Investing Basics 101
askpaul shares some simple and helpful investment tips:
When it comes to investments, there are a number of different types of plans in the marketplace and saving contracts. The easy thing is to set up a direct debit from as little as €75 per month and get involved in these. You can also take money on a lump sum basis. So, if you had €100,000 from an inheritance, you can take that, and put it into an investment plan. That’s the easy part. The hard part is choosing which plan to go for. There’s a lot of video content in this section of the website that goes through the risk profiles. What I want to talk about now is the type of investments that are out there.
Different Types of Investing
So generally speaking, when it comes to investments, you’ve got the stock market, which is known as equities. That can be deemed as high risk, but the longer you leave your money in there, in my opinion, the lower that risk becomes, and the better the return is for you.
I also want to talk about property. So, property is another asset class, especially in Ireland we kind of have a quite focus towards property investing. But you can also invest in commercial property funds. You can also invest in commodities such as oil, wheat, etc. Commodity stocks are quite important. And there’s also bonds out there. Bonds would be government bonds, corporate bonds, and that’s when you give somebody a bit of money, and they give you money back on a return on an annual basis. And again, it can be companies or it can be governments.
Generally speaking, the best type of investments would be ones that are diversified. You’ll have one fund that will cover all types of those four investment categories, and that will give you some confidence to know your investment is spread around a lot of different places. That means, should one sector go down, like maybe the property market, the equity markets might be up, so won’t be a disaster completely for your overall investment fund.
It’s very important to sit down with somebody that you trust and you feel that can talk to you in plain English in a way that you understand what’s going on now, but also in the future. So, if markets do take a turn for the worse, or if they go up in value, you will understand what to do and how to deal with it.
Tax on Investments
I also want to talk about investment tax. There are various different ways to tax your gains when it comes to investments. So, you have what’s called exit tax 41% and you have capital gains tax at 33%. It depends, again, what type of investment vehicle you use to set these up with. So it’s really important that you sit down with a financial advisor, preferably us here and askpaul, and we can give you a hand to make sure you have the right structure around your investments to give yourself the best chance of having the best tax treatment, as well as the best investment returns, which is probably the most important part. Hope you found this content useful. As always, any questions, just hit me or my team up and we’ll get back to you right away.
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