If you are thinking of becoming a regular saver, you are going to have some questions. We can help you get started with this handy Introduction to Saving guide.
It is not easy to be a saver these days. Deposit rates just aren’t what they used to be. If you want to see growth in your nest egg, a standard deposit account is unlikely to deliver. You need to look at other options that can give you results.
So how do you decide what is right for you? Let’s take it step by step.
Identify your goals
If you are working towards a short-term goal such as a new car, then saving your money in a medium to long-term fund is not going to suit you. But if you are planning for the future, maybe the children’s education, then it is worth considering a savings option that aims to give you better results over a longer term.
You can use our Investment Suitability Tool to help you figure out if saving is the best way to achieve your goals but we suggest you also talk to an expert. A Financial Broker can talk you through the risks associated with this type of saving so you can decide if it is the right option for you.
Work out a plan for your money
You will generally get the best returns if you save regular amounts (at least €150 a month) over a medium to long term (at least 5-7 years). Don’t choose this option if you think you are going to need this money in the near future.
You need to have enough savings to put money away comfortably, cover your basic living expenses and still have an emergency fund you can access, just in case.
Understand your risk profile
Your attitude to risk will be a major factor in how you choose to save for your future.
If you are cautious about your money, then maybe you need to consider alternative saving options, or at least choose low-risk options. But if you are prepared to take on some risk, you may be willing to speculate if there is a possibility of a good return on your money.
Choose a fund
Once you decide to invest and you figure out what level of risk you are comfortable with, you can start to work with your Financial Broker to see which funds you should invest in.
Risk and Return
Different types of investments grow at different rates but every investment carries some risk. The higher the risk, the greater the potential rewards AND the potential losses.
Fortunately, you can spread your risk to protect your money. Invest in different assets that will not have their ups and downs at the same time. It is called diversification. We like to think of it as “not putting all your eggs in one basket”.
At Friends First, we offer over 40 investment funds. We rate each one using the European Securities and Markets Authority (ESMA) risk scale where a score of 1 indicates the lowest risk and 7 indicates the highest risk.
You can select a readymade portfolio fund that suits the level of risk you want to take. Or you can take more control of your investment and work with your Financial Broker to build your own portfolio. The choice is yours.
Why Friends First?
We offer investments to suit all needs – you can build your own portfolio or choose a ready-made investment solution from our multi asset portfolio range, Magnet