Now that we've hopefully emerged from lockdown for good, life is getting back to some sort of normal. Now is not the time though to hit the pause button on the excellent exercise regime you may have built up while life was all a bit quieter. If you're keen to maintain an exercise routine, (30 mins of moderate activity five days a week is the recommendation for adults), wearable fitness trackers are a great way to monitor your activity. 

What are Wearables?

For anyone unfamiliar with the concept, fitness wearables are ‘smart’ electronic devices worn on the body (most commonly, as watches). They’re smart because they track your activity – counting how many steps you take in a day and measuring your heart rate via your pulse. There are lots of brands on the market, all offering a personalised analysis of your current health level, allowing you to set goals in order to get fitter. As technology continues to advance, wearables in turn are becoming more sophisticated, offering all manner of innovative health solutions, many of which will come in handy during lockdown. Here’s an overview of the top two contenders: wearables in turn are becoming more sophisticated, offering all manner of innovative health solutions.

Multi-Functional Fitbit

Fitbit is probably one of the most well-known activity trackers. Founded back in 2007, this American company has released several iterations of its famous wearable, the latest being the sleek Fitbit Sense. Lightweight, durable and water resistant to 50m, the Sense lets you tune into your body with features for stress management (particularly relevant these days), heart health and a built-in GPS system for those evening runs. Women can use it to chart their ovulation cycle (when used with the Fitbit app), and the Pay function even lets you make contactless payments if you’d rather not handle cash.

A Bite of the Apple

The tech giant’s latest wearable is the Apple Watch 6. Boasting a 44mm screen, 6’s interface is very user-friendly. What’s more, it comes with lots of health bonuses, like a blood oxygen monitor and irregular heart rhythm notification, each of which could potentially flag an underlying condition. Like Apple’s previous two iterations, 6 also has fall detection. Particularly useful for older users who may see family less due to lockdown, this function analyses wrist trajectory and impact acceleration, determining if a hard fall has occurred. This delivers an alert to the watch, allowing the user to easily call emergency services.

MyLife App

The MyLife* app by Irish Life connects to fitness trackers and apps feature. You can download the MyLife app by searching MyLife by Irish Life in the App Store or Google Play. Then add your fitness tracker by tapping Track > Add Tracking Devices/Apps. Irish Life customers can redeem their MyLife points against a range of Fitbits in the MyLife Reward Store. Tap the Rewards tab to find out more.

*MyLife is provided by Irish Life Financial Services. MyLife is not a regulated financial product

With our BeneFit plans, you can claim €50 back on selected fitness wearables. Find out more here.

We are fortunate to work with quite a number of clients who have reached or are well on the road to financial independence. This is a great place to be, where any money worries fade into the background and your desired future lifestyle is achievable, except of course where the assumptions underpinning the plan are ignored.

However we find with most such clients that their goals are clear and realistic, they are comfortable to work within any expenditure constraints as agreed and outlined in the plan, and they don’t undermine the plan by irrational investment decisions. They’ve worked hard to achieve financial independence and are not now going to throw it all away. As our clients age and become parents and in time grandparents, some of the focus of the plan moves away from wealth generation and towards their accumulated wealth funding their lifestyle in retirement, and ultimately towards wealth transfer to their loved ones. And this is where some people need to be careful and require gentle but firm guidance.

Of course we are huge supporters of helping you to transfer your wealth to your loved ones in the most tax efficient way possible, and this is why we will always discuss and action this important area with you as part of your financial plan. But this transfer should only happen at the right time. We believe that it is so important to look after yourselves first.

Under Irish tax laws, any individual may receive a gift up to the value of €3,000 from any person in any calendar year without having to pay Capital Acquisitions Tax (CAT). This means that you may take a gift from several people in the same calendar year, and the first €3,000 from each disponer is exempt from CAT – it doesn’t impact your CAT thresholds. This is a really valuable tax benefit and a very useful way of transferring wealth to your loved ones… when you can afford it.

We became aware of a situation recently of a couple (not clients of ours) who went beyond the spending assumptions in their financial plan, which hurt them down the road. The problem was that it felt ok, because their increased spending was actually just gifting to their kids and grandkids, just earlier than planned.

Let’s call this couple Paul & Anne. Both had successful careers, Paul sold his business in his early 50’s and continued to do a small amount of consultancy work until he fully retired about a decade later. The proceeds of the business sale were effectively his pension fund. Anne had a pension from her employment in an insurance company where she had worked. They were very comfortable and retirement promised a nice lifestyle for the rest of their days, much of it to be spent in their holiday home in Portugal. Until their generosity got in the way…

Paul and Anne were young parents to three children (each of whom are now married themselves) and were ultimately grandparents of 8 grandchildren by the time they were in their 60’s. Life was really great! As Paul & Anne’s three children were buying houses and establishing themselves, Paul and Anne wanted to give them a dig out. The problem was they went significantly beyond the spending assumptions within their financial plan…

They decided to gift each of their children and their spouses, and also very generously each of their grandchildren the maximum allowed under the small gift exemption. This was €3,000 from each of Paul and Anne to 14 people - €84,000 p.a. in total. All of it tax free, but a significant amount each year.

This continued for ten years or so, running down their cash and then unfortunately Paul had a car accident. Between some changes needed to their house and expensive care after the accident, they needed a lot of cash. They still had some left, their children helped out a little but the difficult decision was taken to sell the house in Portugal in order to free up cash. This was really unfortunate, as it was still going to be possible to use the holiday home as Paul continued to recover. It was also avoidable. Thankfully Paul has made a good recovery, they just miss their "home from home” in Portugal…

When we consider gifting strategies with our clients, we examine your likely future cashflow for each year of your life, and your capacity for your generous gifts, without impacting your own lifestyle first. It’s similar to the safety announcements on airplanes, “Put on your own oxygen mask first”. And then we test the plan against some potential scenarios – for example what if you get sick, one of you passes away, or the investment assumptions are not achieved? Does this undermine your financial capacity for generosity?

Look after your family, but help them by looking after yourself first. As the renowned author and motivational speaker Simon Sinek said,

“Putting yourself first is not selfish. Quite the opposite. You must put your happiness and health first before you can be of help to anyone else.”

It’s not an easy ride for investors today, when you consider the volatile backdrop facing you,

• Covid-19 still hanging over us
• Economic indicators challenging as Ireland seeks to recover ground lost during the pandemic
• A market fall of >30% in 2020, followed by a very strong recovery
• Negative interest rates on offer in the Irish banks
• Brexit and the Northern Ireland protocol – where will this go next?

Any one of these on their own would appear like a big deal. But all of them together – wow!

It can be difficult to remain calm with all this swirling around. But that is exactly what’s needed here – to remain calm. And it’s our job to help you do that. We’ve seen these situations before, where the sense of needing to take action, even any action at all seems to be right course. But it’s not, instead it’s important to follow the well-worn path of staying focused on your plan. Here are a few thoughts to help you to stay committed to that plan.

Remember your time horizon

Short-term volatility is just that, short-term. Your investment time horizon will typically be more than 10 years, maybe 40 or 50 years if you are looking at your pre and post retirement timeframe. A blip in the market is just that. The S&P500 fell 34% between 19^th February and 23^rd March last year. Lots of people panicked and bailed out of the markets at the end of March, and missed the rebound that followed over the remainder of 2020 and indeed into 2021. Thankfully our clients didn’t, you stayed focused on your plan and your long investment time horizon.

Focus on what you can control

All of the headwinds mentioned at the top of this piece are outside of your control. But what you can control is having clarity of your goals, your timeframes and your willingness to accept risk. With our help, you can then build a plan and a financial portfolio to help you achieve your objectives. Focus on these things within your control, get them right in order to achieve your objectives. The other factors are unhelpful noise. And then together we’ll regularly review your plan and your portfolio to ensure it continues to meet your needs. 

Aiming for higher returns increases volatility (this is not a bad thing)

When you are investing over a long timeframe, investors are often willing to take more risk with the aim of achieving higher returns. In this scenario, your carefully crafted investment portfolio will likely contain more risk assets such as equities. This will in turn increase the short-term volatility of returns. This is not a bad thing; volatility is simply an expected feature of higher risk asset classes. As an investor, you need to expect volatility and be comfortable with it. Otherwise, you should consider reducing the risk within your portfolio, and also your likelihood of achieving higher returns. 

Be realistic

Of course we would all love to achieve double digit positive returns every year. But this is simply unrealistic, certainly without taking extreme levels of risk, which in turn increase the potential for significant downwards swings. Don’t build your plan around unrealistic and unachievable expectations. Instead build a plan that can be realistically achieved over the longer term in usual market conditions, with all their highs and lows. Then review the plan regularly to ensure it remains the most realistic way of achieving your goals.

Leave emotions at the door

As probably the world’s greatest investor Warren Buffett once said, “Be fearful when others are greedy, be greedy when others are fearful”. The point he is making is that markets are often driven to extreme levels by irrational exuberance. This is demonstrated by people piling in and buying as markets soar upwards (greed), and by people selling out of markets that have fallen sharply (fear).

Of course Buffett was noting the contrarian opportunities. Instead of succumbing to the emotions of greed or fear, people should only consider selling when markets have had a good run and are now expensive, or buying in when markets have fallen and now are cheap.

Yes, the investment world is a little uncertain at the moment. But the sun will rise tomorrow and the day after. Stick to your long-term plan and increase your chances of achieving your goals.