Have you ever opened an investment app only to be bamboozled by a veritable alphabet soup of acronyms, jargon, percentages and arrows?
If that was a thrilling sensation and the icons on your phone’s screen made sense to you, then you can kindly move along.
This episode of Better with Money is for the lily-livered nervous Nellies among us who want to start DIY investing but cannot make head nor tail of apps like Degiro, Trade Republic and Trading212.
Enter Dan Malone from honest.ie, a chartered accountant, chartered tax adviser and qualified financial adviser.
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He analyses the popular online trading platforms in Ireland and which ones might suit the novice investor.
Many of them offer 0% commission, so what are the hidden fees and charges you should watch out for? Dan has the acronyms and he’s not afraid to use them. You’ll be the same.
But hold your horses. Don’t just start buying shares in companies that you like the look of. Vibes-based investing is a no-no for beginners.
“I fundamentally believe that 99.9% of the Irish general investing population should not be going near individual stocks.”
[ I’ve recently come into a lump sum and want to invest it. What should I do?Opens in new window ]
Dan explains the tedious process professional traders use to analyse whether a company is worth investing in, and if they cannot outperform index funds then what chance have we, the investor plebs?
“But what’s an index fund?” I hear you huff. Don’t worry, it’s all explained in today’s episode.
In Dan’s opinion, an investment strategy more suited to first-timers involves automating payments into an exchange-traded fund and saying goodbye to that money for years, or even decades.
That’s why he’s at pains to emphasise that starting early is the way to long-term wealth.
“You can do grand over a five-, six-, seven-year time horizon. But compound interest – which is when your returns start earning returns of themselves, that snowball effect – to see the real power of that you really have to get into your 10, 20, 30 years.”
This is especially true of women, who not only live longer than men, but who will face a gender pay gap and pension gap during their lifetimes too.
You can listen to this episode on the player above or search for Better with Money from The Irish Times.
Investing your money carries a risk of losing it. This episode is for information purposes only and does not constitute financial advice.
