Better With Money
'Never open that app again' - Investing platforms, ETFs, and the deemed disposal headache
05 May 2026
Transcript generated automatically by AI and may contain errors.
Chapter 1: What is the main topic discussed in this episode?
You're listening to The Irish Times.
This is Better With Money from The Irish Times. I'm Aideen Finnegan and today is part two of understanding DIY investing using online trading platforms. If you haven't heard part one with Dan Malone from Honest.ie, which was last week's episode, stop, do not pass go, do not collect $200 bucks. Just scroll back one week and listen to that first.
Or else this episode might sound to you a bit like, wait, what did he say? What was that? Dan is a chartered accountant, chartered tax advisor and qualified financial advisor. In part one, he ran us through the apps, the best investing strategies for beginners, and outlined what the hidden fees and charges are that you need to know when using investment apps.
For those of you who did hear it, here is a super quick refresher of the jargon before we dive back in. An index is simply a measuring tool used to track the performance of a specific group of investments.
Chapter 2: What are the best investing strategies for beginners?
For example, the S&P 500 measures the performance of the 500 largest companies in the US. You cannot invest in an index, but you can invest in an index fund. It aims to match the performance of a particular index. So an S&P 500 index fund seeks to provide you with the returns of the S&P 500. Index funds are often available as ETFs or exchange traded funds.
You can buy ETF shares on the stock market through an investing platform. And when you invest in an ETF, you become a part owner of everything the ETF owns. So instant diversification. Finally, there's the TER or total expense ratio. This is the annual percentage fee charged by the fund provider to manage the investment. It's taken automatically from the fund, so you won't see a bill.
And that's why you need to read the T's and C's very carefully. Now, back to where we left off in the conversation with Dan last week, which is what you would see when you open up an investing app. Can we kind of walk through it then? I guess maybe if we invent somebody, we'll call her Sarah and she's in her 30s and she's, I don't know, a marketing executive or somebody who's not on big money.
How much should they be putting in? What app would you say to them? You know, I think this one would suit you. And then when they open it, what are they going to see?
I think the first thing I would say to Sarah, and I won't labour on this point because I know you've covered it in previous episodes, is that because I view investing as always long-term investing, the first port of call is always going to be the pension. So if Sarah actually is interested in long-term investing, the journey starts with the pension. It doesn't start with the investing platforms.
It doesn't start with a personal investment portfolio. And the reason for that is it's just infinitely more tax efficient to invest using your pension and the potential for returns are a lot greater doing that.
So we'll assume that Sarah has exhausted her maximum personal pension contributions and she still has money left over at the end of the month that she's looking to put to work in an investment fund. Again, we'll assume that she has her emergency fund in place because, again, you shouldn't be investing all of your cash and have no buffer there in case you need to access that cash account.
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Chapter 3: How should a beginner choose a user-friendly investing app?
I think the step one is to pick a broker, is to pick an investing platform. And for me right now, and I already said full disclosure, we do have affiliate agreements with them, but I do generally believe that Trading212 is the most user-friendly investing platform at the moment for beginners in Ireland.
Going back to that point again about like really friendly user interface, very seamless kind of app experience and the low fees and the zero commission is really important. But that's not the only choice. You know, you could go with your Trade Republic series year or light year, whatever it is. So Sarah would start by downloading those apps.
And the other thing to know is that a lot of these apps are free, totally free to download. So, you know, if it's a case that you want to download them and deposit like 20 quid onto it and just try out different platforms to see like which one makes most sense to you, which one you like the feel of, because that is important as well.
It's the actual feel of the app and how comfortable you are in it too. So once Sarah has her app kind of set up, The next thing I would be saying is like, are you kind of committed to this idea of long term investing? It's not going to be something that you're going to be doing for two or three years and say, I know I've had enough of this.
Like, it's not like you don't have to be fully, fully committed, but the ethos should be that if you're going to subscribe to this, you kind of have to be saying, right, this is going to become part of my life and I'm going to. buy with the intention of holding for many years to kind of support you in retirement in addition to your pension.
And provided that that does align with what they want to do with their money, then the next step is to find an ETF to invest in. And when it comes to researching ETFs, there's kind of two strategies. The simplest strategy is to just pick what's called an all-world ETF.
And what an all-world ETF is, you'll remember those indexes we were talking about earlier that measure different parts of the stock market. Well, an all-world or global ETF will track an index that measures the entire stock market or what could be seen to be a good proxy for the entire stock market. So For example, like the Vanguard All World ETF that tracks a particular index.
And you'll have stocks from America, Europe, the emerging markets, Asia, all that kind of stuff. That's the simplest approach. So you just own everything and then just... I like the sound of that. And what's beautiful about it is that there's very little ongoing research or time commitment needed.
As I said, you just kind of have to make sure you're looking at the right product and that the expense ratio is good. But beyond that, it's kind of plug and play. If you want a bit more control and flexibility over your investments and where your money is actually allocated, you can go out and buy individual ETFs that are specific to a certain region.
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Chapter 4: What should be the first step in long-term investing?
And then the definition of risk then is not achieving that. So I think like every little helps, no matter how small it might seem. And hopefully even if you start off small,
By virtue of you getting comfortable with the process of just getting used to like markets going up and down and prices moving or just getting used to the feel of the app and just giving it time, then maybe as time goes on, you might say, actually, I'm ready to put in a couple hundred quid a month then.
And is that better than doing smaller amounts across a number of ETFs?
Yeah, so that's the conversation of whether you euro cost average or lump sum invest. Euro cost averaging is effectively where, like, let's say, you know, you had 1,000 quid to invest today. You've two options, really. Do you invest all that 1,000 euro right now? Or do you say, okay, I'm going to put in 100 quid a month for 10 months and drip feed it in that way? There's pros and cons to both.
If you lump sum invest from day one and then the market goes down,
Yeah.
obviously you won't be too happy because you've kind of taken the full hit on your full investment. Whereas if you drip feed it over time, you're constantly buying at a lower price, which is good for the future because your average cost will be lower. But the thing to remember is nobody knows what's going to happen in the short term. It's impossible. There's like, you cannot time the market.
It's not something that's doable. That's why the long-term mentality is so important. You shouldn't care what happens over six months or one year or 18 months because...
in the context of a 10 or 15 year stock chart it's you know those couple of bad months are a tiny tiny blip that you can barely even see to begin with but like if you need the money in six months and something goes wrong well then that's a disaster so that's why i would say like it doesn't really matter if you are committed to that lump sum mentality just invest what you have and if you have a certain amount ready and you're committed just get it in because like you
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Chapter 5: How can one maximize pension contributions effectively?
A quick version.
The deemed disposal conversation has been the bane of my existence for a couple of years because obviously like a lot of what I do is try to get people subscribed to the long term investing mentality and they say, oh, well... Obviously, up until recently, it was 41% tax versus 33% tax on stocks. And why would I do that if I could just pick individual stocks?
But the thing that people miss is you're assuming that you can achieve a similar performance investing in individual stocks as you can with index funds. You can't. That's the whole point. The differential in the tax rate between 38%, as it is now, and 33%. is not so big that it completely eradicates all of the benefits of long-term ETF index fund investing. It doesn't.
And that's why it's such an annoying policy, to be frank, because it's causing this, we call it distortionary behavior in investors, where they're choosing products, investment products, that aren't as suitable to their own personal circumstances because of tax policy. Yeah. And that should never be the case.
I know, but you have to file a tax return, don't you, every year?
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Chapter 6: What is the importance of having an emergency fund before investing?
Yeah.
Yeah, so when you invest yourself, you have to look after your taxes yourself with the investing platforms, whereas a lot of the life companies, because the investments are structured as life insurance products as well, they'll handle the tax for you. But the tax isn't really that complicated. And I'm very, very hopeful that deemed disposal will be removed in an upcoming budget.
I've been advocating for it since 2021. You know, the Funds Review 2030 report recommended its removal.
And just to explain for people who might know, it's where you pay tax as if you made money from the fund, but you haven't because you haven't.
You haven't sold. So it taxes what's called unrealized gains. And what an unrealized gain is, is when effectively you have made a paper gain on your investment. So the value of your investments has gone up, but you haven't sold. So those gains aren't technically real. They're real on paper, but you don't have access to those gains because you haven't sold the investment and taken the cash.
Deemed disposal doesn't care about that. It looks at whatever your unrealized gain is on the eighth anniversary of every purchase and it charges you 38% tax on that paper gain. It's a crazy policy. It needs to be removed. One of the fundamental principles of capital gains taxation is that you don't tax unrealized non-real gains. You only tax real gains.
Yeah, because someone might say you're rich because you live in this house and you're like, yeah, but I live in it, like I haven't sold it and I don't have the money.
And the problem is as well, you know, with deemed disposal, if you do have a large paper gain and if you have done well as a long term investor over eight years, you might not have the cash on hand to cover the tax bill. Exactly.
So you might be forced to sell some of your shares, which creates an opportunity cost in and of itself, because as you've now less shares, if the market keeps going up, you've lost the potential gains on those shares.
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