18 year old - best investment?

Marc said:
if you have an age related allowance of 15% and pay say, €500 into a pension you obtain tax relief of 15% of €1525 or €228.75 which represents an effective rate of tax relief of 45.75%
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I don't understand this at all and don't get where €1525 came from. The age related allowance relates to how much of your income you can put in the pension not the relief on it right? So the relief would be either 40% or 20% (and 20% seems more likely as early in career salary would quite likely not result in paying 40% tax). So I thought the tax rate would either 20% or 40% not 45.75% - what am I not understanding?
 
abc_xyz said:
I don't understand this at all and don't get where €1525 came from. The age related allowance relates to how much of your income you can put in the pension not the relief on it right? So the relief would be either 40% or 20% (and 20% seems more likely as early in career salary would quite likely not result in paying 40% tax). So I thought the tax rate would either 20% or 40% not 45.75% - what am I not understanding?
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It appears to be incorrect, as relief is only allowed on contributions.

The idea put forward was that no matter what amount was paid into PRSA, that one would receive relief on a minimum of 1,525. However that's the minimum allowable, even if it exceeds the age related allowance.

Discussed here also: https://www.askaboutmoney.com/threa...-any-tax-relief-possible.221628/#post-1698462
 
All depends on what type of person they are, some people would love to blow the 5k on partying, experiences, taking courses, learning a new skill, material possessions. Me personally, I would have loved to get started on my first investments. I think, seeing an investment grow can have an extremely positive impact on your life and your understanding of wealth and how investing and compound interest works. Whatever she does, I think she should at least set up an account with Degiro/Trading 212 or another alternative cheap broker, and invest even if its 100euro in an ETF. It would be a great learning experience on the power of investing.
 
NoRegretsCoyote said:
And what would a big loss at an early age teach you? ;)
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If you go all in in Game stock and lose your money, you will probably never invest again. But starting off with safe diversified equities like ETF's you can't go wrong as long as you are willing to leave it for the long term. I personally wish I learned about investing at 18. The power of compound interest is insane and the earlier you start the more wealth you will eventually accumulate.
 
@Younginvestor93 Do you get commission for selling ETFs or something? It's all you talk about! It sounds like you spent far too much time on the US FIRE reddit and that's all you know!
 
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