Long term regular investment for 19YO

_Brian

Daughter is wonderng whee best to make a start putting away a bit regularly, something that is flexible to increase as time goes bye.. Would be interested in hearing optios and opinions...

Jim2007

What is the time horizon and the objective?

_Brian

Pension type investment

sonyvision

Zurich have saver accounts which are managed funds you can invest monthly into. If it is a pension you want they also do that. My one is with Zurich and in the Dynamic Fund.

Markus Antonius

https://www.boards.ie/discussion/comment/118681280#Comment_118681280

With all due respect, why on earth would a 19 year old put money into a pension? Car, travel, house, children, life - all these things need to be funded in the next 15 years nevermind what's 50 years down the track.

Jim2007

https://www.boards.ie/discussion/comment/118681430#Comment_118681430

Probably because they don’t intend it to be 50 years down the track for a start. There is a fairly large interest in living frugally early on and getting out early. I and most of my colleagues got out after about 30 years and none of us wanted to hang about any longer (we did not do the frugal part though).

Henry Ford III

https://www.boards.ie/discussion/comment/118681342#Comment_118681342

Lots of places have savings and pension investment products.

Zurich may or may not be the best option here.

lawrencesummers

https://www.boards.ie/discussion/comment/118681342#Comment_118681342

What kind of performance have you been gettin on it?

_Brian

https://www.boards.ie/discussion/comment/118681430#Comment_118681430

Typical regressive view...

Money put in early on in any long term fund/pension/investment is the money that has the chance to make you the most.. My own started at 23YO.. I'm nearly 50 and have scaled back my work to a stress free medium paid flexible job because I don't need to be killing myself any more.. By end of year hopefully the mortage will be gone and will have two houses each with land associated and herself is thinking of retiring to do some privte work on her own schedule, shes already gone half time.

Both kids will inherrit a house on a smallholding of land, money put by to get them through college. Thats our gift to get them started..

She's been in paid employment since age 15..

sonyvision

I don't know the exact figure you can look up the fund performance on Zurich. 10 year return is around 8 or 9% PA.

I'm 30 so this on going event with Russia and Ukraine will just be a blip in 30 years when I draw down.

Happyhouse22

The general consensus is that long term low cost passive investing is the best option. Unfortunately not as simple in Ireland as other places, I recently made a post suggesting that the best option in Ireland depends on your timeframe - will paste it here.

I now believe the best way to invest in Ireland is very dependent on the timeframe in which you need the money.

Less than 5 years: The general advice is that if you need the money in less than 5 years you should avoid the stock market. The best place for your money is probably a deposit account in the bank.

Exactly 5 years: If you know you will need the money in exactly 5 years it probably makes sense to put the money in a savings certificate which gives a guaranteed tax free return of 0.59% tax free each year.

5-15 years

I think for this timeframe ETFs such VWCE can be a good option, while the deemed disposal tax after 8 years is annoying as is the 41% rate, in this timeframe it’s impact is not so detrimental as your investment does not have as much time to compound. Ideally if funds are available you would pay the tax in year 8 from seperate funds and allow the investment to continue its growth.

15 years plus : Investment trusts or BrkB . As deemed disposal is due every 8 years holding ETFs in the longer term isn’t great because paying tax in year 16 and 24 will really eat into the compound returns on your investment. UK investment trusts such as Monks, F&C or Scottish Mortgage or the American company Berkshire Hathaway are subject to CGT rather than

30years plus- If the savings are for the long term and you are sure you won’t need them by far the best place for them is within a pension wrapper. While fees can be high the fact that the money can continue to grow tax free is a huge incentive to use them.

Obviusly in Ireland property is a great store of wealth - but have avoided that and things like crypto or gold here as I think it’s a whole other topic!

So your daughter would probably benefit from a mix of approaches, if she really is thinking long term then then majority into a pension makes sense- but possibly only if she is paying tax.

Then maybe some in savings account for short term needs, a holiday , a car etc.

Some in ETFs for the slightly longer term - thinking buying a house(another one), getting married or having kids in 10- 15 years.

And the some in something like investment trusts or Berkshire Hathaway for the longer term (to avoid deemed disposal) but still having accessible before retirement.

Henry Ford III

https://www.boards.ie/discussion/comment/118687033#Comment_118687033

General consensus? General advice?

No. Absolutely not. Every case and every set of circumstances are different, so offering universal advice like that can never be correct.

Jim2007

https://www.boards.ie/discussion/comment/118702312#Comment_118702312

Except the consensus the obvious are actually misunderstood...

"The general consensus is that long term low cost passive investing is the best option." Actually the original proposal was that a portfolio constructing using low cost ETFs with the correct asset allocation should represent the benchmark for evaluating your investing costs not a suggesting to accept mediocracy as the best option... Just good marketing by vendors did the rest.

"Obviusly in Ireland property is a great store of wealth", Not even in Ireland, it is still a high risk asset class with a low rate of return in comparison to the universe that investors have available to them.

Happyhouse22

https://www.boards.ie/discussion/comment/118702972#Comment_118702972

Sorry guys - I was clearly incorrect - will try to delete my comment when I get a chance.

Apologies again

Pomodoro

Invest in:

• Travel and Experiences
• Education / Skills development. (and at 19 you are at a time when you are making choices that massively impact your earning potential)
• Any other passions that make life enjoyable

Early 20's is a time of opportunity for new experiences and personal growth. If there is money to spare then keep it in a deposit account, so that when the opportunity and desire to do something fun comes up, she will be in a position to pay for it.

Worry about the pension when your career starts and your earnings break into the high tax bracket.

Jim2007

https://www.boards.ie/discussion/comment/118707793#Comment_118707793

Everyone has their own objectives in life. However having your pension savings dictated by your tax bracket is not a smart move.

Pomodoro

Totally agree on the life objectives. I just think it would be unfortunate for a 19 year old to lock up their money in long term investments at the cost of opportunities at a key stage in life.

Point taken on the tax bracket part, although these days if money is a consideration for career choice, you will be in the high tax bracket very early in your career. And if you want to get out early, the easiest way to do it is skill yourself up in a high wage profession and live frugally. And not pay irish rents!