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The one question that determines your future wealth

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Inflation is an inherently personal thing. We quantify it in general terms with headline figures, but don't be fooled. Inflation isn't the same for everyone.

In Ireland, the inflation rate has fallen over the past few months from 9.6% in July to 7.7% in December, but this doesn't mean that everyone's life is now 7.7% more expensive.

How inflation affects you will differ depending on your age, location, job, savings and investments.

There will be winners and losers: net buyers and net sellers.

Let's take an example.

You bought a house before 2020 vs. you're looking to buy a home in 2023.

For those who bought pre-2020:

Initial fixed rate at 3% or lower (many of these will be approaching their fixed rate cliff)
Up to 40% increase in home value since purchase
Your mortgage repayments have remained constant while the value of your home has increased dramatically.

Yes, you're paying more for eggs, but your debt as a percentage of household net worth is considerably lower.

You're wealthier now than you were before the pandemic, in both absolute and relative terms, due to the inflation tied to your most significant asset.

Over two thirds of the Irish population have a mortgage or own their home outright.

For many of these, inflation has been a net positive due to the housing effect - a wealth-creation event.

For those looking to buy a home now, the past three years have created a very different scenario.

Wealth destruction

According to the Central Statistics Office, the average house price index has gone from €293,000 to €359,000 since 2019, an increase of €66k. Mortgage rates are now starting to increase. This is set to continue as the ECB looks to raise its deposit rate to 3.5%. (ECB rates were negative in 2019). As such, recent inflation has had a materially negative impact on both the purchasing power of the savings accumulated to buy a house and the future debt burden that the mortgage represents. The same inflation. Two very different outcomes.

The property divide

This is the very essence of how wealth gaps materialise, playing out in real time at an accelerated pace.

Many factors drive wealth inequality in Ireland, but it's bizarre to think that the side of the wealth divide you find yourself on may be determined by simply asking the question.

Did you own a home before the pandemic started or not?

With 70% of Irish wealth tied up in housing, the wealth effect of rising house prices is particularly strong relative to the rest of the world.

Remedies

Don't just listen to the headline numbers. Figure out how inflation is affecting you personally.

Are you being crushed by rising prices, or are you a net benefactor as prices increase?

Everyone isn't on the same boat here. The sooner you realise this, the sooner you can do something about it.

Want investment advice and personal finance tips that won't bore you to death?

Join the one thousand plus subscribers by scanning the QR code or go to www.theislandinvestor.com.

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Killarney Advertiser remains Kerry’s last family-owned news publication

Following the announcement this week that Kerry’s Eye has been acquired by Webprint, the Killarney Advertiser now stands as the last remaining family-owned and in-house published news outlet in the […]

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Following the announcement this week that Kerry’s Eye has been acquired by Webprint, the Killarney Advertiser now stands as the last remaining family-owned and in-house published news outlet in the county.

The acquisition of the Tralee-based title leaves the Killarney Advertiser, and the Galway Advertiser, as the two longest-running independent publications of their kind in Ireland.
Established in 1973 – one year before Kerry’s Eye -the Killarney Advertiser was founded by the late Danny Casey in Woodlawn.
Danny’s vision was to create a publication that truly reflected the whole community, a mission that has remained the core value of the business for over five decades.
Today, the publication is led by Danny’s son, Cormac Casey. Having started his journey with the magazine as a delivery boy, Cormac has worked in every department of the business.
Under his leadership, the publication evolved from its original black-and-white format into the high-quality, full-colour weekly magazine that has become a staple of Friday nights in Killarney.
A key to the success of the Killarney Advertiser’s independence is its production process.
Every issue is written, designed, and published locally. To ensure continued local production, Cormac established KC Print at a state-of-the-art facility in Coolcashlagh.
Now one of Ireland’s largest trade printers, KC Print employs a workforce of 30 people, keeping jobs and expertise within the Killarney area.
“Our hyper-local news, led by our trusted journalists, ensures we are the community’s favourite read each week,” said Cormac Casey. “As we move into this new era for Kerry media, we remain committed to our roots. We are proud to be a local family business, and we want our readers to help us shape our content for the future.”
As the media industry sees further change, the Killarney Advertiser remains dedicated to independent, community-focused journalism. The support and goodwill of readers and advertisers ensure that, over 50 years since its first edition hit the shelves, the publication remains at the very heart of the weekend conversation in Killarney every week.

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The Cuckoo has landed in the National Park for third year in a row

One of Killarney’s most famous migratory residents has made a triumphant return as Cuach Cores arrived back in the National Park this week following an incredible 9,000-kilometre journey from Africa. […]

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One of Killarney’s most famous migratory residents has made a triumphant return as Cuach Cores arrived back in the National Park this week following an incredible 9,000-kilometre journey from Africa.

The latest satellite tracking data from the British Trust for Ornithology (BTO) confirmed that Cores crossed the Bay of Biscay and made landfall in western France last Saturday. By Monday, April 20, he was recorded on the outskirts of Villeneuve-en-Retz, perfectly on schedule for his annual return to his breeding grounds at Derrycunnihy Woodland.
This marks the third consecutive year that Cores has returned to the same spot in Killarney since being tagged at Incheens in May 2023. His reappearance is a significant relief for researchers, as his tag had gone “radio silent” for four months while he was deep within the Congolese forests. The signal finally sprang back to life on March 19 in Ghana, showing he had successfully crossed the Sahara.

For those hoping to catch a local performance from this elusive harbinger of summer, the National Park suggests heading to Derrycunnihy Church. Visitors can park and follow the Kerry Way signs toward the Old Kenmare Road (Incheens). Local experts say that if you pass the strea

m and follow the path, the distinctive call of Cores can often be heard echoing through the woodland.
Solving a natural mystery

The Cuckoo Tracking Project is a collaborative effort between the National Parks and Wildlife Service (NPWS) and the BTO. It aims to solve the mystery of where Irish cuckoos spend their winter and whether they follow different migration routes than their British counterparts.
While cuckoo populations have seen a 27% decline in some regions, the Irish population has remained relatively stable. Tracking birds like Cuach Cores—who was the first cuckoo from Ireland or the UK to reach the Democratic Republic of Congo in 2023—provides vital data on the challenges these birds face during their epic biannual treks across two continents.
Cores is one of three cuckoos tagged in Killarney National Park, alongside “Cuach Torc” and others. His arrival signals the official start of “the time of the cuckoo” in the Kingdom, a period traditionally associated with the final days of April and the true beginning of the Irish summer.

Photos by Valerie O’Sullivan

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