Investment Advice

BluE-WinG

I need some advice, Id like to save €500-800 monthly but I dont know HOW to do this profitably in Ireland so that my money grows at a rate higher than inflation.

I have an SSIA with the max amount put in each month - so thats out.

Canada Life have a nice range of investment opportunities that look quite profitable, has anyone got any success/failure stories about this crowd?

Is there any bank that offers interest rates higher than 2% Per annum?

Credit union isnt useful either as I hate loaning money.

Anyone got any ideas? Im looking to earn 5%-8% Interest per year - In UK you can pick up 5% in a long term bank account - Can you do that here in Ireland?

Any advice would be helpful.

Victor

€500-800 isn't a lot of money in investment terms. Practically I found the best way to save was to simply set aside the money in a second bank account, with less ability or likelyhood of spending it. At the moment you simply cannot get a return of 5-8% on that small an amount of money. All you can do is shop around and get the lowest charges -v- highest interest rates.

eclectichoney

anglo irish have a new 21 day notice deposit account giving 2.5%, or a 7 day notice account giving 2.3% min balance 2000.

BluE-WinG

Sound advice Victor - I'll open another bank account and do a Standing order out of my current account.
Does anyone know how to get a bank account with no ATM card (So I dont have to waste 10 quid on an ATM card I wont use?)

Do Anglo Irish have any longer deposit accounts (90 Days+) ?

RainyDay

Originally posted by BluE-WinG
I need some advice, Id like to save €500-800 monthly but I dont know HOW to do this profitably in Ireland so that my money grows at a rate higher than inflation.

As a first step, you need to decide your investment timescale & risk profile, as these will have a major impact on the options available to you. How long are you prepared to lock away the money for? Do you have other rainy day money (pun intended) that you can draw on in case of emergency, or is this fund your emergency backup? Are you prepared to risk your capital in order to achieve higher returns?

Originally posted by BluE-WinG
Canada Life have a nice range of investment opportunities that look quite profitable, has anyone got any success/failure stories about this crowd?

Are you sure you wont to get into equity investments? Most advisors would recommend a 5-year + timescale for equities, and of course you will be putting your capital at risk. Also, pay lots of attention to the charges on these funds - some of which will cream off up to 5% of each of your contributions for themselves.

Originally posted by BluE-WinG
Is there any bank that offers interest rates higher than 2% Per annum?

Check out the Askaboutmoney.com Best Buys list for details of best deposit accounts available at present, but you won't get anything like 5% to 8% with a deposit account.

Originally posted by BluE-WinG
Credit union isnt useful either as I hate loaning money.

I'm not sure what you mean by this. Yes, the CU will loan out your money to other members, just as the bank will loan out your money to other borrowers. There have been no bank or CU 'crashes' in living memory in Ireland, so if you put your funds on deposit with either a bank or CU, your funds are quite safe.

Some CU's offer quite high dividend rates (e.g. up to 5%) - The drawback is that the dividend rate is not set until the end of the year, so you don't know what you are getting in advance - so it is a bit of a gamble.

Originally posted by BluE-WinG
Anyone got any ideas? Im looking to earn 5%-8% Interest per year - In UK you can pick up 5% in a long term bank account - Can you do that here in Ireland?

Based on Channel 4 Teletext page 538, the highest rates on offer at the moment are in the low 5% region (i.e. 5.25% for 1 year) - I don't think you will get much higher than that on a deposit account. Yes, Irish (or more specifically Eurozone) rates are a point or two lower than that again.

Originally posted by BluE-WinG

Any advice would be helpful.

Check out the Askaboutmoney.com Guide to Savings & Investments to get a better idea of the options available to you.

BluE-WinG

Thanks RainyDay.

What I meant about the CU was that I have no interest in ever taking a loan from them - and People have told me the best way to get a loan is to use a CU - They arent good for much else is what I've been told

Thanks again.

Victor

Originally posted by BluE-WinG
I need some advice, Id like to save €500-800 monthly .

Ooops, just saw the word monthly. Are you availing of the tax break a pension affords (you can't touch the money until you retire / are about to die)?

BluE-WinG

Originally posted by Victor
Ooops, just saw the word monthly. Are you availing of the tax break a pension affords (you can't touch the money until you retire / are about to die)?

Nope I'm not... CAN I avail of this??

Victor

Essentially, you set aside the money for investment until you retire (normally 60-65, but in the case of debilitating illness may be earlier). Effectively this money is treated as postponed income and you only pay tax when you avail of the money. Unlike company schemes, the money always remains yours. When you retire, you need to set a certain amount aside to maintain an income (e.g. by buying an annuity or similar scheme), but you can draw down a lump sum. Up to age 30 there is a limit of 15% of annual income, then 20%, continuing to rise, until you retire.

Ideally talk to an independent pension broker (or several) and pay him a commission, don't go for situation where the pension company is paying him a commission. PM rainyday, he's the best one for this type of advice.

Be aware of putting all your eggs in one basket. Will you want to save up for a home / wedding / car / holiday / fees?

http://www.pensionsboard.ie/

BluE-WinG

Decided to invest my Money in UK property -- Should have a decent return.

RainyDay

Originally posted by BluE-WinG
Decided to invest my Money in UK property -- Should have a decent return.

Maybe, or maybe not.

By choosing to move your money outside the country, you are taking on a substantial currency risk on top of the normal investment risk, i.e. the success of your investment is additionaly dependant on the sterling/euro exchange rates. You may also find that you get poor value exchange rates if you are regularly exchanging relatively small (i.e. hundreds or thousands) amounts of money from euro to sterling or vice versa. You are also likely to be hit with significant transaction fees depending on how you transfer the funds.

And that's all before you even think about the property market. How well do you know the location(s) you will be investing in?

Foreign property would be a fairly high-risk investment strategy. Hope it works out for you.

BluE-WinG

Originally posted by RainyDay
Maybe, or maybe not.

By choosing to move your money outside the country, you are taking on a substantial currency risk on top of the normal investment risk, i.e. the success of your investment is additionaly dependant on the sterling/euro exchange rates. You may also find that you get poor value exchange rates if you are regularly exchanging relatively small (i.e. hundreds or thousands) amounts of money from euro to sterling or vice versa. You are also likely to be hit with significant transaction fees depending on how you transfer the funds.

And that's all before you even think about the property market. How well do you know the location(s) you will be investing in?

Foreign property would be a fairly high-risk investment strategy. Hope it works out for you.

My parents will be doing it all over there for me (They are moving there in a few months)

Should be fine

RainyDay

Originally posted by BluE-WinG
My parents will be doing it all over there for me (They are moving there in a few months)

Should be fine

Hi BlueWing - I'm not trying to intrude or be a pain in the ass, but having a parent over there does not make these problems go away. If you are transferring EUR into GBP on a regular basis, you will be paying FX commissions to the bank of between 1% & 3% on each transation. You could also end up paying hefty transaction fees on each payment. If the investment eventually becomes cash generating, you will have the same problem converting your GBP income into EUR.

The success of your investment is also very dependent on the EUR/GBP rate - which is outside your control. So you could plough a pile of money & effort into managing a good property and still lose 10% or 20% of your investment if GBP slides for whatever reason.

And that's all before you face up to the usual risks of property investment like getting/keeping tenants, property maintainence etc. Think carefully & do the sums before you put serious money into this kind of investment. Contrary to popular belief, it IS possible to lose money on bricks & mortar investments.

retneil

Get yourself 2 index linked tracker funds.

Use dollar cost averaging when inserting the payments.

Would only suggest index linked if you do not want the money for the next 8 years.