small time newbe investing

moreCoffee_2

I want to start investing but somewhat confused about all the options and platforms available.

I am in early 20's, and will be able to invest about 50euro a month (plus an initial deposit of a couple of hundred euro). I know that this isn't much so firstly is it worth it? This is spare money that I don't plan on needing for at least 5+ years

Secondly, presuming it is worth it, I reckon that ETF's (from what little i know about them) is the way to go? Opinion?

Thirdly and what I am really struggling with is how do I start? I have been looking through online brokers and seem to be just confusing myself. If I go with a broker in the USA or somewhere that isn't my home country does that effect anything? Can I still buy/sell on US/other markets without complected legal stuff?
For example I was looking at the broker 'charles-stanley-direct' but they seem to be UK based and seem to want a UK passport number.

Can anyone recommend a broker with low fees that would suit my needs?

Thanks in advance

brendon

You're investing Euros -- where are you based? Generally speaking, people here only have experience with UK based savings and investments.

moreCoffee_2

Thanks for the reply Brendon. I am based in Ireland. Does that make much of a difference?

bottleandahalf

moreCoffee wrote: »

I want to start investing but somewhat confused about all the options and platforms available.

I am in early 20's, and will be able to invest about 50euro a month (plus an initial deposit of a couple of hundred euro). I know that this isn't much so firstly is it worth it? This is spare money that I don't plan on needing for at least 5+ years

Secondly, presuming it is worth it, I reckon that ETF's (from what little i know about them) is the way to go? Opinion?

Thirdly and what I am really struggling with is how do I start? I have been looking through online brokers and seem to be just confusing myself. If I go with a broker in the USA or somewhere that isn't my home country does that effect anything? Can I still buy/sell on US/other markets without complected legal stuff?
For example I was looking at the broker 'charles-stanley-direct' but they seem to be UK based and seem to want a UK passport number.

Can anyone recommend a broker with low fees that would suit my needs?

Thanks in advance

The whole investing and saving game in ROI is a bit all over the place, for a start the interest earned for ALL taxpayers is taxed at between 41-45%. (DIRT)
I think that this isn't the case if you invest in ETF's in the south e.g if you invest in an American ETF that is based in the US, it doesn't get taxed at the rate.

Then there is some 7 year rule for funds and/ or ETF's.

Here is an ROI forum similar to this forum which will provide some useful information on funds, ETF's etc.
http://www.askaboutmoney.com/forums/exchange-traded-funds-etfs.105/

jimjames

moreCoffee wrote: »

Thanks for the reply Brendon. I am based in Ireland. Does that make much of a difference?

Yes, a big difference. For starters you don't have ISAs which are one of the main vehicles used for investing here.

moreCoffee_2

bottleandahalf wrote: »

The whole investing and saving game in ROI is a bit all over the place, for a start the interest earned for ALL taxpayers is taxed at between 41-45%. (DIRT)
I think that this isn't the case if you invest in ETF's in the south e.g if you invest in an American ETF that is based in the US, it doesn't get taxed at the rate.

Then there is some 7 year rule for funds and/ or ETF's.

Here is an ROI forum similar to this forum which will provide some useful information on funds, ETF's etc.

You have successfully managed to scare me! Thanks for the link tho. That fourm looks good (tho not as good as this here! I like it here ). Ireland Tax system seem crazy in regards to ETF's. (Am not allowed to post link.)
Not sure what I should do now. This seems more complicated than it should be.

bottleandahalf

moreCoffee wrote: »

You have successfully managed to scare me! Thanks for the link tho. That fourm looks good (tho not as good as this here! I like it here ). Ireland Tax system seem crazy in regards to ETF's. (Am not allowed to post link.)
Not sure what I should do now. This seems more complicated than it should be.

Haha. I think it is Enda and the boys who are scaring people into saving with them tax rates on interest. They want everyone to spend, spend spend I doubt.

There are several brokers in South such as Davy.ie, TD Waterhouse, Goodbody Cantor Fitzgerald etc, but for that kind of money, most of your money would be gobbled up in charges eg Cantor charge 250 euro a year. Not really suitable for your needs.

What you could do is invest in investment trusts on Degiro.ie as these are traded as shares and are only subject to CGT when they are sold. (The first €1,270 of an individual's annual gains is exempt. The balance is chargeable at 33%.) Here is their fee structure: https://www.degiro.ie/fees.html

If you were able to save 100 pm, you could save up a bit for 15 months in a savings account at Nationwide http://www.nationwideuk.ie/savings/regularsaveraccount.asp
, and then buy an investment trust/ ETF etc at the end of the 15 months. The Nationwide regular saver pays 3% but again you have 41% on the interest, which leaves you with 1.77% after tax. They say "Don't let the tax tail wag the dog" but hard not to in the Republic.

You won't be able to post links as a new poster for a while.

moreCoffee_2

bottleandahalf wrote: »

Haha. I think it is Enda and the boys who are scaring people into saving with them tax rates on interest. They want everyone to spend, spend spend I doubt.

There are several brokers in South such as Davy.ie, TD Waterhouse, Goodbody Cantor Fitzgerald etc, but for that kind of money, most of your money would be gobbled up in charges eg Cantor charge 250 euro a year. Not really suitable for your needs.

What you could do is invest in investment trusts on Degiro.ie as these are traded as shares and are only subject to CGT when they are sold. (The first €1,270 of an individual's annual gains is exempt. The balance is chargeable at 33%.) Here is their fee structure:

If you were able to save 100 pm, you could save up a bit for 15 months in a savings account at Nationwide
, and then buy an investment trust/ ETF etc at the end of the 15 months. The Nationwide regular saver pays 3% but again you have 41% on the interest, which leaves you with 1.77% after tax. They say "Don't let the tax tail wag the dog" but hard not to in the Republic
You won't be able to post links as a new poster for a while.

Thanks for your advice. I have signed up to Degiro.ie.

At your suggestion, I have been doing some reading on Investment Trusts and yes they are treated differently for Tax purposes in Ireland while still maintaining built in diversification. So seems like a good idea. I am still very unsure about the difference in Unit Trusts vs Investment Trusts and the pro/cons of both. Feel like it will take me a while to get over this learning curve.