Smart Tips for First-Time Investors

Niamh De Búrca
Sep 11
3 min read

How to Beat Inflation and Build Wealth with Confidence

Everyone talks about inflation—but what does it really mean for your money?

At SproutPlans, we often meet people who save consistently, only to find that inflation quietly erodes their purchasing power.

Here’s the reality:

From July 2015 to July 2025, prices rose by 24.2% (≈2.42% per year).
From July 2005 to July 2025, inflation totaled 40% (≈2% per year).

For context, the European Central Bank (ECB) targets 2% inflation as its benchmark for price stability.

What does this mean for you?

To simply maintain your wealth, your net return after taxes and fees needs to at least match inflation—around 2% per year over the long term. That’s why the ECB’s 2% target is a useful benchmark for financial planning.

Comparasion of Cumulative Inflation and Cumulative Demand Deposit Rates since 2015. — *Source: CPI Inflation calculator CSO (https://visual.cso.ie/?body=entity/cpicalculator/*)

Why Saving Alone Isn’t Enough

Putting money into a savings account feels great—you see your balance grow. But here’s the catch: If inflation is 3%, something that costs €100 today could cost €103 next year. Over time, your money loses value if it’s sitting in low-interest accounts.

How to Keep Pace with Inflation

Before you invest, ask yourself:

What’s your appetite for loss? How much could an investment drop before you start to worry?
What’s your capacity for loss? If an investment went to zero, would it jeopardize your long-term goals?

3 Key Steps to Build Resilient Wealth

✅ 1. Build an Emergency FundKeep it in accessible, secure cash with a reputable provider. If it earns interest, even better.

✅ 2. Protect Your Income and WealthUse cost-efficient life assurance—enough to cover essentials, but not excessive.

✅ 3. Invest WiselyDesign efficient investment and pension portfolios that:

Have a strong track record
Are managed by a reputable team
Come from financially sound providers
Offer fair charges (cheapest isn’t always best)
Are regulated and transparent about risks

💡 Understand the potential downsides before you invest—no surprises later.

Smart Tips for First-Time Investors

If you’re looking for smart tips for first-time investors, the key is to start simple and focus on long-term goals. These strategies help beginners build confidence and avoid common mistakes.

Stick to what you know: Invest in industries or assets you understand.
Spread your risk: Diversify across sectors, geographies, and asset types.
Know your limits: Be clear on how much loss you can afford—and tolerate emotionally.
Think long-term: Only invest money you won’t need for at least five years.
Favour passive strategies: Index funds and ETFs often outperform active strategies over time.
Be cautious with risky assets: For volatile or unregulated investments like crypto, only invest what you’re willing to lose.

If you’re starting from scratch, consider building your portfolio around a stable core of low-cost, diversified passive funds, then add smaller “satellite” investments for extra growth potential.

Key Definitions

Inflation: The rise in the general level of prices over time, reducing your money’s purchasing power.
Shares: Units of ownership in a company, traded on stock exchanges.
ETF (Exchange-Traded Fund): A basket of investments (stocks, bonds, etc.) that trades like a share.
Volatility: How much and how quickly an investment’s value moves up or down.