How to start investing

This article was developed in partnership with the Credit Union, a not-for-profit, community-owned financial institution.

Investing can be a useful tool that helps you to save towards your future goals. However, before making a financial investment, it is important to seek reliable advice from a qualified expert so that you are aware of the risks involved.

Things to consider before investing

Investing means putting some of your money into an asset, such as a share of a company, with the hope that your money will increase over time. Before you invest money, there are some things you should consider.

Set your goals

What do you hope to achieve through making an investment? It is a good idea to be clear about this before you speak with a financial adviser as it will help them to determine whether investing is the right choice for you.

If you want to be financially secure so that you are prepared for any unexpected expenses that may arise, informed investing could be a wise choice. However, if your reason for investing is to get rich quick, it might not be the best option for you. Every investment carries a certain amount of risk so you should only invest what you can afford to lose. While people invest in the hope that they will increase their wealth, this is never guaranteed, even if they have been successful with investments in the past. Before you invest in anything, you must understand the risk involved.

Look at your financial situation

Before you decide to invest, look at your own financial situation. If you are already finding it difficult to pay for essentials such as rent, food and healthcare, or if you have significant debts to pay, investing might not be the best choice for you. Additionally, if you worry about money and don’t like uncertainty or taking risks, you might want to reconsider investing.

If you feel financially comfortable and are interested in investing, it might be worth exploring your options with a regulated and qualified financial advisor. 

You might decide that investing is not a realistic option for you right now. However, it is something you can come back to later if your financial situation changes. Until then, you can learn about the topic by reading about investing for beginners.

Get help from experts

It is really important to seek expert advice before investing your money. If somebody you know or follow has made investments and earned money as a result, it does not mean that they are an expert. 

A regulated and qualified financial adviser with relevant experience will be able to offer you the advice that you are looking for. The Central Bank keeps a list of firms and individuals authorised to sell and to advise on investment products. Before meeting with a financial adviser, you should check this list to ensure they are regulated by the Central Bank. 

It is also important to check whether the financial adviser has a professional qualification (such as a QFA) to give financial advice, and whether they have experience working with people like you. Make sure that you ask about any fees that you may have to pay too. It can be a good idea to consult a truly independent financial adviser who is not tied to any company. They will be able to offer unbiased information based on the best outcomes for you.

Before choosing a financial adviser, contact a number of them and compare their fees, qualifications and experience.

Question what you see online

It is important to be very cautious about where you get your financial advice from. Many of the investment opportunities that you see on social media are fake. For example, because of the growing interest in cryptocurrencies, a number of scam accounts have been set up promising people that they can get rich quick with their cryptocurrency investment opportunities. Sometimes they will use fake celebrity endorsements in order to make them appear legitimate. These scams can cause people to lose thousands of euro and should be avoided. It is best to consult with a qualified advisor before making any investment decisions.

How to avoid fake investment opportunities

To avoid falling for one of these fake investment opportunities, keep the following in mind:

• Only accept financial advice from a regulated and qualified financial advisor
• Do not offer your financial details or send payments to anyone who contacts you about investment opportunities via social media or email
• Be wary of anyone who promises that you can get rich quickly and with minimal effort
• Remember, if it sounds too good to be true, it probably is

What you do with your money is your decision. Regardless of how much money you have, what age you are or what others are doing, you don’t need to be investing in the stock market or buying cryptocurrency if it is not the right decision for you. If you feel under pressure to invest, it is a good idea to explore why you are feeling this way. Know that your self-worth is not tied to how much money you have or your financial decisions.

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