what to do with 40000?

laciegradient

Hi. I'm new to this forum, sorry if these questions have been asked before. I'm early 20s and am very inexperienced with money. I was just looking for some of your thoughts on investing.

I have a little over 40 grand invested in bank of ireland shares. These were bought for me a few years ago and until recently i've had very little to do with them except to receive dividends every once and a while.

I've been thinking that it might be better to separate the money into a few other things aswell, maybe other stocks and some into a savings scheme. Is this a good idea or is it better to keep it all one thing?

Has anyone any recommendations with what to do with it? I don't mind leaving it in there if it's a good idea but i think i could do more with it.
Thanks.

faceman

slow down tonto, there are a million and one things you could do with the dosh, but it depends on how long you are willing to invest for.

Are you looking for short term return or long term return?

Mr. Pseudonym

If you have no other savings/assets, then having €40k in BOI shares is very risky.

Have a look at www.askaboutmoney.com for a few ideas and as faceman said it depends on whether you are looking for short or long term gains (or losses!)

Its hard to give any meaningful advice without knowing your personal circumstances (income, debts, other assets etc) and your financial goals.

You could always try to speak to a financial advisor in a bank (it will cost you nothing) but be wary as they will be looking to flog you their products. The alternative is to go to an independent financial advisor who can advise you on many suitable financial products, but they will usually be fee based.

laciegradient

Thanks for replies.
I'm a college student with no income. I'd like to have access to some of the money while in college and set aside the rest for when I graduate.
Why is it risky to have it all in BOI? I was told the banks are fairly stable.

xebec

Having all your money in one share is seen as a very risky practice because if the price of that share falls (for any number of reasons from bad performance to corporate scandal) then you lose a lot of money. A safer strategy would be to hold a portfolio of shares in order to spread out the risk.

Lets take a very simple analogy. You have €1000 to spend on shares and it's coming up to the summer season. You think it would be a great idea to buy some shares in an ice-cream retailor. However, it turns out to be the coldest and wettest summer on record and the ice-cream retailor goes bust, you've lost all your money. Another strategy would be to split your €1000 into buying €500 of ice-cream shares and €500 of shares of an umbrella maker. If the summer is warm the ice-cream shares should go up and the umbrella shares go down and hopefully you'll make some money. On the other hand if the summer is wet and cold the ice-cream shares will go down but the umbrella shares will go up, again hopefully making you some money.

This is a simplified analogy of how to reduce risk in a share portfolio. If you want to learn more then I would suggest googling it.

If you are looking for solid financial advice, and with that amount of money it would be worth the cost in my opinion, then go to an independant financial advisor.

faceman

laciegradient wrote:

Thanks for replies.
I'm a college student with no income. I'd like to have access to some of the money while in college and set aside the rest for when I graduate.
Why is it risky to have it all in BOI? I was told the banks are fairly stable.

what do u mean by have access to some? just for partying & pleasure or because you will need it to survive?

i dont mean to sound mean, but 40k isnt a lot for investing short term so if u can invest all of it go for it.

laciegradient

faceman wrote:

what do u mean by have access to some? just for partying & pleasure or because you will need it to survive?

i dont mean to sound mean, but 40k isnt a lot for investing short term so if u can invest all of it go for it.

I mean having access to it for general survival yeah. Seem to be building a lot of debt while in college. Was thinking of wiping the slate clean or something.

Thanks for the advice. I'll have a chat with a financial advisor so. Hopefully I won't come back with magic beans.

westside

I would not sell all of the BOI shares as they are over eur 5 off their yr high. you do need to diversify as if you held a number of shs then you may not have taken such a hit. you could free up some of your investment and invest in a quinn life or rabo fund where you are guarenteed diversification.you could also throw some cash into a high int rabo or first active account where you can earn 5%. Investing in shares while you are a college student is risky business where you cant afford to lose your capital. Its a nice nest egg you are building up but I would takes xebec's advice and get a portfolio

stepbar

laciegradient wrote:

Hi. I'm new to this forum, sorry if these questions have been asked before. I'm early 20s and am very inexperienced with money. I was just looking for some of your thoughts on investing.

I have a little over 40 grand invested in bank of ireland shares. These were bought for me a few years ago and until recently i've had very little to do with them except to receive dividends every once and a while.

I've been thinking that it might be better to separate the money into a few other things aswell, maybe other stocks and some into a savings scheme. Is this a good idea or is it better to keep it all one thing?

Has anyone any recommendations with what to do with it? I don't mind leaving it in there if it's a good idea but i think i could do more with it.
Thanks.

First thing first, what price were the shares bought at? Any profit over and above 1,270 will be subject to 20% capital gains tax. Thats an important point to note. In other words I wouldn't be selling all in one go. Chances are you are sitting on a substantial profit as it is. I would sell enough to bring you up to the tax exemption level. As we are coming close to the end of the tax year, you could do this twice in 6 months.

As another poster said, the BOI share price is around 5 eur down on its all time high (18.90). Personally, I think it could be a while before it reaches those dizzy heights again. However at 13eur something, I wouldn't be in a rush to sell just yet. BOI shares look good value at the moment considering that BOI could be bought and paid for in 7 years (based on this years profit and the present value of the company). Seriously undervalued.

Finally, if you can, keep away from debt during college. It will cost you less in the long run. You hear horror stories about people who come out with 10-15k in debt. Takes them years to pay it off and years to start saving for a deposit on a house etc.

A Random Walk

Write down what your aims moneywise are over the next couple of years.

You'll probably need an emergency fund of some sort and anything you'll need cash for in the short term is probably best left in a deposit account.

Have a think about house deposits and weddings and the like. If you've any of them planned in the near future you'll need to keep more in cash.

For medium to long term cash needs you should be looking at investing. Usually you would try to avoid being dependent on one company, so typically you would look to spread your risk rather than have it all concentrated in one company. Index ETFs are ideal for this, as are funds such as Quinn (in particular) or Rabodirect.