Savings & Investments

Planning for Tomorrow: 7 Proven Tips for Long-Term Investing Success

Nick Charalambous13th Feb 2023 • 4 min read

Investing for the long term can feel like a big step, but it’s a great way to build wealth and ensure a secure financial future. However, if you’re new to the world of finance, it can be a bit overwhelming. In this blog post, we have compiled our seven tips that can help you get started with long-term investing. By following these tips, you’ll be well on your way to achieving financial success and security.

Start Early

The earlier you start investing, the more time your money has to grow. The power of compounding means that your investments will grow at an exponential rate over time, so the earlier you start, the more time you have to reap the benefits. As mentioned in our previous blog post, one of the most common financial mistakes is not having a budget. To calculate your own personal person, check out our Budget Calculator.

Create a Diversified Portfolio

One of the most important aspects of successful investing is diversification. By spreading your investments across different types of assets, you can reduce your risk and increase the likelihood of earning a steady return over the long term. To start making your money work for you, our Alpha savings and investment club creates diversification and consistency.

Set Realistic Expectations

Investing is not a get-rich-quick scheme. It takes time, patience, and a lot of discipline. Set realistic expectations for your investments, and be prepared for ups and downs along the way.

Financial Planning for long term investing

Make a Plan and Stick to It

Develop a long-term investment plan and stick to it. Don’t let short-term market fluctuations dictate your investment decisions. Stay focused on your goals and resist the urge to make impulsive trades.

Educate Yourself

Learning about different types of investments, market trends, and financial concepts can help you make informed investment decisions. Take advantage of online resources, books, and educational programs to improve your knowledge and understanding of the investment world. Visit our YouTube channel and watch our latest webinars on various financial topics.

Consider Professional Advice

Consulting with a financial advisor can help you make informed investment decisions, understand your options, and build a diversified portfolio that aligns with your goals and risk tolerance.

Monitor Your Investments Regularly

Regularly monitoring your investments can help you stay on track and make adjustments as needed. Review your portfolio at least once a year to ensure that your investments are still aligned with your goals and that you are on track to achieve your financial objectives.

Conclusion

Long-term investing can be a powerful tool for building wealth and securing your financial future. By following these seven tips, you can start your journey to financial independence with confidence. If you need help getting started, Alpha Wealth is here to help. Our experienced team of financial advisors can provide you with the guidance, advice, and support you need to achieve your investment goals. Contact us today to schedule a consultation and start building your financial future.

For more financial tips and advice, make sure to check out our recent blog posts using the links below.

Nick Charalambous

13th Feb 2023

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Savings & Investments

What Is the Government’s New Savings and Investment Scheme?

The Government is developing a new Savings and Investment Scheme which is expected to become available in 2027. The new savings and investment scheme is designed to make investing more accessible and tax-efficient for Irish savers. It will allow individuals to invest up to a set annual limit through an investment account, with no minimum contribution required.

Why does the Government want people to invest?

Keeping money in a deposit account can be a suitable option for many people, particularly when saving for short-term needs or keeping an emergency fund, the Government argues that too much household wealth remains in low deposits.

The concern is that money held in cash may not grow significantly over time, particularly when inflation reduces its buying power.

The Government therefore wants to give people another option, which is investing some of their longer-term savings in an investment account.

The aim is not simply to get people to take more risk. Alternatively, the Government wants to make investing more accessible to people who may traditionally have kept all their savings in cash.

Who is the scheme for?

Designed for Irish tax residents aged 18 and over who hold a Personal Public Service Number (PPSN).

Aimed at everyday savers and middle-income households.

Encourages people to move some of their savings from bank accounts earning low levels of interest into capital-market investments.

Designed to make investing more straightforward and accessible, rather than being aimed solely at experienced investors.

There will be no minimum contribution, allowing people to start with an amount they are comfortable investing.

An annual investment limit will apply.

Provides people another option for money they can afford to invest for the long term, while keeping cash savings available for short-term needs and emergencies.

What are the tax benefits?

The exact tax-free threshold, flat tax rate and annual contribution limit have not yet been announced and are expected to form part of Budget 2027 announcing on October 6th.

Some thoughts:

76% of people support the introduction of the Government’s savings and investment scheme.
1 in 5 are concerned that the scheme will mainly benefit wealthier households.
1 in 3 are worried about potentially losing money through the scheme.
19% lack trust in the Government’s ability to oversee and manage the scheme.
19% are concerned about potential fees and tax implications.

This is a positive way forward for Irish savers, making investing more accessible and helping more people consider the potential of long-term investing. Stay tuned for further updates as we get closer to Budget 2027.

Maximise your savings and make your money work harder for you

In Ireland, it has been revealed there is over €100 billion sitting in deposits across Ireland earning less than one percent – even when there is a wide range of saving and investment options available. It’s no secret that it can be challenging to decide where to put your hard-earned money to avoid it being eroded by inflation and sometimes you just don’t know who to go to or where to start.

To ensure your money is working at its fullest potential, check out these four essential savings strategies:

1. Segregate Your Savings by Time

Categorise your savings into short-term (next five years), medium-term (five years to retirement), and long-term (retirement and beyond) “pots.” This structure allows you to align your financial strategy with your timeline and risk comfort level.

For example, short-term savings should be in secure, low-risk deposit accounts.
Medium-term savings can include options like ETFs or diversified investment accounts with potential returns over 5% annually but may come with moderate risk.
Long-term savings, such as pensions, not only offer higher growth potential but also significant tax advantages.

2. Shop Around for the Best Rates

Once your savings are categorised, finding the best rate for each time period is crucial. While traditional Irish banks like AIB and Bank of Ireland offer low deposit rates, foreign online banks like Raisin, Trade Republic, and Bunq can provide more competitive interest rates of over 2% annually (before tax). Revolut’s entry into the Irish market has opened eyes to these options, demonstrating that better rates are achievable. For monthly savings, AIB and Bank of Ireland do offer rates as high as 3% (as of November 2024), but understanding the terms is essential to maintain those benefits over time.

3. Understand Fees, Charges, and Taxes

Hidden fees and tax implications can eat into your savings. For instance, while Revolut and N26 accounts may have additional fees, Trade Republic and Lightyear typically do not. When investing for the medium term (five years or more), fees set by brokers can vary widely. High management charges or contribution fees can erode your potential returns, so it’s important to choose wisely and compare offerings. Additionally, some accounts are taxed differently, so knowing the details is key to optimising your returns.

4. Seek Impartial Financial Advice

While it’s tempting to rely solely on personal research, getting impartial financial advice ensures a well-rounded perspective. Tied agents, such as those from AIB or Bank of Ireland who represent Irish Life or New Ireland Assurance, respectively, may only offer limited product choices. Independent financial advisors, on the other hand, can present a wider range of investment and savings products, ensuring you find the best fit for your goals. Consulting an independent advisor provides valuable insight into diverse options, helping you make informed decisions tailored to your financial needs.

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How to Save Money: 5 Tips to Maximise Your Savings

In today’s uncertain economy, getting the most out of your money is crucial. One of the easiest ways to improve your financial well-being is to ensure the interest on your savings outpaces the inflation rate. However, many of us need help figuring out where to begin – how much should we save and where should we put our money?

5 Tips to Maximise Your Savings

1. Get the Best Return on Savings

Look beyond Irish banks for better returns on your savings. Traditional options like the Credit Union, Post Office, or Irish banks are no longer the only choices. International institutions such as Revolut, Trade Republic, Raisin, and N26 offer competitive interest rates. Diversifying your savings across these alternatives can yield better returns and is a crucial strategy for maximising your savings potential.

2. Start Saving Early

Saving early is crucial to harness the benefits of compounding. Compounding means earning interest on your interest, accelerating wealth growth over time. The earlier you start, the more time your money has to grow, leading to significantly larger returns. Even small, regular contributions can grow substantially, providing a strong financial cushion for the future. Start early to maximise your investments and ensure a secure, prosperous financial future.

3. Save First, Spend Later

Warren Buffett advises saving before spending, meaning you should prioritise setting aside money before non-essential purchases. This approach builds a financial cushion, allowing you to invest in long-term opportunities without worrying about debt. Being smart with your money and planning ensures financial stability and reduces stress. Save a portion of your income first, then enjoy spending what’s left, knowing you’ve secured your future.

4. Ensure the return you are getting on your savings is higher than the rate of inflation

Basically, you want to ensure that the interest or returns you’re getting on your savings are higher than the inflation rate. If inflation erodes your money faster than it grows, you lose value. Aim for savings or investments that outpace inflation so your money retains its value over time and you don’t lose out.

5. Consider your financial goals: short, medium and long term

Setting short, medium, or long-term financial goals is essential to choosing the right place to save money. For short-term goals, an instant access savings account works well. For longer-term savings, consider options from insurance companies like Zurich or Aviva, which often offer better interest rates. Matching your financial goals with the appropriate institutions will help maximise your returns.

If you are seeking more advice on maximising your savings, book a financial review with Alpha Wealth today. Let our experts help you make the best choices for your financial goals.

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