Value Ireland Research – First Published October 9th, 2006
On the flip side to our “15 Things to Do with your SSIA“, there are things to watch out for now that you have a bundle of cash once your SSIA matures. Having such ready cash to hand might proove too much for some people. With a little care and attention, you can avoid the pitfalls and keep your money safe.
- Watch out carefully what happens to your SSIA with your SSIA provider if you just leave the money with them once it matures. Ask your provider to tell you what will happen to the money if you do nothing at maturity. Will it continue to be invested on same terms and conditions, at the same savings rate, or in the same investments? Or will the money be flipped to a low interest account immediately?
- If you don’t have to spend the money immediately, then don’t. It’s quite likely that prices for luxury items that everyone expects people to spend their SSIA money on will have increased around about now. Waiting may allow you avoid these price hikes.
- Don’t buy a brand new car. A new car is a massive waste of money. After three years the average depreciation on a new motor is 40pc to 50pc. Take advantage of this and find the car you want in the second hand market. There are loads of online car sales sites where you can find the car you want, at a much better price.
- Many financial are now offering post-SSIA offers where they appear to offer similar top up deals to what you’ve recently received from the Government. Read the small print carefully on these offers. One offer we read promised a 25% bonus, but in the small print this was only on the first years savings, and only paid out after 6 years. Be wary of the offers here – the banks don’t have the same motivations in offering bonus’ that the government did.
- Do you really need to keep up with “the Jones’? Just because they’ve got artwork in their hallway, have a massive extension, or have property abroad, does that mean that this is something that you actually need or want? Whatever other people spend their money on is their own business. You need to work out for yourself what you want, and value, and how you want to spend your hard earned money.
- By all means investigate the hype surrounding sites such as www.spendyourssia.ie/, www.spendyourstash.com/, ssiawatch.com/, www.ssiaideas.ie/, www.ssiamoney.ie/, or www.myssia.com/. But remember, these sites are there to make money more than they’re there to provide you with advice. If any offers seem good to you, by all means investigate further, but don’t assume that they’ll be the best offers around.
- Be careful that some SSIA websites are actually run by financial institutions, such as www.ssiaoptions.ie run by permanentTSB.
- The website www.ssia.info, which it might seem useful is actually a site for the Shoe Service Institute of America. This organisation is “committed to furthering the shoe repair industry by educating consumers about the physical, economic and environmental benefits of purchasing and maintaining quality footwear”.
- Just because you have more money now than before doesn’t mean that it’s now a better idea to invest in risky propositions. Watch out for scams. Pyramid schemes might seem like a good idea, but they’re not. Anonymous e-mail tips on the next hot stock aren’t either. Remember, if it sounds too good to be true, then most likely it is.
- One particular financial company is advising visitors to their website to “keep your ssia” and to take out a car loan with them instead. This is nuts. If you need a car, and you have the cash, why take out a loan and pay interest when you could have the car free and clear on day one – putting you in a much better financial position in the future – you’d have no car loan repayments to make at all.