Should You Save or Invest

There is no easy or quick way to achieve any financial goal and if there was, we'd all be millionaires! Unless you are extremely lucky, the only way you can turn a small amount of money into a large amount of money is by consistently saving or investing over the longer term.

When deciding what type of savings plan to put in place, the first thing you should do is determine what you would like to save for (for example - a car, your children's education or your retirement?). You then need to decide how long you wish to put your money away for to achieve these goals.

• To achieve short to medium term savings goals (e.g. over the next 6, 12 or even 24 months) the majority of customers save via deposit accounts and try to steer their money clear of stock & property markets, which can fluctuate in value regularly (i.e. try to avoid "market" risk)
• To achieve longer term savings goals, however, many people are more open to investing their money into assets such as shares or property, which have a good record of outpacing inflation & other forms of investments over the medium to long term, e.g. 5 to 7 years + (i.e. try to avoid "inflationary" risk)

Inflation is constantly gnawing away at the value of your money by increases in the cost of living. Don't underestimate it, as over the longer term it can have a devastating effect on your money.

The table below shows that if inflation is running at just 3%, over 15 years the buying power of EUR100 comes down to EUR65. If inflation is running at a constant 5%, it gets even worse, as your EUR100 becomes worth only EUR45 after 15 years.

That's why it is important to choose a savings plan with the potential to "outperform" inflation, so as your money retains or grows its true value.

If you plan on saving or investing for the medium to long term (e.g. 5 to 7 years +), we recommend that you meet an AIB Financial Adviser*, who can help you find the right home for your money, taking into account your unique personal circumstances and appetite for risk. AIB have a number of savings plans that give you the opportunity to tap into the higher growth potential of the stock and property markets.

* In recent independent research, 95% of customers would recommend AIB's Financial Advisory service to a family member or friend

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