Ya I think ill be going with the fund option alright, unless something particularly good comes upThe fund option is certainly a better way to go instead of putting all your eggs into one SME basket.
I've been looking up some of the companies that they have invested in in the past and they are very profitable companies, with turnover in the tens of millions, some of them with fairly low operating costs too.
Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
What about the Goodbody/Hughes Blake one?
Unless things have changed since the days of the old BES scheme - when Ireland was booming economically - EIIS investments are best avoided as the vast majority of them will lose money or else deliver a negligible return if you're lucky enough to get your money back at all. The old saw about friends, family and fools is as relevant as ever. Caveat emptor.
There is a huge appetite for tax breaks that are not pension contributions.
If an investment doesn't look like a good investment in its own right, then it's still not a good investment even if there are tax breaks connected to it.
This cannot be emphasised enough. If you want to take a little more risk than buying Microsoft shares there are plenty of lower tiers of investments with higher risk (AIM, penny stocks etc.) before you reach the typical company seeking EII funding. This is not to denigrate these companies at all, but I think if people were more aware of how small these companies are and thus how high the risks are, the perception of the scheme would be much better.People do have to be aware that they are investing in SME's and the risks that go with it.
At a bare minimum you get 30% of your money back from Revenue when you invest, if the company is still around and has grown by a single employee four years later you'll get another 10% back from Revenue. While losing the other 60-70% would obviously be very bad, having a floor set on the amount you can lose, while investing in such high-risk assets is pretty rare....if you're lucky enough to get your money back at all
Just to point out that this cap you mention is put in-place by the fund you are investing in, not the EII Scheme specifically. You can invest in EIIS companies directly with no cap on your returns, just like you would invest in any other company. There is a big difference between investing in EII companies through a fund vs. directly, with the fund just trying to get an unsophisticated investor a small but more likely return, while investing directly is similar to investing in any other company where you may get a big winner 1/10 times. I appreciate there is a market for what these funds do, but if you saw the fees-upon-fees they layer on the companies who receive money (which the investor will never see) and how their focus is much more about this than your return, you might not feel too comfortable about it.The returns are capped at 110% of investment, so the broader you spread it the safer is seems to me.
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