M
Molly
Guest
I hope you don't mind me posting this question in this forum instead of the Savings and Investments forum - it's just that the standard of analysis seems far higher here.
My husband Leo has just retired. Our only income is the contributory old age pension which is €250 per week. We have a nice local authority house on which we pay a small rent. We are both in tip top health, so we expect to live for another 20 or 30 years.
We live a fairly simple lifestyle. Leo is an early riser. He always brings me my breakfast in bed. He goes on long walks every day and has a sandwich and a few pints in some pub off Grafton street. I stay at home most of the day, practising my singing, talking to myself in bed and surfing the internet.
20 years ago, Leo inherited £78,756.40 from some Eastern European relative. We have kept in the bank as I didn't want to take <!--EZCODE ITALIC START--> any<!--EZCODE ITALIC END--> risk. I manage the household finances as I have always done. I pay all the housekeeping expenses out of the pension and I give Leo the interest on our savings for buying pints. He is complaining that it is not enough. The interest is very low these days - back in the late 80's he did much better - we were getting 10% a year and up to 15% at one stage. But I always learned that you should live on your interest and not touch your capital and that is what I am insisting on doing. Leo keeps saying that he is not able to drink as much as he used to 20 years ago, but he is always complaining and I am not touching the capital.
I have just recently read the Guide to Savings and Investments and I am wondering if the deposit account was the safest place for my money all along? 20 years ago we could have bought a house on Eccles Street with the money. Now €100,000 wouldn't even buy a one bed apartment. I am thinking of investing in the stockmarket.
I like Brendan's advice of buying 10 different shares and holding them forever. Even I can understand that. Leo will have to live off the dividend income but that should rise over time - hopefully keeping pace with the price of pints. The dividend income seems to rise steadily enough although I see that the underlying value of the shares will rise and fall over time.
So here are my questions:
For a totally risk averse investor like me with no other assets and no other income, is investing in shares risky? ( I don't want to hear the words <!--EZCODE ITALIC START--> standard deviation<!--EZCODE ITALIC END--> or <!--EZCODE ITALIC START--> volatility<!--EZCODE ITALIC END--> or any other technical terms in the answer.)
Is it ok to invest only in Irish shares as Brendan suggests? Would it be significantly less risky if I bought shares in other countries?
And of course, how many shares should I hold to minimise the risk? (I don't want to buy a unit-linked fund as the charges are too high and I will pay 20% tax on encashment whereas the dividend income is unlikely to bring me above the income tax threshold. )
Thanks
Molly
My husband Leo has just retired. Our only income is the contributory old age pension which is €250 per week. We have a nice local authority house on which we pay a small rent. We are both in tip top health, so we expect to live for another 20 or 30 years.
We live a fairly simple lifestyle. Leo is an early riser. He always brings me my breakfast in bed. He goes on long walks every day and has a sandwich and a few pints in some pub off Grafton street. I stay at home most of the day, practising my singing, talking to myself in bed and surfing the internet.
20 years ago, Leo inherited £78,756.40 from some Eastern European relative. We have kept in the bank as I didn't want to take <!--EZCODE ITALIC START--> any<!--EZCODE ITALIC END--> risk. I manage the household finances as I have always done. I pay all the housekeeping expenses out of the pension and I give Leo the interest on our savings for buying pints. He is complaining that it is not enough. The interest is very low these days - back in the late 80's he did much better - we were getting 10% a year and up to 15% at one stage. But I always learned that you should live on your interest and not touch your capital and that is what I am insisting on doing. Leo keeps saying that he is not able to drink as much as he used to 20 years ago, but he is always complaining and I am not touching the capital.
I have just recently read the Guide to Savings and Investments and I am wondering if the deposit account was the safest place for my money all along? 20 years ago we could have bought a house on Eccles Street with the money. Now €100,000 wouldn't even buy a one bed apartment. I am thinking of investing in the stockmarket.
I like Brendan's advice of buying 10 different shares and holding them forever. Even I can understand that. Leo will have to live off the dividend income but that should rise over time - hopefully keeping pace with the price of pints. The dividend income seems to rise steadily enough although I see that the underlying value of the shares will rise and fall over time.
So here are my questions:
For a totally risk averse investor like me with no other assets and no other income, is investing in shares risky? ( I don't want to hear the words <!--EZCODE ITALIC START--> standard deviation<!--EZCODE ITALIC END--> or <!--EZCODE ITALIC START--> volatility<!--EZCODE ITALIC END--> or any other technical terms in the answer.)
Is it ok to invest only in Irish shares as Brendan suggests? Would it be significantly less risky if I bought shares in other countries?
And of course, how many shares should I hold to minimise the risk? (I don't want to buy a unit-linked fund as the charges are too high and I will pay 20% tax on encashment whereas the dividend income is unlikely to bring me above the income tax threshold. )
Thanks
Molly