Investments Next Slide © Annie Patton

Aim of Lesson To increase your understanding of what one can do with excess money. Next Slide © Annie Patton Previous Slide

Preserving the spending power of your savings But my €100 could buy lots 20 years ago and the thief did not appear!! It is important that your savings preserve their spending power or even better increase the spending power as the cost Of living will be increasing. Next Slide © Annie Patton Previous Slide

What can you do with excess money? Put in a deposit account in the bank Buy property Buy Shares Next Slide © Annie Patton Previous Slide

Choice depends on Do you want to be sure your investment (capital) is safe or are you prepared to risk it. Tax implications. Rate of inflation in comparison to the rate of interest you get in a bank. How fast you might need access to your money. The amount of hassle you are prepared to undertake in order to increase your wealth or preserve your spending power. © Annie Patton Next Slide Previous Slide

Buying Property A lot of people increase their wealth by buying property. They can either live in this property or rent it to tenants. As we have seen in other lessons, they use their savings as a deposit and borrow the rest in the form of a mortgage. © Annie Patton Previous Slide Next Slide

Making money by buying property!! If the buyer is living in the property, they will save on rent elsewhere. If the property is rented, the buyer will receive rent. Hopefully the property will go up in value. However it must be noted that the price of property can go up or down in value. Next Slide © Annie Patton Previous Slide

Property Abroad A lot of Irish people are now buying property abroad, in countries like Bulgaria, Hungry etc. A lot of risk attached here, because in addition to the risk of property prices not increasing in these countries, a lot of different laws apply re title deeds etc. Next Slide © Annie Patton Previous Slide

Buying Shares Often, when people are setting up business, they do not have enough money, so they invite other people to buy shares in their company. As a reward the lenders will expect to get a fraction of the profits, known as dividends, but note in most cases dividends will not be guaranteed. In addition to the payment of dividends, the buyers of shares can expect to make money by selling their shares at a profit. Next Slide © Annie Patton Previous Slide

So two ways to make money from buying shares Share prices go up Dividends Next Slide © Annie Patton Previous Slide

So two ways to make money from buying shares Share prices go up Be warned Dividends are not guaranteed and share prices can rise as well as fall. Dividends Next Slide © Annie Patton Previous Slide

Portfolio of shares When people have shares in different companies, they are said to have a portfolio of shares. As share prices can go up or down, it is recommended that people who invest in shares, buy shares in different types of companies. This is because, when shares in property companies are not doing well, shares in banking companies may be doing well. However shares in all types of companies can be doing badly at the same time. Next Slide © Annie Patton Previous Slide

Commission The public are not allowed to buy or sell shares on the stock exchange, but must engage a stock broker to do it on their behalf. This is the fee that you have to pay the stock brokers for buying or selling shares on your behalf. Next Slide © Annie Patton Previous Slide

On line Rather than go through a stock broker a lot shares are now bought and sold on line. The usual care needs to be exercised when giving details on line and that you are dealing with a registered broker. Next Slide © Annie Patton Previous Slide

Capital Gains Tax This is the tax one has to pay on the gains made from the sale of property or shares. The sale of ones personal home is exempt. Next Slide © Annie Patton Previous Slide

Conclusion Important to make your savings increase or keep it’s spending power. Three options, save in a bank, buy property or shares. © Annie Patton Previous Slide Next Slide