Jill Kerby

QUALITY, NOT QUANTITY FOR CHRISTMAS ‘09

It is said that Christmas is for children and if you mean by that, the tree, the brightly wrapped toys and parcels, the panto and the general level of excitement, then I suppose it is.  But what I don’t ‘get’ about Christmas is the volume of worthless junk that our children receive, much of it laid out for the nation on the annual Late Late Toy Show. 

This year was no different.  With a few exceptions, practically every toy displayed required batteries or an inexhaustible supply of electricity, and even host Ryan Tubridy noted on more than one occasion that “this should keep them occupied for ten minutes” or comments to that effect. 

“The best toys are dolls for girls and guns for me,” my small son once told me, brandishing an old-fashioned cap gun and holster, but the politically correct can relax:  the child also got lots of Lego and Playmobile stuff – the greatest toys of all time – and zillions of books.  (He reads to this day and his children will hopefully get good use out of his book collection and the Playmobile castle that I packed away so carefully.)

The original present-givers, the Three Wise Men, definitely had the right idea in going for quality rather than quantity.  Gold, frankincense and myrrh were valuable and rare, the ideal gifts for a newborn king.  You might want to keep that in mind before you fork out hundreds of euro for (still) overpriced toys and gifts that will be quickly forgotten and discarded.  

Since I have an aversion to giving cash as a gift other than to a charity, I’m certainly not advocating handing over envelopes of money to anyone this Christmas.  But if you do have the resources to be generous and you want to give someone a money-based present that will last longer than the few weeks of this holiday, let me make a few suggestions that can be stuffed into a loved one’s stocking.  

You may have to make a bit of an effort in arranging some of these, but I can guarantee that your thoughtfulness will be appreciated and might even offset some of the anxiety that has been caused by the December Budget: 

FOR CHILDREN: 

If you’re a parent, grandparent or indulgent relative, open up a savings account for the beloved young child and either pay in a regular contribution that is arranged on-line or by direct debit. As the child gets older (s)he can be encouraged to save as well.  (Pop a little piggybank into the stocking to get them started.)

Open an investment fund for the child.  A regular monthly contribution (as little as €100 a month with Rabo Funds) should smooth out stock market volatility and if you have sufficient time, a well-chosen fund will hopefully, return a long term yield that exceeds the deposit rate and reward the risk you take.  Be careful about the fund you choose – I think gold and precious metals are a good play because of the way the money supply is being inflated, but some commentators believe prices are ready for a correction.  Oil and energy shares should also be a good long term buy and emerging markets, but until you familiarise yourself with the ins and outs and technicalities of the market, you can start them in a low risk cash or bond fund. 

Buy them some physical gold or silver – and then keep it safely stored.  Encourage them with a collection of coins or stamps or other small, affordable antiques.  The great collector and philanthropist Chester Beatty of the Dublin library/museum fame, bought his first rare snuff bottle at an auction in New York for a few dollars when he was ten. 

Stuff their stockings with some Prize Bonds.  You need to buy them in batches of €50 now, but there is a million euro tax free draw every month and every bond remains active until it wins. 

Anyone can ‘gift’ a child – who doesn’t even have to be a blood relative – up to €3,000 a year without it having to be declared to the Revenue.  This is a good way to disperse an estate early to low tax-free categories of beneficiaries without any tax implications and could go some way towards helping pay long term education fees.

FOR GROWNUPS:  

I can’t think of a better non-cash gift to give than gold or silver this Christmas in any form – a fund, an ETF, physical coins or even jewellery, but the latter needs to be pure gold (a la a Dubai souk) to expect a fair encashment value. The price is likely to fall back after reaching its €1,200 peak but goldbugs believe it has far to go over the medium term. 

Offer to pay for an investment course for someone interested in building a share or fund portfolio.  Check out Rory Gillen’s excellent investoRcentre.com for one day seminars and his weekly subscription newsletter. 

Older family members who want to play ‘The Wise Man’ or woman this Christmas could offer to help out younger members with offers to assist with some bill paying this year if they are struggling financially.  How about picking up their heat or electricity bill, a portion of their mortgage, school fees, or private health insurance bill.  A gift like this can go the other direction too. 

A wonderful gift for an older person who lives alone is a taxi-account.  Start a tab for them at your local taxi-company that you can clear every month directly from your own bank account. 

Make a financial donation to the recipient’s favourite charity. Both the home and overseas charities will send out gift cards to donors. 

And finally, how about adding some ‘how to’ finance books and magazines to everyone’s stocking this year? My favourite weekly picks are The Economist and MoneyWeek magazine, subscriptions to the UK financial newsletter, Fleet Street Letter and to DailyWealth, a UK trading letter and other Agora Financial letters like Capital & Crisis, S&A Resources and Daily Wealth.   A great read for the holidays is the updated Empire of Debt by Bill Bonner and Addison Wiggin of www.dailyreckoning.com fame and of course the ‘four angry (Irish) men’ collection from Penguin: Matt Cooper, Shane Ross, Pat Leahy and Fintan O’Toole’s books about the boom and bust years. 

And a Happy, Prosperous and Joyful New Year to all.