The cigarette vending machine tycoons..

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?

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

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

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...

Vending machines

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

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.

Re: Vending machines

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

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

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

Re: Vending machines

The figures didn't really add up

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

Re: Vending machines

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

-Rd

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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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.

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?

referral fees

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

What are "referral fees"?

Re: referral fees

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

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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.

Referral Fees

What are "referral fees"?

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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

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

*

"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

"

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.