Rich/Poor mindset

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.
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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
 
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.
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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%
 
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. ;)

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
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
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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.
 
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.
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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
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
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.
 
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.
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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
 
I thought Fair Deal was a finite % of income/ property which is reasonable enough. Not sure what above point is then
 
deanpark said:
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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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.
 
Hi help 99

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

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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.
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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...
 
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.
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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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.
 
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.
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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.
 
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.
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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
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
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
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
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"Penny wise and Pound foolish "
 
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........
 
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.
 
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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