Monthly investment advice needed.

C

Constantine

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My daughter finished college in May and has started working in a progessional role. She is living at home and saving circa 1k to 1.5k per month (has to start saving towards getting a deposit for our over-priced property market).

I'd like to recomend a mutual fund she can save her money and earn more than the current rate of depost interest e.g. she could make a direct debit transfer every month to a mutual share fund. When my wife and I lived in America 20+ years ago we had such a plan with MFS. Is there a similar way to save, and gain exposure to stock market, in Ireland. Who might I put my daughter in touch with ?

Kind regards
 
It is of course possible to make montly contributions to either an ETF or managed funds.

But there are two issues.

(1) the tax is high - it is known as exit tax, and it is 41%, and there are further complications (look up "deemed disposal")

(2) is saving into equities suitable for this time period?
 
Hi Protocol, good point....yes tax is high.
Might be better to pick a few individual shares then can use annual CGT 1,270 allowance.
Is mutual fund taxed as income tax while gain individual shares taxed as CGT (over the 1,270 threshold)?

On no 2) the time period be 5-7 years so can accept risk.
 
This is a very fair query from an Irish point of view. In US and UK it seems a really easy thing to do. I had a stocks and shares ISA in the UK, no tax, very reasonable charges, easy to set up through almost any bank or self directed through an online platform. Putting a small amount away monthly really seemed to add up quite quickly.

Doesnt seem so straightforward here. Either track an index with Degiro etc at low cost but then have to deal with tricky tax complications as a regular saver, or else pay at least 1% AMC for an actively managed fund which will sort the significant amount of tax that needs to be paid.

Despite the obvious downside, it's no wonder so many people just leave money sitting in low interest deposit accounts here.
 
Until the Exit tax issue gets sorted, I would go with Berkshire Hathaway BRK.B
You can add monthly to the position using Trade Republic of Trading212
 
AJAM said:
Until the Exit tax issue gets sorted, I would go with Berkshire Hathaway BRK.B
You can add monthly to the position using Trade Republic of Trading212
Click to expand...
Is Berkshire Hathaway BRK.B similar to an ETF but taxed differently?
 
dublinaam said:
Is Berkshire Hathaway BRK.B similar to an ETF but taxed differently?
Click to expand...
It's a normal share so taxed as such (and doesn't pay dividends) but as a large conglomerate offers a level of diversification not offered by most other individual company shares, but not as much as many/most common equity/index tracking ETFs. This infographic gives an idea of the asset mix. The panel on the left represents the value of the core BH businesses as opposed to its equity and cash/bonds holdings.

berkshire-2-sotp.png
 
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Another option to add to the mix is Revolut's Robo-Advisor. It's an automated ETF investment service that creates personalised portfolios based on your individual needs, risk tolerance, and goals. You can start with €100 and set up recurring top-ups from just €10. The annual management fee is 0.75%
 
bigred said:
Another option to add to the mix is Revolut's Robo-Advisor. It's an automated ETF investment service that creates personalised portfolios based on your individual needs, risk tolerance, and goals. You can start with €100 and set up recurring top-ups from just €10. The annual management fee is 0.75%
Click to expand...
Is this not giving the worst of both worlds? Dealing with ETF tax issues and a separate annual management fee?
 
jpmackey said:
On Trading212 you can set up a “pie” that mimics the top 30-50 holdings of an ETF and automatically invest at those weightings regularly.
Click to expand...
Is it accumulating (dividends) otherwise becomes a bit challenging from a tax perspective?
 
Is it accumulating (dividends) otherwise becomes a bit challenging from a tax perspective?
Click to expand...
Pies are not accumulating. It's a basket of individual stocks, it's not a fund.

It pays out the dividends then buys more of the same stocks with the payed-out dividends. You still have to pay tax on them annually.
 
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Persia said:
Is it accumulating (dividends) otherwise becomes a bit challenging from a tax perspective?
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Yes you can set it to invest the dividends automatically into the pie. But don’t see what the challenge is; run off an annual statement of total dividends received and add that to your P12 for the year.
 
jpmackey said:
Yes you can set it to invest the dividends automatically into the pie. But don’t see what the challenge is; run off an annual statement of total dividends received and add that to your P12 for the year.
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For the PAYE worker, not familiar with doing a tax return, it presents an issue.

A) ignore requirement and hope Revenue doesn't audit.

B) Engage an accountant and pay €300+ for them to do return.

C) Learn how to do a return yourself.

Option C from listening to colleagues over the years, who have an ostrich like refusal to deal with tax matters arising from Company share disposal, is a non event....its a catch me if you can play.

So yes, for most it is a challenge, whether accecpted or ignored it presents hurdles.
 
Logging into one's Revenue myAccount and sticking the total dividend income figure into the appropriate field doesn't really take much learning or need to cost several hundred euros?
 
jpmackey said:
Yes you can set it to invest the dividends automatically into the pie. But don’t see what the challenge is; run off an annual statement of total dividends received and add that to your P12 for the year.
Click to expand...
Automatically reinvesting the dividends doesn't make it less challenging (which isn't very). You have to declare the dividends either way.
 
ClubMan said:
Logging into one's Revenue myAccount and sticking the total dividend income figure into the appropriate field doesn't really take much learning or need to cost several hundred euros?
Click to expand...
You must have worked with some exceptionally tax compliant colleagues....my experience is different, most don't declare profits arising out of company share disposal, relying on ignorance etc as a defence if collared.
 
Honestly, if someone finds filing an income tax return comprising of multiple dividends, share disposals, tax credit adjustments etc. difficult, then they shouldn’t get involved in creating and managing their own investment portfolio.
 
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