€20k to Invest for 10 years

bbam

Hi folks..
We've managed to hack together €20K.
My eldest is 8 and all going well will be finishing school in 10 years time, my younger will be just a few years behind..

We are hoping to invest the 10K each somewhere secure so I'll be guarenteed the money back and some interest too, it needs to be guarenteed !

We are thinking of the Government Solidarity Bond, it would yield 147% of the principal in 10 years, maybe a bit less if dirt increases but it's guarenteed..

Any opinions on this idea ??
This is a once off shot and I need to get it right :rolleyes:

Feedback and opinions very welcome

Smcgie

is the solidarity bond yield not 50%?

daheff

personally...i wouldnt touch the government solidarity bond...you only get the top rate if you leave the money in for the full period of time. And then you dont benefit from any increase in interest rates (which will come over the next 10 years).

for example if you could get a rate of 3.5% per year paying 23% DIRT then you would still earn nearly 33% over the 10 year period

If i were you, i whould try and put it in a savings account that rolls every 6 -12 mths. Be prepared to move the cash to whatever account is paying the best rate at the end of investment period.

Radiotower

Have a look into forestry - heard a bit about it on the radio the other evening - takes 10-12 years to get a return, its very predictable so you know how much you'll have at the end of it, its tax free aswell (untill the budget anyway!!) Downside seems to be that it is not a liquid asset so your money is tied up for a long time and you have to wait the 10 or so years to get your hands on the cash

Mr Cawley

10k in savings acc, 10k in Tesco shares or other safe shares!

Warning: Please do not buy shares in an Irish bank.

(Joke response: Give it to me and I'll give you 40 back in ten years, the rest I make, I get to keep for myself???)

bbam

Thanks for the replies...

I don't like the idea of kicking the cash from account to account and think the idea of locking it up for the 10 years appealing...

Would anyone be worried about the security of the Solidarity Bond, what's the chances of the government of the day renaging on the bonus payment??

Thanks but Forestry doesn't interest me...

Are there other options I'm not thinking about ???

kmick

The solidarity bond is 47.5% return net after 10 years. If that is the timescale you requires I dont think there is a better guaranteed return out there.
http://www.anpost.ie/AnPost/GeneralTemplates/ProductsAndServices.aspx?NRMODE=Published&NRNODEGUID=%7b12D0AC6A-939F-46B4-B59B-4CC349FF896E%7d&NRORIGINALURL=%2fAnPost%2fMainContent%2fPersonal%2bCustomers%2fMoney%2bMatters%2fNational%2bSolidarity%2bBond%2fTerms%2band%2bConditions%2f&NRCACHEHINT=Guest#five

Compounding 3.5% (if you put it in the bank) you get 14,105.99 from a 10k investment.
http://www.moneychimp.com/calculator/compound_interest_calculator.htm
You may or may not get more than 3.5% but its not going to be a lot more. The current ECB rate is 1% but banks are giving a rate of 3.5% because of the cost of money on the wholesale market. So rate rises will NOT automatically feed into deposit/fixed term rates.

If you put the 20k in the solidarity bond it would be worth 29500k at the end of year 10 guaranteed.
Id keep away from equities altogether it sounds like you are risk averse but if you want a potential better but more riskier return put 5k of it into something like the Quinn Life Freeway funds or Rabo Direct funds
http://www.rabodirect.ie/investments/default.aspx
http://www.quinn-life.com/quinnlife_freeway_funds.html
There is an array of them - probably best to go Rabo with the doubts over Quinn.

WildBoots

bbam wrote: »

Hi folks..
We've managed to hack together €20K.
My eldest is 8 and all going well will be finishing school in 10 years time, my younger will be just a few years behind..

We are hoping to invest the 10K each somewhere secure so I'll be guarenteed the money back and some interest too, it needs to be guarenteed !

We are thinking of the Government Solidarity Bond, it would yield 147% of the principal in 10 years, maybe a bit less if dirt increases but it's guarenteed..

Any opinions on this idea ??
This is a once off shot and I need to get it right :rolleyes:

Feedback and opinions very welcome

Don't put all your eggs in one basket! Diversify!
If I was investing 20K at the moment, I'd be looking at commodity related assets.

bbam

WildBoots wrote: »

Don't put all your eggs in one basket! Diversify!
If I was investing 20K at the moment, I'd be looking at commodity related assets.

OK I have to ask... commodity related assets??

Would this be Gold and the like, I'd be thinking Gold is another bubble waiting to burst??

Jim2007

bbam wrote: »

OK I have to ask... commodity related assets??

Would this be Gold and the like, I'd be thinking Gold is another bubble waiting to burst??

Given your criteria, your first suggestion is the correct way to go.

Jim

Kristopherus

If you can afford to leave it on deposit for 10 yrs., then the National Solidarity Bond is the only gig in town.You will pay a small amount of DIRT, but by & large you should have the guts of €30k at the end of the 10 yrs. Investing in Shares or Commodities will be a risky business for the forseeable future, and an occupation only for the most experienced of investors IMHO.

bbam

Thanks... I'm 75% decided but I want to make sure I'm not missing anything...

I've little interest in shares, investment folios or constantly looking round every six months for a better deposit rate...

Now that I have this cash I want to maximise it specifically when it's needed and be as sure as possible it will be there..

whatnext

In my opinion these http://www.statesavings.ie/Downloads/SavingsCertsBrochure.pdfare possibly a better option than the solidarity bond.

Two reasons are
1/ No Dirt Tax

2/ I believe interest rates will not remain as low as they are now for the next 10 years. Therefore after one of these bonds or certs mature, it is likely (but not guaranteed) that there will be some higher yielding bond or cert in the market.

Where as with the national solidarity bond you are tied to a pre determined rate for the 10years.

Thats my opinion anyway.

RizzoJR

bbam wrote: »

Thanks... I'm 75% decided but I want to make sure I'm not missing anything...

I've little interest in shares, investment folios or constantly looking round every six months for a better deposit rate...

Now that I have this cash I want to maximise it specifically when it's needed and be as sure as possible it will be there..

if you arent prepared to risk anything, ie invest in shares, commodities, etc
then you arent going to get much, ie savings account

and what you "maximise" maybe 3 or 4% per year over next 10 years
which IMHO is negligible

idea: lock say half it away in high yield deposit
invest half it in some investment fund

JR

digme

silver and gold

Mr Cawley

This is not a direct answer to your specific Q but

Research much much more OP, you've a golden opportunity to get your money working for you!!!

Shares are your friend. Learn about them first and then make an informed decision.

You can pick a more trustworthy business or you can hand it to a dodgy bank/government!

OfflerCrocGod

If you have any debts pay them off.