500 every may.

Todays value - $418,000

Procter & Gamble - Invest 10k in May 1987 - Reinvest dividends - invest a further 500 every may.

Todays value - $273,000

Assuming you were lucky enough to have $40,000 sitting in a credit union somewhere, you potentially could have been a millionaire today by investing. (total for the 4 was $1,260,000 )

All stodgy blue chips. Boring, unsexy companies. But all dividend kings.
Investing need not be complicated. The above is what Charlie Munger of Berkshire Hathaway would call 'sit-on-your-ass' investing.

We need to be more investment centric in Ireland. You put your money with the best businesses in the world, sit tight through the inevitable crashes and panics and your money will have grown. It would do much to alleviate the forthcoming pensions crisis. The dividends from the such companies will cater for your retirement when you let them do what they do over the long term and even beyond your own lifetime.

Fantastic Post.:cool:

Tsipras

scooby77 wrote: »

I find biggest problem is tax. As a PAYE public servant, I've few (or no!)  mechanisms for writing off tax on share/etf profits. Would love to dabble in markets...but hand over huge chunk of profits to revenue?  I'd have to make a lot to justify risk.
Have a prsa avc in some funds...but that's boring!

My main concern is handing over money (commission or whatever) to someone if you want to trade/invest, I work with companies in financial services and the money they make is absurd, I don't want their greedy mits on my money

MikeSoys

hi odd question and im not sure where to post it. i've used a couple of brokers (mainly uk). im considering davy.ie but my only question is if I open an account with them (which would be a crest account euro/gbp/usd) are irish brokers safe?
I mean if I have 100k with them either in cash, invested or both ..how safe is my money with them?

if for whatever reason ..is there a guarantee with brokers (like irish banks) up to 100k or something else? some uk brokerage says funds are safe up to 80k is this the case in Ireland too??

BailMeOut

When you wire money to Davy to wire to a Bank of Ireland account but do not know if it stays there when sitting as cash or if moves somewhere else.