Moneycube is often asked about the investment alternatives for someone with around €10,000 to invest.
Is there a worthwhile alternative to leaving the cash in the bank? Yes, absolutely! We’ve set out some considerations for someone with this kind of sum to invest.
An investment fund is ideal
With €10,000 at stake, the risk of putting all your eggs in one basket, as well as the stockbroker costs, mean that buying individual shares is a difficult route to follow. And certain options are out of the question – for example, buying an investment property.
For most people in Ireland, far better to go with an investment fund. These funds pool money from many investors and use it to buy a range of assets as this video explains.
Moneycube has access to a wide range of ‘multi-asset’ funds which you can take advantage of with a sum of this size. These funds are relatively cheap to buy, and hold many underlying investments. They are designed for a range different risk/ reward ratings.
So the chances are there will be a multi-asset fund that matches your appetite for risk.
What’s your €10,000 for?
Are you investing to grow your lump sum, to generate an income, or maybe to start a fund and add to it every month? Depending on what you want, there will be a route for you.
The second side of this question is deciding how long you can put your money away for. In general, the longer you can afford to leave your cash, the higher the levels of risk/ reward you can take, as your investment has time to ride out bumps in the market.
Just want to get started? Tell Moneycube your investment requirements today
What are the growth prospects?
Growing your money is the whole point of investing after all.
Even post Covid-19, there are plenty of funds out there which have delivered annual growth of over 10% per year. This chart shows what a fund growing at 9% could look like after 5 years, including Moneycube fees. (Remember though that no investment grows at a constant rate, and growth is not guaranteed, so this is just an illustration).
You can see that in this scenario, €10,000 is worth just over €14,500 after five years. If you withdrew at that point, even after tax you’d have around €12,700. Compare that to the near-zero returns from your bank.
You can run your own investment scenarios using our investment returns calculator.
Consider adding to your savings
Now you’ve done the right thing with your money, consider following it by setting up a regular plan to top up. Building up wealth is all about good habits, and investing your first €10,000 is probably the hardest bit.
Focus on cost
With a sum like €10,000, you’ll want to avoid soaking a lot of the money up in one-off costs to access the investment. So be sure to scrutinise the transaction costs, and make sure they have been clearly set out to you.
The annual cost of a €10,000 investment with Moneycube is 1.25%.
Best places to invest in Ireland in 2020
Whether you’re a new investor, looking to invest a large lump sum, or seeking income from your investments, we’ve chosen five funds we think have strong potential, in 2020 and beyond.
Moneycube knows investments. Whether you have €10,000, €100,000, or more to invest, we’d love to help.
Get started with Moneycube today.