Investment funding OT

Boon

Boon

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i am looking to invest a small amount of money shortly, and i wondered if any of you had any idea of where you would invest yours. I have been to the AL and Leics today, and came out with my head spinning, there is so many places to put it, all i want is something like a mini ISA, somewhere i can put my money in, and should i want some, go take some out, but also giving me a good return.
I have also just been to moneysavingexpert too, which is alright so long as you know finance, i dont.:shrug:

So the long and short of it, is, Where would you invest YOUR money..
 
Boon - The thing to bear in mind with money is you get paid for risk. Depending on what size you are wishing to invest there are a few avenues open:

1. Savings Accounts - ING Direct have recently offered the best rates but it it pays to look around. In order to not pay tax you could put up to £7,000 a year into a cash ISA. Your wife could do the same. An alternative way of saving tax is to pay off some of the mortgage, this is unpopular with financial advisors as there is no comission.

2. Traded Equities (Shares) - In the long term there is an argument that shares tend to outperform. This is true but are you investing for the long term? Unless you are looking at over 2 years I would say don't bother. Again ISA's are the way forward to avoid tax.

3. Property - Rental yields (Annual return/value of property) are now below morgage rates, I would say it is not the time to get in.

4. Private equity (High Risk) - It is possible to invest as a "Cash Angel" in up and coming unlisted companies. Obviously, if the company does well the upside can be very good, the downside is pretty much all of your investment. Look for one that EIS registered, you would get up to 20% of the investment back in your tax return and any gains are capital gains tax free after 3 years.

There are, of course, many other opportunities. Generally if you are getting more than 5% return on your money with supposedly no risk - it is a lie. More return means you are taking greater risk.

Good luck.
 
Boring but safe - Premium bonds! I suppose it depends on how much you are looking to invest.

I put in just over a grand 2 years ago and have won just over £800 so far - granted I had one bond of £500 come up which was great! Some people I know have put in more and won less - so i guess there is a health warning there. But you can take all or some of your money out without penalty.

Good luck.
 
The max you can put in a cash ISA (mini ISA) is £3000 per year. It's good but if you have to take out the money at any point, then you can't put it back in if you've already used up your £3000 allowance per year.

For example, you put in £2000 into a cash mini ISA, so you have £1000 of your allowance left this tax year. Then, for some reason, you have to take out £1500 from your ISA. After that you can only put in £1000 to reach your £3000 allowance.

I think the best rate at the moment is with National Savings & Investments. Their Direct ISA is at 5.3% (0.55% above Bank of England rate). Minimum deposit £1000. http://www.nsandi.com/products/disa/index.jsp
 
kamion said:
I think the best rate at the moment is with National Savings & Investments. Their Direct ISA is at 5.3% (0.55% above Bank of England rate). Minimum deposit £1000. http://www.nsandi.com/products/disa/index.jsp
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having been around the net a while, i really like the % rate of this one, the best 'out there' as yet..
is it true, that if you have an ISA, you cant have another, or is it that you cant open two in the same year??
 
You can have a max of £7K in an ISA (in your own name) in any investment year Steve. Your wife could do the same.
 
CT said:
You can have a max of £7K in an ISA (in your own name) in any investment year Steve. Your wife could do the same.
Click to expand...

Yeah, but you can't have £7k all in cash though.

There are two types of ISA - mini and maxi. You cannot have a mini and maxi together in a same year.

You can have mini ISAs with different providers. So you can have your mini cash ISA up to £3000 with one bank and the other £4000 in a shares mini ISA with another bank.

Or you can have a £7000 maxi ISA with one provider (up to £3000 in cash and £4000 in shares or all £7000 in shares).

Here's a better explanation:
http://www.moneysupermarket.com/isa/GuideToIsas.asp
 
All true Kamion - no argument whatsoever. :)
 
EDIT: Decided not to post that, but PM CT instead. Sorry.
 
Another option to look at is an offset mortgage whereby you can effectively put the invested money against the morgage and by not receiving interest on that investment you don't pay interest on the equivalent part of your mortgage. The end result being either a reduction in your monthly payments or a reduction in the mortgage term.

It's not for everyone though so I would recommend talking to a mortgage advisor first.
 
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