# Rich/Poor mindset



## help999 (3 Jun 2022)

_Moderator's note: This is nonsense from a UK website _

Hi, i am wondering how some people can drive big top of the range cars and Jeeps mainly bmw Jag Audi etc. Brand new ones. I did some research and found that if you have a business you can offset that big top of the range car against tax on the annual return. Poor people well not so much poor but middle income either take it out ok finance or part payment of cash, where people who i consider to be rich are more financially educated they know how to grow wealth where as poor people lose it or dont build on it.
I have heard of cases where people with multiple houses on the books incorporate them as part of a business and pay less tax. Rich people know how to avoid tax and amass wealth poor people dont. Is being rich a case of being educated?


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## Steven Barrett (3 Jun 2022)

As someone who talks to people about their money for a living, I can tell you don't believe in everything that you see. Some people spend all their money on possessions and don't have any savings. So people think they are rich when they are not, they just give the otherward projection that they are. Cars are the easiest way to do this as you can get finance for an expensive car pretty easily and get a new one every 3 years on PCP i.e. you are renting your car. 

there are plenty of other people who are extremely wealthy but you would never know. Why? Because they don't broadcast their wealth by having expensive possessions. They save their money instead and no one else can see this. But when they come to their late 50's, they have amassed a lot of wealth and can choose to stop working, cut back, help their kids out financially. Whatever they want because they are wealthy. 

Meanwhile, the person who spends every penny still hasn't saved anything and has to continue working because they don't have a choice. So while the frugal person is spending 6 months in Asia and Australia as a 60th birthday present, the other person is wondering where they got the money to be able to do that!

We do not know what other people's financial situations are so don't try to guess. Concentrate on your own. Don't take on too much debt. Save for your retirement. Spend less than you earn and invest the rest. Have the correct structures and habits in place and you'll do alright. 


Steven
www.bluewaterfp.ie


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## galway_blow_in (3 Jun 2022)

it varies , people from an urban backround are more likely to immerse themselves in displays of wealth ,rural  farmers are often quite wealthy but go around dressed what might be viewed as  poor , they are also masters at " talking poor " , same farmes might have a few million euro worth of land


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## Steven Barrett (3 Jun 2022)

There are lots of other socio economic advantages that people coming from middle/ upper class backgrounds have too that help them get started in life. 

See the article on Tony Blair's son Euan . Would he have had the opportunities he had if his dad wasn't Tony Blair? No chance. While this is an extreme example, it is the same to a different degree with others.


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## Brendan Burgess (3 Jun 2022)

help999 said:


> Is being rich a case of being educated?



Education is part of it, but being smart and thinking through things is important. 

For example, they don't borrow money to put it on deposit at 0%!





__





						Baby on the way - time to review our finances.
					

Age: 36 Spouse’s/Partner's age:32 Not married.  Number and age of children: 0 but 1 the making.   Income and expenditure Annual gross income from employment or profession: base pay €41k,  €61k all in including shift Allowance and Rostered overtime. Annual Bonus = Average 10% of Base Pay. Annual...



					www.askaboutmoney.com


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## MelF (3 Jun 2022)

Money talks, wealth whispers is a good rule of thumb I feel!


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## Introuble83 (3 Jun 2022)

I think mindset is certainly an issue . I have relatives who have substantial savings but never spend anything because they have programmed themselves to save so much, there money serves them little value . Like above I have friends who drive 75k cars but have no savings . Each to there own .


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## joe sod (3 Jun 2022)

galway_blow_in said:


> it varies , people from an urban backround are more likely to immerse themselves in displays of wealth ,rural  farmers are often quite wealthy but go around dressed what might be viewed as  poor , they are also masters at " talking poor " , same farmes might have a few million euro worth of land


That's more to do with the rural mindset though and the attachment to land. They don't own the land but are slaves to it in many cases, the land owns them.

John B Keane's "The Field " is as relevant today as it was in the 1950s in delving into that whole mindset


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## Steven Barrett (3 Jun 2022)

Then you have the cost of failure. People from medium/ upper class have a safety net that poorer people don't have.

Look at Donald Trump and his businesses. He took big risks on so many ventures that others wouldn't make because of the risks involved. If they went wrong, his dad bailed him out. If they worked, he made massive gains and was called a business genius. 

Other people just simply can't take those risks as it would bankrupt them and they wouldn't come back from it.


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## T McGibney (3 Jun 2022)

help999 said:


> I did some research and found that if you have a business you can offset that big top of the range car against tax on the annual return.


Some "research" that was, LOL.

Care to post some links to substantiate this nonsense?


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## Blackrock1 (3 Jun 2022)

galway_blow_in said:


> it varies , people from an urban backround are more likely to immerse themselves in displays of wealth ,rural  farmers are often quite wealthy but go around dressed what might be viewed as  poor , they are also masters at " talking poor " , same farmes might have a few million euro worth of land


a few million euro worth of land that you arent prepared to sell to realise that gain may not make your rich, it depends on what you can earn off it, there are more income poor farmers than income rich ones thats for sure.


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## T McGibney (3 Jun 2022)

Blackrock1 said:


> a few million euro worth of land that you arent prepared to sell to realise that gain may not make your rich, it depends on what you can earn off it, there are more income poor farmers than income rich ones thats for sure.


Selling a few million euro worth of land won't make you rich if it means sacrificing your future livelihood.


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## Blackrock1 (3 Jun 2022)

T McGibney said:


> Selling a few million euro worth of land won't make you rich if it means sacrificing your future livelihood.


depends on when you sell it....


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## PGF2016 (3 Jun 2022)

T McGibney said:


> Selling a few million euro worth of land won't make you rich if it means sacrificing your future livelihood.


I think you're ignoring the 'few million euro' bit that the farmer selling will make.


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## T McGibney (3 Jun 2022)

PGF2016 said:


> I think you're ignoring the 'few million euro' bit that the farmer selling will make.


No I'm not.


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## Introuble83 (3 Jun 2022)

T McGibney said:


> No I'm not.


Would a few million euro not be akin to having a large salary over a long period of time ?


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## Paul O Mahoney (3 Jun 2022)

Personal Balance Sheet is the measure of your wealth.  There was a book " Habits of a Millionaire ", probably wrong title,  but the Author studied people who were by there balance sheets wealthy.

But on visiting them he found that they employed "thrift " to everything but also knew the difference of value and cost and they had low/no debt

Most were still cutting " coupons " from the local newspaper or other publications, obviously a US study.

Book was "Millionaires Mind"


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## T McGibney (3 Jun 2022)

Introuble83 said:


> Would a few million euro not be akin to having a over a long period of time ?


Would it? For someone under 55, a €2m sale of land would equate to circa €1.5m-€1.7m after CGT. If average life expectancy at age 52 is say 87, they have 35 years left and their main asset and source of income is gone.  €42k-€48k p/a ain't exactly the equivalent of large salary  especially when inflation is counted.


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## joe sod (3 Jun 2022)

PGF2016 said:


> I think you're ignoring the 'few million euro' bit that the farmer selling will make.


in general though they don't sell it, land on average is only transacted every 400 years in Ireland thats the main reason why it always has a high monetary value. I heard of a case where a farmer's son inherited a huge farm that had been built up over generations, he then sold the farm for a few million euros, the father later shot himself. So its not that simple realizing those paper millions that you may in theory "own". There are loads of stories like that not to mention the recent murder suicide cases over land inheritances in Cork


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## Pinoy adventure (3 Jun 2022)

T McGibney said:


> Would it? For someone under 55, a €2m sale of land would equate to circa €1.5m-€1.7m after CGT. If average life expectancy at age 52 is say 87, they have 35 years left and their main asset and source of income is gone.  €42k-€48k p/a ain't exactly the equivalent of large salary  especially when inflation is counted.


T - some might just look at the €2m figure and not even think of the small yearly amount of €42-48k p/a until the €2m is gone.then realise they bought or spent a load of nothing.


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## Blackrock1 (3 Jun 2022)

Paul O Mahoney said:


> Personal Balance Sheet is the measure of your wealth.  There was a book " Habits of a Millionaire ", probably wrong title,  but the Author studied people who were by there balance sheets wealthy.
> 
> But on visiting them he found that they employed "thrift " to everything but also knew the difference of value and cost and they had low/no debt
> 
> ...


Youd wonder what the point of having all the money was


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## Paul O Mahoney (3 Jun 2022)

Blackrock1 said:


> Youd wonder what the point of having all the money was


Well in our case "it's there "mostly our children's education. While our income covered those outlays our quite saving,  pensions etc have opened our eyes recently and our children are on their path.

Money is only a medium of exchange and some hoard it some spend it and very few fully understand it.


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## Introuble83 (3 Jun 2022)

Paul O Mahoney said:


> Well in our case "it's there "mostly our children's education. While our income covered those outlays our quite saving,  pensions etc have opened our eyes recently and our children are on their path.
> 
> Money is only a medium of exchange and some hoard it some spend it and very few fully understand it.


Slightly off topic but I hear constantly on AAM about education funds for kids . I don’t get it . Fees are circa 3k a year .18 year olds and over should be working part time to fund their social life’s . Vast majority of students are within traveling distance of a university. Why on earth are folks savings crazy amounts for the kids to go to college ?


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## garbanzo (3 Jun 2022)

Introuble83 said:


> Slightly off topic but I hear constantly on AAM about education funds for kids . I don’t get it . Fees are circa 3k a year .18 year olds and over should be working part time to fund their social life’s . Vast majority of students are within traveling distance of a university. Why on earth are folks savings crazy amounts for the kids to go to college ?


I guess it’s fine if you are like us. UCD is two miles from our door. Kids went to private schools with big fees. So, them going to College actually means we are saving money. 

It’s a different story if you are from Donegal, Kerry or Mayo and your kids want to do the same course. Accommodation costs are a killer. In my job I sign off on remortgaging applications for folk (in their 50s) from these counties who are borrowing to put their kids through Third Level. A hard ask and fair play to them.


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## PGF2016 (3 Jun 2022)

Farmer sells land for a few million. He's a multi millionaire.

But he's not rich?


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## Introuble83 (3 Jun 2022)

garbanzo said:


> I guess it’s fine if you are like us. UCD is two miles from our door. Kids went to private schools with big fees. So, them going to College actually means we are saving money.
> 
> It’s a different story if you are from Donegal, Kerry or Mayo and your kids want to do the same course. Accommodation costs are a killer. In my job I sign off on remortgaging applications for folk (in their 50s) from these counties who are borrowing to put their kids through Third Level. A hard ask and fair play to them.


Very commendable no doubt . Should be better long term student loans to facilitate such scenarios . If someone is re mortgage a house to fund college SUSI is obviously not an option for them


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## galway_blow_in (3 Jun 2022)

T McGibney said:


> Would it? For someone under 55, a €2m sale of land would equate to circa €1.5m-€1.7m after CGT. If average life expectancy at age 52 is say 87, they have 35 years left and their main asset and source of income is gone.  €42k-€48k p/a ain't exactly the equivalent of large salary  especially when inflation is counted.


you could buy an income producing asset with the proceeds or invest it in the stock market , it would not be that difficult to put the money to work and derive an income from a sum like that


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## Paul O Mahoney (3 Jun 2022)

Introuble83 said:


> Slightly off topic but I hear constantly on AAM about education funds for kids . I don’t get it . Fees are circa 3k a year .18 year olds and over should be working part time to fund their social life’s . Vast majority of students are within traveling distance of a university. Why on earth are folks savings crazy amounts for the kids to go to college ?


Agreed but Mammy did all that part time work, lived in damp flats , got out with a PhD....and decided not to let her/our children suffer the same. 

She earned that money and still does, and she can use it as she wishes its post tax .

I find it incredible that people find it incredible that people who work hard decide to make their children's life easier. 

Thought that was the idea of being a parent.


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## Paul O Mahoney (3 Jun 2022)

Introuble83 said:


> Very commendable no doubt . Should be better long term student loans to facilitate such scenarios . If someone is re mortgage a house to fund college SUSI is obviously not an option for them


Why? Apparently its €3k a year in college without Grant's. Who needs to remortgage a home to facilitate a 3rd level education in Ireland?

In the US its different but this is Ireland.

What's SUSI?


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## Paul O Mahoney (3 Jun 2022)

garbanzo said:


> I guess it’s fine if you are like us. UCD is two miles from our door. Kids went to private schools with big fees. So, them going to College actually means we are saving money.
> 
> It’s a different story if you are from Donegal, Kerry or Mayo and your kids want to do the same course. Accommodation costs are a killer. In my job I sign off on remortgaging applications for folk (in their 50s) from these counties who are borrowing to put their kids through Third Level. A hard ask and fair play to them


So, why are they sending their children to 3rd level?


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## Protocol (3 Jun 2022)

My friend has four children.

He tells me about the college costs.

During the highest cost year,  three of four were in college at same time, all in Dublin I think.

That year cost him 41-42k.

9k in fees plus 3x Dublin accomm bills.


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## garbanzo (3 Jun 2022)

Paul O Mahoney said:


> Why? Apparently its €3k a year in college without Grant's. Who needs to remortgage a home to facilitate a 3rd level education in Ireland?
> 
> In the US its different but this is Ireland.
> 
> What's SUSI?


Google is your friend Paul.









						Student Universal Support Ireland [SUSI]
					

Student Universal Support Ireland [SUSI] is Ireland’s national awarding authority for all higher and further education grants. Applications for student grant funding can be made from early April to early November for an academic year. Check the SUSI Eligibility Reckoner to get started.




					susi.ie


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## deanpark (4 Jun 2022)

Protocol said:


> My friend has four children.
> 
> He tells me about the college costs.
> 
> ...


But country people are quids in on much cheaper outlay on mortgages compared to Dubliners. But they don't put away the difference in their lesser mortgage payments to soften the blow of putting their kids through college "up above" in Dublin.  So I dont have much sympathy for country folk when they moan about outlay for their kids for Dublin accom etc. Its tough but so it is for  a Dub paying a Dublin property morgage for 20-25 years.


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## cremeegg (4 Jun 2022)

PGF2016 said:


> Farmer sells land for a few million. He's a multi millionaire.
> 
> But he's not rich?


No he's not. The rules are different for farmers.


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## Gordon Gekko (4 Jun 2022)

Rather than making sweeping generalisations, it’s probably better just not to make assumptions based on appearance.

Some people appear wealthy but aren’t. Some people don’t appear wealthy but are.

I do think it’s better to strike a balance and enjoy success though.


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## 872117 (4 Jun 2022)

To go back to the original point; I think a lot of people are guilty of lifestyle creep. If you can possibly afford it you should get it. 

That coupled with very effective marketing and well trained sales people; you may end up buying the Audi when the Skoda did everything it could do, and met all of your needs. Then if we can afford the nice Audi why not get the Mercedes? May as well get the 19 inch tyres and leather seats etc.

Then the method of payment is swiping a card or doing an online transfer. If you have to go to the ATM or bank and physically saw the €100,000 you had to hand over for the fancy car, I think most people would pause and have a reality check.

But to each their own....

Some people like fancy clothes. Some people shop in Michael Guineys. Some have several expensive watches, some have a swatch, some use Nivea, some use Clinique.

I have to earn around €166 to pay for something that costs €100. I would not buy a €166,000 depreciating asset that is guaranteed to be worth nothing in time (classic cars excepted here)....


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## galway_blow_in (4 Jun 2022)

872117 said:


> To go back to the original point; I think a lot of people are guilty of lifestyle creep. If you can possibly afford it you should get it.
> 
> That coupled with very effective marketing and well trained sales people; you may end up buying the Audi when the Skoda did everything it could do, and met all of your needs. Then if we can afford the nice Audi why not get the Mercedes? May as well get the 19 inch tyres and leather seats etc.
> 
> ...


" lifestyle creep "

terrific term that


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## Gordon Gekko (5 Jun 2022)

It’s the biggest enemy of financial freedom…


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## Monbretia (5 Jun 2022)

deanpark said:


> But country people are quids in on much cheaper outlay on mortgages compared to Dubliners. But they don't put away the difference in their lesser mortgage payments to soften the blow of putting their kids through college "up above" in Dublin.  So I dont have much sympathy for country folk when they moan about outlay for their kids for Dublin accom etc. Its tough but so it is for  a Dub paying a Dublin property morgage for 20-25 years.


Not always the same earning power in the country in the first place so no excess to put away.   I worked in lending not in major cities or big town, mainly small town and rural customers.   Anyway when sent on training courses to Dublin it always fascinated me the salaries that were pre populated on sample income certs for mortgages.   I remember in particular a salary of 70k (many years ago) that training companies either in house or external thought was 'average' on a mortgage application!   In my day to day experience I would seldom have seen that figure as a joint income not to mind sole income especially from employees.

Equally now when I read many of the finance threads on here I would just love to ask 'what is your job', the salaries are eye watering to me who still lives in same small town and doesn't know anyone on that sort of money, I know my daughter's friends who are in the 30/40s age bracket at this stage and there are some good salaries but nothing near the over 100k.   I know one in her circle in that bracket who is in a very specialised area and is self employed.

So while housing is obviously way more expensive in the cities it's not comparing like with like to say the cheaper houses in the country give those people way more disposable income to put away to pay the college costs.


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## NoRegretsCoyote (5 Jun 2022)

My only advice: spend as much as you can buying a house, spend as little as you can buying a car.


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## Introuble83 (5 Jun 2022)

NoRegretsCoyote said:


> My only advice: spend as much as you can buying a house, spend as little as you can buying a car.


Good advice but many young men grow up dreaming about having nice cars and having to wait years and years to buy it . I can see why someone would splash out on a car notwithstanding it’s a depreciating asset unlike a home . Each to their own . You can’t be sensible all the time


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## Gordon Gekko (5 Jun 2022)

It depends on each individual’s circumstances. If someone has maxed out their AVCs, done their 10% mortgage overpayment through Avant, and has an emergency fund, buying a nice car isn’t a heinous crime.


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## nest egg (5 Jun 2022)

Gordon Gekko said:


> It depends on each individual’s circumstances. If someone has maxed out their AVCs, done their 10% mortgage overpayment through Avant, and has an emergency fund, buying a nice car isn’t a heinous crime.


That order makes a lot of sense, though I'd guess very few do it that way! Some may try to juggle the 3 at once. So if you're someone who likes a nice motor, here's a question...

Assuming new in both scenarios, better to "buy" car on PCP at 3%, to ensure you could maximise funds for pension contributions (returning an average of 6%), or take the hit on the pension for a couple of years, and save up and buy a car outright?

I've never thought car credit to be a good idea, but in those scenarios it does seem (slightly) more so.


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## Gordon Gekko (5 Jun 2022)

I don’t think borrowing at 3% to contribute to a pension makes a whole lot of sense.

Which is, in effect, what that would mean.


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## PGF2016 (6 Jun 2022)

Introuble83 said:


> Good advice but many young men grow up dreaming about having nice cars and having to wait years and years to buy it . I can see why someone would splash out on a car notwithstanding it’s a depreciating asset unlike a home . Each to their own . You can’t be sensible all the time


You can't be sensible all the time but two times when it's more important to be sensible is when buying a house or a car. The two largest purchases for most people.


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## Silversurfer (6 Jun 2022)

mojoask said:


> That order makes a lot of sense, though I'd guess very few do it that way! Some may try to juggle the 3 at once. So if you're someone who likes a nice motor, here's a question...
> 
> Assuming new in both scenarios, better to "buy" car on PCP at 3%, to ensure you could maximise funds for pension contributions (returning an average of 6%), or take the hit on the pension for a couple of years, and save up and buy a car outright?
> 
> I've never thought car credit to be a good idea, but in those scenarios it does seem (slightly) more so.


The old rule applies to car loans. Always own more of the car than you owe. If possible be your own banker.


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## galway_blow_in (6 Jun 2022)

Silversurfer said:


> The old rule applies to car loans. Always own more of the car than you owe. If possible be your own banker.


in a time of high inflation , buying a car with cash instead of availing of sub 3% finance makes little sense , buying an EV usually means buying new so availing of finance makes sense , Im doing it , I ordered an MG EV in early January , 7 K upfront and 2.9% finance rate over four years , no way was i buying in cash as contrary to popular belief , there is no saving in buying in cash , car companies and banks are hand in glove nowadays , there are no savings for a cash deal on new cars


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## Bluefin (6 Jun 2022)

galway_blow_in said:


> in a time of high inflation , buying a car with cash instead of availing of sub 3% finance makes little sense , buying an EV usually means buying new so availing of finance makes sense , Im doing it , I ordered an MG EV in early January , 7 K upfront and 2.9% finance rate over four years , no way was i buying in cash as contrary to popular belief , there is no saving in buying in cash , car companies and banks are hand in glove nowadays , there are no savings for a cash deal on new cars


Would be interested in hearing about your decision to purchase the MG and how the test drive went? 

Which version did you go for and what's the interior design like?


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## Gordon Gekko (6 Jun 2022)

It is all about balance really. Retirement planning is important, but so too is enjoying yourself and enjoying the journey, not just the destination.


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## Steven Barrett (6 Jun 2022)

Blackrock1 said:


> Youd wonder what the point of having all the money was


It is built up over a lifetime by being thrifty and not overpaying for things. Driving a €30k car instead of a €100k car etc. They are then able to maintain this lifestyle well into retirement as they have lots of money and their lifestyle isn't overly expensive. It is not about not having a good life, saving loads of money and dying with millions in the bank.


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## Silversurfer (6 Jun 2022)

galway_blow_in said:


> in a time of high inflation , buying a car with cash instead of availing of sub 3% finance makes little sense , buying an EV usually means buying new so availing of finance makes sense , Im doing it , I ordered an MG EV in early January , 7 K upfront and 2.9% finance rate over four years , no way was i buying in cash as contrary to popular belief , there is no saving in buying in cash , car companies and banks are hand in glove nowadays , there are no savings for a cash deal on new cars


Congratulations on your new car. My point in being your own banker was not to get a cash discount on the purchase price of a car. It was so that you would never have to owe money every month over the four years. With inflation running at 8% and a car depreciating at 15% it makes no sense to borrow.


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## galway_blow_in (6 Jun 2022)

Silversurfer said:


> Congratulations on your new car. My point in being your own banker was not to get a cash discount on the purchase price of a car. It was so that you would never have to owe money every month over the four years. With inflation running at 8% and a car depreciating at 15% it makes no sense to borrow.


EV,s do not depreciate at anything like the level you list

whats the problem with " owing money every month " ? , that sounds like some sort of ideological opposition to debt , that philosophy is no guarantee of wealth , its just a personal principle


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## galway_blow_in (6 Jun 2022)

Bluefin said:


> Would be interested in hearing about your decision to purchase the MG and how the test drive went?
> 
> Which version did you go for and what's the interior design like?


I have not taken delivery yet , be lucky to have it by September , I was very impressed , interior not in anyway cheap or nasty , I went for the ZS , the 5 is quite bland but a newer one is being released next year


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## Paul O Mahoney (6 Jun 2022)

I don't get this mantra that "debt is bad" , I've always lived with the rule that if you can cover the repayments and not go short on the essentials, roof over your head being the most important,  why not buy a new car on " the tick"? 

I don't like being in Debt but I also don't like being miserable or feel that frugality is healthy.

My wife would like to change her car now, and she won't buy out a car eventhough its affordable and has been for over 20 year's,  she has a Jaguar now and resisted " flipping " it when the 3 year PCP finished,  she has a car Allowance which obviously is taxed but the net after tax is about €800 a month and she feels it's her perk.

That maybe an extreme example but if anyone can afford say €300 a month not go hungry and enjoy having a new car or a family holiday why not. 

I was speaking to my brother in law over the weekend,  he feels he has nothing,  its difficult as he is wheelchair bound , but I sat with him and " valued"  his house , the pensions now accessible, his social welfare and the few bob he earns as a dog minder, and it's not insignificant,  first thing he said " new car with wheelchair access " type? Apparently Tesla truck......


Living life is important too, and like greed can be a little good, debt isn't totally bad.


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## cremeegg (6 Jun 2022)

Silversurfer said:


> Congratulations on your new car. My point in being your own banker was not to get a cash discount on the purchase price of a car. It was so that you would never have to owe money every month over the four years. With inflation running at 8% and a car depreciating at 15% it makes no sense to borrow.


Each to their own on matters of opinion, and I would be very catious about debt, however high inflation makes borrowing less of an issue rather than more.  

Borrowing to buy a depreciating asset well that's to be avoided.


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## Gordon Gekko (6 Jun 2022)

cremeegg said:


> Each to their own on matters of opinion, and I would be very catious about debt, however high inflation makes borrowing less of an issue rather than more.
> 
> Borrowing to buy a depreciating asset well that's to be avoided.


In general, perhaps. But Ireland has changed somewhat. For example, there are tens of thousands of people who have share options and bonuses coming from multinationals. Something like PCP might suit those people really well if they already have share options that just haven’t vested yet. Or anyone who has cash coming to them.


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## T McGibney (7 Jun 2022)

galway_blow_in said:


> you could buy an income producing asset with the proceeds or invest it in the stock market , it would not be that difficult to put the money to work and derive an income from a sum like that


It still has to be put to work somewhere so its not exactly riches, just a means of putting food on the table. In my hypothetical example he'd normally be much better off keeping the land.


Pinoy adventure said:


> T - some might just look at the €2m figure and not even think of the small yearly amount of €42-48k p/a until the €2m is gone.then realise they bought or spent a load of nothing.


Exactly.


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## Blackrock1 (7 Jun 2022)

Steven Barrett said:


> It is built up over a lifetime by being thrifty and not overpaying for things. Driving a €30k car instead of a €100k car etc. They are then able to maintain this lifestyle well into retirement as they have lots of money and their lifestyle isn't overly expensive. It is not about not having a good life, saving loads of money and dying with millions in the bank.


there is a balance to be struck to be fair, a life time of thrift isnt for everyone.


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## Peanuts20 (7 Jun 2022)

To me, there seems to be a lack of understanding between being asset rich and cash flow. Plenty of people during the Celtic Tiger thought they were millionaries because of the value of property and lived the appropriate life style, often funded on credit. When the boom went burst, they did not have the income to maintain that lifestyle. Same applies to farmers, whilst the asset may be worth a couple of million, are they really rich unless they are getting a return on that asset. ? In a lot of cases ( and I can think of a few bachelor farmers I know), they are not generating an appropriate return on that asset and live often close to the poverty line. However if they sold the land, it would destroy then mentally. 

As for the urban/rural divide, there are swings and roundabouts. yes, the mortgage payments are higher in Dublin but so, in a lot of cases, are the salaries to attract and retain staff in Dublin. Converse of that is that transportation costs are significantly dearer in rural Ireland, no 20% reduction on Luas fares in Listowel, instead a massive hike in petrol or diesel. 

As for education, I can think of a few "cute hoors" who left school at 15 and are plenty rich. To me, whilst education can and does help, it's often about attitude and effort as well


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## Steven Barrett (7 Jun 2022)

Blackrock1 said:


> there is a balance to be struck to be fair, a life time of thrift isnt for everyone.


I haven't read the Millionaire Mindset but The Millionaire next door is a very good read. 

For instance, buy an expensive car when you have made it. Not when you are trying to make it. No point in buying a €100k+ car when you aren't rich. Invest that money and buy a decent, cheaper car. In years to come, when you are rich, that €100+ car will then be a small percentage of your overall wealth. In other words, be the middle age man driving a Porche. 

It is all about living within your means. Too many people have lifestyles that they may not be able to maintain. As Peanuts said, there are a lot of high earners but they aren't rich because they spend their money. Unless you plan to work until you die and earn the same level of income, there will come a time when you are going to have a drop in income. And because you haven't saved for the future and are not wealthy, there will be a drop in lifestyle...or more likely, you will spend what you do have in the initial years and then run out of money. 


Steven
www.bluewaterfp.ie


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## galway_blow_in (7 Jun 2022)

T McGibney said:


> It still has to be put to work somewhere so its not exactly riches, just a means of putting food on the table. In my hypothetical example he'd normally be much better off keeping the land.
> 
> Exactly.



money always has to be put to work , a farm wont earn money without any effort either , not all farm tenants are reliable in the same way not all residential tenants are or investing in the financial markets is entirely without headaches , point remains however that a large sum of money like that can be made to work and deliver an income


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## galway_blow_in (7 Jun 2022)

cremeegg said:


> Each to their own on matters of opinion, and I would be very catious about debt, however high inflation makes borrowing less of an issue rather than more.
> 
> Borrowing to buy a depreciating asset well that's to be avoided.


not necessarily , you can borrow money to buy a new EV much lower than borrowing money to invest in a BTL , you could use the cash to buy a BTL for example and buy the EV @2.9%


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## Blackrock1 (7 Jun 2022)

Steven Barrett said:


> I haven't read the Millionaire Mindset but The Millionaire next door is a very good read.
> 
> For instance, buy an expensive car when you have made it. Not when you are trying to make it. No point in buying a €100k+ car when you aren't rich. Invest that money and buy a decent, cheaper car. In years to come, when you are rich, that €100+ car will then be a small percentage of your overall wealth. In other words, be the middle age man driving a Porche.
> 
> ...


no i get you, but i see too many people in their 70s wedded to their accumulated wealth afraid to spend it, i dont see the point in that either, its hard to leave the habits of a lifetime behind.


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## Steven Barrett (7 Jun 2022)

Blackrock1 said:


> no i get you, but i see too many people in their 70s wedded to their accumulated wealth afraid to spend it, i dont see the point in that either, its hard to leave the habits of a lifetime behind.



Fear is another reason for that too. When is the end? They don't want to go mad, especially in the early years of retirement and then run out of money. If we all had a check out date, it would be easy to plan for the decumulation of wealth. But as it is, we don't know whether to look to spend it by 80 or 95! And with home care costs being so high, people don't want to be a financial burden on their children either. 

It's a difficult one to manage. And you are 100% correct on it being hard to leave the habits of a lifetime behind. A lot of people have real trouble spending money in retirement, living on the 4% imputed distribution and their State pension as they can't bring themselves to save down their savings. 

Goes to show that managing wealth and finances is as much to do with behaviour as it does with the actual money. 

Steven
www.bluewaterfp.ie


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## Paul O Mahoney (7 Jun 2022)

I think the 2 most important things that people should achieve financially is to have a home and a pension, so when they reach 60 they will have the assets to enjoy what would be in many cases 40 years of work .

During those 40 years life will throw enough challenges at you and if you manage to conquer or at least control them that is in my opinion some achievement.

How this is achieved will depend on many factors,  education is one , but we all know of people who left school at 15, 16 or left college and achieved a lot and we know the opposite too. Attitude is also a factor and common sense is another thing that seems to have disappeared but every older generation would say that about the younger generation.


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## Peanuts20 (7 Jun 2022)

Blackrock1 said:


> no i get you, but i see too many people in their 70s wedded to their accumulated wealth afraid to spend it, i dont see the point in that either, its hard to leave the habits of a lifetime behind.


The one thing I've learned in recent months is that if you hang on to it, you run the risk of spending it on nursing homes or Fair Deal spending it for you to cover the nursing home costs. Given Fair Deal can look back 5 years (or at least that's my understanding), in addition to planning for retirement, people also need to start thinking about planning for succession/inheirtance


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## deanpark (7 Jun 2022)

I thought Fair Deal was a finite % of income/ property which is reasonable enough.  Not sure what above point is then


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## Peanuts20 (8 Jun 2022)

deanpark said:


> I thought Fair Deal was a finite % of income/ property which is reasonable enough.  Not sure what above point is then


80% of your income and 7.5% of your home, farm or business per year for 3 years. Virtually every other financial asset such as shares, savings etc can be taken over the course of the time a person is in a nursing home to pay for it. So someone who has large savings could have them wiped out over a number of years unless they redistribute them in time.


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## help999 (13 Jun 2022)

T McGibney said:


> Some "research" that was, LOL.
> 
> Care to post some links to substantiate this nonsense?











						Can I Buy a Car Through my Sole Trader Business? • Another Answer
					

If you are a Sole Trader, buying a car through your business can be a really tax-efficient decision.




					www.anotheranswer.co.uk


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## Brendan Burgess (13 Jun 2022)

Hi help 99

And which of these areas serviced by that accountancy practice do you live in?


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## ClubMan (14 Jun 2022)

Blackrock1 said:


> no i get you, but i see too many people in their 70s wedded to their accumulated wealth afraid to spend it, i dont see the point in that either, its hard to leave the habits of a lifetime behind.


Not just of a lifetime.
But sometimes also of previous lifetimes!
My parents grew up during the war/emergency.
They were used to parsimony and frugality.
That mindset/approach arguably persisted longer than it was relevant when they were better off.
(But at least they did start treating themselves a little later on in life).
And it trickled down to their children to a greater or lesser extent.
So it's still echoing down the generations...


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## T McGibney (14 Jun 2022)

help999 said:


> Can I Buy a Car Through my Sole Trader Business? • Another Answer
> 
> 
> If you are a Sole Trader, buying a car through your business can be a really tax-efficient decision.
> ...



That website (from the UK) doesn't suggest that "_if you have a business you can offset that big top of the range car against tax on the annual return_" as you claimed. Or anything like it.


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## Paul O Mahoney (14 Jun 2022)

ClubMan said:


> Not just of a lifetime.
> But sometimes also of previous lifetimes!
> My parents grew up during the war/emergency.
> They were used to parsimony and frugality.
> ...


My mother 78 now still buys 10 chickens if the price is right,  all her sisters are gone now but when they were alive and times were tough my mother would hop into the car chickens on back seat, stop off a green grocer haggle for 10kg of spuds and deliver them to her sisters,  she maintains one decent meal a week is a good foundation.

She still does it but more for my siblings in Cork that are close to her and the number used has reduced but the 2 freezers are full. 

They knew the value of everything even if the cost was sometimes prohibitive.


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## Nermal (15 Jun 2022)

Peanuts20 said:


> 80% of your income and 7.5% of your home, farm or business per year for 3 years. Virtually every other financial asset such as shares, savings etc can be taken over the course of the time a person is in a nursing home to pay for it. So someone who has large savings could have them wiped out over a number of years unless they redistribute them in time.



It would amaze me if the Government ever introduced a policy that didn't coddle farmers or business owners, or didn't incentivise you to buy the largest PPR you could.


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## T McGibney (16 Jun 2022)

Nermal said:


> It would amaze me if the Government ever introduced a policy that didn't coddle farmers or business owners, or didn't incentivise you to buy the largest PPR you could.


The Fair Deal scheme doesn't do that though.


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## Steven Barrett (16 Jun 2022)

Paul O Mahoney said:


> My mother 78 now still buys 10 chickens if the price is right,  all her sisters are gone now but when they were alive and times were tough my mother would hop into the car chickens on back seat, stop off a green grocer haggle for 10kg of spuds and deliver them to her sisters,  she maintains one decent meal a week is a good foundation.
> 
> She still does it but more for my siblings in Cork that are close to her and the number used has reduced but the 2 freezers are full.
> 
> They knew the value of everything even if the cost was sometimes prohibitive.


I have this conversations with clients all the time. They tell me that they shop in Aldi and Lidle all the time and look for offers. Shopping Aldi won't make a massive difference to most people's wealth. But driving a €100,000 Range Rover to get there will. It will take a long time shopping in Aldi to see the difference between spending €100k on a car and €30k. People need to worry about the big ticket items, not saving a few quid here or there. 

Steven
www.bluewaterfp.ie


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## Paul O Mahoney (16 Jun 2022)

Steven Barrett said:


> I have this conversations with clients all the time. They tell me that they shop in Aldi and Lidle all the time and look for offers. Shopping Aldi won't make a massive difference to most people's wealth. But driving a €100,000 Range Rover to get there will. It will take a long time shopping in Aldi to see the difference between spending €100k on a car and €30k. People need to worry about the big ticket items, not saving a few quid here or there.
> 
> Steven
> www.bluewaterfp.ie


"Penny wise and Pound foolish "


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## Buddyboy (17 Jun 2022)

Steve, 
"Shopping Aldi won't make a massive difference to most people's wealth. But driving a €100,000 Range Rover to get there will. "
I laughed at this. It appears to fly in the face of "look after the pennies and the pounds look after themselves", But if you look after the pennies, and squander the pounds........


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## Gordon Gekko (17 Jun 2022)

There are also people who have the money to adopt either approach, but choose a Porsche and an Aldi product because they prefer both.

There are loads of things that are nicer in Aldi, but I’ve never seen a €30k car nicer than a Porsche.


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## aristotle (17 Jun 2022)

Getting value for money is important and it also depends on what you like.

I have a nice car (to me) that cost 50k but I also love saving a a few euro when I fill it up using my circle K fuel card. It literally is only a 2 euro or so saving per tank but I would rather it be in my pocket.
Yeah I could have bought a car for 20k but you have to reward yourself within financial reason.


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## Steven Barrett (17 Jun 2022)

Buddyboy said:


> Steve,
> "Shopping Aldi won't make a massive difference to most people's wealth. But driving a €100,000 Range Rover to get there will. "
> I laughed at this. It appears to fly in the face of "*look after the pennies and the pounds look after themselves*", But if you look after the pennies, and squander the pounds........


Except that saying means if you save small amounts, you will accumulate money. Not spend it on a €100k car 



Gordon Gekko said:


> There are also people who have the money to adopt either approach, but choose a Porsche and an Aldi product because they prefer both.
> 
> There are loads of things that are nicer in Aldi, but I’ve never seen a €30k car nicer than a Porsche.


Not what I was talking about Gordon.


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## Pinoy adventure (17 Jun 2022)

Gordon Gekko said:


> There are also people who have the money to adopt either approach, but choose a Porsche and an Aldi product because they prefer both.
> 
> There are loads of things that are nicer in Aldi, but I’ve never seen a €30k car nicer than a Porsche.


Maybe you are looking at the wrong car.


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## Gordon Gekko (17 Jun 2022)

Steven Barrett said:


> Except that saying means if you save small amounts, you will accumulate money. Not spend it on a €100k car
> 
> 
> Not what I was talking about Gordon.


I’m aware of that


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## Gordon Gekko (17 Jun 2022)

Pinoy adventure said:


> Maybe you are looking at the wrong car.


Enlighten me


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## Blackrock1 (17 Jun 2022)

Gordon Gekko said:


> Enlighten me


interested to hear also.


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## DublinHead54 (17 Jun 2022)

I lived in the US for a few years up until 2017, and had no need for a car but lived close to a few high end dealers (Volvo, Merc, Porsche etc) and was aware of the price. 

When I moved home it was finally time to buy our first car and I eagerly logged onto Volvo and I was shocked at the price vs the US. I did a comparison and the top end volvo XC60 in the US was almost half the price of the entry level model in Ireland. 

I was looking at deposits of 15k plus and pcm costs of 500 upwards! I just couldn't fathom the expense and what people are paying when I see all the range rovers and other high end cars driving around Blackrock! We have significant earnings, but even a car payment puts a dent in monthly income when you account for mortgage, childcare etc. Maybe when I stop paying for childcare I can replace some of that for a Porsche!


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## dubdub123 (17 Jun 2022)

Dublinbay12 said:


> I lived in the US for a few years up until 2017, and had no need for a car but lived close to a few high end dealers (Volvo, Merc, Porsche etc) and was aware of the price.
> 
> When I moved home it was finally time to buy our first car and I eagerly logged onto Volvo and I was shocked at the price vs the US. I did a comparison and the top end volvo XC60 in the US was almost half the price of the entry level model in Ireland.
> 
> I was looking at deposits of 15k plus and pcm costs of 500 upwards! I just couldn't fathom the expense and what people are paying when I see all the range rovers and other high end cars driving around Blackrock! We have significant earnings, but even a car payment puts a dent in monthly income when you account for mortgage, childcare etc. Maybe when I stop paying for childcare I can replace some of that for a Porsche!


A lot of people I knew in rural ireland would drive high end vehicles. Might use them for work related things (towing boxes, accessing farm etc).
One friend told me they got them greatly reduced as they werec
 self employed. Prob some of the high end cars around are company cars also. 
Mad money at minute all the same.. cost me nearly 10k for a hatchback car recently..


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## DublinHead54 (18 Jun 2022)

dubdub123 said:


> A lot of people I knew in rural ireland would drive high end vehicles. Might use them for work related things (towing boxes, accessing farm etc).
> One friend told me they got them greatly reduced as they werec
> self employed. Prob some of the high end cars around are company cars also.
> Mad money at minute all the same.. cost me nearly 10k for a hatchback car recently..



My hypothesis is that a lot of people work in Tech and got stock annually. In most cases this stock reward was surplus income and given the bull run over the last decade was very profitable. Thus spending on a luxury car probably didn't impact overall financial goals. 

With the recent downturn this surplus will greatly reduce at least in the interim. 

I also look at it this way, my car sits on the driveway most of the time but If o was driving daily I'd want to spend more money on the car.


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