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A Tribute to Charlie Munger

In the vast landscape of finance and investment, certain figures rise above the rest, not just for their wealth but for their profound influence on the principles that govern success. One such luminary was Charlie Munger, a man whose name became synonymous with wisdom, rationality, and the art of intelligent investing.

Born in Omaha, Nebraska, Charles Munger came from humble beginnings. His early life was marked by a relentless pursuit of knowledge, which eventually led him to the University of Michigan, where he studied mathematics. Little did the world know that this young man would grow up to be one of the most revered figures in finance.

Munger’s journey into the world of investments didn’t follow a traditional path. After serving as a meteorologist in the U.S. Army Air Corps during World War II, he attended Harvard Law School and, later, entered the field of law. It was a twist of fate that brought him in contact with Warren Buffett, a meeting that would change the course of both their lives.

Charlie Munger’s name became inseparable from Warren Buffett’s as the two forged a partnership that would define an era of investment wisdom.

As Vice Chairman of Berkshire Hathaway, Munger played a pivotal role in the company’s success. His influence extended beyond finance; he became renowned for his wit, clarity of thought, and an uncanny ability to distill complex ideas into simple, actionable principles. The annual Berkshire Hathaway shareholder meetings, where Munger and Buffett share their insights, have become legendary gatherings, attracting investors and enthusiasts from around the globe.

Berkshire Hathaway, under the leadership of Warren Buffett and Charlie Munger achieved remarkable success and has become one of the most well-known and respected conglomerates in the world.

Berkshire Hathaway’s stock has consistently outperformed the broader market over the long term. The company’s success in generating substantial returns for its shareholders has made it a paragon of long-term investment.

The success of Charlie Munger and Warren Buffett was a testament to a combination of astute investment strategies, enduring principles, and a partnership built on mutual respect and shared values.

Munger’s wisdom extended beyond the stock market. His speeches and writings were rich with life lessons, emphasising the importance of lifelong learning, intellectual humility, and ethical conduct.

On November 28 th 2023 the investing world lost a colossus, may he Rest In Peace.

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Blueprint Financial Planning once again a finalist in Broker Expert Awards

John O’Driscoll company MD attended the Broker Expert Awards in Dublin’s Mansion House. A great achievement again to be a finalist in the prestigious investment broker expert category.

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Blueprint Sponsor Training Tops for Skibb Ladies Football Team

John O’Driscoll presenting new training tops to members of O’Donovan Rossa ladies football panel who recently won County and Munster honours.

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Blueprint Blog

Budget 2024 Explained

Today, Michael McGrath TD (Minister for Finance) and Paschal Donohoe TD (Minister for Public Expenditure, National Development Plan Delivery and Reform) delivered the Budget for 2024 to the Dáil. So what were the main takeaways?

Pension Changes

There were no changes in relation to private pensions in Budget 2024, although we expect some small pension changes to be included in the Finance Bill 2023 which is due to be published later this month.
 
Social Welfare Pensions
Budget 2024 confirmed that the State Pension (Contributory) Personal Rate will increase by €12 per week from €265.30 per week to €277.30 per week from January 2024.
 
Cost of Living “One Off” Support Payments
This year the Cost of Living Support payments will be as follows:

  • Energy credit of €450 across three instalments of €150 between the end of this year and next April
  • Double child benefit
  • Christmas bonus of social welfare payments
  • Once-off double payment of all social welfare payments in January
  • €400 lump sum to recipients of the working family payment
  • Those on the Living Alone Allowance will receive an extra €200 payment
  • Once-off payment of €400 to be made before Christmas to recipients of Carer’s Support Grant, Disability Allowance, Blind Pension, Invalidity Pension and Domiciliary Care Allowance.

Pensions – No Changes

In summary, there were no changes in Budget 2024 to the following:
 
Employer Pension Contributions
Corporation Tax relief will continue to be available on Employer Pension Contributions paid to an approved Occupational Pension Scheme subject to the overall maximum pension funding and benefit limits.
 
Employer Contributions to a PRSA
Last year the Finance Act 2022 removed the Benefit-in-Kind Charge on an Employer Contribution to a PRSA and there were no further changes in Budget 2024. There is currently no limit on employer contributions to an employee’s PRSA
(however, the overall standard fund threshold for an individual of €2m still applies).
 
Tax Relief – Employee Pension Contributions 
This relief will continue at the marginal rate of income tax but subject to the Age- Related Contribution Limits and Earnings Cap (and overall Revenue Maximum Approvable Benefit limits).
 
Employer Corporation Tax
The Corporation Tax rate remains at 12.5% for the vast majority of businesses trading in Ireland (with a minimum effective tax rate of 15% applicable from 1 January 2024 to large firms with group turnover of €750 million or more).
 
Retirement Lump Sum
Up to €200,000 remains tax-free and amounts from €200,000 to €500,000 will be taxed at 20%.
 
Standard Fund Threshold
The Taxes Consolidation Act (Chapter 2C of Part 30) imposes a limit or ceiling on the total capital value of pension benefits that an individual can draw in their lifetime from tax-relieved pension products, where those benefits come into payment for the first time on or after 7 December 2005. This is called the Standard Fund Threshold (SFT) and is currently €2 million. There are significant additional tax liabilities where the limit is exceeded.
 
We will need to wait until December 2023 to see whether Minister for Finance agrees to amend or increase the SFT from 2024 due to the cost of living crisis in line with an earnings adjustment factor (as provided for in the definition of “standard fund threshold” in section 787O of the Taxes Consolidation Act, 1997).

 
Income Tax
There was an increase of €2,000 in the income tax standard rate band for all earners, from €40,000 to €42,000 for single individuals and from €49,000 to €51,000 for married couples/civil partners with one earner and increase up to €33,000 (from €31,000) for two earners.
 
There was also an increase each of the Personal Tax Credit, Employee PAYE Tax Credit and Earned Income Credit by €100, from €1,775 to €1,875 and an increase of €100 in the Home Carer Tax Credit from €1,700 to €1,800 and an increase of €200 in the Incapacitated Child Tax Credit (from €3,300 to €3,500).
 
Universal Social Charge (USC)
The USC Rates & Bands from 1 January 2024 will be:
 
Incomes of up to €13,000 are exempt. Otherwise:
€0 – €12,012 @ 0.5%
€12,013 – €25,760 @ 2% (there was an increase of €2,840 to the ceiling for the 2% rate band)
€25,761 – €70,044 @ 4.0% (the rate is to reduce from 4.5% to 4%)
€70,045+ @ 8%
Self-employed income over €100,000 = 3% surcharge
 
The USC concession for medical card holders is being extended for a further two years to 31 December 2025. Reduced rates of USC apply to individuals who have a
full medical card and whose income is €60,000 or less per annum. The reduced rates of USC are 0.5% on the first €12,012 and 2% on the balance.
 
PRSI
Pay Related Social Insurance (PRSI) contribution rates will increase 0.1% from 1 October 2024.
 

Corporate Deposits
The current corporate exit tax rate remains at 25%, in line with corporation tax for non-trading income.
 
Capital Acquisition Tax (CAT)
There was NO increase in any of the CAT Thresholds and these remain as follows:
 
The Group A Threshold (gifts or inheritance from parent) remains unchanged at €335,000.
The Group B Threshold (gifts or inheritance from
brother/sister/aunt/uncle/grandparent/foster child) remains unchanged at €32,500.
The Group C Threshold (relationship other than A or B) remains unchanged at €16,250.
The rate of Capital Acquisition Tax remains at 33%.
 
Capital Gains Tax (CGT)
Capital Gains Tax rate remains at 33%.

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2023 Golf Classic Cheque Presentation

Pictured, John O’Driscoll presents a cheque for €9500 for West Cork Down syndrome raised from the Blueprint Financial Annual Charity Golf Classic.

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Blueprint Blog

Book Review: The Psychology of Money

“The Psychology of Money” by Morgan Housel is not your typical finance book filled with complex investment strategies or financial jargon. Instead, it delves into the intricate relationship between money and the human
psyche. Housel skillfully weaves together anecdotes, research findings, and practical wisdom to provide readers with a profound understanding of how our behaviors and emotions influence our financial decisions.

Understanding Financial Behavior

One of the book’s most compelling aspects is its exploration of the quirks and biases that affect our financial behavior. Housel introduces readers to concepts like loss aversion, recency bias, and the impact of storytelling on our perception of wealth. Through engaging examples and relatable stories, he illustrates how these psychological factors can lead to poor financial choices and offers insights into how to overcome them.

The Importance of Time Perspective

“The Psychology of Money” underscores the significance of one’s time perspective in financial success. Housel argues that the ability to think long-term is a critical driver of wealth. He emphasizes the importance of patience, compounding, and adopting a “get rich slowly” mindset. This perspective shift challenges the allure of get-rich-quick schemes and highlights the power of consistency and discipline.

The Role of Luck and Risk

Housel masterfully discusses the often underestimated role of luck in financial outcomes. He distinguishes between actions under our control and those determined by chance. Recognizing the influence of luck helps readers approach both success and failure with humility and a deeper
appreciation for the unpredictability of financial markets.

Simplicity Over Complexity

In an era where financial products and investment strategies grow increasingly complex, “The Psychology of Money” advocates for simplicity. Housel argues that a straightforward, well-understood approach to finance
often outperforms intricate schemes. This message resonates with readers seeking a more accessible path to financial well-being.

Embracing the Unpredictable Nature of Markets

Housel’s book provides valuable lessons on embracing the unpredictable nature of financial markets. He contends that instead of trying to predict market movements, investors should focus on managing their behavior, such as avoiding panic during market downturns and sticking to a long-term plan.

The Power of Stories

Throughout the book, Housel highlights the role of storytelling in shaping our financial decisions. He discusses how narratives, both personal and societal, influence our beliefs about money and wealth. By understanding
the stories we tell ourselves, readers can gain greater control over their financial behavior.

Conclusion

“The Psychology of Money” is a thought-provoking and immensely valuable book that transcends traditional financial literature. Morgan Housel brilliantly combines psychology, personal finance, and storytelling to illuminate the complex relationship between money and human behavior. Whether you’re an experienced investor or someone just starting to explore the world of finance, this book offers profound insights that can transform
your understanding of wealth and the choices you make. Housel’s engaging narrative style makes it an accessible and enjoyable read, making it a must-read for anyone interested in mastering the psychology of money.

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2023 Blueprint Annual Charity Golf Classic

Over 100 golfers competed in glorious sunshine at Skibbereen Goof Club at our 4th annual charity golf classic raising much needed funds for West Cork Down Syndrome Support Group.

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Blueprint renews GAA Gear Sponsorship

Blueprint Financial has renewed sponsorship of training gear for O’Donovan Rossa GAA in 2023.

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Extensive media coverage for Blueprint Financial Planning!

Blueprint MD John O’Driscoll featured in both the Irish Times and Examiner on March 31st discussing challenges affecting SME’s, the need for proper succession planning and how we should all have a sunny day fund.

You can read the Irish Times article here: https://www.irishtimes.com/special-reports/2023/03/31/blueprint-for-adjusting-financial-outlook-from-god-forbid-to-sunny-day/

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 Red Business Podcast Appearance

John O’Driscoll recently appeared on the Red Business podcast discussing financial planning for younger clients and Blueprint Financial Planning recently celebrating 5 years in business.

Listen Here: