5 ways to invest €10,000: Tips for Irish investors

Some households in Ireland were able to save more during the pandemic, leaving many people with some extra money in the bank.

If you’ve managed to save €10,000, there are a few smart ways to save and even grow that money.

Here are five things Irish investors can do with €10,000

1. Contribute more to your pension

Even if you’re far from retirement, contributing more to your pension (called an additional voluntary contribution) can be a wise investment for your future.

Pension saving is one of the few areas where you can still get tax relief. You receive tax relief on your own contributions to a pension arrangement within certain limits and you are generally not taxable on your employer’s contributions, if any (effectively this is tax-free pay).

Investment returns earned by pension schemes are also exempt from capital gains and dividend income tax and the lump sum you can take at retirement is tax-free up to certain limits.

Remember there is a risk for investments to lose money or underperform, which means less retirement income later on.

2. Invest in a basket of stocks

Stocks can provide the best growth potential and can even provide some passive income from dividend payments. However, stocks also open investors up to some risk if the companies they invest in perform poorly.

Major global events can trigger volatility in the stock market, but financial experts say periods of uncertainty shouldn’t discourage long-term investors.

Here is a recent article on how to buy shares if it's your first time investing in the stock market. Always try and make sure you spread your investment across a diverse range of assets/stocks to lower your risk.

3. Diversify your investment portfolio with ETFs

Exchange traded funds, or ETFs, are convenient investment tools used to efficiently gain exposure to a market by tracking an index. They’re purchased and traded like a traditional stock, but ETFs have a few key advantages.

Basically, purchasing one share of an ETF gives you fractional shares of several stocks, all in one transaction. This allows you to avoid transaction fees, grow your wealth and earn regular dividends.

Keep in mind that ETFs still come with some risk and unfortunately in Ireland some onerous tax requirements. Here is more info on how you can buy products like ETF's online.

4. Buy gold to minimise investment risk

Gold is an excellent long-term investment because its value tends to rise during times of political and economic uncertainty.

That’s because gold is a limited resource that will always have value, unlike paper currencies and stock market investments.

Investors purchase gold to protect themselves from economic inflation, deflation, and instability, according to Investopedia.

However, the value of this safe-haven investment isn’t always guaranteed. Central banks own most of the world’s gold and large sales of gold could tank its value, The Irish Independent reported.

5. Property

An eternal favourite in Ireland, investing in property doesn't always mean that you have to buy a property outright. You could invest in one of Ireland's largest homebuilders that are on the stock market such as Cairn Homes or Glenveagh.

Glenveagh, saw remarkable growth in 2021 despite ongoing restrictions and supply chain challenges due to the coronavirus pandemic. The company completed 1,150 homes and generated €476 million in revenue in fiscal year 2021, a significant increase from the previous fiscal year when it reported €232 million in revenue.

Investors can look beyond traditional builders and consider the various companies that support real estate development in Ireland.

Development crowdfunding firm Property Bridges has been helping Irish builders connect with investors to finance construction projects since 2018. The unique lending model is designed to make it easier for developers to secure financing while offering lower entry levels for investors.