Small investment €2000-€3000

mandymo

I have a small amount of money to invest €2000-€3000. I have no idea where to start or how to go about investing. I am not looking for an initial return maybe something that in 20- 30 years will have amounted to something. Any suggestions or help. would be welcomed. Thanks

Wheety

Will you be adding to this amount weekly/monthly?

Do you have an idea of what you want this to amount to after 20-30 years?

I'll be honest, it's not a large amount to invest.

mandymo

Thanks for your reply.
This is the amount I have currently. I wont be adding to it. I have the money sitting in my account was just wondering if it could be used to invest.

Wheety

I've a similar amount in P2P lending. It's not for everyone and is quite risky. But the interest earned could be in double figures if you don't have any defaults. It's probably likely that you will though.

Do you have any debts to clear first?

Other options are state savings or prize bonds but both would have only small returns, if any in the case of prize bonds.

I'm not too familiar with shares/stock market. I'm sure someone else could tell you if it will be worth getting involved there.

mandymo

I have no debts to clear I am going to some research on-line and see what is recommend.

topper_harley2

Search this thread anyway. There are probably 40 threads with almost this exact title.

newacc2015

Wheety wrote: »

I've a similar amount in P2P lending. It's not for everyone and is quite risky. But the interest earned could be in double figures if you don't have any defaults. It's probably likely that you will though.

Do you have any debts to clear first?

Other options are state savings or prize bonds but both would have only small returns, if any in the case of prize bonds.

I'm not too familiar with shares/stock market. I'm sure someone else could tell you if it will be worth getting involved there.

I would second P2P too. Mintos is pretty good as you can highly diversify it and sell loans pretty quickly if you need cash. Mintos apparently has had zero defaults and they are super easy to use

iainBB

2 to 3k is the minimum but you could go down the stock market root. Lots of learning before profit.

newacc2015

iainBB wrote: »

2 to 3k is the minimum but you could go down the stock market root. Lots of learning before profit.

There is no breaking the stock market in the long run. Just buy highly diversified ETFs like FTSE 350 or S&P 500

iainBB

newacc2015 wrote: »

There is no breaking the stock market in the long run. Just buy highly diversified ETFs like FTSE 350 or S&P 500

Very passive investment strategy. But would win out in the long run.

Does not suit everyone.

fleet

2-3k?

You've already paid the tax on it (if any was due), therefore why not claw it back?

Have you maxed out your pension?
If not, then increase your AVC (additional voluntary contributions) coming out of your pay, and use the cash you have to to supplement your (now reduced) income.

Instant 20-42% return, plus your contributions are already making money in whatever the pension fund invests in.

Sonnenblumen

fleet wrote: »

2-3k?

You've already paid the tax on it (if any was due), therefore why not claw it back?

Have you maxed out your pension?
If not, then increase your AVC (additional voluntary contributions) coming out of your pay, and use the cash you have to to supplement your (now reduced) income.

Instant 20-42% return, plus your contributions are already making money in whatever the pension fund invests in.

not quite true, the tax break is oversold and actually in decline. Otherwise it is effectively a deferral, you'll be paying plenty of tax at the other end (if you make money!). Pension funds rise and fall, but fees remain!!

If I were you but shares in 1 or 2 global companies and forget them. Best returns (re-invest the dividend payments to acquire more share sin same companies. Sit back, watch your nest egg grow, with low level risk and you can always sell out at any stage.

iainBB

Sonnenblumen wrote: »

not quite true, the tax break is oversold and actually in decline. Otherwise it is effectively a deferral, you'll be paying plenty of tax at the other end (if you make money!). Pension funds rise and fall, but fees remain!!

I agree . you will never see a rich person have a pension.

fleet

Sonnenblumen wrote: »

not quite true, the tax break is oversold and actually in decline. Otherwise it is effectively a deferral, you'll be paying plenty of tax at the other end (if you make money!). Pension funds rise and fall, but fees remain!!

Granted, there were inherent assumptions in my post. Fees, usually paid by ones employer if they offer a pension.
Pension funds shouldn't be any riskier than necessary, I know mine lets one chose the level of risk.
As for it being effectivly a deferral of tax, yeah, kinda, but for most people the majority of ones pension would be tax free. Sad, but we can't all be rich when we retire!

iainBB

fleet wrote: »

Granted, there were inherent assumptions in my post. Fees, usually paid by ones employer if they offer a pension.
Pension funds shouldn't be any riskier than necessary, I know mine lets one chose the level of risk.
As for it being effectivly a deferral of tax, yeah, kinda, but for most people the majority of ones pension would be tax free. Sad, but we can't all be rich when we retire!

Rich people don't invest in pensions . it's not a good ROI.

newacc2015

iainBB wrote: »

Very passive investment strategy. But would win out in the long run.

Does not suit everyone.

With a small investment of €2k even with using Degiro for buying and selling, you would be hammered with transaction fees. At least ETFs are cost effective at low investment amounts.

fleet

iainBB wrote: »

Rich people don't invest in pensions . it's not a good ROI.

As always, you have to balance the risk/reward.

The risk for the average person in not having a pension is immense.

Currently we have 5 works for every retiree, in 2050 it'll be 2 workers for every 5 retirees - you can forget relying on the state pension. The pension reserve fund was raided after barely 10 years last time, no way can an Irish government plan 30 years ahead.

Rich people could just flog off a few assets if they need cash later in life.
Chances are you won't be able to.

Anyway, I'm at risk of derailing this thread.

So OP, want a gamble? Whack it in something Brazilian. The Real has tanked along with their economy, but no way can that last given their natural resources

jive

iainBB wrote: »

Rich people don't invest in pensions . it's not a good ROI.

Rich people don't pay their tax in Ireland. For the average Joe, pumping money into a pension makes sense due to the penal tax system we have here regarding equities, both in terms of cost and effort.

Sonnenblumen

jive wrote: »

Rich people don't pay their tax in Ireland. For the average Joe, pumping money into a pension makes sense due to the penal tax system we have here regarding equities, both in terms of cost and effort.

You do realise that the irish pension racket is structured to lure one in, do not pay tax on the way in but on the way out! Same difference?

Sonnenblumen

newacc2015 wrote: »

With a small investment of €2k even with using Degiro for buying and selling, you would be hammered with transaction fees. At least ETFs are cost effective at low investment amounts.

How so? Any examples??

robp

Sonnenblumen wrote: »

jive wrote: »

Rich people don't pay their tax in Ireland. For the average Joe, pumping money into a pension makes sense due to the penal tax system we have here regarding equities, both in terms of cost and effort.

You do realise that the irish pension racket is structured to lure one in, do not pay tax on the way in but on the way out! Same difference?

In fairness many working people paying the higher rate of tax and than in retirement pay the lower rate so I think they would benefit, plus there is the tax free lump sum.

iainBB

2k is fine I started with less.

There is no good ROI on a pension. Yes people should invest in one if they are not investing in anything else. But you will get a low return.

_Tombstone_

fleet wrote: »

As always, you have to balance the risk/reward.

The risk for the average person in not having a pension is immense.

Currently we have 5 works for every retiree, in 2050 it'll be 2 workers for every 5 retirees - you can forget relying on the state pension.

Future is gonna be...I don't know...regarding labour force. Foxconn just let go 60,000 people, replaced by robots and this is just gonna continue across every field.

This is not gonna end well. Theirs an "adjustment" coming and it ain't gonna be pretty.

http://www.techtimes.com/articles/161028/20160526/it-has-begun-apple-supplier-foxconn-replaces-60-000-employees-with-robots.htm

Sonnenblumen

robp wrote: »

In fairness many working people paying the higher rate of tax and than in retirement pay the lower rate so I think they would benefit, plus there is the tax free lump sum.

Remove the initial tax benefit on contributions and you will expose the obvious poor returns of the pension racket. Also the trend on tax allowances on contributions is definitely falling, capped contributions, and lower rates etc.

IMO pensions are one of the great 20th century investment cons! I'm not condemning it as a form of investment, but IMO some are much better than others, but many are woeful.

DYOR!!

iainBB

Sonnenblumen wrote: »

Remove the initial tax benefit on contributions and you will expose the obvious poor returns of the pension racket. Also the trend on tax allowances on contributions is definitely falling, capped contributions, and lower rates etc.

IMO pensions are one of the great 20th century investment cons! I'm not condemning it as a form of investment, but IMO some are much better than others, but many are woeful.

DYOR!!

spot on.if you look at the pension board online calc. And do some reverse engineering of their figures. After return is about 2% per annum.

Tax on the way out is a fools game.

robp

Sonnenblumen wrote: »

robp wrote: »

In fairness many working people paying the higher rate of tax and than in retirement pay the lower rate so I think they would benefit, plus there is the tax free lump sum.

Remove the initial tax benefit on contributions and you will expose the obvious poor returns of the pension racket. Also the trend on tax allowances on contributions is definitely falling, capped contributions, and lower rates etc.

IMO pensions are one of the great 20th century investment cons! I'm not condemning it as a form of investment, but IMO some are much better than others, but many are woeful.

DYOR!!

Right. I agree but they would be fine if they were more flexible and encouraged people to passively invest cheaply.

Dohnjoe

_Tombstone_ wrote: »

Future is gonna be...I don't know...regarding labour force. Foxconn just let go 60,000 people, replaced by robots and this is just gonna continue across every field.

This is not gonna end well. Theirs an "adjustment" coming and it ain't gonna be pretty.

http://www.techtimes.com/articles/161028/20160526/it-has-begun-apple-supplier-foxconn-replaces-60-000-employees-with-robots.htm

People have been constantly replaced by more automated processes for centuries now - yet aggregate unemployment rates are unaffected

Nothing to be worried about in your lifetime

iainBB

adjust your investment if the market is not want you want.

for the last 3 months now the market is going side wards. we all should know how to invest in this kind of situation right ?

SuperO'B

_Tombstone_ wrote: »

Future is gonna be...I don't know...regarding labour force. Foxconn just let go 60,000 people, replaced by robots and this is just gonna continue across every field.

This is not gonna end well. Theirs an "adjustment" coming and it ain't gonna be pretty.

http://www.techtimes.com/articles/161028/20160526/it-has-begun-apple-supplier-foxconn-replaces-60-000-employees-with-robots.htm

Who designs and makes the robots?

Cute Hoor

SuperO'B wrote: »

Who designs and makes the robots?

Kuka

nbrady

To the original poster Mandymo regarding 2-3k investment. I am not an expert in finance or investing, just a normal joe. I have spent alot of time looking at different options for investing for the long term. The more I learn the more I realize I don't know and the more risks there are that I would not have foreseen or understood. 2-3k is a small amount so in some respects you have very little to loose whatever you do. I don't condone just investing and forgetting about it. With any investment I think before you proceed you should have a plan for why you are investing and what returns you expect, and the track that over time, periodically, ready to intervene if needed. One of my main motivations for researching this is to put in place an investment strategy that will pay off in my retirement. I have learned a few things recently.
Property investment is still a good option for the long term but not for the faint hearted. You need the deposit and loan approval, you need to carefully consider the right location for good rental opportunity, you need to fully understand the ongoing cost of owning a property, like tax, insurance, appliance/furnishing expenses, renovation, non occupancy etc. You need to be mentally prepared for dealing with people and issues.
Shares are a viable investment but there is so much to learn it's ridiculous. The one investment strategy in shares that really appealed to me was dividend investment. You choose traditionally strong companies that pay good dividends and have good potential for growth. However choosing is the difficult thing. There are good methods out there but hard to understand. You should aim to get a stock at good value and be prepared to hold for a long time if criteria is correct. Technically you can do this with 2-3k and you will realise the same gains in % terms as someone with a larger investment. You should plan to reinvest your dividend ongoing and get the benifit of compound gains. The drawbacks of a small amount of initial investment is your % fees and charges will be higher. Also any sane person will advise if investing that you deversify your risk across various sectors, so you can't really do this with 2-3k.
Consider a high risk investment fund offered by most of the banks. They will charge you hefty fees but at least they will manage it for you and make decisions for you so you can forget about it. Over the long term I think you have a good chance of make better than deposit rates. This is what I would do with only 2-3k.
Finally if you want to be more involved you should consider buying and selling, cars, phones, whatever. If you can make 5-10% on every transaction you will probably be doing way better than most other options.
Hope this helps.