# The cigarette vending machine tycoons..



## paulie (19 Feb 2004)

The subject of tonights SMTM. Extremely topical given Miachael martin's announcement yesterday. From the RTE website: (try reading it with Eddie's Cork accent   )


Mary and Stephen live in rural Wexford. Their two grown up sons have now left home. Stephen is hard working, frugal and quiet living while Mary, 53, drives a Mercedes and enjoys spending money on clothes, on shoes, on her appearance and on a healthy social life. 

Together they run a cigarette vending machine business, which they have built up over the last 20 years. The business was always planned as the couple's pension and they hoped that Stephen could retire this year at the age of 62. However, the imminent smoking ban in bars and restaurants has put a very big hole in their retirement plans. A business once worth around €250,000 is now possibly worthless. 

Apart from the business Mary and Stephen have very significant and spiralling debts but luckily they also have assets. Their situation now means that they will have to realise these assets so that they can maintain their lifestyle into retirement. But extricating maximum value from their assets proves a huge challenge, not least because of the banking arrangements the couple have entered into. Mary and Stephen provide a salient lesson on how not to deal with banks! 

In short both their business and personal finances are in a complicated mess and they need Eddie's help to sort it out. Can they dig themselves out of a bad deal so that they can retire comfortably? And does Mary really need to take a part time job so that she can maintain her spending regime into the future?


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## jdwexford (20 Feb 2004)

omfg
How much were the bank fleecing them for?
And which bank-better warn my parents!!
jd


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## rainyday (20 Feb 2004)

Hi Paulie - I actually thought you had crafted this carefully-scripted piece as a skit. Seemed kind-of surreal, didn't it?


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## Aquila (20 Feb 2004)

*Another one for an Off The Rails special?*

I'm still in shock after hearing that the wife hadn't washed her own hair since she was 16...


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## Chesty Cough (20 Feb 2004)

*Vending machines*

Why dont they convert their ciggarette vending machines over to condom dispensers.


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## Joe123 (20 Feb 2004)

*Vending machines*

Eddie should have named and shamed the bank, to warn other people in the area to shop around for a bank.  I believe a bank of ireland statement was seen in a previous episode.


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## postagepaid (20 Feb 2004)

*Re: Vending machines*

Did you not notice the name of the bank on the money bags he was filling with euro coins?


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## zag (20 Feb 2004)

*Re: Vending machines*

Going off on a slight tangent I noticed something in the paper about the introduction of the smoking bill.  Some cigarette vending machine association spokesperson was giving out about the effect it was going to have on his members . . .

I know he had to say something, but it's a bit like the cyanide gas manufacturers association giving out about cyanide being outlawed.

z


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## Brendan Burgess (20 Feb 2004)

*Re: Vending machines*

What would be your overall advice to a couple aged 60 and 50 with €2.7m in assets and €.7m in loans, and presumably their own home? 

They have a high lifestyle expenditure. The figures didn't really add up, but let's say it's €50k a year. 

I would recommend that they sell assets to pay off their loans. 

I wouldn't worry about spending €50k a year. Without investment income, they could maintain this level of expenditure for 20 years and still have €1m left. At that stage, they would be 80 and 70 years old, so presumably their lifestyle expenditure would be reducing, unless they are in nursing homes.

It is ridiculous that a guy this age is working 7 days a week without taking a holiday in 6 years.

Their banking arrangements are strange. There must be some other story there. Why pay 14% interest? It makes no sense. It didn't require financial expertise to get a better deal elsewhere. I have seen financial institutions screw people who could not move, but the Parles could move easily but didn't for some reason.

Brendan


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## <A HREF=http://pub145.ezboard.com/baskaboutmoney.s (20 Feb 2004)

*Re: Vending machines*



> The figures didn't really add up



This seems to be a recurring theme with SMTM. At least EH didn't recommend the CU this time... :rolleyes


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## daltonr (20 Feb 2004)

*Re: Vending machines*

Maybe RTE are planning a new series 
'Show Me The Money - Uncut'

-Rd


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## Elcato (20 Feb 2004)

*Re: Vending machines*



> Did you not notice the name of the bank on the money bags he was filling with euro coins?


Any bank will take any money bag regardless of the 'Advertised bank logo' so I wouldn't think that to be conclusive. Is this not more scaremongering regarding the smoke ban. Why would people not still buy ciggies from vending machines in pubs and clubs ? Just cos they cant smoke in the club doesn't mean they wont buy. I accept they might smoke less over the night but I bet the panic buying at closing time will still exist.
Regarding the bank its quite clear that friendly bank managers like to give the impression they're there for the people while all the time they are there to fleece them. The couple were reluctant to move because they felt they had been treated well by the bank over the years. Eddie pointed out that they weren't and they finally moved having realised this. Another thing about this couple though was that they were comfortable dealing with this bank and may well have felt they would upset the local staff by moving cos after all they probably are neighbours. That's generally something we don't have to deal with in Dublin to be fair.


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## Sally (20 Feb 2004)

*Brendan's logic*

Once again Brendan you display a mechanical thinking when it comes to people.  Banks pick their targets carefully and looking at the programme last night, it was clear that Stephen and Mary were a pushover.  There are many people in Ireland particularly at their age group who would be terrified about upsetting their banks.  I got the impression that Stephen was afraid to seriously tackle the 14% interest rate at a time when in his mind their business was vulnerable to the bank pulling the facility completely.  

He must have been living in terror, day in, day out, that the rug would be pulled from under him, and too afraid to do anything.  This is an old story and it is great to see it shown for what it is.  I have no doubt but that without the intervention of SMTM Stephen would have done nothing.  Where was his Accountant?


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## Techman (20 Feb 2004)

*referral fees*

They were being charged "referral fees" of €100 pw by their bank. 

What are "referral fees"?


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## <A HREF=http://pub145.ezboard.com/baskaboutmoney.s (20 Feb 2004)

*Re: referral fees*



> Once again Brendan you display a mechanical thinking when it comes to people.



I haven't seen the show (this or any other episode) but it sounds to me that it's less Brendan's "mechanical" thinking that is at fault here but rather the woolly thinking of many consumers who can't/won't take responsibility for their own financial decisions.


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## daltonr (20 Feb 2004)

*Referral Fees*



> What are "referral fees"?



If ther eis not sufficient funds in your account to meet a debit, like a loan repayment, or another direct debit, the bank may cover it for a day, so your account does overdrawn, but you don't have an approved overdraft.

They'll charge you a fee for doing this.

The problem in the show was they were getting charged referral fees, despite having an agreement on an overdraft.

€100 per week sounds ridiculous though.

-Rd


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## Brendan Burgess (20 Feb 2004)

*Re: Referral Fees*

Hi Sally

I am not sure that they were that much a pushover.

They built a vending business from scratch to 88 machines. Presumably this involved serious negotiations with pubs and cigarette wholesalers over a number of years. The business made a "net profit" of €150k last year.

They own a quarry. 

They own two rental properties.

They own a site for 6 houses.

They own 50 acres of farmland which is on lease.

It's odd that they are so savvy in so many other areas and stupid when it comes to banking. Maybe they are good business people but bad at money and banking issues? It would be difficult to build up a business and such assets without knowing about money. But maybe you are right and I am too mechanical in my thinking. 

Brendan


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## <A HREF=http://pub145.ezboard.com/baskaboutmoney.s (20 Feb 2004)

> "Common sense is not so common"
> 
> -- Voltaire


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## Red (20 Feb 2004)

***

"They own a quarry. 

They own two rental properties.

They own a site for 6 houses.

They own 50 acres of farmland which is on lease."


They were both from farming backgrounds, and could have inherited property. Maybe not ?

Rgds
Red


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## maryh (22 Feb 2004)

*"*

It seems to me to be immoral to make so much money selling fags from machines!It also points out how badly paid employees are in comparison to employers.


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## Rmul (23 Feb 2004)

*Above*

You ignored inflation Brendan, 50k for twenty years at price inflation of 4% amounts to nearly 1.5m, leaving them near to penniless. Five years later the remaining capital would be gone, since 50k today would need nearly 110k in 2024. Maryh, the Govt makes even more by taxing the "immoral" earnings as you put it. It collects money off the tobacco firms, the pubs, the machine vendors, the advertisers, even the hospital staff that are used to cope with the fall out.


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## daltonr (23 Feb 2004)

*Re: Above*



> It collects money off the tobacco firms, the pubs, the machine vendors, the advertisers, even the hospital staff that are used to cope with the fall out.



Don't forget the tax it tax off the low paid workers.   

But give them credit, for once they are introducing a policy that gives up a bit od tax revenue in return for a longer term gain.  It helps that it's the popular thing to do, but we'll give Michael Martin the benefit of the doubt that he'd do it anyway.

-Rd


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## Sparky (24 Feb 2004)

*It seems to me to be immoral to make so much money selling f*

How many "holier than though's" have pension funds reliant on the so called Vice Funds of Tobacco, Alcohol, Porn etc.?


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## daltonr (24 Feb 2004)

*Re: It seems to me to be immoral to make so much money selli*



> How many "holier than though's" have....



I didn't say it was wrong for all these people/governments to make this money.  I was just completing the list.

As it happens there are companies that I would not buy shares in simply because I disagree with their attitude/actions.  But I have no problems with others buying all the shares they want.

I wouldn't buy Tobacco Shares because their product kills it's customers and others around them if used as directed.  I wouldn't buy Ryanair because I don't like the company or it's management.  I wouldn't buy a football club because the economics are just loopy.

It's not an entirely irrational position to take, I have a nagging fear that Ryanair's two fingers to everyone policy will ultimately hurt the company badly, and I'd prefer not to own shares when that happens.  

But You're all free to buy any shares you like.  I couldn't care less.

-Rd


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## Patricia (24 Feb 2004)

*The Issue*

I don't think we'll get too far if we go off on a moral tangent. The main theme from SMTM last week was how a bank regulated in our country get get away with this type of abuse of customer. 

It's irrelevant I think what the customer does for a living, the point is the rip off at 14% against a fully secured position. Its a pity that the bank wasn't named -perhaps had it been the outcome would be different. 

The media is often seen as heavy left, maybe something to do with plain old begrudgery, but there appears to be resonances here. If this was a PAYE couple, and not one with assets over €2m and a Merc, what's the betting that the public reaction, reflected here, would be one of outrage?

If there's any truth in that suggestion then we really have to ask ourselves if we've yet matured enough as a people to be comfortable with wealth. Personally I think that the couple would provoke more begrudery than empathy - it didn't matter that they were being screwed.


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## daltonr (24 Feb 2004)

*Re: The Issue*

Just be careful when demanding the naming and shaming of the bank in this case.  From the very first episode of SMTM it was plainly clear that the viewer is not being told the full story.

If the facts of this case are just as it was presented then yes the bank should be ashamed of itself.  But I'd take what I see on SMTM with a big pinch of salt.

-Rd


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## Harry (24 Feb 2004)

*Above*

C'mon Daltonr that's a not a reponse to what is a good observation, but at least your persistent. From the start of SMTM isn't it the case that you've shown you just don't like the presenter or anything to do with him?


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## daltonr (24 Feb 2004)

*Re: Above*



> isn't it the case that you've shown you just don't like the presenter or anything to do with him?



I like Eddie Hobbs a lot.  I like what he writes, I like his contributions on TV and radio, and I even liked him on the Late Late Show.  It's good that there's a high profile voice for the consumer, and he clearly believes in what he's saying, it's not a flag of convenience.

I'd probably prefer to see him do a Watchdog style program because I think it would suit him better, and it'd be a more interesting show.  You could see he was enjoying criticising the bank in the most recent SMTM, without actually naming them.  

I have from the start said that the viewer is not getting the whole picture on SMTM.  The loans that Eddie arranges for the participants are not available to the viewer, figures never seem to quite add up.  And that's fine, people shouldn't have to bare all to the public, but we should remember that we are only hearing part of one side of the story in each episode.

I'm not trying to excuse the interest rate charged to the tobacco vendors either, I'm just saying there may be reasons why the show couldn't or shouldn't name and shame the bank.

Also I don't know if Eddie had much editorial input into the show.  He doesn't have a problem telling it like it is in other media outlets, but this being an independant production, they may be playing it safe.  Remember the show isn't made by RTE.

-Rd


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## Ear to the ground (24 Feb 2004)

*RTE*

Daltonr is right. Hobbs should have named and shamed the bank, but the reason SMTM didn't is probably to do with RTE who are well known in media circles to be risk shy. This is a light entertainment slot, but Daltonr is right to say that we badly need a hard hitting consumer programme. SMTM clearly isn't it.


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## Brendan Burgess (27 Feb 2004)

Rmul said:



> You ignored inflation Brendan, 50k for twenty years at price inflation of 4% amounts to nearly 1.5m,



Actually, I didn't ignore it. What about investment income?

€2m at 4% for 20 years amounts to €4.4m.

If you take a 2% real return on €2m, that's €40k, so in real terms, they are running down their expenditure at only €10k a year.

Brendan


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