Money thoughts …

Tom_the_great

Tom_the_great

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Hi all,

Here seems a good a place as any to see what people come up with…

Ive managed to save some money and not sure quite what to do with it …

Pay off some of the mortgage?

Shares/stocks ? Got a few ideas but not sure where is best to go I don’t want to buy one day and sell the next I would be in it for a long wait if that makes sense …

Gold? Don’t know much but it appears more people then you think do it?

Some form of isa/savings account?

Anything else ? As it’s ‘spare’ it’s open to abit of risk and for reference to put figure out there we’re taking around £15,000.

Tom.
 
Depends what you want. If you can afford to 'lose' the money and still cover bills like mortgage then a higher risk shares thing may be a good option, forget about it for say 5/10 years and hopefully collect the dividends.

If you have any debt though (loans, cards) I would priorities that.
 
My advice: don't ask other people for advice on forums.
My other advice: Never invest more than 10% of your capital in any one thing. If in doubt, reduce that proportion to 5%.

Coins TZ40 1010509.JPG
 
I would prioritise any debt you may have. The most expensive first. One other thing I would consider if you haven't enough to clear your mortgage -do you have enough to move to a cheaper LTV bracket? If you can you can find mortgages at every cheap interest rates. Boring though so I would have a good holiday
 
Thanks for the initial responses, just to add some more detail.

No debts (other than mortgage, which is in a healthy place).

It was a rainy day fund which has grown and some hard work but I’m just not sure what to do now and it’s sat in a current account doing nothing.
 
Everything Hugh (@boyfalldown) said. However it is always good to have a rainy day fund, if possible to cover 6 months or so out of work/sick etc. But not in a current account. There are some fixed term deposit accounts/National Savings and cash ISA options paying upto 2%. Share investments are a bit volatile at present due to COVID news and currency fluctuations caused by Brexit politics, so unless you can play the long game and risk losing 50%, don't go there. If you must, then go for some ETF funds such as a FTSE tracker ETF or better still a Europe markets ETF (this is not my area of interest so best seek specialist advice). The best option though would be to switch to an offset mortgage with a suitable low interest rate and pile your savings into the offset account, thereby reducing the mortgage interest you are paying whilst still having access to the money if you should need it.
 
I'm going to presume we are talking in thousands not just a couple of hundred, if so then personally I'd pay off some mortgage.

I got mine when interest rates were around the 13% rate, never reduced payment as interest fell, and the first time I got made redundant (knowing I has a new job a week later) paid a lump some off.

Ended up paying the complete mortgage early and them owing me money due to over payment.

The feeling of knowing you have a roof over your head no mater what, can't be overstated. Also we are now at the end of downward interest rate they will only go up from now, maybe only a little at first but....

I do agree with having a rainy day fund, a quick look around will find the best rates.
No mater what you decide DO NOT leave it in a zero interest current account.
 
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The present state of almost zero interest rates where ever you look, makes this a difficult decision for everyone. Some sort of investment plan based on stocks and shares makes good long term sense. For although individual shares can lose their value. When diluted amongst a range of products in a plan,u this is rarely an issue. In fact such a plan is the only investment of mine that has made significant gains over the past few years..

Premium bonds on NS&I pay out better than any deposit, but the capital is necessarily depreciating at the rate of inflation, so can only be regarded as a short term dump. Which at the moment is not a bad idea.

However I am in the same position as yourself in not knowing what to do with a useful but not large lump sum. So I can hardly talk.
At my age thinking long term is no longer realistic.
 
I put a small amount in a Hargreaves’s And Landsdown global growth share ISA. It works simliar to an ISA except your money goes into a pot which they then use to buy stocks in selected companies.
I put £300 in a year ago and it’s now currently sat at £479.
Of course it can all be lost completely as is the way with Stocks, but as they have experts doing the stock dealing, it’s less likely than if you were buying stocks yourself. You can remove the funds at any time too.
 
With interest rates so low it might make sense to keep your mortgage.
Long term shares are a good idea. I would not buy individual shares but tracker funds.
FTSE 100, FTSE 250 and S&P 500 trackers are a good place to start. Do some research first.
For diversification (essential) from the above more look at close ended investment trusts. Lots of choices. Also, don’t forget some target income whilst others target growth. All of the above held in a tax free share-dealing ISA. Halifax are a good place to start.
If you go this route you need a minimum 10 year horizon.
Rainy day fund is essential IMO. 6 months salary is a good rule of thumb.
Another option is to put some into your pension if it allows extra.
Just my opinion, not financial advice.
 
If you have no expensive debt then 15K is a no brainer - Premium Bonds. You will never lose the money, earn decent return of "interest" and feel like you are winning with about £100 a year in prizes. If you win big then it's tax free.
 
I agree with Jonathan - I get a far better return with my little wins on the PB than any savings account can give me and there's no risk of losing it as there is with S&S.

The only other consideration would be property, but it's been a long time since that much could buy a house (in the UK at least).
 
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Sky said:
The only other consideration would be property, but it's been a long time since that much could buy a house (in the UK at least).
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Also, the UK government seem to have decided they don't want private landlords. 3% extra stamp duty and a whole host of costly requirements mean it's not as good as it was even a year ago.
 
beyond the blue said:
Premium bonds paid me 1.25% last year and 1.1% this year.
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I reckon that would be about the same here as opposed to the 0.01% the ISA would have paid.
Also gives a very small chance of winning a life changing amount, can't be bad really.
 
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www.moneysavingexpert.com

Premium Bonds

Premium Bonds are the UK's most popular savings vehicle, but Martin Lewis' detailed analysis shows returns don't add up for many compared with savings.
www.moneysavingexpert.com www.moneysavingexpert.com
 
beyond the blue said:
Premium bonds paid me 1.25% last year and 1.1% this year.
Click to expand...
Some of my investments returned more than 5% but others did much worse, This is why it's important to diversify, unless you invest in something that offers a state supported guarantee. Even then, it's important to remember that each bank and building society's guarantee is limited to £85,000 in total ( https://www.nidirect.gov.uk/articles/compensation-if-your-bank-or-building-society-goes-bust )
 
Thanks again all for taking the time to respond I’ve opened a premium bond account and shunted 75% savings in.

The remaining 25% I’m going to put in some shares (thinking Hargreaves Lansdown) but not sure if I should be going for fund and share account or stocks and shares isa ….?
I know who I want to buy shares in but can’t seem to understand the difference ? am I being thick? Any advice or suggestions welcome.

Thanks Tom.
 
Tom_the_great said:
Thanks again all for taking the time to respond I’ve opened a premium bond account and shunted 75% savings in.

The remaining 25% I’m going to put in some shares (thinking Hargreaves Lansdown) but not sure if I should be going for fund and share account or stocks and shares isa ….?
I know who I want to buy shares in but can’t seem to understand the difference ? am I being thick? Any advice or suggestions welcome.

Thanks Tom.
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If you buy into a fund. You can not choose the shares yourself, that is what the fund manager does. And he buys and sells to maximise either growth or income or a mixture of both.
You can choose the risk level that you want to invest in,
or the proportion of the investment risk for a number of products. Some with good returns and others with good growth prospects.

If you ask advice of a bank, they will only advise on their own products. Some banks will only manage investments for people with over a certain net worth. But they will sell product to anyone.

Your investments are always subject to risk. High risk can equal high returns or high losses. So do not put all your eggs in one basket.

Stocks and share isa's are protected from capital gains tax but probably are somewhat conservative.


Stock and share Investment plans usually have better growth prospects and can be protected by a life insurance package. But gains will eventually be taxable.
 
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Terry’s advice is good.

Hargreaves are expensive. If you buy funds via them they charge you extra. They have the usual transaction charge per share deal, as other do.
I chose a Halifax share dealing ISA. No extra charge for buying funds, just the standard transaction charge.
It is important to differentiate between active and passive funds. Active are where a manger chooses the shares. They can get it wrong as well as right. Passive just follow an index.
My passive Vanguard FTSE 100 tracker ETF held in an Halifax share dealing ISA will have a capital gain of 14% in 2021. (That’s how much the FTSE gained last year). In addition I have received a 4% dividend yield. All tax free in the ISA.
Of course the index can go down as well as up, which is why this is long term. But I still receive the dividends.

Buying individual shares can be more profitable but riskier. You need to do plenty of research first. And don’t buy just one or two, diversify.
 
Peter123 said:
Buying individual shares can be more profitable but riskier. You need to do plenty of research first. And don’t buy just one or two, diversify.
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Good advice.

My wife did extremely well on the stock exchange at the end of the 1960s but then the market changed, as it so often does. Our appetite for risk has reduced over the years, so we stay away from share based investments.
 
I'm really not advising anybody to buy stocks or shares, but if you do, this is well worth a £2 investment

Monkey with a Pin: Why you may be missing 6% a year from your investment returns eBook : Comley, Pete: Amazon.co.uk: Books

Monkey with a Pin: Why you may be missing 6% a year from your investment returns eBook : Comley, Pete: Amazon.co.uk: Books
smile.amazon.co.uk

Amazon says I bought a copy in 2015 which was the time I started managing my own pension fund. Fidelity say it's been performing at an annualised return of 6.52% ever since (including all expenses and fees). That's not a huge amount but it's respectable for a pension. I have a slightly riskier ISA that's doing rather better at 8.61%. Either way, averages are way more important than peaks.
 
I know the thread is 7 months old but I searched before starting one and it seemed appropriate.. and was interesting after the fact

I have made money in the past with gold.. But its so high now I wouldnt touch it... I have some crypto (ETH) thats currently low but it will go back up and it will give me a better return than sitting in a bank.. however its only a small part of my savings

I ahve just today transferred a decent amount of money from the bank that was earning me so little it was hardly worth looking at.. into premum bonds.... If I am unlucky I still ahve my original stake and if i am as they say bog standard lucky i should get 1.4% and if I ahve a bit of decent luck.. well then

But what it gives me is the fun factor the bank doesnt haha.. I dont do the lottery as that seems wasted money.. but premium bonds seems like a good idea..
 
FYI I have received this from AJBell YouInvest who I have my SIPP, ISA and other share investmenrts with: cash savings offering between 2.75% and 3.1% depending on fixing for 1, 2 or 3 years
 
KIPAX said:
I know the thread is 7 months old but I searched before starting one and it seemed appropriate.. and was interesting after the fact

I have made money in the past with gold.. But its so high now I wouldnt touch it... I have some crypto (ETH) thats currently low but it will go back up and it will give me a better return than sitting in a bank.. however its only a small part of my savings

I ahve just today transferred a decent amount of money from the bank that was earning me so little it was hardly worth looking at.. into premum bonds.... If I am unlucky I still ahve my original stake and if i am as they say bog standard lucky i should get 1.4% and if I ahve a bit of decent luck.. well then

But what it gives me is the fun factor the bank doesnt haha.. I dont do the lottery as that seems wasted money.. but premium bonds seems like a good idea..
Click to expand...

I've read that you can a get a better return from some savings accounts than the average you'd get from the same amount held in Premium Bonds ( https://www.moneysavingexpert.com/savings/premium-bonds-calculator/ )

However, we have had money in PBs for many years and although we have never had a big win, I think about £150 was the biggest, we get £25 or £50 now and again and as you say there is always the chance of something bigger, without risking the money.

Dave
 
Premium Bonds return is 1.4% but that doesn’t mean you will get that over any period of time (although you could get a lot more).
Top savings accounts are now paying 1.5% without risk but, both options means you are losing with inflation at 9.5%.
Fir regular savings I’d be using an ISA with Vanguard or A J Bell and invest in a tracker fund.
 
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Of course pay off any loans or mortgages that you are paying a higher interest on than You can earn from your money.., is the obvious thing to do. But having some money invested in an easy access fund, in case you need funds in a hurry is probably a good idea as well.
 
tijuana taxi said:
Premium Bonds have done ok for me and risk free
One 25 quid win is more than you would get in yearly interest from £15k in an isa
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This just can't be right but if it is right in your case move your isa.

I have £30k in premium bonds, some months I win but some I don't.

Ah, just seen that your post was quite some time ago so ignore what I said :D
 
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tijuana taxi said:
I'm ok thanks, already had 200 quid from the PB this year
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See above. I missed the date on your post. Interest rates are now on the up but of course PB payouts will go up too but I still think that PB are only worth it for the fun as you're up £200 but you can't guarantee to do that again. I think the most I've gone without winning is 3 months. I have won £100 in one month but over a longer term my belief is the same, they're only worth it for the fun and the hope that you might get a big win. Of course you'll never get a big win with an isa or savings account.

I do internet banking once a month and this month I moved an account for my mam and got her an extra £200 interest a year. It is worth keeping on top of changes and moving money to take advantage. If I can get a few more £ a month in and cut down on a few £ going out just by spending an hour on the pc once a month I do it as every little helps.
 
Sorry but I can't resist posting this...

Someone I know had a very good job, a nice GF, a nice apartment and money to invest. He spotted an opportunity in lets call it... mood related substances... and decided to go all in and of course he was going to make a killing (money wise of course and I don't think he gave a flying about another way "a killing" could be made) but his GF informed on him, he lost everything including the apartment and he went to stay in a place owned by the state for a while.

Be careful how you invest :D
 
KIPAX said:
I ahve just today transferred a decent amount of money from the bank that was earning me so little it was hardly worth looking at.. into premum bonds.... If I am unlucky I still ahve my original stake and if i am as they say bog standard lucky i should get 1.4% and if I ahve a bit of decent luck.. well then
Click to expand...


So today is my first time in the draw....and i won £25 haha i swear i have :)

ernie.jpg
 
I have been in the draw for over 18 months now, only twice have I won nothing. I usually win between 50 and 100 but have never had a big win. However this is not keeping up with either inflation or the value of the pound.
This is below a taxed 3% which as achievable on investments now. But which would likely increase in capital value as well, so keeping pace with inflation in the long term.

Premium bonds are not a good long term investment, but have been a safe bet over this recent period.
And a few people win a big ticket

This month 3X£25.
 
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Totally depends on your circumstances.
Personally my mortgage is fixed at a low rates so not worth overpaying.
I put a fair bit into my children's ISAs and pensions. Plus my own pension.
I don't really have short term savings.
 
Ricardodaforce said:
Learn how to ride a motorbike, buy one, and have some fun.
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been there done that 48 yrs ago and it still scares me to think of how close I came to killing myself on it haha


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