The ease with which one can invest in the stock market, by simply tapping a few buttons on your phone, might tempt you to take a punt on a random company you fancy the look of.
Yes, you might know someone who invested in Nvidia before the chipmaker became the golden goose, but as last week’s episode of Better with Money explained, the general investing public should not be going near picking individual stocks.
Having warned us off vibes-based investing, qualified financial adviser and chartered tax adviser Dan Malone from honest.ie is back to walk a “friend” through the process of using online trading platforms to build long-term wealth.
“Sarah” wink, wink, is a beginner investor, on an average income and doesn’t know her assets from her elbow.
The first thing Malone would say to her is that the process starts with the pension, maxing out her contributions to net the biggest tax break on the returns.
Assuming she has an emergency fund in place, the next step is to pick a broker.
He recommends choosing a user-friendly, low-fee broker app such as Trading 212, Trade Republic, Degiro or Lightyear etc, and trying them out with small deposits, before committing to a long-term mindset.
“Because once this thing is set up, the best thing you can do is never open that app again.”
'99.9% of people shouldn’t be picking stocks': A beginner’s guide to investment apps in Ireland
Having explained the value of Exchange Traded Funds (ETFs) in building long-term wealth in last week’s show, Malone walks Sarah through the process of selecting one on her chosen broker app. He elaborates on how some of them are structured and why buying euro-denominated listings will avoid foreign exchange costs.
The conversation also covers realistic amounts of money, euro cost averaging vs lump sums, and the Republic’s deemed disposal rules, which are essential to being tax compliant.
And it’s all in plain English for the Sarahs among us.
You can listen to this episode on the player above or search for Better with Money wherever you get your podcasts.
Presented by Aideen Finnegan.
- This episode is for information purposes only and does constitute financial advice.
