Will you invest in the National Solidarity Bond?

namloc1980

After the announcement of the National Solidarity Bond today, will you invest in it? Obviously we don't know what the details are but, in principle, will you invest?

omahaid

In principal I would, but I would have to research it more and find out more details.

thebman

Depends what the conditions are, too early to say. Not against the idea for the government but if conditions are favourable and many people put their money into this, it may harm business as people may put a lot of money into this that they would have spent otherwise.

Not saying that will happen but it is a possibility.

nkay1985

This seems to be about all the information available on it at the moment.

It would all depend on what the returns on it are and the minimum and maximum levels of investment, I suppose, but a lot of people took up the option on the SSIA.

When is the Finance Bill released? Next week is it?

thebman

Looking forward to seeing the details. Now that I'm earning again, I am saving packets from having to budget so hard when unemployed

I spend less than a 150 a week including rent and cost of getting to work ATM.

seclachi

I will, if the terms are decent that is. Chuck in a few hundred quid and I`ll call it my own little mini nama for the state

ntlbell

eddy hobs said "computer says no"

he's never let me down.

Rev. BlueJeans

ntlbell wrote: »

eddy hobs said "computer says no"

he's never let me down.

I assume you didn't buy any of the shoeboxes out foreign that that disgraceful little gnome was trying to flog off on us all a short while ago

How the media has the tunnel vision to employ him as a guru escapes me.

ntlbell

Rev. BlueJeans wrote: »

I assume you didn't buy any of the shoeboxes out foreign that that disgraceful little gnome was trying to flog off on us all a short while ago

How the media has the tunnel vision to employ him as a guru escapes me.

Oh yes, I stocked up :pac: never a better time to buy tbh.

Seems a good deal.

50% top up on savings after 10 years (gross before tax but still how bad ). One of my biggest regrets in life is not saving with ssia. why why oh why didnt i do it?!!!

will certainly be putting a few bob into this

Wudyaquit

It's only 4.15% when you compound which is crap given that over that period interest rates are as likely as not as to be up at that level anyway.

You're not getting much (if any) of a premium, not enough to warrant locking your funds away for 10 years anyhow. Going with the regular bonds will most likely yield something similar and could even yield substantially more (Govt bonds were above 5% relatively recently as far as I remember).
Regardless, at best case scenario is they perform marginally better and having access to your money is worth a small premium imo. It's certainly no SSIA.

Nody

Between inflation and the fact the funds are coming late (money later is worth less then money today) no; even a generic index fund is likely to do better over that time frame.

Highly Salami

There seems to be an option to contribute monthly (like SSIA) rather than buying the bond with money up front but no further details are mentioned on website or literature.
50% sounds like a good return if it were a 5 year or less term, but 10 years....I'm not so sure.

The_Thing

No, not a Goddamned cent. I'd rather give it to this man:



Image courtesy of http://419eater.com/

flutered

nooooooooooooooo

ei.sdraob

Not many details available yet

But heavily leaning towards a NO

Beside having no trust in the state with anything money related :P that's one rotten rate of return for the level of risk its carrying in the time-frame involved

I suppose this is perfect for the citizens who are financially challenged and also nationalistic...

FGR

I guess what I'd love to know is whether the 40% bonus is paid on the final total sum in the account at the end of the 10th year..or a very complex mathematical computation of what would have been earned as interest as a result of making monthly payments into the account.

specialist1

ForegoneReality wrote: »

I guess what I'd love to know is whether the 40% bonus is paid on the final total sum in the account at the end of the 10th year..or a very complex mathematical computation of what would have been earned as interest as a result of making monthly payments into the account.

http://www.statesavings.ie/Downloads/NSBBrochure.PDF

Wudyaquit

ForegoneReality wrote: »

I guess what I'd love to know is whether the 40% bonus is paid on the final total sum in the account at the end of the 10th year..or a very complex mathematical computation of what would have been earned as interest as a result of making monthly payments into the account.

You don't make any monthly payments - the bond is invested fully at the outset.

Head The Wall

Wudyaquit wrote: »

You don't make any monthly payments - the bond is invested fully at the outset.

No, you can build it up in instalments by paying monthly

ei.sdraob

Subject to DIRT

yeh that makes it so much more attractive :rolleyes:

yeh fairly rotten rate of return i have to say for the time-frame involved

Alun

ei.sdraob wrote: »

Subject to DIRT

yeh that makes it so much more attractive :rolleyes:

yeh fairly rotten rate of return i have to say for the time-frame involved

It's only the 1% interest that's subject to DIRT, the 40% bonus is tax-free.

Atlantic Dawn

Not with Fianna Fáil still in power but yes with anybody else.

Wudyaquit

Head The Wall wrote: »

No, you can build it up in instalments by paying monthly

Nope. You can contribute monthly until you build up the €500 minimum, but the 10 years only start once you've reached the target.

Silvio.Dante

I would if I could make monthly contributions of a couple of hundred euro over the 10 years but thats not an option it seems.

StudentDad

What the National Credit card is maxed out and now the govt. is sending a cap round to gather up a few quid before the 'man' comes round to cut off the electricty? I'd rather keep my money in my back pocket thanks. I'm quite capable of wasting it myself - I don't need to give it to govt. so they can waste it for me.

SD

Eliot Rosewater

So is this scheme just a mechanism by which to delay the day we will have to pay Ireland's national debt by 10 years?

ei.sdraob

Alun wrote: »

It's only the 1% interest that's subject to DIRT, the 40% bonus is tax-free.

it still ads up and cuts into it over such a long period

thats about 3.8% per year its working out at (and you have to keep it there for that period to get the bonus, otherwise its much less)
if things ever do get back to "normal" (whatever that be), inflation alone will wipe that out

which is a fairly ****ty rate of return and yes there is risk attached

is it a better investment than putting money into Anglo? yes
is it a good investment? nope this is certainly not SSIAs

Gael23

Seen as I got less than €90 intrest on €10k in my bank a/c last year, it might be worth considering.

Stinicker

When we default people who have invested in this will lose everything.

MaceFace

Stinicker wrote: »

When we default people who have invested in this will lose everything.

And when will this be?

Has this happened anywhere else in the world?

bonzos

Not a hope i would give money to this gov to pay wasters who are entitled not to do their job. Enough of my tax has been waster over the years on an over paid and under worked PS.....imagine ringing up a PS office and someone sitting beside the phone,refusing to answer it and your money paying thier wages....must think we are all fools!

ei.sdraob

MaceFace wrote: »

And when will this be?

Has this happened anywhere else in the world?

What countries defaulting?

yes yes it has

MaceFace

ei.sdraob wrote: »

What countries defaulting?

yes yes it has

No no, not countries defaulting, but countries defaulting and people losing everything?

Not bondholders or institutions with money on deposit, but Joey Citizen?

ei.sdraob

MaceFace wrote: »

No no, not countries defaulting, but countries defaulting and people losing everything?

Not bondholders or institutions with money on deposit, but Joey Citizen?

Uhm yes it has happened where the average Joe has lost all their saving and/or whatever remained rapidly disappeared due to high inflation

take Argentina or Russia/exUSSR in the last 15 years

It might be hard for you to imagine since Ireland had it so good for so long but I have been to exUSSR in 90s as it seen a meltdown where the average "Joe" suffered the most

Now whether Ireland will default, I dont know, but its certainly within the realm of possibility


Ireland incredibly is the most indebted country in the world by just about every measure, I recommend reading the last 6 articles titled "World Debt Wish" from Dr. Constantin Gurdgiev where he goes into great detail analysing all aspects of Irish debt (government, private, company, IFSC etc) really really grim reading

.. Especially realizing that this makes our economy leveraged to the tune of 1960% compared to the rest of the world. Imagine having that level of LTV on your house?! ...

lmimmfn

cant we buy German bonds?

Sleepy

I honestly can't see this raising much. It's a poor rate of return and the average joe in Ireland is in debt, not holding onto savings to invest.

MaceFace

ei.sdraob wrote: »

Uhm yes it has happened where the average Joe has lost all their saving and/or whatever remained rapidly disappeared due to high inflation

take Argentina or Russia/exUSSR in the last 15 years

The people in Argentina did not lose everything. Of course they suffered and the value of the currency they had was much less, but that is very different than the claim that people who invest in the Solidarity Bond will lose everything if the country defaults.

If the country was to go down the tubes, everyone would lose, but those that do invest in the bond will be the last to be hit. The cash you receive in the end may be devalued massively, but I doubt very much that any government will simply turn around to those who invest and say their money is gone.

ei.sdraob

MaceFace wrote: »

The people in Argentina did not lose everything. Of course they suffered and the value of the currency they had was much less, but that is very different than the claim that people who invest in the Solidarity Bond will lose everything if the country defaults.

If the country was to go down the tubes, everyone would lose, but those that do invest in the bond will be the last to be hit. The cash you receive in the end may be devalued massively, but I doubt very much that any government will simply turn around to those who invest and say their money is gone.

Of course people in countries that defaulted haven't lost "everything"
but they did loose ALOT in many cases being setback a decade or more
in case of Russia for example pensioners literary lost all their life savings for retirement (however short that is now) and had to resort to scavenging in rubbish, did any of them in late 80s think that things would get so bad when their currency was on par with dollar?

defaults hurt the ordinary people


anyways looking forward to next 10 years if we dont default or endup being forced out of euro then there's the danger of high inflation
this bond is only ~47% over 10 years
in the last 10 years we had 40% inflation, keep that in mind

its a very long period with a low return, alot can happen then, and frankly i dont trust the government, i know you do and have fallen for their fud in regards to Anglo, but sorry

oilibhear

Probably. On principle.

I can't abide the feeling going around (you see it in Greece right now) that this is all the governments fault and I wouldn't give them a cent to waste anymore - eh ... who elects them? If the government has wasted money it is because we have elected wasters (and don't imagine that FG would/will do any better. The true fault behind this whole mess is Joe/Jane Public and the choices he/she made both at the polls and in their daily lives over the past decade.

We need to take responsibility. If handing over cash (voluntarily, not just in taxes) is a way to do so then I'm all for it. Let's remind ourselves that this is a republic and we front the cost of it, we pay for it when it flops and if we are negligent in our roles as an electorate we will elect gombeens (as we have done over and over again in the past).

thebman wrote: »

Looking forward to seeing the details. Now that I'm earning again, I am saving packets from having to budget so hard when unemployed

I spend less than a 150 a week including rent and cost of getting to work ATM.

Fair play.

lmimmfn

According to the Sunday Times the post office bonds provide a better return and are only for 5 years

rossit

i have 4000 to invest is the 10 year bond the post office one the best way to go or can anyone give me any pointers thanks

Farmer Pudsey

http://www.anpost.ie/anpost/maincontent/personal+customers/money+matters/savings+and+investments/

Above is link to state savings however remember that the rates subject to tax will only yield 0.62 of what they state if Dirt remains as is and PRSI is added. So the actual yield/years is 0.62% and the 35% bonus so it works out at 41.2% over the lifetime of the bond not sure of the AER.

CruelCoin

namloc1980 wrote: »

After the announcement of the National Solidarity Bond today, will you invest in it? Obviously we don't know what the details are but, in principle, will you invest?

If the rates offered can beat those on the open market, yes, if not then **** no.

I'm not japanese, not willing to buy patriotic bonds.

323

Deleted User wrote: »

Seems a good deal.

50% top up on savings after 10 years (gross before tax but still how bad ). One of my biggest regrets in life is not saving with ssia. why why oh why didnt i do it?!!!

Cause the return was well below inflation for the same period.
Got better return on deposit from the bank (even after dirt)

Once signed for, it just forced folks to save who otherwise may not have been disciplined enough to always put that amount away monthly.

[Jackass]

I don't understand the logic behind this.

So the Revenue raised by this would presumably be negligible in the grand scheme of things, and all it serves to do is temporarily reduce the money supply in an already overly choked economy.

Whats more, it has far less favourable terms than say the SSIA's, which presumably was designed to be a temporary cooling measure for a rapidly expanding Economy, followed by a generous hand out to reinvigerate it, probably the only tangible measure FF took to manage the growth of the Economy.

So this would appear to be further retractionary measure, removing more capital from the Economy.

Anybody wish to offer what possible positives could come from this, or what the logic behind it might be?

[Jackass]

Also, might I ask, am I alone in thinking that bonds in general just seem like a massive waste of time? It seems returns are so small for the commitment of capital, that I'd rather invest in something with greater investment return, or even for lower return, keep cash on hand in an account rather than commiting to a bond for a set time frame without being able to access it.

Depending on your interest rate and it's not fixed, if your mortgage has a redraw facility, you'd be better off paying it into your mortgage to reduce interest repayments on such a large amount, and redraw cash if / when you need it. I know KBC have this facility, presumably others do too.

srsly78

[Jackass] wrote: »

Also, might I ask, am I alone in thinking that bonds in general just seem like a massive waste of time? It seems returns are so small for the commitment of capital, that I'd rather invest in something with greater investment return, or even for lower return, keep cash on hand in an account rather than commiting to a bond for a set time frame without being able to access it.

Depending on your interest rate and it's not fixed, if your mortgage has a redraw facility, you'd be better off paying it into your mortgage to reduce interest repayments on such a large amount, and redraw cash if / when you need it. I know KBC have this facility, presumably others do too.

They are not aimed at individuals they are aimed at large institutional investors. Some investments are regulated and must be put into AAA instruments - this means bonds. The yield is so low because the risk is supposed to be low.

German bond yields actually went NEGATIVE recently, what does this mean? It means that institutions were so scared about the world economy that they were willing to pay for the safety implicit in German bonds.

So basically: the investment needs of institutions like pension funds are vastly different from your own. But also consider that pension funds invest OUR money.

GCU Flexible Demeanour

[Jackass] wrote: »

It seems returns are so small for the commitment of capital, that I'd rather invest in something with greater investment return, or even for lower return, keep cash on hand in an account rather than commiting to a bond for a set time frame without being able to access it.

I don't know about these particular bonds, but you can cash in Savings Certs (which are similar) early. There is a problem in identifying savings products with greater returns, but acceptable risk. Now, I do take the point that the fixed interest rate may not even protect against inflation. But if you've some amount of cash savings that you don't immediately need, it's actually difficult to find a medium to put it into that gives you a reasonably secure return over a few years.

[Jackass] wrote: »

Depending on your interest rate and it's not fixed, if your mortgage has a redraw facility, you'd be better off paying it into your mortgage to reduce interest repayments on such a large amount, and redraw cash if / when you need it. I know KBC have this facility, presumably others do too.

I'd agree that, for anyone with substantial debts, the first "saving" priority is to reduce and ultimately eliminate them.