Archive | Spend Less

Buying wine, art and classic cars is spending your cash, not investing

There are rules in place which prevent many media commentators and journalists from tipping stocks. That’s why, we see so many ridiculous suggestions as to where we should invest our money.

On Twitter recently I have been critical of journalists who helpfully suggest that we spend any recently gained additional wealth on buying wine, art, coins, classic cars and other such nonsense in the name of “investing”. As far as I’m concerned, buying a classic car is spending your money (and possibly lots more with upkeep, maintenance, insurance and running costs), not “investing”.

These journalists and others have to delve deep in the bottom of the personal finance barrel of top tips to source these alternative “investment” tips because they’re not allowed take up their weekly 500 words telling us to invest in Apple, or Microsoft, or whatever the stock market flavour of the month is. Alternatively, the go-to tip for many of these journalists is to “buy gold”.  (Gold isn’t a regulated product like stock market shares, and I’ll come back to this gold buying nonsense sometime soon).

Market Abuse Directive

The Market Abuse (Directive 2003/6/EC) Regulations 2005, sets out what are known as accepted market practices for how organisations involved in the stock markets are expected to behave in order to prevent insider dealing and market manipulation (i.e. market abuses).

One effect of this directive is that it prevents pretty much anyone that isn’t employed by a regulated financial services firm from tipping stock market shares. So, someone working for one of the top stockbrokers can do so because they have the research capabilities of their organisation behind them.

However, given that Joe Journalist doesn’t have the same backing, he or she can’t just publish a stock market investing tip based on just a hunch or a tip.

Investing in Molycorp in May 2013 was not a good ideaDon’t always believe what you read in the papers

Here’s a perfect example of why we’re being protected in this way. For the purposes of this tale, assume we’re back some time around May 5th, 2013. This article snippet shows up in a popular Sunday newspaper.

On this day, our fearless journalist told us that Molycorp – a company where the share price had fallen in two years from €70USD to €6USD – was possibly about to experience a turn in their cycle (according to anonymous unnamed tipsters).

Wow! Imagine. Given that past performance must obviously be a guide here to future performance, I could have bought that stock back in 2013 for €6USD and surely it’ll get back up to the original €70USD very quickly. In fact, it’s more than 3 years now, so surely I’d be rich already based on that advice.

And even better, because of a “kind of volatility who knows where they will end up”, I should definitely stay away from Apple. It went from €700USD 6 months previous to that article and was now trading at a measily €575USD.

Molycorp is a rare earths producer. It operates in the Resources, Chemicals and Oxides, Magnetic Materials and Alloys and Rare Metals segments. Easy enough stuff to understand – surely the tipsters do.

Fair enough, because it’s in the papers, it must be true. Dear Mr. Stockbroker, I’ll have €10,000 worth of Molycorp. In 3 years, based on the numbers above, I should have at least €100,000.

Hell of a Hunch

As of close of business May 3rd, 2016, my investment in Molycorp is worth a princely €91. Yup, a drop of 99.09% in the 3 years since the original tip above was published. Even an investment in the much maligned Bank of Ireland would have given you a 50% gain over that same period of time.

Investing at that time in Apple, despite the warnings at the time in the article, would have returned you a near 60% gain on your investment as of May 3rd, 2016.

This particular journalist would be a very big fan of gold as well. In the same period of time, a €10,000 investment in gold would now be worth about €8,750. Better than Molycorp, I guess.

Molycorp, the 5 year journey from USD$76 to USD$0.05

Molycorp, the 5 year journey from USD$76 to USD$0.05

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What’s your normal bottled water buying routine?

Would you be able to save nearly €1000 over the course of a year by giving up on buying bottled water, and sticking to tap water? You’d be helping your pocket, as well as helping out the environment. Previously, I did a similar analysis asking “What’s your normal coffee buying routine at work?” which could you a further €1400 each year.

Single bottle of water can cost you up to €1.85.

The price of bottled water varies widely, from a few cents to a couple of euro per litre. For illustration purposes here, I’m using a well known sparkling water brand 500ml bottle which you’ll find in any shop in the country. The same 500ml of sparkling water, but from a different brand (imported) could cost you as “little” as €1.19.

A days supply of bottled water could cost you €3.70.

But 6 500ml bottles of sparkling water in Lidl would set you back €1.69 total. Strangely enough, 6 500ml bottles of sparkling water, no matter where you buy the pack in my recent experience, will cost you €1.69. Grocery competition? Where?

A weeks supply of bottled water could cost you up to €18.50

But it’s not just the cost to you or I that’s of interest in buying bottled water as frequently as this. There is the economic cost of shipping water from region to region, or even from country to country. Though, getting a glass of water from our tap these days isn’t cheap – we only need to see the costs incurred by Irish Water when it comes to fixing pipes.

A months supply of bottled water could cost you up to €74.

There is also the cost to the environment through all the plastic used to bottle water. “Plastic water bottles can take over 1,000 years to bio-degrade and if incinerated, they produce toxic fumes. It is estimated that over 80% of all single-use water bottles used in the U.S. simply become “litter”.” Furthermore, “it is estimated that actually 3 liters of water is used to package 1 liter of bottled water”.

Buying bottled water for a year can set you back nearly €1000.

There are obviously some simple alternatives to buying water in plastic bottles. Well, you could buy one, and then reuse it which would save you a lot of money. Never one to advise spending money in an effort to save money, but you could purchase one of those high-quality reusable water bottles you see people using these days. While these bottles aren’t cheap, if you look after the bottle and keep it clean and hygienic, it should last you a long time. Or just use a glass.

And when you’re out, assuming it’s not one of the places starting to charge for it, don’t be shy to just ask for the house tap water.

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Pre-paying for your electricity is unlikely to save you money

We’re seeing a lot of advertising recently from suppliers of pre-pay, or pay-as-you-go electricity supply services. One of the advertising slogans used is “no more shocking bills” which to me seems to give the impression that might be saving money by switching.

To be fair to the companies involved, most of the advertising pitch is based around “control” – “Always in control – With Pinergy you are the boss”, and “Sign up to PrePayPower now and enjoy having total control over your electricity costs!”

Control costs, or control usage

Technically – none of us have, nor can our specific electricity provider provide us with, control over the costs we pay for electricity. We can choose our electricity provider to avail of the costs they charge for electricity, but once signed-up, we can’t control what they charge us.

However, when it comes to control of our electricity usage don’t we all have control over that already, no matter who our electricity provider is? We have that control whether we’re with Electric Ireland, Airtricity, Bord Gais Energy – never mind Pinergy or PrePayPower.

Just because we have to regularly load up a meter in our hallway, or pay a regular direct debit, the principles of how we use – or don’t use – electricity will always be the same. And how we control our usage of it as well.

Pre-pay Electricity is Expensive Electricity

Leaving aside the bogus “control” factor therefore, moving to a pre-pay electricity service provider, like for like with the regular providers, will cost you more. So, you’re paying extra to get “control” that you already have. Pointless!

Specifically, you pay 37.5c per day for the pre-pay meter that will be installed in your house. That’s an extra €136.87 per year added to cost of electricity. That you have no control over if you sign up to them.

That charge is on top of the electricity standing charge (€125 to €169 per year) that you pay no matter which electricity service provider you use, and on top of the Public Service Obligation Levy as well (€31.60 per year).

At the moment, you can have your pre-pay meter installed for free, but who’s to say that that won’t cost you either. And presumably, you’ll get stuff for any maintenance costs on the meters as well.

No savings on cost

And just to clarify, the pre-pay electricity service providers do not provide electricity at a cheaper rate than the standard ESB rating. Pinergy “guarantee to match the standard electricity tariffs of Electric Ireland”, while PrePayPower promise that “Our rates match Electric Ireland Standard Electricity Price Plan’s unit charge and standing charge”.

Both company websites are, in fact, so similar, I did have to a special to check that they were actually different companies.

You can’t shop around

And despite their similarities, because of the fact that you need a company specific meter installed, switching electricity suppliers to try to get a better deal becomes a lot more complicated.

Worth switching?

While I appreciate that certain consumers are living from day to day when it comes to their income and expenses, based on the information above, switching to a pre-pay electricity supplier doesn’t seem to be an answer. Yes, you can see your money being spent and used on a daily or weekly basis as opposed to monthly or bi-monthly, but given the way you’re charged, it seems to be a false economy.

  1. You pay more
  2. You don’t get any more control over your electricity usage
  3. It’s harder to switch electricity suppliers to get a better deal

What to do?

Firstly, as a simple change, if your regular bills are just too big, you could set up a weekly or monthly standing order to pay a fixed amount for your electricity instead of paying by direct debit. That’ll smooth out over a year – overpaying in the summer while underpaying during the winter.

Before taking the drastic move to a pre-pay electricity supplier, try to cut your own electricity bill – work on controlling your usage and see about switching to a cheaper supplier.

In these tougher economic times, I don’t see how switching to a more expensive service supplier can be the solution to cutting costs.

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Top VI Tips to Save Money on Mobile Phone Insurance

Earlier this week I wrote about the hard lessons learned by an Irish Times reader when it came to buying and renewing insurance on their mobile phone, Hard lesson learned on the pointlessness of paying for mobile phone insurance.

Inspired by that story, here are the ValueIreland Top VI Tips on saving money on mobile phone insurance.

  1. Don’t buy mobile phone insurance

  2. When buying a mobile phone in a shop, don’t buy the mobile phone insurance they offer you there and then

  3. If you think you do need mobile phone insurance, their just look after your phone better

  4. Don’t buy the mobile phone insurance that might come with your contract with your mobile network

  5. If you’ve damaged, lost, broken, or dropped your phone in the toilet before, then maybe don’t buy an expensive phone

  6. Don’t buy mobile phone insurance as part of an add on on your home, or other, insurance policies

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Big Deal. No, seriously, why bother, Superquinn?

It just shows how dire the state of competition in our grocery market is when Superquinn think it’s worth their while printing up posters telling us how much they’re exactly the same as one of their competitors. Not just a little better, not a lot better, but merely exactly the same.

If you're reading this, you're probably on a PC with internet filtering, or a poor connections, so you're missing a picture of a Superquinn poster proclaiming that they're exactly the same as Tesco.

Competition in our grocery market? Not here anyway.

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Top Twitter Tips for Grocery Shopping

Back in early April, Margaret E. Ward (@MargaretEWard) put out the call on Twitter for some tips on what to do, or not do, when out grocery shopping. I believe she was going onto the Tubridy radio show (@TubridyTweets) to talk about such things. 

I thought it might be worthwhile to bring together the best of those Twitter tips forwarded on to Margaret at that time.

  • Use Pigsback.com grocery coupons – Oh I think the coupons on Pigsback.com are fantastic (get link), I got discount of my sun dishwasher tablets yesterday & super milk, they’re fab (@AineOFarrell)
  • Beware of % extra free deals – Watch out for 50% extra free nonsense. Price per kilo is best guide, less room for entrapment (JoyceHickey)
  • Bring a calculator – bring a calculator when shopping…seriously, 3 special offers of same product but varied quantities, had to work out cheap one (@MitchellNicola)
  • Keep an eye on special offers – This ValueIreland page might help #groceryshopping > list of supermarket grocery special offers updated each week (put in actual link) (@ValueIreland)
  • But beware of offers too good to be true – it’s an obvious one but don’t be blinded by special offers. Always check the unit cost of the item (€x per kg). (@lecraic)
  • Ignore multi-packs – Only buy what you need – ignore multibuys. (Except for books where gluttony is encouraged. Books are groceries, right?) (@jenny_heller)
  • Buy non-perishables in bulk – look out for worthwhile deals on your household standards and stock up your freezer/pantry/etc. (@zenbuffy)
  • Know the science of supermarket pricing – The best value deals are on products you consume at a fixed rate. Beware of expandable consumption (@conalhenry)
  • Make a shopping list – Make a list before you go – stick to it, avoid supermarket’s ploys – fresh bread, fast music and POS temptations! (@Clodaghdc)
  • Save time and help others – Save time by helping the person in front unload their trolley so they can pack. Especially if they have a kid (@JoyceHickey)
  • Don’t go shopping when hungry – make sure to eat before you go grocery shopping!! (@jenblogsbooks)
  • Leave the kids at home – Another tip don’t take your kids shopping with you if you can avoid it as they can’t avoid temptation & want junk (@SimonPRepublic)
  • Shop alone – top tip is don’t shop with your partner or toddler! Quieter & I can stick to my list then, done in 10 minutes (@PaulMWatson)
  • Shop in only one store – shop in one supermarket, so you know where everything is: that way you are less likely to impulse buy. (@mswolfie)
  • Shop online – It stops you putting all those unnecessary extras into your trolley. #outofsightisoutofmind (@taunyagrogan)
  • Do a “main” shop, not lots of “mini” shops – don’t go for a few bits and pieces, you always end up spending more (@Avoidanceman)
  • Shop late in the day – go shopping close to closing time, they always have specials on (@Avoidanceman)
  • Walk to the shops – if possible, shop local, shop daily, walk to shop – spend less. ps the walking to bit is important ….. arm ache of heavy bags, minimises excess buying. 🙂 (@talentcoop)
  • Shop local – I shop in local butchers and get deals buying a few items at once, ends up cheaper than supermarket, meat and service is better too (@IrelandGuide)
  • Only bring the money that you’ll need – Bring out only the cash to cover your shopping list (@Sinabhfuil)
  • Delegation – get someone else to do it (the shopping that is) (@siobhwithafada)

I think I’m in agreement with most of those tips – though maybe not the one that suggests shopping in only one store. With our retail grocery market the way it is at the moment (mostly non-competitive), it is important to keep an eye out on the special offers available across the different stores each time you go shopping. They vary widely across stores, so if you have the ability to shop across different stores, you’ll possibly save more.

What do you think? Do you agree with these? Do you have any other tips or tricks that you use when you’re doing your grocery shopping?

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Internet cookies on your computer will cost you money

This tweet recently, from @sampsonian, was very popular with more than 100 retweets. It’s from someone highlighting how the Ryanair website recognises when you’re back visiting them more than once, and tries to charge you more the second time around.

Ryanair exhibit A. Looked up fare yesterday, total £123.00. Returned today and fare is £237.oo. Flushed cookies. Fare is back to £123.00.

It’s a sneaky trick, but it’s nothing new. Your can read an article here on how cookies can cost you money that I wrote back in 2009.

If you’re not sure on how to clear the cookies from your computer if you think you’re losing out because of this, just search Google for the browser that you’re using with the words “clear my cookies” to find instructions. Some browsers will allow you set this automatically as well so that the cookies are cleared each time you close down your browser – but that’s maybe a bit extreme.

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Saving money during sales – keeping an eye on receipts

I had coffee this week with someone who has a similar interest in consumer affairs as myself. They were highlighting something that seems so simple, but something they said that they’ve encountered a number of times recently.

They were pointing out how many shops are having almost non-stop sales at the moment, and if they’re selling something that we actually need at a cheaper price, then great.

But they mentioned that these constant sales, and frequent price changes and price reductions, can cause problems for the staff in these stores.

Many times they just can’t keep the price labels on the items themselves up to date with the posters that might be up around the shop.

This means that while the headline poster above the items may say a certain price, it’s not always guaranteed that the barcode label with the item itself would be also updated to the same price.

Their advice was to be vigilant when at the till to make sure that the price rung up on the cash register is the price highlighted back on the rail in the shop.

Yes, a simple thing, but something that can mean we’re not being overcharged when we’re actually expecting to save money.

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