There are many reasons you could run in to €2,500. (Here’s one way). The important thing right now isn’t how you got it, but what you’re going to do with it. Is it worth investing it?
Some might spend it on a holiday or retail therapy. Others however, want something to show for their money. They want to invest it for growth. This might be you.
You’re probably sitting there wondering, “Yeah, I have €2,500, but can I start an account with that money? And is it worth investing it if I do?”
The answer to both of those questions is yes.
Now, as everyone will tell you, the surest way to invest your money for growth is over the long term. If you’re a younger investor, you can watch that €2,500 expand in to a very substantial chunk of money.
For fun, let’s say that you live in a utopia where there are no taxes on the growth of your money (which is true for pensions, but more on that later), and your money grows at a constant rate (in reality the ups and downs will average out over time).
Let’s assume growth 9% annually – reflecting the kind of higher-risk opportunities that might be right for you at an early point in your investment career. This is in line with the performance of several funds Moneycube can offer.
And let’s say today is your 25th birthday! On this beautiful, sunny day, you decide that you’re going to invest that €2,500.
Roll forward 8 years
Then, on another beautiful day, while celebrating your 33rd birthday, you decide to check your account to see €4,981. You’ve doubled your money. But, you’re well off, so you keep your money in the market and watch it keep building.
On your 41st birthday you decide to check your account again, and realize your investment is now knocking on for €10,000. At a 9% growth rate, you double your money every 8 years (well, 8 years and one month to be precise).
That’s all fun and games but you want to give it one more run. Now it’s your 60th birthday, and that small €2,500 investment has turned in to a whooping €51,035! Now that’s the proper amount of money for a holiday!
Back in reality: is it still worth investing?
Now the above scenario is an idealistic way to think about investing. Moneycube is here to help you deal with the real world.
Put that money into a pension, and it’s simple: your money won’t be taxed. Instead it will compound to over €51,000.
At 60 you’d be able to take a quarter of your pension pot completely tax-free, with the rest being taxed as regular income as you draw it down.
Not everyone wants to lock up their money in a pension right now though. We just want to invest for a few years, in a regular account to make some return because we know that the banks are paying us nothing for keeping it on deposit.
In this, much more likely scenario, investment is still a great idea, because the prospects for growth far outstrip leaving your money in the bank, and because it’s an important habit to get into.
Sounds good – where do I start?
There are many ways to do that, but because you are on the Moneycube website, we’re obliged to say that the best way to do it is in investment funds with us!
In that scenario, you’d be liable to the government’s exit tax every 8 years, or when you sell, if that happens sooner. At the current tax rate, you’d get €3,964 back after taxes on your 33rd birthday. That’s 59% up on your initial €2,500.
Starting an account with Moneycube is easy, and a great way to get your feet wet in investing! We’ll get you started in different investment funds that have a strong record of growth and put your money to work.
Get started with Moneycube today.