The thing is, no one will offer you that return and if they do, they won't guarantee it. In other words, in hindsight you'll get it and that sounds real good to some
The thing is, no one will offer you that return and if they do, they won't guarantee it. In other words, in hindsight you'll get it and that sounds real good to someInflation in Ireland is about 2% over the last 25 years. So a real return of 4%.
I would take a 4% real return over 25 years if you offered me.
It will be interesting to see whether that still holds in the next few years. I think we are definitely heading back to much higher inflation rates, once the inflation genie is out of the bottle it is very difficult to put him back in , the 70s proved that, once again the primary mover in this is energy but also the curve ball thrown into the mix by the covid lockdowns. It hasn't gone away you know, it just had a very long sleep.There are many reasons why this is the case, many of them speculative. But what it tells me is that the world economy seems able to tolerate "loose" monetary policy without runaway inflation anymore.
Of course it is in real terms. Dealing with actual policies will always be in real terms. It is an easy calculation to make, time, present value (contribution), future value (current value) and you get the rate. 6.2% per annumAnd also out of curiosity are these are these returns per annum quoted in real terms i e after being adjusted for inflation. Im sure everybody would be very interested in having this clarified.Thanks p s lets use the average inflation over say the last 50 years inflation may be low now but sooner or later it will rear its ugly head again as it always has.Sorry this question is for Steven.
The concern about markets crashing which is popular these days, I believe, is based on higher inflation and interest rates.Interest rates have been very loose globally since 2008. Pretty much everywhere at or near zero. Far lower than anyone (c 2005) thought they could be sustained at without stimulting inflation.
What has happened globally to inflation? It is has fallen, fallen, fallen. Not just in rich countries. Global inflation was just 2% last year. Probably the lowest since fiat currencies were introduced.
There are many reasons why this is the case, many of them speculative. But what it tells me is that the world economy seems able to tolerate "loose" monetary policy without runaway inflation anymore.
Hi Steven. Sorry i am still a bit confused here.Lets keep this simple for us laymen.My question concerns inflation.Can you please clarify if it is 6.2 percent minus 2 or 3 percent likely inflation so would equal 4.2 or 3.2 percent in real terms after i it is adjusted for inflation at the end of the term or is it not. Thanks.Of course it is in real terms. Dealing with actual policies will always be in real terms. It is an easy calculation to make, time, present value (contribution), future value (current value) and you get the rate. 6.2% per annum
| Year | Total Return |
|---|---|
| 2021 | 21.70 |
| 2020 | 18.40 |
| 2019 | 31.49 |
| 2018 | -4.38 |
| 2017 | 21.83 |
| 2016 | 11.96 |
| 2015 | 1.38 |
| 2014 | 13.69 |
| 2013 | 32.39 |
| 2012 | 16.00 |
| 2011 | 2.11 |
| 2010 | 15.06 |
| 2009 | 26.46 |
| 2008 | -37.00 |
| 2007 | 5.49 |
| 2006 | 15.79 |
| 2005 | 4.91 |
| 2004 | 10.88 |
| 2003 | 28.68 |
| 2002 | -22.10 |
| 2001 | -11.89 |
| 2000 | -9.10 |
| 1999 | 21.04 |
| 1998 | 28.58 |
| 1997 | 33.36 |
| 1996 | 22.96 |
| 1995 | 37.58 |
| 1994 | 1.32 |
| 1993 | 10.08 |
| 1992 | 7.62 |
| 1991 | 30.47 |
| 1990 | -3.10 |
| 1989 | 31.69 |
| 1988 | 16.61 |
| 1987 | 5.25 |
| 1986 | 18.67 |
| 1985 | 31.73 |
| 1984 | 6.27 |
| 1983 | 22.56 |
| 1982 | 21.55 |
| 1981 | -4.91 |
| 1980 | 32.42 |
| 1979 | 18.44 |
| 1978 | 6.56 |
| 1977 | -7.18 |
| 1976 | 23.84 |
| 1975 | 37.20 |
| 1974 | -26.47 |
| 1973 | -14.66 |
| 1972 | 18.98 |
| 1971 | 14.31 |
| 1970 | 4.01 |
| 1969 | -8.50 |
| 1968 | 11.06 |
| 1967 | 23.98 |
| 1966 | -10.06 |
| 1965 | 12.45 |
| 1964 | 16.48 |
| 1963 | 22.80 |
| 1962 | -8.73 |
| 1961 | 26.89 |
| 1960 | 0.47 |
| 1959 | 11.96 |
| 1958 | 43.36 |
| 1957 | -10.78 |
| 1956 | 6.56 |
| 1955 | 31.56 |
| 1954 | 52.62 |
| 1953 | -0.99 |
| 1952 | 18.37 |
| 1951 | 24.02 |
| 1950 | 31.71 |
| 1949 | 18.79 |
| 1948 | 5.50 |
| 1947 | 5.71 |
| 1946 | -8.07 |
| 1945 | 36.44 |
| 1944 | 19.75 |
| 1943 | 25.90 |
| 1942 | 20.34 |
| 1941 | -11.59 |
| 1940 | -9.78 |
| 1939 | -0.41 |
| 1938 | 31.12 |
| 1937 | -35.03 |
| 1936 | 33.92 |
| 1935 | 47.67 |
| 1934 | -1.44 |
| 1933 | 53.99 |
| 1932 | -8.19 |
| 1931 | -43.34 |
| 1930 | -24.90 |
| 1929 | -8.42 |
| 1928 | 43.61 |
| 1927 | 37.49 |
| 1926 | 11.62 |
I realise this a few months old but I was reading backHi Steven. Sorry i am still a bit confused here.Lets keep this simple for us laymen.My question concerns inflation.Can you please clarify if it is 6.2 percent minus 2 or 3 percent likely inflation so would equal 4.2 or 3.2 percent in real terms after i it is adjusted for inflation at the end of the term or is it not. Thanks.
The problem with this is that you think it is a good return.For example, I did a review recently for a client who made a single premium contribution in 1995. That money has seen the dotcom crash, the credit crunch as well as the Covid crash. It has also experienced the upsides too. The annualised rate of return over the 25.5 years the money was invested? 6.2% per annum.
That is an annual return of 68% if my maths is correct. Before looking at any capital appreciation.
Hi Brendan.I am a senior citizen with an investment property/house paid for after a 20 year morgage paid off.I dont think i needed to get paid for time as the time was minimal with long term tenents.For me it was just a hobby.I never considered it a risk and slept soundly.My figures are similiar to Cremeegg.Ithink that the magic bullet was gearing up ,[10 per cent deposit and 90 percent morgage] and i would never take a huge risk like this in shares although i have a few long term shares as well but without the gearing the amounts and gains are smaller.I now have the option of selling the house and spending the money to avoid IHT or investing the gains or keeping the property and renting it out as usual.[The gearing factor makes me tend to favour property over equities]Just my humble view.Hi cremeegg
You are comparing a passive investment in a fund with a business of property investing. Did you make a deduction for paying yourself for the time you put into it?
And the risk was huge. Look at all the people who bought investment properties and lost them due to the bust. Many still are paying off the debt although they have lost their property.
If I borrow €200k from the bank and buy a property for €200k then I could get an infinitesimal return.
Brendan
You got lucky Bud, count your blessings.Hi Brendan.I am a senior citizen with an investment property/house paid for after a 20 year morgage paid off.I dont think i needed to get paid for time as the time was minimal with long term tenents.For me it was just a hobby.I never considered it a risk and slept soundly.My figures are similiar to Cremeegg.Ithink that the magic bullet was gearing up ,[10 per cent deposit and 90 percent morgage] and i would never take a huge risk like this in shares although i have a few long term shares as well but without the gearing the amounts and gains are smaller.I now have the option of selling the house and spending the money to avoid IHT or investing the gains or keeping the property and renting it out as usual.[The gearing factor makes me tend to favour property over equities]Just my humble view.
Brendan, do you mean infinite?
I never considered it a risk and slept soundly.
If you could get the mortgage and put the 120k in shares back then I wonder how it would compare. Leverage is powerful.The problem with this is that you think it is a good return.
I invested €12,000 in an investment property in 1999 (10% deposit). I have collected over €300k rent in that time. Profit after interest and capital repayment approx €150k. While there was no guarantee with that investment, none of those numbers are in any way exceptional.
That is an annual return of 68% if my maths is correct. Before looking at any capital appreciation.
You are correct in saying that there was time and effort on my part, but I met lots of diverse and interesting people along the way, and I have no interest in watching football or playing golf. But that is a small matter.Hi cremeegg
You are comparing a passive investment in a fund with a business of property investing. Did you make a deduction for paying yourself for the time you put into it?
And the risk was huge. Look at all the people who bought investment properties and lost them due to the bust. Many still are paying off the debt although they have lost their property.
If I borrow €200k from the bank and buy a property for €200k then I could get an infinitesimal return.
Brendan
I don't accept that this ever happened, can you outline an example. An example where a property in a reasonable location, purchased at a reasonable rental yield, and not promoted by some dodgy developer or investment manager, worked out badly.A lot of people who slept soundly got a rude awakening.
The fact that people don't appreciate risk, doesn't mean that they are not taking risk.
The timing worked out well for you. For many others, the timing was bad, and their lives have been ruined.
Brendan
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