QI would like to invest between €10,000 and €12,000 instead of sitting dormant in my checking account. Is it a good time to invest considering we may be facing a global recession? I know we have to weather the storm, so I advocate a five to ten year investment horizon.
A It’s impossible to recommend anyone’s specific investments without knowing a lot about their financial circumstances, said Liam Ferguson of finance brokerage FergA.com. An investment that might be right for you might not be right for your neighbor. Before you think about moving money from a checking account to an investment, first look at the alternatives. Have you maximized the tax relief on pension contributions? Have you paid off all expensive debts like credit card debt? If not, prioritize that, Mr Ferguson said.
Then you need to determine how much risk you are willing to take with your money. As a rule, very low-risk or capital-secure investments offer correspondingly low returns.
As interest rates rise, it’s likely that government savings products and deposit accounts will again offer a better rate (albeit less than inflation) in the coming months, so if your risk tolerance is low or you’re looking for capital safety, it might worth waiting a few months to see what interest accrues, he said.
Both AIB and Permanent TSB act as sales agents for Irish Life products and Bank of Ireland only sells New Ireland products so you will only receive advice from them on what their affiliates offer. If you ask a trusted friend or relative for a financial broker recommendation, you will receive advice on a much broader range of investment products and funds, not just what one company is offering.
Q I own a second home in a small country town worth around €150,000. I have three children in their late 20s who will need help buying a home as none of them are making good money. My plan is to use this house to help them with a down payment so I’m wondering if there is any financial advantage to me signing the property over to them so they can sell it when they need the money . Or should I sell it myself and split the money between them?
A If you transfer the house to your children now, they will have to pay stamp duty of 1 per cent on the value, according to attorney Susan Murphy of MakeMyWill.ie. In addition, if the value increases prior to sale, capital gains tax may apply.
There is also potential for conflict if one wants to sell and the other doesn’t, she said. It would be a lot cleaner to just sell it yourself and split the money, but do some research in the area to see if now is a good time to sell. If you’re still hesitant about putting it on the market but still want peace of mind that you’re getting the benefit, Ms. Murphy suggests you speak to your attorney about updating your will to reflect your wishes.
Q I feel like I’m really bad with money and it’s not related to inflation. How do I become a better saver?
A Admitting you don’t blame inflation for your lack of savings means you’ve thought about it, says Frank Conway, founder of financial wellness provider MoneyWhizz and a qualified financial advisor. You’ve gotten off to a great start.
Identify your financial means as this is crucial to achieving any financial goals you may have in mind
In order to achieve a life goal, whether it’s saving for short-term needs, planning for a life event, investing for retirement, or anything else, it’s important to recognize where you are right now. In addition to identifying your current situation, it is equally important to identify your financial resources as this is critical to achieving your financial goals. With that in mind, the first step is to identify your goal.
You may want to protect yourself financially by building an emergency fund. Regardless, you need to give your saving habit a purpose. Next, identify your funds. You just have to make sure your goal aligns with your financial capacity. If you want to save €6,000 in a year, you need to save at least €500 every month.
However, if the maximum you can save on your monthly expenses (rent, transport, groceries, heating, etc.) is €200, your funds will not support your goal. Here it is important to align your goal with your means.
Eventually remove yourself from the equation. You should have a savings account that is separate from a checking account/debit card. That way, in the evening, the temptation to plunder your money is out of reach.
https://www.independent.ie/business/personal-finance/your-personal-finance-questions-with-a-possible-recession-on-the-way-is-now-a-good-time-to-invest-some-spare-funds-42031208.html Your Personal Finance Questions – With a possible recession, is now a good time to invest some leftover money?