Dear Reader

Welcome to the May edition of the Money Mentor monthly newsletter, brought to you by Vantage Financial Planning, your trusted guide through the ever-evolving world of personal finance. Each month, we explore insights in financial education, coaching, advice, and the role of technology in shaping your financial future.

📰 Monthly Economic Update

U.S. inflation continues to stabilize, with the 12-month rolling rate easing to 2.3% in April, down from 2.4% in March. However, prolonged tariff activity poses a risk of reigniting inflationary pressures.

The European Central Bank and the Bank of England have reduced interest rates by 0.25%, while the U.S. Federal Reserve maintains a cautious "wait-and-see" stance, keeping rates between 4.25% and 4.5%.

Employment remains robust, although recent tech sector layoffs (e.g., Microsoft) may foreshadow a broader trend. As AI adoption accelerates, it is reshaping white-collar roles, reducing headcount in some areas while significantly boosting productivity.

Equity markets have rebounded following a strong Q1 earnings season and a temporary pause on tariffs. Markets have now climbed above pre "Liberation Day" levels, despite recent volatility. Still, global consumer spending is showing signs of slowdown across both income and wealth brackets.

Meanwhile, 10-year and 30-year U.S. Treasury yields have increased, influenced by President Trump’s new round of tariffs and the recent passage of his “Big Beautiful Bill”, which includes sweeping tax cuts and fiscal changes.

I’m anticipating a tumultuous market ahead and am fearful the economic war between the US and China is a prelude to military conflict in the South China sea.

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🏡 Property Ownership in Ireland

Ireland’s deep-rooted attachment to land and property is a recurring theme in our national story. From colonial history and the Great Famine, to John B. Keane’s The Field, to the 2008 debt-fueled property crash, and now to today’s soaring land and housing prices. The cultural and economic significance of property remains strong.

🏘️ Property Investing

As of late 2024, Ireland had 105,594 registered private residential landlords, collectively managing 240,964 tenancies. This landlord base ranges from small-scale individual investors to large institutional players, reflecting a diverse and evolving investment landscape.

When evaluating property as an investment, it’s important not to assess it in isolation. Instead, compare it to alternative options, most notably the stock market, which remains widely misunderstood despite its accessibility, liquidity, and historical long-term performance. Understanding the risk-reward profile of both asset classes is key to building a balanced and resilient portfolio.

✅ Property Pros

Long-term growth & income - Property has historically provided both capital appreciation and a rising income stream. Investment returns come from two sources:

• Rental income (the productivity of the asset)
• Capital appreciation (the increasing value of the land over time)

Simple property investment return example
A property valued at €400,000 generating €30,000 in annual rental income:
​(€30,000 ÷ €400,000) × 100 = 7.5% yield​
If the land also appreciates at 3% annually, the total nominal return (before taxes, costs, debt, and inflation) is 10.5%.

Diversification - Property can complement a broader investment portfolio, reducing overall risk if you hold other asset types.

Tangible asset - It’s physical, you can see it, visit it, and often feel a greater sense of security than with digital or paper-based assets.

Steady, predictable cash flow - Rental income is typically consistent, assuming occupancy remains high.

Tax efficiency - Interest and allowable expenses can be deducted before calculating taxable rental income.

• No Capital Gains Tax (CGT) applies between spouses
• No CGT is triggered upon death (the gain "dies with the owner")

❌ Property Cons

Transaction & ongoing costs - Buying, selling, maintaining, and repairing property involves significant costs: stamp duty, legal fees, surveys, insurance, service charges, and furnishing.

Depreciating physical structure - While land may appreciate, the building itself requires upkeep and depreciates over time.

Illiquidity & concentration risk - Property is not easily or quickly sold, and a single investment can represent a large proportion of your wealth increasing risk.

Tax burden - Outside of pension structures, both rental income and gains are taxed:

• Income Tax at your marginal rate
• Capital Gains Tax (CGT) on appreciation
• Capital Acquisitions Tax (CAT) if inherited (outside of spousal exemption)

Interest rate & debt risk - Rising interest rates or high loan-to-value borrowing can erode returns and increase risk.

Real returns may disappoint - After accounting for transaction costs, maintenance, taxes, debt servicing, and inflation, real (net) returns can be modest.

Rental income often spent, not reinvested - Unlike dividends in equities, which can be easily reinvested, rental income often goes toward living expenses.

Time, hassle & regulation - Managing tenants, maintenance issues, compliance with fire safety, rent pressure zones, and housing standards can be time-consuming and stressful.

Market volatility & demographic risk - Property markets can suffer sharp downturns (e.g., 2008), and future long-term demographic shifts may impact demand, especially in Western economies.

Tenant risk & legal constraints - Tenant turnover, non-payment, legal protections for tenants, and disputes can all eat into profits and peace of mind.

Structural risk - Poorly built properties can lead to costly repairs or complete loss of value.

📌 Summary & Final Thoughts

Property investors who net a 3% real rental income yield return annually after costs, tax, and inflation are doing quite well in today’s environment.

For many, land/property investing isn’t a yes-or-no decision, but rather an if and when question. If you don't mind the hassle, if you have land or property expertise/experience and when you’ve:

• Maximised pension contributions
• Paid down (or are close to paying off) your forever home mortgage
• Focus on debt-free property held for a minimum of 15+ years
• Ideally, time the investment around retirement, when your earned income drops.

Investing is about following the right sequence of steps allocating money to the right mix of tax-free, tax-deferred, and taxable structures as you move up the wealth curve. That’s how you build momentum and progress toward financial security and independence.

Personal finance is personal. Even if the math says one thing, most people do what feels right to them and that’s okay.

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🌍 What Is a Global Equity Index Fund?

A global equity index fund is a low-cost, diversified investment that passively tracks the performance of thousands of the world’s largest publicly traded companies. Rather than trying to pick winners, it aims to mirror the overall growth of global business activity over time.

By investing in this type of fund, you gain exposure to a wide range of industries and economies, all in one simple, efficient package. As the companies in the fund grow and generate profits, those profits are passed on to you in the form of capital growth and dividends.

Your investment is spread across regions and countries based on market capitalisation, the total value of companies in each country. This means larger economies and more valuable companies carry more weight in the fund:

When you invest in a global equity index fund, your money is also allocated across a broad range of industry sectors and companies of varying sizes, again based on market capitalisation (calculated as share price × number of outstanding shares).

This approach gives more weight to larger, more valuable companies, while still including exposure to mid- and small-size companies. Below is an example of how a global equity index fund is allocated across industry sectors and the companies within those sectors:

The depth and breadth of global public markets is immense. Rather than trying to find a needle in a haystack, you own the entire haystack, a dynamic collection of companies that are constantly innovating, evolving, and competing.

By investing broadly, you gain exposure to some of the world’s largest and most successful businesses, the very companies whose products and services are used every day by individuals, businesses, and governments around the globe, either directly or indirectly.

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💸The Impact of Low Returns

If you can’t psychologically tolerate temporary stock market declines that come with a 100% global equity fund, you may be putting your long-term financial freedom at risk.

Reacting emotionally to short-term market volatility can lead to decisions that undermine your ability to fund important future goals such as lifestyle spending in retirement, surprise expenses, healthcare, gifting and other personal pursuits.

It’s completely normal to feel fear during temporary stock market declines. The key is not to let that fear drive your decisions resulting in financial self-sabotage. If we were all perfectly rational, I wouldn’t have a job.

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😱 The Battle Between Fear & Logic 🧠

A core part of what a financial planner does is behavioural investment coaching, helping clients stay focused on long-term goals, remaining calm during periods of stock market volatility, and avoid costly emotional mistakes.

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Stock market volatility is the emotional price of admission for long-term investment returns. The real difference between investment returns and investor returns comes down to investor behaviour.

Staying invested, even through the ups and downs, is what allows you to capture the long-term growth investment markets offer.

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📚 Recommended resources 💡

JP Morgan Guide To The Markets (EMEA Monthly):

​​​JP Morgan Guide to the Markets EMEA 30th April 2025.pdf​​​​​​​​​

Monthly podcast recommendations:

Patrick Boyle On Finance: The Biggest Wealth Transfer In History is Happening Right Now!

Listen on Spotify

The Morgan Housel Podcast: How We Used to Live (Levittown, Progress and Expectations)

Listen on Spotify

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We launched the Ripple Money website during the month of May which can be perused here: https://www.ripplemoney.io/​

We are also in the midst of a Vantage rebrand and website upgrade which is due for completion mid July.

For those who made it all the way to the bottom, here is a publicly available (limited functionaity) fund analytics tool where you can compare many of the funds available across most Irish investment providers: http://funds.irishtimes.com/​

If you are interested in personal finance education, coaching, advice or technology, please reach out to me on my contact details below.

If you found this month's newsletter useful, feel free to share it with family, friends and colleagues. Constructive feedback is always welcome! If there's any personal finance topic you'd like covered please let me know.

Until next month.

Kind regards,

Ken Mason CFP®

Tel: (01) 539 2670

Mobile: 083 803 2008

Email: ken.mason@vantagefp.ie

www.linkedin.com

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