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Mary from Aghadoe wins new car in Credit Union draw

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Mary O’Connell from Aghadoe got a great surprise this week when she received a call from Killarney Credit Union to find out she had won a brand new Suzuki Swift 1.2 Hybrid SZ-5 in the Killarney Credit Union members draw.

Mary picked up the keys of her new car from Shane Foley and Elma Culloty of Killarney Credit Union this week accompanied by family.

Speaking about the members draw, Karena McCarthy, Killarney Credit Union Marketing Officer said: “We currently have just over 2,400 members in the draw which is held twice a year. Our prizes include a new car and cash prizes ranging from €250 to €2,000, our next draw will take place in January 2023,”

Members can apply for the members draw at any of the branches or apply online on www.killarneycu.ie. €12 will be taken from the members account twice a year as an entry fee for the members draw.

The cash prize winners were Marie Brosnan, Michael O'Sullivan, Neilie Carroll, Dan Nagle, Patricia O'Doherty, Kieran Madden, Kristina Napijalo Mulic, Robert Morris, Eileen Fleming, Gerard Coffey and Brid Ann Cronin.

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Housing Will Never Be The Same

Last week I wrote about the pathetic investment options out there for Irish investors. Despite high ongoing fees (mortgage, maintenance, insurance etc.) and the actual headache of being a landlord, […]

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Last week I wrote about the pathetic investment options out there for Irish investors.

Despite high ongoing fees (mortgage, maintenance, insurance etc.) and the actual headache of being a landlord, it’s easy to see why real estate functioned as the de facto investment portfolio for an entire generation.

Wealth creation was a rinse-and-repeat function where couples put money away until they had enough for the ‘next house’. As a result, we have an economy where 70% of household wealth is tied up in real estate.

Driven by the profits it created, Ireland became obsessed with owning real estate.

But real estate as an investment won’t be nearly as successful for our generation. (If you are able to get a house, that is)

All you have to do is look at the anecdotal evidence all around us to confirm this.

My parents bought the house they currently live in for 30k (pounds) 35 years ago. The house is now worth roughly 450k.

I typically despise these back-of-the-envelope calculations when It comes to property, given the endless variables and ongoing costs involved, but bear with me.

That’s a gross return of 15 times the original value. Now there are upgrades, a change in currency and other adjustments to consider here, so for argument’s sake, let’s call it 10X.

To achieve the same level of growth over the next 35 years, you would be left paying 4,500,000 euros for what is a pretty modest house.

Sure, we will still see property prices increase over time, but the rate of growth won’t be anywhere near as meaningful for one simple reason.

Interest rates.

Artificial Growth

Over the last 30 years, real economic growth has been stagnant, yet Ireland has experienced enviable nominal growth.

How did we manage it?

We created imaginary wealth.

We pushed interest rates lower and lower to stimulate economic growth.

And it worked.

After all, if you make 100k/year you can probably afford a 400k mortgage at 4%. At 2%, with the same 100k/year salary you can now take on 600k in debt.

So, were we getting richer, or was the debt just easier to afford?

Where do we go from here?

We have now squeezed interest rates as low as they can go.

The house price appreciation we have seen was justifiable because the mortgage rates on housing continued to fall in recent decades. This allowed people to take on more debt without severely impacting their ability to repay that debt.

If we go back to my parents, they were paying 14% on their mortgage. Mortgage rates are currently between 2 to 3%.

A relentless drop in interest rates gave way to higher and higher prices for houses, but interest rates are now on the floor.

The juice has been squeezed.

In fact, the trend has started to reverse, with rates expected to rise 1.5% in the first half of 2023

Be mindful that the same credit expansion cannot happen again.

How the next generation thinks about their investment options has to change.

Banks offering 0% returns for the use of your money and a housing ladder you can’t get on are not your only two options.

If you need help creating your own investment portfolio, just reach out to me at mike@theislandinvestor or simply scan the QR code above.

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Biddies performance celebrates St Brigid

Two local Biddies groups performed at Muckross House as part of St Brigid’s Day celebrations in aid of Kerry Parents and Friends Association. The Killarney Parents and Friends Biddy Group – formerly […]

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Two local Biddies groups performed at Muckross House as part of St Brigid’s Day celebrations in aid of Kerry Parents and Friends Association.

The Killarney Parents and Friends Biddy Group – formerly known as the Beaufort Biddy Group – and Kilgobnet Biddies came together for the event.

The tradition of the Biddies is one of the oldest and most colourful customs in Ireland, a blend of pagan and Christian pageantry, held on February 1 each year, heralding the beginning of springtime and honouring St Bríd the patron saint of the farming community.

Master traditional craftsman, Pat Broderick, at Muckross House, was also part of St Brigid’s Day celebrations, making a St Brigid’s Cross as part of the traditions.

 

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