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2020 Vision & ‘Ask Me Anything’! Blog 163

informed decisions blog

2020 Vision & ‘Ask Me Anything’! Blog 163

23rd December 2020

Paddy Delaney


This week, in the final article of 2020 I am sharing two quick concepts to help you, and we’re getting stuck into some of our Podcast Tribe Members ‘Ask Me Anything’ questions (exclusively to members – you can Join here).

Where’s Your Focus?

As a fan of Stephen Covey’s work and insights – his Circle of Influence framework whcih addresses the topic of where we place our attentions and efforts has been particularly relevant this year.

Covey suggests that all things in our live can be categorised into two sections; things that are in our Circle of Influence and things that are in our Circle of Concern. Proactive people focus predominantly on their Circle of Influence – the professional & personal aspects of their lives that they can control and influence directly.

He suggestst that proactive people spend little or no time in the Circle of Concern – the professional & personal aspects of the world which may of course be of interest and concern, but over which they have no control of – which they cannot influence, improve, adjust or change in any meaningful way.

I love the simplicity of this framework, and in a rare pulpit moment, I believe it would benefit all of us. While I drift in and out of the Circle of Influence, focusing on the things I can shape and influence helps me both professionally and personally. It helps me decide where to focus my time, money and energies; invariably on things that I CAN control – and which move me closer to the things that I have identified as of importance to me, our family and our business.

This simple framework is useful in our financial lives as it is in all other aspects. If you want to achieve certain goals, outcomes and results in your long term investing or retirement planning, which of the following two behaviour sets is most likely to give you the result you seek, A or B:

A) Looking at your investment account values every day – worrying about the markets – looking at Tesla share values and wodering if you should invest 30% of your financial assets in it, because everyone else seems to – looking enviously at your neighbours new car and deciding to buy a new one yourself, even though your existing car is perfectly functioning – buying shares when they go up because that’s what you read in the papers at the weekednd – subsequently selling shares when they fall – looking at the overall market valuations and deciding that you know what nobody else on planet earth knows as fact – stopping your contributions or moving to cash because you believe that ‘this time it’s different’ (it’s not)


B) Focusing on developing your skills and earning potential – spending less than you earn and saving the balance – investing in a manner that gives you the returns of the market and which has delivered all the returns you need to achieve your goals – ensuring your tax/performance/fee strategy is aligned with your plans and optimal for you – refining your plan based on your own priorities, in conjunction with the loved-ones, and doing what your plan requires of your – tuning out the media drivel about markets or values – focusing on what you can control

It will be obvious to us all which will most likely deliver the results we seek, and which will lead to less stress, less anxiety, more time and more pleasure.

It will come as no surprise when I share that the most successful people that I have encountered personally, and have learned about through reading, have all been far more B than A! They focused on their own stuff, and that of those that are close to them – the rest is just noise. If you notice yourself displaying ‘A’ tendancies – perhaps reflect on them and consider if your time and energy could be better invested elsewhere, on things that will actually move the dial forward for you.

Sermon over!

2020 Vision

In Blog 156 we got very philosophical and invited you to consider what ‘day’ of the ‘week’ you are in – I received a few emails from people who were close to the ‘weekend’ and had their dancing shoes ready, which is great – here’s hoping the dancefloor is open and ready when you are!

If we stretch things even a little, and instead of 1 week, we assume that your financial life spans an entire year – 2020 is kinda precisely what most financial lives look like from an investing perspective. In terms of volatility, in terms of committing to action, accumulating wealth and investing it regularly and consistently, irrespective of where market values are at. In terms of staying the course – it is a prime example.

During all of our working lives we will hope to save and invest a chunk of our cash on a monthly basis – we recognise that the values of markets will plumet on average of every 5 years, and annually we’ll see swift annual declines – despite (or indeed due to) these periods of volatility, and our ability to stick to our portfolio and our plan – we reap the rich rewards at the end when we draw on our savings.

If you have stuck to your plan – invested regularly, using a well diversified Global Portfolio (not a pure S&P 500 – which has streaked due to Elon & Jeff & Tim’s handy-work!), your portfolio is up over 12% – while the portfolio itself is up ‘only’ a nose over 4% in that time. Why is the regular accumulator up 12% yet the portfolio itself is only up 4%? Because you maintained your plan – you invested every month – buying into your portfolio during those inevitable temporary declines – only to now be ‘retiring’ and in a position to take your 25% tax free chunk and start drawing your income from a sensibly diversified portfolio over the next hopefully 3 or 4 decades!

The Podcast Tribe Members Only Section:

This months ‘Ask Me Anything Questions’ session we answered the following questions for our members. Not a member yet? Join here today.

Listener’s AMA Questions

The Podcast Tribe Members Only Section:

This months ‘Ask Me Anything Questions’ session we answered the following questions for our members. Not a member? Join here today.

1) Hi Paddy, are there executive pension plans available in Ireland that allow you to invest in low cost ETFs? I am trying to limit the fees going to management fees while taking advantage of the market rising.

2) Hi Paddy, I currently have a lump sum invested through a traditional institution invested in funds. (1.5% AM fee). I am considering opening a DeGiro account to avail of low cost fee’s and to buy ETF’s. What would be the best way to do this – lump sum transfer or dollar cost averaging over time?

3) Hi Paddy, Have listened to your episode on the topic but am really undecided on over-paying the morgage versus investing. Any thoughts to help?

4) I have been saving maximum portion of salary to pension for years now – is there any way to compare how the funds have performed versus others in the market? Regards, Eoin

5) In Blog 160 you mentioned that if you invest in ETF’s on a monthly basis, you will need to do deemed disposals on a monthly basis too. I sent a question to Revenue a few weeks ago on this but there is still no response. Can you clarify which scenario is correct (because I worry the right answer is also the hard answer so I want to be doubly sure!): Each month I invest some of my salary into ETF’s. After 8 years, will I have to: A) do one deemed disposal of everything bought in the last 8 years? OR B) each month, do a deemed disposal for the ETF I bought 8 years ago?

Oh, and Tribe members get to hear me BUTCHERING a Bing Crosby Classic!!

To you dear reader – a most hearty well wishes for your Christmas Break – and I look forward to sharing more earth-shattering insights with you in 2021!

You’re a legend.

Paddy Delaney QFA RPA APA

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