Rule 34

Rule 72, unlike rule 34 in every way

You’ll have to forgive the meme reference of ‘Rule 34′, because ‘Rule 72′ is a financial mathematics tool that helps you decide how long it will take for a sum to double at a certain rate of return.

How does it work? Easy, you just take the number 72 and divide it by the interest rate, so if you had a sum of €10,000 and were getting a 4% return, how long would it take for you to double your money?

Workings: 72/4 = 18 so it should take 18 years to turn €10,000 into €20,000. We can test this using financial maths by inserting €10,000 into the formula of 10,000*(1+r)^x which will take our principal and gross it up by the compounded series at 4%.

€10,000 x (1+0.04)^18 = 10,000 x 2.02581 = €20,258

So while it isn’t as precise as the known formula calculation, it’s very close given that we are discussing a term of 18 years. You can use the rule of 72 for any interest rate and it will get you a fairly close answer, although …

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RTE Morning Ireland: ask Irish Mortgage Brokers about homelessness

We were asked by Morning Ireland to discuss homelessness and to iterate our view that the removal of bedsits which were a source of housing for people with low to no incomes was a mistake. Focus Ireland shared the view and made important points about their work being more than just putting roofs over peoples heads.

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Irish Mortgage Brokers Oireachtas appearance discussed on RTE Radio 1

Our appearance at the Oireachtas finance committee was discussed on RTE Radio 1 on the day, it was about the proposal for mortgage lending caps. The meeting in question took about three hours but the clip the journalist chose was a very good reflection of our general position.

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Talking Money: RTE Radio 1 Be financially ready for Christmas!

This week on Talking Money on RTE Radio 1′s ‘Drivetime’ show Karl Deeter & Jill Kerby discussed different aspects of Christmas and how you can save money during the festive season. Sticking to the simple ground rules of lists, sensible shopping and a few other tips will help the average person go into 2015 with less of a financial headache than they otherwise might have had!

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RTE Radio 1: Talking Money with Karl Deeter & Jill Kerby

On talking Money on the 24th of November we looked at the issue of mortgage arrears and the role of the Insolvency Service in terms of finding ways to get solutions with guaranteed end dates. There is a mismatch between the goal of banks and borrowers and it is resulting in solutions that often don’t work.

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2014 irish loan number by quarter

Only 2,800 first time buyers would have been affected…

Patrick Honohan told the Oireachtas committee a few days ago that “2,800 mortgages issued in 2013 would have been affected by the proposed new lending rules”.

There are a few reasons why this is bad use of data. For a start, in 2013 in gross numbers there were 14,984 mortgages drawn down. If you strip out re-mortgages, switchers, top ups and investment loans to get an idea of the actual ‘home purchase’ group it comes down to 12, 875 which means 22% of all loans.

Secondly, 2013 is a low level year in lending, the charts below show the draw-downs and the number of loans, they are at anaemic levels and don’t show any sign of a credit bubble in a country that is still rapidly deleveraging.

How can this be interpreted as a rising risk? The rising prices are a separate issue, but that some wave of credit is ready to swamp down on limited supply denies the fact that most of the market is in …

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RTE Primetime: Homelessness crisis – a housing problem 24th November 2014

We took part in a panel discussion on homelessness and more importantly in the rise in rough sleepers. This issue was made worse by government policy and the reduction in low end housing at the same time as there was no investment in social housing.

We tried to point out that there are consequences to many policies and that were introduced such as rent allowance cuts in the past.

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RTE Radio 1: Talking Money, how to ‘beat the bank’ with Karl Deeter & Jill Kerby

Last week on ‘Talking Money’ Mary Wilson spoke to Karl and Jill about ways to ‘beat the bank’. In an era of low returns and higher costs on credit and use of the financial system beating the banks becomes an important aspect of finances because of the amount of interaction most of us have with banks.

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