Teenagers take note: you are NEVER too young to start a pension plan!

John Lowe, the Money Doctor, is great at dispensing financial advice – see below for lots of hot tips. But how good is he at taking his own medicine?! Are you battening down the hatches for a shares crash? Don’t wait for the tsunami to arrive. The stock market is a little overheated so you need to have your strategy well in place at this point. The buzz word is ‘diversification’. For those staying in stocks and shares, remember Warren Buffet’s wise words: ‘The stock market is a mechanism for transferring wealth from the impatient to the patient!’ Any good deals on mortgages? Ulster Bank’s three years at 2.95% and PTSB’s five years fixed at 3.05% look pretty good. What about savings? The best ‘deposit’ rate is An Post’s ten year National Solidarity Bond yielding 16% tax free. Best place for your money? The simple pension is still one of the best investments. If you’re 40 and earning €100,000, you can invest €25,000 pa into your pension and the Government will give you back €10,000. What else is going on in personal finance? Slashing benefit-in-kind on all electric cars has seen a rush of savvy buyers to the showrooms. Watch out for the soon-arriving Jaguar I-Pace. Where do I save if I have up to €500 a month to spare? Regular saver deposit accounts:

KBC: 2.5% interest if you save €100-€1,000 a month. (Must open a current account.)

EBS: 1.75% for same deal (but with only one withdrawal a year). Stock market accounts:

Irish Life’s Pinnacle account. Choose between five funds depending on your risk attitude. Minimum €250 monthly.

Zurich’s LifeSaver regular saver stock market account, using their five PRISMA funds from cautious to high risk. Minimum €75 per month and maximum €2,500. What would be your top three personal finance tips? 1. Have a Rainy Day Fund – usually three to six months’ net annual income with immediate access for emergencies, sudden loss of income or that investment opportunity... but minimum €5,000. 2. Pay off high interest short term debt – avoid moneylenders and never borrow for lifestyle purposes. 3. Retirement planning should be incorporated into your finances from the time you leave school or college. You are NEVER too young to start a pension. Teenagers today will be probably aged 75 before they qualify for the State Pension, and by that time I doubt whether the government of the day will be able to afford those pension payouts to the 1.8million-plus pensioners over that age then! Most unusual thing you’ve done? As manager of a First National Building Society branch in the late eighties, I donned a guitar and went out to the foyer of my branch to sing a happy birthday to a customer who was 80 years old that day. Boy, was she surprised. Can’t see many bank managers of today doing that! Three things you’d do if you were a government minister tomorrow? 1. Penalise owners of vacant land with a soul-destroying tax if they do not immediately build, and force all Government-held vacant land to be put at the disposal of the homeless and those seeking social housing. 2. Make pensions compulsory now and NOT wait three years before auto-enrolment is due to be brought into the workplaces. The Government had been talking about this over 10 years ago! 3. Give a tax benefit to those with stay-at-home partners so that they can create their own pension. They may not be working financially but they are working as hard as their partner in the home, hence the reason why I always ask at consultations: ‘Do you work financially outside the home?’ What was your worst financial decision? I do have over 40 years of experience but one can still be caught out. In 2005/6 I had a number of advisers who needed to be housed on the northside of Dublin and, instead of renting in 2006, I bought property. It’s still horribly in negative equity. One wasn’t to know… just as much as no one can predict when the next Bear market will be for shares. It has to drop 20%, but when? See www.moneydoctor.ie for more helpful advice and tips from John.