Hi Radagast,
Thanks very much for your reply and feedback!
I'll absolutely look into that, thanks for the steer. Would you have any specific picks for each of the three funds you mention?
Just to add a bit more context to my plan...
Savings vs investment culture in IrelandIn Ireland there really isn't a culture of investing. Up until 2017 I would never have even considered putting money into stocks and bonds. I would have looked at it as gambling. If I had mentioned it to my wife, parents, brothers etc they would have told me I was crazy! The only option in my mind was regular savers, on which the rates have been terrible for the last five or six years.
State savings - one of the largest holdings of Irish savings The Irish population holds savings of around 24 billion in State Savings -
https://www.statesavings.ie/ - These are government savings bonds offered through the Irish Post Office. Safe, dependable but very low interest rates. The highest AER currently is 0.96% after tax on a 10 year bond. This is the highest savings rate on a savings account anywhere in Ireland.
Up until 2017 I would have kept most of my savings in these government state savings bonds. As would my parents and many of the people I would have spoken to day to day. Even on popular finance boards in Ireland, the recommendation would have been to put your money into the best state savings account for lack of a better alternative.
Index vs managed fundsAnyone who I spoke to who had some experience of investing told me to look at managed funds, such as those offered by Irish Life. An example here of their current main investment offer
FlexInvest a "straight forward investment solutions'
https://assets-eu-01.kc-usercontent.com/ffd8d21b-ebd4-0151-55d5-297335c8f50f/135cb68b-2a49-486b-bbf0-a05216fe4a53/FlexInvest_Product_Booklet.pdfOfferings such as Irish Life's just seemed too complicated, and when I tried to understand the costs and returns neither were clear to me.
An experiment in index funds...So, around 2017 I was looking to do something different and to get a better solution. All the good advice, including what I read from MMM and this forum, seemed to point to self managed low cost index funds, through one of the new online brokers which had popped up - Degiro etc. With many suggesting the bog standard S&P as a good place to start.
I looked at it as a bit of an experiment. My aim was to see if I could beat the best savings rate offered in Ireland at the time - 1.5% AER after tax offered by the State Savings 10 Year National Solidarity.
I wanted to take the
leanist approach possible to investing -
which explains the name! - so I decided to (1) just use Degiro, (2) only purchase the S&P500 (VUSA) and (3) only purchase €1,000 worth of S&P per transaction, as Degiro do not charge fees on purchases of S&P (VUSA) over €1,000.
Old habits die hard....I do still have regular savings accounts with terrible interest rates.....I have one where I keep a balance of money for unexpected costs etc. And, another one where I'm saving for a deposit for a house. The bulk of my savings go into these accounts - about 66%. The remaining I put into the S&P which I'm looking at as my 'Freedom Fund' - something I'm growing over the long run to hopefully provide an alternative source of income if I can get up to the €700K/€800K range.
Appreciate the advice and comment - as mentioned, if you have any specific examples of three funds please send on. I'll consider broadening my investments. Four investments is still a very lean approach and one which I could manage easily month to month.
Thanks again Radagast!