Recommend Regular Savings Investment for 25yr old

M

Montbretia

Registered User
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40
Hi,
My daughter (aged 25) wishes to open some sort of regular investment policy (equity-based) with a 10-year time horizon. From my searches, I came up with the Vanguard Global Stock Index through a Standard Life Synergy Fund, hopefully with the capacity for additional single premiums when markets dip. Charge-wise, these funds seem okay. Any thoughts or alternative recommendations welcome.
 
I'd be interested in reading any replies or feedback on this topic too, perhaps some folk will reply yet.
 
Me too!

Vanguard have probably the best reputation for passive index tracking. They more or less created this entire industry.

Research shows passive investing is the best strategy for investing in stock market.

Standard life are fairly well known company. I have been a client in the past and overall was happy.

Are there any minimum or maximum on the payments you can make? Can you pause payments?

How much of your contribution is invested?

Are there any restrictions or fees on cashing out?

Do you understand the way the product will be taxed?

What are the fees via standard life for this product? Could you get lower fees on this product via a discount broker?
 
The best value option that you could get with the SLAC regular saver is for €500+pm as the allocation is 101% - (€125 - €499 is 100%). If, however, you wanted to add a single premium the allocation for that would be 100%. There would be early exit charges in the first 5 years of the contract. Early exit charges on the SPs are on a first-in-first-out basis.

The above terms are on a nil commission basis so you'd have to find an intermediary that would give you these terms and charge you a fee to execute the transaction. Otherwise you'll end up with higher AMCs or diminished allocation rates.

Gerard

www.InvestAndSave.ie
 
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Thanks!

Do you know the tracking error between the SL funds and the underlying vanguard funds over the last few years? (As a indicator of actual total costs to investor of using SL).

Can you pause payments?
Can you increase/decreases payments at any stage?
 
Hi Gerard

Do you offer SL funds yourself or just Zurich? If I go direct through SL, could I get the terms above?
Thanks
 
The (3 to 5yr) cumulative tracking error range is between 0.03% and 0.89%, depending on the fund selected.

The intermediary that you're buying the product through would have access to this information.

Gerard

www.bond.ie
 
Montbretia said:
My daughter (aged 25) wishes to open some sort of regular investment policy (equity-based) with a 10-year time horizon.
Click to expand...
Is your daughter:
  1. On a steady career track?
  2. A home-owner?
  3. maximizing tax-relieved pension contributions?
If the answer to all three is "Yes" then go ahead, but I suspect it is not.

For most 25 year olds their priority should be getting educated for a well-paid career, and then in a few years purchasing a home. Getting started on a pension is a good idea too if she can afford it.

Equity investment in Ireland outside a pension doesn't make much sense unless you have a lot of spare wealth. The upside is taxed heavily, and over ten years there is a material risk of a capital loss.

A lot of young people are getting their information from youtube and US forums where the tax situation is totally different. Your daughter has spent nearly half her life during an equity bull run too. There will be a correction at some stage and a lot of 20-something posters I see here don't seem to realise this.
 
She is a teacher, so pension is sorted. Not a home owner, but who wants to be at her age, more likely in 10 years time. In the meantime, she needs to save and this approach (drip-feed into equities) seems reasonable.
 
Montbretia said:
Not a home owner, but who wants to be at her age, more likely in 10 years time.
Click to expand...
For lots of people it can make sense to buy in their late or even mid 20s depending on their personal circumstances.

Risk of capital loss is really material over a five-year horizon. If she wants to buy a house in 5 years she would really resent a 20% capital loss compared to the 0% you get with a savings account these days.
 
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