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By Noel Kelly, Business Manager, Standard Life Top ten investment tips: I am regularly asked about ‘get-rich-quick’ schemes, sure-fire investments and so on. Believe me, I would happily share this knowledge and make you a millionaire overnight if it were that simple! Investment is an art not a science but thankfully, there are some rules of thumb to adopt, and common mistakes to avoid. I can’t promise to make you rich but hopefully, in time, you should be a bit better off! If you are investing longer term, say 10 years or more the following tips might help: 1. Be honest, how much risk are you truly willing to take? Peace of mind is priceless. If you can’t bear losing 25% of your money in a year or two, then don't invest too much in shares. They can plummet – remember 2008! 2. How much should you save? Many people do not realise they need to save a good chunk of money over a significant period of time to end up with a decent nest egg. Magic shares that go up 50 or 100 fold are extremely rare! So, compound interest is your best friend and will multiply your money over time, preferably feeding it through regular savings or top ups if your income is variable. Saving €50 to €100 per month might feel virtuous but is unlikely to be enough for many people’s investment goals. See table below to check out how much you need to save. You need a fund of approximately €350,000 to give you an income of €18,000 per annum or half the average industrial wage at 65. Age 25 35 45 Premium per month to give €350k at age 65 Monthly premium (gross) €238 €432 €864 Assume 1% AMC, 6% growth p.a. The above does not include any state benefits you may be entitled to. 3. Don’t forget if you’re a taxpayer, long term investment is a no brainer. Saving via a pension allows a tax saving of 20% to 41% for standard rate and higher rate taxpayers respectively. If you can afford to save. Why give the taxman 20% or 41% of your hard-earned money. 4. Don't try and time the stockmarket, except when there’s panic on the streets, no-one wants to buy and you have the means. Many people won’t have the time or the money to seize these opportunities, so regular drip feeding your money into stockmarkets aptly called ‘averaging in’ eliminates worries about buying at market highs or selling at lows. 5. Read widely, money journalists tend to be very knowledgeable and bang up to date for investors with insights on good value for money, charges latest trends, hottest products, things to avoid etc. 6. Diversify, don’t have all your money invested in a handful of stocks, one country, one sector etc. Many unfortunate Irish investors were heavily, if not entirely, weighted in Irish banks with hazardous results. Don’t miss out on exposure to different returns: small companies as well as large, emerging markets in addition to Europe. 7. Don’t buy on the basis of cheap fees, or past performance. Charges are definite – future performance is not. The most expensive investment provider is not always the best. Active funds can out-perform or under-perform passive funds, the issue is not choosing one approach or the other but using both. 8. Good professional advice is invaluable if you’re not financially literate enough to make prudent investments decisions over the long term. Especially as you get older and need to decide on the timing of moving out of shares into safer assets like certain property and government bonds. * Average industrial wage is approximately €36,000 per annum, according to CSO, 2012… An annuity rate of 5% is assumed.