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The Journal
6 days ago
- Business
- The Journal
Planning a home renovation? Here's everything you need to know
WHILE HOME RENOVATIONS are often a great source of excitement, we all know that such a major financial outlay is never a decision to be taken lightly. We want to get the most out of our homes, whether that means an extension, an attic conversion, or transforming any of the rooms where we spend so much of our quality time. If you're currently considering putting a significant chunk of money towards a home renovation, you'll know that there are plenty of factors to consider before you feel comfortable with your decision. One way to go about financing home renovations is with an An Post Money Home Improvement Loan, which offers customers Ireland's best fixed rate on loans from €20k-€30k*. Paul Merriman, the financial advisor behind Ask Paul , also has some essential tips for how you can finance your dream home while maintaining healthy spending and budgeting habits. Financial advisor Paul Merriman What is the smartest way to go about budgeting for home improvement, such as renovations? Start with your 'must-haves' and 'nice-to-haves.' Be realistic about what your budget will actually cover. That means getting at least three quotes and factoring in hidden costs like skips and permits. Always build in a contingency buffer of at least 10–15%. Don't make guesses: use a proper budgeting spreadsheet or app that breaks down materials, labour, and timelines. If it doesn't fit on paper, then it won't work in reality. What are the advantages of a Home Improvement Loan from An Post Money, compared to a loan from a bank or credit union? An Post Money Home Improvement Loans are unsecured personal loans, meaning you don't need to put up your home as security like a remortgage might. They're also very transparent with fixed rates, making it easier to budget your repayments. Plus, the application process is simple and fast, ideal if you've got contractors lined up. It's peace of mind without the red tape. What are the pitfalls that homeowners need to be most wary of when paying money for significant work being done on the house? Scope creep is a killer. That's when you start off replacing the kitchen cabinets and suddenly you're rewiring the whole house. Advertisement Also, beware of not having a written contract. It should clearly outline costs, timelines, and payment terms. Never pay large amounts upfront. What sort of questions should homeowners be asking themselves before seeking a loan for doing up the house? Is this renovation adding value or just adding cost? Can I realistically afford the repayments over the full loan term? Will this work improve how I live in the home every day? Have I explored all options like savings, grants, supports? Am I taking on debt for lifestyle reasons or actual home improvement? How can our readers keep their budget on track during a big home renovation? What tracking methods? Use a simple Excel or Google Sheet tracker and log every expense, no matter how small. Group them by category (materials, labour, tools, fees). Review weekly and cross-check against your original budget. Is it easy to find out how much more my house will be worth after the works are completed? Talk to a local estate agent before you begin. They'll give you a ballpark figure on what similar upgraded homes in your area are selling for. Focus on kitchens, bathrooms, energy upgrades, and extra living space as these tend to give the best return. Remember, some works are about lifestyle value not resale value, and that's okay too, if it makes your home work better for you. Is there a best practice when it comes to paying contractors? Yes, always agree a payment schedule in writing before any work starts. Typical stages are deposit (no more than 10%), mid-point payment(s), and final payment after work is completed and snagged. Avoid cash payments where possible. Use a bank transfer or card for traceability. And don't pay the final instalment until you're 100% satisfied. That's your leverage if anything needs fixing. Enjoy Ireland's best fixed rate on Personal Loans from €20k-€30k with An Post Money*. *Information correct as of 14 May, 2025 (source excluding green loans). Lending criteria T&Cs apply. Rate is dependent on your financial profile and credit history. An Post acts as a credit intermediary on behalf of Bankinter S.A., who provide loan and credit card services and facilities. An Post trading as An Post Money is authorised as a credit intermediary by the CCPC. Bankinter S.A., trading as Avant Money, is authorised by the Banco de España in Spain and is regulated by the Central Bank of Ireland for conduct of business rules.
Yahoo
16-05-2025
- Business
- Yahoo
These $5,000 bonds can help you fix a stock-heavy portfolio
Most coverage of investing in the financial media centers on the stock market. But some investors want a stream of income and some may have felt during this year's stock-market decline that they had been overly focused on the S&P 500. Adding bond-market exposure to an investment portfolio can address both of these concerns. But let's discuss your portfolio allocation for a moment. 'My wife says no': I'm 57 and ready to retire next year on $7,500 a month. Who's right? My wife and I paid off my stepdaughter's $415K mortgage in exchange for her house, but it's now worth $310K. Should we sue? My second wife says her 2 kids should inherit our estate, but I also have 2 kids. Is that fair? My husband and I spend more money on our daughter and her family than on my single son. Do we compensate him? 'We're not wealthy': My niece is marrying out of state and she has a honeymoon fund. Is that cheeky? Through Tuesday, the S&P 500 SPX had returned 0.5% for 2025 with dividends reinvested. That was quite a recovery, considering the large-cap U.S. benchmark stock index had been down 15% through April 8. How did you feel when the market was near its bottom last month? This is an important question for investors to address right now. In hindsight, we know that the best thing for an investor in an S&P 500 index fund to do after the decline that followed President Donald Trump's 'liberation day' tariff announcements on April 2 was nothing. But if you had regrets at the bottom on April 8, and wished your investment portfolio was less highly concentrated in the largest U.S. stocks, the market's recovery might make it easier for you to start altering the mix. Paul Merriman recently explained that investment-portfolio performance over the long haul depended on the allocation to stocks and bonds. His work, incorporating data going back to 1970, might help you to find a balance between risk and performance potential, which can make it easier for you to tolerate sharp market declines. And now let's get back to the income objective. Many investors prefer to have money flowing in continually. It turns out that for long-term investors, high-yield bond indexes have performed much better than indexes of investment-grade bonds. For taxable bonds, we covered this phenomenon in this article featuring an interview with John McClain, who co-manages BrandywineGlobal High Yield Fund BGHAX BGHIX and the BrandywineGlobal Corporate Credit Fund BCAAX BCGIX. Before discussing tax-exempt bonds, we need to review some terminology: Tax-exempt municipal bonds are only attractive sources of income if your top graduated federal income-tax rate is high enough to be worth avoiding. If you are adding bond-market allocation within a tax-deferred retirement account, such as an IRA, 401(k) or 403(b), municipal bonds aren't appropriate. Within the high-yield space, newly issued bonds tend to be sold directly by underwriters to institutional investors. The bonds are typically issued in denominations too high for most individual investors. Another reason that most high-yield investors are professional money managers is that these bonds, by their nature, have a higher risk of default — missed interest or principal payments by the borrowers. So the way to invest in high-yield bonds is through bond funds managed by experts who can analyze credit risk and pricing opportunities. Here is how you can do your own taxable-equivalent calculation in the current market — it is only a quick example, and you would need to look more closely at the yields of any funds or individual bonds you consider investing in. As of the close on Tuesday, the Bloomberg Municipal Bond High Yield Index had a yield-to-worst of 5.84%. That was up from 5.52% at the end of last year. You can review federal tax brackets for 2024 at this IRS website. The highest graduated federal income-tax rate for a married couple earning between $201,050 and $383,900 was 24%. We are leaving state and local income taxes out of this discussion. So if we divided the 5.84% tax-exempt yield by 0.76, we have a taxable-equivalent yield of 7.68%. In comparison, the Bloomberg U.S. High Yield Corporate Index had a yield-to-worst of 7.42%. So in this example, the investor would receive more interest after tax with the municipal index. John Miller oversees the $6.1 billion First Eagle High Yield Municipal Fund, which was known as the First Eagle High Income Fund prior to Dec. 27, 2023. That is when the fund's main objective was changed to its current one of providing dividend income that is exempt from federal income taxes. Capital appreciation is a secondary objective. The First Eagle High Yield Municipal Fund has two main share classes. Class A FEHAX has annual expenses of 1.13% of assets, however, First Eagle is limiting the expenses to 0.85% at least until Feb. 28, 2026. The Class I shares FEHIX have annual expenses of 0.91%, currently limited to 0.60% at least until Feb. 28, 2026. The Class A shares quote a 30-day SEC yield of 5.08%, while the Class I shares had a 30-day distribution rate of 5.45% as of April 30. These yields are net of expenses and meant for comparison with those of other funds. The First Eagle High Yield Municipal Fund makes monthly distributions, which have been running at $0.036 a share over the past several months for Class A. That makes for an annualized distribution rate of 5.19%, based on Tuesday's closing price of $8.33 for the Class A shares. For Class I, monthly distributions have been running at $0.038 a share for the past several months. That distribution rate translates to an annualized distribution rate of 5.48%, based on Tuesday's closing price of $8.32 for the Class I shares. As of March 31, the First Eagle High Yield Municipal Fund's portfolio had 8.2% in cash. Excluding the cash, investment-grade bonds made up 19.8% of the fund as of March 31. The rest of the bonds were unrated or had ratings that were below investment grade. Back in September, Miller talked about how a municipal bond fund manager could take advantage of market disruptions during times of stress by having 'a combination of cash and highly liquid securities, and maybe a cushion above it, [for] reasonably good preparation for that next downcycle and to cover outflows.' Since the fund's strategy was changed to its current one in late December 2023, here is a comparison of total returns from the end of 2023 through Tuesday for its Class A and Class I shares with those of the Bloomberg Municipal Bond High Yield Index and the Bloomberg Municipal Bond Index, which is comprised mostly of investment-grade bonds. From the end of 2023 through Tuesday, the fund's Class A shares returned 10% with distributions reinvested, compared with a return of 5.27% for the Bloomberg Municipal Bond High Yield Index and a return of 0.17% for the Bloomberg Municipal Bond Index. A look at the long-term performance of the two Bloomberg indexes shows how high-yield municipal bonds have outperformed investment-grade municipal bonds. Here is a comparison of long-term returns for the two indexes: Index 3-year return 5-year return 10-year return 15-year return 20-year return Bloomberg Municipal Bond High Yield 14% 24% 50% 112% 146% Bloomberg Municipal Bond 9% 5% 24% 55% 93% And here are the average annual returns for the same periods: Index 3-year avg. return 5-year avg. return 10-year avg. return 15-year avg. return 20-year avg. return Bloomberg Municipal Bond High Yield 4.5% 4.4% 4.1% 5.1% 4.6% Bloomberg Municipal Bond 2.8% 0.9% 2.2% 3.0% 3.4% Source: FactSet According to Miller, the municipal bond market is robust. 'Last year we had record issuance. This year, first-quarter issuance was 15% or 16% higher than last year,' he said. That shows not only the need for municipal financing for infrastructure projects around the U.S., but that there is sufficient demand for the new securities. He also said that the market's reaction following Trump's slew of tariff announcements on April 2 was even harsher for municipal bonds than it was for U.S. Treasury bonds, because of lower liquidity for municipal bonds and 'particularly outflows from muni ETFs [exchange-traded funds].' While the First Eagle High Yield Municipal Fund's monthly distributions have remained stable this year, Miller said 'earnings inside the fund are growing because of the opportunity set' brought about by price declines. Back in September, when asked to discuss specific bonds held by the First Eagle High Yield Municipal Fund, Miller focused on several bonds issued to support the construction and operations of the Brightline railroad in Florida. During the recent interview, Miller listed five investment-grade bonds held by the fund that he said were 'really attractive.' The issuers are the Los Angeles Department of Airports to support the Los Angeles International Airport and the New York Transportation Development Corp. to support the redevelopment of two terminals at John F. Kennedy International Airport. The five bonds are exempt from federal income taxes and state and local income taxes for the states in which they were issued. The two airports 'have tremendous long-term strategic value and days' cash on hand, traffic and landing fees and all those earnings airports make,' to support bond payments, he said. 'With airports, you have diversified exposure to all the airlines and they are so important to all our transportation infrastructure.' Trading activity for municipal bonds isn't minute-by-minute as it is for stocks of large companies. These five bonds have been trading at premiums to par. They were issued in $5,000 denominations, which means they are far easier for individual investors to consider than most high-yield municipal bonds. Here is some information from FactSet about the bonds, based on the most recent closing prices when checked early Thursday, with yields-to-worst, which are defined above. Call dates are included and all five can be redeemed by the issuers at 100 on or after the call dates. CUSIP Description Call Date Maturity Date YTW Most recent closing price 5444453D9 LAX 5/15/2035 5/15/2055 4.924% 104.492 5444453S6 LAX 5/15/2035 5/15/2050 4.921% 102.561 650116HM1 JFK Terminal One 6/30/2033 6/30/2054 5.405% 100.607 650116HQ2 JFK Terminal One 6/30/2033 6/30/2060 5.345% 100.999 650116HW9 JFK Terminal Six 12/31/2034 12/31/2060 5.414% 100.619 Data source: FactSet as of 8 a.m. ET on May 15 The LAX bonds are rated AA by S&P and Aa3 by Moody's. The JFK bonds are rated BBB- by S&P and Baa3 by Moody's. The JFK bonds have lower ratings and higher yields because that airport 'has more construction going on,' Miller said. 'For investment-grade paper, these are some of the highest yields in 20 years,' he added. Miller went on to say that he 'would not write off the year, in terms of performance for this asset class, this soon. May 1 is a 'big date for coupon payments and sinking funds,' he said, with the latter term referring to pools of money set aside by issuers to make sure interest and principal payments will be made. When asked about particular risks from trade-policy uncertainty, Miller said: 'Maybe we will see the hard data begin to soften. The economy has a history of being more resilient than expected.' But municipal bonds 'tend to hold up during a recession,' he said. The retail buy-the-dip move paid off. What that crowd of investors is doing now, according to JPMorgan. These $5,000 bonds can help you fix a stock-heavy portfolio How Europe's best investor picks stocks including GE Aerospace and Microsoft I have $50,000 in credit-card debt after my divorce, but received $30,000 after a car wreck. Do I buy a used Lexus? 'I am scared to death that I'll run out of money': My wife and I are in our 50s and have $4.4 million. Can we retire early? Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
The Journal
23-04-2025
- Business
- The Journal
Managing communion and confirmation cash: How to give your kids a strong financial foundation
DECIDING WHAT TO spend your communion and confirmation money on is a rite of passage for many Irish children, and the gifting of money remains a strong cultural tradition to this day. While clothes, video games and smartphones will certainly be a major temptation for most kids, sacrament season is also an opportunity for them to start saving and building strong financial habits from an early age. A child's first communion or confirmation might also be the perfect time to set up an An Post Money Mate account , which is a current account, debit card and app specifically for kids aged 7-15. The An Post Money Mate account allows parents to see how much money is in the account, where it is being spent and set spending limits. The An Post Money Mate app is also there to help kids under 16 get used to managing their money, and allows parents to block ATM, shop or online use. Paul Merriman, the financial adviser behind Ask Paul , has some other essential tips for how parents can use communion or confirmation cash as an opportunity to help teach their kids essential skills, including financial literacy and making smart choices when it comes to spending their money. Paul Merriman of Financial Advice by AskPaul Why is it important for children to learn the value of money early in life? Learning financial lessons early in life helps children understand that every euro has a purpose. It builds a foundation of discipline, responsibility, and appreciation for hard-earned money. When kids grasp that money isn't limitless, they develop a respect for budgeting and saving, which sets them up for sound financial decisions throughout their lives. Advertisement What are good financial habits to start your kids off with? Start simple: encourage saving a small portion of any money they receive and explain the idea of budgeting through weekly or monthly allowance. Using tools like the An Post Money Mate can help them visualise where their money is going. Teach them to divide their money into different pockets for spending and saving. These habits foster confidence and instils practical financial management skills early on. Is it a good idea to introduce financial goals to children? Absolutely. Setting even small financial goals teaches children the value of planning and delayed gratification. Whether it's saving for a toy or a special outing, putting a goal in place encourages kids to think ahead and make thoughtful choices. This practice not only makes saving fun but also builds a mindset that balances short term desires with long-term benefits. What should I do if my child wants to spend all their communion money in one go? It's natural for kids to want immediate gratification, so discuss the benefits of saving some money for future needs or even for a special treat down the line. You might suggest splitting the money into portions. For example, some of the money could be used for instant fun while the remainder is fenced off for saving. This approach shows them that managing money isn't all about restriction, but about making choices that provide long term rewards. Is bringing my kids shopping with me to explain price tags etc a good option, how should we go about this? Yes, taking your kids shopping is a fantastic hands-on learning experience. Use real world scenarios to explain how price tags work, compare costs, and discuss what makes one product a better value than another. Let them handle small transactions under your supervision. This practical exposure makes abstract concepts tangible and by asking questions and exploring choices together your kids will gain a deeper intuitive understanding of money management. To learn more about an An Post Money Mate account, visit the An Post Money website . Terms & Conditions apply. An Post is authorised by the Minister for Finance to provide payment services and is regulated by the Central Bank of Ireland in the provision of such services
