Question: I’m in my mid-50s and have built up a reasonable sum of money sitting on deposit. With all the recent media coverage about Ireland’s – and Europe’s – push to get individuals investing more in market-based assets rather than leaving savings in the bank, I’m starting to question whether staying entirely on deposit still makes sense?
I’m cautious by nature and the ups and downs of markets make me uneasy. How do I judge whether I should stay on deposit or begin investing – and what risks should I really be thinking about?
Answer: It’s a sensible question, and a common one now. Many people have done exactly what they were told to do for years: work hard, save steadily, keep money safe in the bank. Now they’re being told they should do the opposite – put more into markets. It can feel like the rules of the road have changed overnight.
Firstly, there is nothing reckless about holding money on deposit. It buys certainty – you know where it is and what it’s worth – but it also has limits. It protects capital, not purchasing power, and carries its own form of risk.
The “perfect account”– full access, total security and solid growth all wrapped into one – doesn’t exist. There is always a trade-off between access, security and return. The practical alternative is not to look for perfection, but to give your money different jobs.
1. Protection
This is your true rainy-day fund – the money you can reach instantly if life takes an awkward turn. A common rule of thumb is at least three months’ income, though some people prefer more, particularly if income is irregular or business-linked. This money is not designed to grow. It is designed to sit still and be useful when everything else is wobbling.
2. Set up for the expected
These are the known expenses over the next few years: changing a car, home improvements, wedding costs, college fees.
This money should not be exposed to the daily crosswinds of markets. Its job is timing, not performance.
3. Looking to growth
This is the surplus – money you don’t need to touch in the short to medium term – usually at least five years, and ideally longer. This is the portion that can reasonably be considered for investment, because time is the main shock absorber in markets.
This is where the media discussion often becomes unhelpful. It tends to speak about “markets” as if they are a single, twitchy creature that either rewards or punishes. Risk has many moving parts: country, currency, credit, inflation, liquidity, manager, sector and the simple fact that prices rise and fall – what we call volatility. Some risks can be reduced. Some can’t. The task is not to eliminate risk, but to choose which risks you are prepared to live with.
When people say they are “cautious”, they usually means one of three things: they may not need high growth; they may not have the financial capacity for losses; or they may simply not sleep well if values fall sharply. All three matter. That is why we assess risk not just as appetite, but as need, capacity and tolerance – the financial equivalent of checking whether the engine, brakes and driver are fit for the road.
Another area where public commentary is often misleading is around timing. Waiting for the ‘right moment’ to invest is tempting and usually costly. Predicting short-term moves is close to impossible, and chasing past performance rarely works.
What does help is diversification. Spreading money across different asset types lowers the chance that one setback derails the whole outcome. It doesn’t stop markets falling but it can soften the landing and steady the recovery.
Some investors prefer capital-protected options while others veer towards multi-asset funds, and others choose a more traditional mix. None is “right” in isolation, only when matched properly to the person using it.
Should I begin investing?
Not by reacting to headlines. And not by copying what others are doing. You start by being clear about what your money is for, when you will need it, and how much fluctuation you can genuinely tolerate without making poor decisions at the wrong time.
The art is in the balance and that balance shifts as life moves on.
This is precisely where good, independent advice earns its keep. Not to push products, but to act as a sounding board – to map out what your money is for, when you will need it, what risks you can afford to take, and which ones you should avoid.
Finally, whatever route you choose, it shouldn’t be set in stone. Circumstances change. Priorities change. Risk tolerance bends with experience.
Regular, disciplined reviews with someone who understands both the numbers and the person behind them is simply how sensible long-term decisions are made.
Martin Glennon is head of financial
planning at ifac, the professional
services firm for farming, food and
agribusiness.
Martin Glennon is head of financial
planning at ifac, the professional
services firm for farming, food and
agribusiness
Question: I’m in my mid-50s and have built up a reasonable sum of money sitting on deposit. With all the recent media coverage about Ireland’s – and Europe’s – push to get individuals investing more in market-based assets rather than leaving savings in the bank, I’m starting to question whether staying entirely on deposit still makes sense?
I’m cautious by nature and the ups and downs of markets make me uneasy. How do I judge whether I should stay on deposit or begin investing – and what risks should I really be thinking about?
Answer: It’s a sensible question, and a common one now. Many people have done exactly what they were told to do for years: work hard, save steadily, keep money safe in the bank. Now they’re being told they should do the opposite – put more into markets. It can feel like the rules of the road have changed overnight.
Firstly, there is nothing reckless about holding money on deposit. It buys certainty – you know where it is and what it’s worth – but it also has limits. It protects capital, not purchasing power, and carries its own form of risk.
The “perfect account”– full access, total security and solid growth all wrapped into one – doesn’t exist. There is always a trade-off between access, security and return. The practical alternative is not to look for perfection, but to give your money different jobs.
1. Protection
This is your true rainy-day fund – the money you can reach instantly if life takes an awkward turn. A common rule of thumb is at least three months’ income, though some people prefer more, particularly if income is irregular or business-linked. This money is not designed to grow. It is designed to sit still and be useful when everything else is wobbling.
2. Set up for the expected
These are the known expenses over the next few years: changing a car, home improvements, wedding costs, college fees.
This money should not be exposed to the daily crosswinds of markets. Its job is timing, not performance.
3. Looking to growth
This is the surplus – money you don’t need to touch in the short to medium term – usually at least five years, and ideally longer. This is the portion that can reasonably be considered for investment, because time is the main shock absorber in markets.
This is where the media discussion often becomes unhelpful. It tends to speak about “markets” as if they are a single, twitchy creature that either rewards or punishes. Risk has many moving parts: country, currency, credit, inflation, liquidity, manager, sector and the simple fact that prices rise and fall – what we call volatility. Some risks can be reduced. Some can’t. The task is not to eliminate risk, but to choose which risks you are prepared to live with.
When people say they are “cautious”, they usually means one of three things: they may not need high growth; they may not have the financial capacity for losses; or they may simply not sleep well if values fall sharply. All three matter. That is why we assess risk not just as appetite, but as need, capacity and tolerance – the financial equivalent of checking whether the engine, brakes and driver are fit for the road.
Another area where public commentary is often misleading is around timing. Waiting for the ‘right moment’ to invest is tempting and usually costly. Predicting short-term moves is close to impossible, and chasing past performance rarely works.
What does help is diversification. Spreading money across different asset types lowers the chance that one setback derails the whole outcome. It doesn’t stop markets falling but it can soften the landing and steady the recovery.
Some investors prefer capital-protected options while others veer towards multi-asset funds, and others choose a more traditional mix. None is “right” in isolation, only when matched properly to the person using it.
Should I begin investing?
Not by reacting to headlines. And not by copying what others are doing. You start by being clear about what your money is for, when you will need it, and how much fluctuation you can genuinely tolerate without making poor decisions at the wrong time.
The art is in the balance and that balance shifts as life moves on.
This is precisely where good, independent advice earns its keep. Not to push products, but to act as a sounding board – to map out what your money is for, when you will need it, what risks you can afford to take, and which ones you should avoid.
Finally, whatever route you choose, it shouldn’t be set in stone. Circumstances change. Priorities change. Risk tolerance bends with experience.
Regular, disciplined reviews with someone who understands both the numbers and the person behind them is simply how sensible long-term decisions are made.
Martin Glennon is head of financial
planning at ifac, the professional
services firm for farming, food and
agribusiness.
Martin Glennon is head of financial
planning at ifac, the professional
services firm for farming, food and
agribusiness
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