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Investing 250 € a month

  • 07-05-2021 12:38pm
    #1
    Registered Users Posts: 205 ✭✭ Rx713B


    Hi All,

    I haven't a breeze about anything like this but I have some disposable income I would like to invest long term - I am already paying into a pension.

    What's the best way to set something like this up. Obviously I would need to use a company to do such as I am not equipped to do it myself.

    This would be long term.

    Thanks in advance


Comments

  • Registered Users Posts: 67 ✭✭ Covieland


    I'd probably open up an account with Degiro and invest in the iShares S&P 500 once a month (they allow one free trade once a month) that's probably the simplest way


  • Registered Users Posts: 192 ✭✭ conor1979


    Rx713B wrote: »
    Hi All,

    I haven't a breeze about anything like this but I have some disposable income I would like to invest long term - I am already paying into a pension.

    What's the best way to set something like this up. Obviously I would need to use a company to do such as I am not equipped to do it myself.

    This would be long term.

    Thanks in advance

    Are you maxing out your pension? If not this would be the first thing I would do.

    You're gaining on the tax relief straight away.

    If you are then spend the a few bob going to a financial advisor who can give you a few options of what to do.


  • Registered Users Posts: 3,501 ✭✭✭ dotsman


    conor1979 wrote: »
    Are you maxing out your pension? If not this would be the first thing I would do.

    You're gaining on the tax relief straight away.

    If you are then spend the a few bob going to a financial advisor who can give you a few options of what to do.

    I wouldn't necessarily max out pension contributions (assuming pension fund is in relatively healthy state). While there is the obvious tax advantage, building up life savings is also a crucial instrument in achieving financial safety/comfort. Without knowing the age/circumstances of the OP, "locking away" all their money until they are in their 60's will likely be unwise as they may have many (expensive) life stages to go through first.

    Likewise, I wouldn't go near a Financial advisor over sums as low as €250 per month.



    OP, it's hard to give advise without knowing a lot more info, nor is boards a suitable method of getting specific advice, so will just throw out a few pointers.
    • The most important thing to do with money is build an emergency fund. Depending on your circumstances, this can be anywhere from a month's salary (i.e. young, no dependants, stable job, renting with no fixed period, no loans, still have mom & dad to bail you out if necessary etc) to a year's salary (kids, spouse, mortgage, loans, unstable/contract work, no/limited family support etc). This money should be kept in cash (i.e deposit A/C).
    • After that, you should look to ensure your pension is being funded to an adequate level (again, depending on age/circumstances, it can be hard to determine what is "adequate") and is a long and complex thread in its own right!
    • After that, you should look to build out life savings.
    • Once your life savings are in a healthy state to cover any anticipated/realistic needs (home deposit, start a business, wedding, kids college fund, long term-unemployment/illness etc), any surplus can go to increasing life savings in line with increasing pension contributions.

    In terms of life savings, given the amounts you are talking about, I would probably look at opening a Degiro account as mentioned. However, I would probably stay away from from ETF's as, since 2018, they are treated stupidly from a tax perspective. Instead, I would simply continue to save the €250 per month in a savings account until you have several thousand. Then, on an annual basis, transfer the savings to Degiro and purchase €500-€1,000 shares in 6/3 companies (and repeat annually).

    There are a tonne of threads on here talking about individual shares/strategies etc, so I won't repeat. But, to point out some basics, I would continue to buy shares in different companies over the years until you have 10-20 companies to achieve some form of diversification (essential). In terms of what companies to invest in -> stick to companies you know and understand. Basically, in investing, you are saying you believe (from a position of reasonable knowledge) that this company "has a bright future". Try to avoid hyped-up shares, or have them only be a small part of your portfolio. While they can grow incredibly, they can also be way over-hyped by the time you decide to invest in them and be hugely overvalued. When thinking of a company simply google "<company name> share price" and switch to the "news" results. This should give you lots of articles written in the last few days/weeks discussing whether it looks like a good investment or not (take each individual article with a pinch of salt, but it's good if there is consensus among several articles/sources). Review the portfolio periodically, and sell & buy into a different company should the outlook for a particular company change. Finally, don't be panicked by short-term losses (If the outlook for the company is relatively unchanged, this is more of a sign to buy even more of said company!). Investing is a long-term game (over many years). Similarly, don't get carried away and think you are a super investment guru if you have a great couple of months/year ;)

    Over time, assuming your salary/monthly saving increases, you can increase the annual amount you invest and start building up a very strong portfolio.


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