Best way to invest 10k + 400 monthly

[Bill90.]

Hi there.

I am new here and love reading through the threads, especially the investment section.

I'm 31 and looking for the best way to invest 10k initially and 400 monthly after for the long term.10/20+ years.

I have been looking at the Ask paul investment club (Zurich fund) and I believe the fee is 1.25 + 0.5=1.5%. The exit tax and deemed disposal is putting me off tho.

Is direct investment in a diversified selection of individual companies better as its 33% CGT?. I know it takes more work, time, and knowledge, and probably risk as you're trying to beat the market.

I would prefer to invest in an etf (s&p500) but the monthly investmets will be a complete disaster when the 8 years are up.

Just looking for advice here and the pros and cons of both? And maybe any suggestions on how to best invest monthly. Preferably passive investment.

Is trading 212 ok if I was to go down the buying shares route?. I like the layout of the app and its easy to track everything.

Bit of background, 31 debt/mortgage free and prsa pension with Davy but I'm not paying much into it as most of my income I'd from rental so it's not tax efficient.

Any advice/recommendations/guidance would be greatly appreciated. Thanks.

 

[Marc]

You should probably just pay more into the PRSA.

your total income is taxed and therefore if you make a larger pension contribution, you will reduce your taxable income obtaining tax relief at your highest marginal rate

 

[Bill90.]

You should probably just pay more into the PRSA.

your total income is taxed and therefore if you make a larger pension contribution, you will reduce your taxable income obtaining tax relief at your highest marginal rate

I don't want to lock the money away and I'm getting no tax relief on the way in because its from rental income so its of no benefit. Except the tax free lump sum but I would prefer to have access to it.

 

[Marc]

Do you not have any earned income at all? Do you not expect to have any earned income over the next 20 years?

You are 31 you can access a PRSA at age 50 that’s in your timeframe surely?

it’s a common misconception that there is no relief from tax.

we have a client in mid 50s no earned income at all and never worked in paid employment. They paid a couple of hundred grand into a PRSA recently. Has a very substantial investment portfolio so obtaining income tax relief on dividends at 52% and no capital gains tax on gains. Currently worth nearly €900k.

when it gets to €2m they can have €500k back in their hand with an effective rate of tax of 12%.

So they are still getting relief from taxes even if there is no upfront deductible against earned income

Personal Savings Accounts

This guide sets out how a Personal Retirement Savings account (PRSA) combined with an Approved Retirement Fund (ARF) can be used by any Irish Investor between the ages of 18 and 75 to invest personal savings in a tax efficient way

joom.ag

 

[NoRegretsCoyote]

Bit of background, 31 debt/mortgage free and prsa pension with Davy but I'm not paying much into it as most of my income I'd from rental so it's not tax efficient.

Your PRSA accumulates with no CGT.

Other investments will be subject to CGT.

 

[GSheehy]

@Bill90.

You can access that Zurich product at a lower cost - 101% Allocation, AMC of 1% + 0.01% (Other Ongoing Charges) for the Indexed Global Equity (Blackrock) Fund - but it's on an execution only basis.

Have a look at Discount Brokers

Gerard.

 

[NoRegretsCoyote]

Bit of background, 31 debt/mortgage free and prsa pension with Davy but I'm not paying much into it as most of my income I'd from rental so it's not tax efficient.

A 31-year-old with most of their income from a non-leveraged property portfolio is not very typical.

It's hard to give advice without knowing much about what your income is, what your future needs are, etc.

This is really a money makeover question.

 

[MugsGame]

obtaining income tax relief on dividends at 52%

Just for clarity - you mean that earning the dividends within the pension wrapper exempts them from Irish income tax? Is there not some income tax (albeit not the full 52%) payable at source depending on the origin of the equity - or can e.g. US dividend withholding tax be reclaimed in this situation?

As opposed to dividends outside the pension wrapper qualifying for tax relief on pension contributions (which they don't, as they're not earned income).