Money box save and invest.
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Hi Folks, I am new to this and I am looking for some advice, have £40,000 to invest, I am
currently retired and have a pension and savings to cover me for at least 5years, I am looking for low risk, high return investments (no surprise there then!). I have looked at Blackmore offering 9.9% over 5years..but look a bit dodgy, I've also looked at MJS Direct-Property-Investment offering 10%over 1 year. I do not want to lose my initial investment..is there anyone offering anything that is safe and at least above inflation?
Thread hijacker Dave! :rotfl:
I would suggest starting a new thread.
Also think you might struggle to find a 'low risk, high return investments' in a short time period.0 -
Malthusian wrote: »A 2.3% initial fee is 2.3% more than you would pay under a more competitive platform with better features.
Like what? Oh and the initial fee is nil. No fee for the first three months.
Moneybox is actually transparent in that we know what we are going to pay. The fees for such things as unit trusts and investment trusts is locked away in the variable costs and commissions.0 -
You posted your question on 2 existing threads neither of which are to do with investing large lump sums. As suggested above you should create a new thread. However the short answer is no. You can't earn more than inflation with zero risk on an amount that large, though you can on some of it for a while at least if you are willing to create a bunch of current accounts and move money around as required.Hi Folks, I am new to this and I am looking for some advice, have £40,000 to invest, I am
currently retired and have a pension and savings to cover me for at least 5years, I am looking for low risk, high return investments (no surprise there then!). I have looked at Blackmore offering 9.9% over 5years..but look a bit dodgy, I've also looked at MJS Direct-Property-Investment offering 10%over 1 year. I do not want to lose my initial investment..is there anyone offering anything that is safe and at least above inflation?0 -
What he's saying is that the initial fee on each month's contributions (before you get to the ongoing fees) is over 2%, on the basis that you're paying £1 fee to get your £43 invested each month.Malthusian wrote: »A 2.3% initial fee is 2.3% more than you would pay under a more competitive platform with better features.
Like what? Oh and the initial fee is nil. No fee for the first three months.
So, ignoring the gimmick of waiving those £1s for the first few months of your long term relationship with them, that's over a 2% "entrance fee" for each £43 you send into the fund.
When you use the "round up" service you would assume the average amount of round up is going to be a bit under 50p (assuming sometimes it's 1p, sometimes 99p and everything in between. Maybe a skew towards smaller values due to goods and services costing prices ending in .95 or .99. But basically your £43pm is probably 90-100 transactions. Lots of people won't have so many but it's not outrageously unrealistic
The question really is just, does it end up being high priced compared to just opening up an account at a fundsupermarket and sending them £40-50pm.
As you mentioned, in your circumstances the rounding is being calculated off your credit card transactions but not literally charged to the card, it is merely pulled from your bank by direct debit, but you don't mind because you use that bank account to settle the credit card bill anyway so it all seems to match up if you were to look at it in detail. The net effect though, is just that your current account takes a hit for an amount of £40-50 over and above your normal credit card bill.
So, if that's going to be the net effect, it would be trivial to just set up a direct debit to a "traditional" investment provider for 40-50 a month. The gimmick of granting someone full access to see all your bank accounts and pulling a few pence a day, does not seem like it's getting you much in the way of value, or encouragement to save, given the money just goes out of your bank account via DD and they charge you a pound for the privilege.
And if money is tight, wouldn't it be more manageable to have a fixed £45 be paid each month instead of randomly £41.17 one month and £52.73 another.
It is no more transparent than the fund supermarkets, all of whose fees are laid out explicitly, just like on the money box website. The supermarkets are lower.Moneybox is actually transparent in that we know what we are going to pay. The fees for such things as unit trusts and investment trusts is locked away in the variable costs and commissions.
There are no special "variable costs" other than the fact that the annual platform fees and the fund manager costs and fees are based on asset values so the fees will vary, just like Moneybox's.
For example, take someone contributing £40-50 a month via direct debit - as you would be doing if you saved at the same pace you experienced with Lloyds "save the change":
UPFRONT MONTHLY CHARGE FOR ISA:-
Money box: £1
TD Direct Investing: £0
Charles Stanley Direct: £0 (ISA fee waived if have an active regular investing direct debit set up or a balance of £5100)
PERCENTAGE-BASED PLATFORM FEE PER YEAR ON VALUE of ASSETS HELD:-
MoneyBox: 0.45%
TDDI: 0.30%
CSD: 0.25%
CHARGES FOR THE UNDERLYING FUNDS PER YEAR ON VALUE of ASSETS HELD (Vanguard /Henderson / Blackrock)
MoneyBox: "these range between 0.22-0.24% of fund value"
TDDI: you can self select from huge range; same rates achievable
CSD: you can self select from huge range; same rates achievable
Examples of cheap mixed asset funds available at fund supermarkets: L&G multi-index (0.31% p.a.) Vanguard Lifestrategy (0.22%), Blackrock Consensus (0.24%).
So, if you are saving decent amounts as lump sum in addition to the "round up" facility, the MoneyBox solution will get expensive, because the platform fee is 0.45% (0.35% to Money Box and 0.10% to the real underlying platform) whereas competitive fund supermarket providers charge only 0.30% or 0.25% total platform fee. It's an extra £20 a year on a modest £10k portfolio (I say modest as the annual ISA allowance is £20k from April). Not really a money saving expert service.
At the other end of the scale we have small investors who are not doing big investment lumps but are just using the App to set up the "round up" facility. If they do £50pm they lose 2% to the £1pm service fee. £25pm, 4%. £10pm, would be 10% of every pound saved. So, when investment profits might only be 5-6% net of all the other ongoing fees, losing 2% or 4% or 10% on your contribution before it even gets invested, is a big deal.
My opinion hasn't wavered since post #4. Still, if you only have £10-20pm you can afford to invest, and the big fund supermarkets want £25pm minimum, I suppose it's a start. But better to start by putting away your savings in cash until you have enough to be able to afford £25pm, £50pm, £100pm, £200pm really.0 -
bowlhead99 wrote: »What he's saying is that the initial fee on each month's contributions (before you get to the ongoing fees) is over 2%, on the basis that you're paying £1 fee to get your £43 invested each month.
So, ignoring the gimmick of waiving those £1s for the first few months of your long term relationship with them, that's over a 2% "entrance fee" for each £43 you send into the fund.
When you use the "round up" service you would assume the average amount of round up is going to be a bit under 50p (assuming sometimes it's 1p, sometimes 99p and everything in between. Maybe a skew towards smaller values due to goods and services costing prices ending in .95 or .99. But basically your £43pm is probably 90-100 transactions. Lots of people won't have so many but it's not outrageously unrealistic
The question really is just, does it end up being high priced compared to just opening up an account at a fundsupermarket and sending them £40-50pm.
As you mentioned, in your circumstances the rounding is being calculated off your credit card transactions but not literally charged to the card, it is merely pulled from your bank by direct debit, but you don't mind because you use that bank account to settle the credit card bill anyway so it all seems to match up if you were to look at it in detail. The net effect though, is just that your current account takes a hit for an amount of £40-50 over and above your normal credit card bill.
So, if that's going to be the net effect, it would be trivial to just set up a direct debit to a "traditional" investment provider for 40-50 a month. The gimmick of granting someone full access to see all your bank accounts and pulling a few pence a day, does not seem like it's getting you much in the way of value, or encouragement to save, given the money just goes out of your bank account via DD and they charge you a pound for the privilege.
And if money is tight, wouldn't it be more manageable to have a fixed £45 be paid each month instead of randomly £41.17 one month and £52.73 another.
It is no more transparent than the fund supermarkets, all of whose fees are laid out explicitly, just like on the money box website. The supermarkets are lower.
There are no special "variable costs" other than the fact that the annual platform fees and the fund manager costs and fees are based on asset values so the fees will vary, just like Moneybox's.
For example, take someone contributing £40-50 a month via direct debit - as you would be doing if you saved at the same pace you experienced with Lloyds "save the change":
UPFRONT MONTHLY CHARGE FOR ISA:-
Money box: £1
TD Direct Investing: £0
Charles Stanley Direct: £0 (ISA fee waived if have an active regular investing direct debit set up or a balance of £5100)
PERCENTAGE-BASED PLATFORM FEE PER YEAR ON VALUE of ASSETS HELD:-
MoneyBox: 0.45%
TDDI: 0.30%
CSD: 0.25%
CHARGES FOR THE UNDERLYING FUNDS PER YEAR ON VALUE of ASSETS HELD (Vanguard /Henderson / Blackrock)
MoneyBox: "these range between 0.22-0.24% of fund value"
TDDI: you can self select from huge range; same rates achievable
CSD: you can self select from huge range; same rates achievable
Examples of cheap mixed asset funds available at fund supermarkets: L&G multi-index (0.31% p.a.) Vanguard Lifestrategy (0.22%), Blackrock Consensus (0.24%).
Let's compare like for like. Stocks and Shares ISA:
* Money box - minimum investment £2 per month, fee £1 per month
* TD Direct Investing - minimum investment £25 per month, fee £5.95p share dealing rate (in the first 3 months). Is that a gimmick too?
That's just one of your own examples. I didn't bother to go further because the unique position that moneybox holds, the low minimum investment required combined with low fees is quite graphically illustrated. For example if I were to invest £100 per month the fee is still £1.
In fact not exactly unique and I'm highly surprised you didn't list it: Moneyfarm, no minimum investment and no fees when the balance is below £10K. What is pretty much unique in Moneybox is the round-ups feature and that's why I use it.0 -
£2 a month isn't going to get you very far with a £1 fee every month for the service. So, no point in touting a minimum investment of only £2pm as a benefit.Let's compare like for like. Stocks and Shares ISA:
* Money box - minimum investment £2 per month, fee £1 per month
Especially when a typical person using the service will have more than three or four transactions in their bank account a month and therefore would put more than £2 in via the "round up" technology which is this company's USP. Your own figures were producing £40-50pm. Someone with a couple of bank transactions a day would be on course for £30 most months. If they didn't have many bank transactions they wouldn't use the service at all, because they don't want to pay £1pm to invest £2pm and lose half their money to that admin charge before they even start paying fees for the actual investment.
As above, the £25 minimum investment direct debit is quite reasonable.* TD Direct Investing - minimum investment £25 per month, fee £5.95p share dealing rate (in the first 3 months). Is that a gimmick too?
For example, if you can only spare a tenner a month there would be no point investing, you might as well just use a bank account paying a decent rate of interest. Certainly using Money Box would not be a solution given the £1 fee would be 10% of your £10pm investment and it would take years to break even.
The £5.95 fees (yes, an intro price for new customers, usually more if you're not a high volume trader) at TD is, as you say, for "share dealing". Nobody depositing only £25pm is going to be using that money for dealing individual company shares directly on the stock exchange and paying several pounds a time to have the brokers place their orders.
No, they are going to hold a "fund" (unit trust or open ended investment company) instead. For that, TD don't charge a "per transaction" fee. They simply charge an annual percentage of the value of the funds you buy, as a platform fee. That is what Moneybox do too. Except the percentage that Money Box charge is 0.45% a year while TD Direct is 0.30% per year. Charles Stanley is 0.25%.
But now you realise that I was not recommending dealing shares in the stock market, only buying the same sort of funds that you would get through Money Box, you could perhaps go back and read it with a clear mind and see that Money Box is more expensive than the mainstream competition.That's just one of your own examples. I didn't bother to go further
If you were to invest £100 per month the admin fee at TD Direct or Charles Stanley would still be £0, so Moneybox is still more expensive because £1 is more than £0.because the unique position that moneybox holds, the low minimum investment required combined with low fees is quite graphically illustrated. For example if I were to invest £100 per month the fee is still £1.
And whether you are investing £25pm or £100pm or £1000pm, their ongoing platform fee for holding the investments would still be 0.30% or 0.25%, comparing favourably with Moneybox's fee of 0.45%.
And the fee from the investment fund manager (Blackrock, Vanguard etc) would still be 0.22-0.24% at TD or CS just like it is at Money box.
Of course, there is no particular reason why a £1.20 item from the corner shop should cost you £2.00 just to make your bank statement more messy and put £0.80 into an investment for you, when the net effect is that you end up with about £40 going to the investment each month. You might as well just do one direct debit into your investment in the middle of the month.What is pretty much unique in Moneybox is the round-ups feature and that's why I use it.
It is a pure gimmick, and your investment is costing you more than it needs to because of the high fee (£1pm vs £0pm and 0.45% platform fee vs 0.30% or 0.25% platform fee).
But hey if you like the extra fees, and the fun mess that it makes out of your bank statement, and you don't mind giving the start-up company access to all your banking records... each to their own :A0 -
* TD Direct Investing - minimum investment £25 per month, fee £5.95p share dealing rate (in the first 3 months). Is that a gimmick too?.
It's not a gimmick. Maybe if you looked at what you were comparing and did a realistic like for like comparison you'd realise that Moneybox isn't good value and rounding up is the gimmick when you can do far better elsewhere. Decide on an amount and pay by DD for less as explained far better by BowlheadRemember the saying: if it looks too good to be true it almost certainly is.0 -
Like what? Oh and the initial fee is nil. No fee for the first three months.
You can access the same kind of fund as on MoneyBox via a fund supermarket / platform at a lower percentage fee and without the monthly charge. Not only that but if you ever wanted to invest in a different kind of fund than MoneyBox's, you would be able to. Lower cost, better features. I don't like naming specific products on this forum but others have done so for me above.
The only thing MoneyBox offers that they wouldn't is the rounding up feature, and as it's a pointless gimmick that doesn't bother me. My mum did this "saving pennies in a jar" thing, and it's a pleasant way of saving for a family meal out every year or so. However putting that kind of money in the stockmarket is pointless because there's not enough to gain, and having to put off opening the jar because the stockmarket is down would be annoying.
For saving for retirement or for any kind of significant future need the "rounding up" is pointless because if you put pennies in you get pennies out. And if you want to put more in then there are better alternatives.
You don't have a brother who is wedded to his Scottish Friendly ISA by any chance?0 -
Malthusian wrote: »You can access the same kind of fund as on MoneyBox via a fund supermarket / platform at a lower percentage fee and without the monthly charge. Not only that but if you ever wanted to invest in a different kind of fund than MoneyBox's, you would be able to. Lower cost, better features. I don't like naming specific products on this forum but others have done so for me above.
The only thing MoneyBox offers that they wouldn't is the rounding up feature, and as it's a pointless gimmick that doesn't bother me. My mum did this "saving pennies in a jar" thing, and it's a pleasant way of saving for a family meal out every year or so. However putting that kind of money in the stockmarket is pointless because there's not enough to gain, and having to put off opening the jar because the stockmarket is down would be annoying.
For saving for retirement or for any kind of significant future need the "rounding up" is pointless because if you put pennies in you get pennies out. And if you want to put more in then there are better alternatives.
You don't have a brother who is wedded to his Scottish Friendly ISA by any chance?
All I see is verbal diarrhea and not anything constructive. If you can't name those companies which offer the same as moneybox for the same fee or less then as far as I'm concerned they don't exist. I've already named Moneyfarm in a previous post as a viable alternative for small savers but they don't have the round-up feature which is my main method of saving - I don't miss the small amounts involved.
"Scottish Friendly" flew over my head: What do they have to do with it?0 -
All I see is verbal diarrhea and not anything constructive.
The OP wanted views on MoneyBox from people with experience in investing. The majority view from experienced investors is "use a lower cost and more flexible alternative" and "forget about rounding up and save an amount that actually matters". If the OP takes these views on board they'll lose less money to charges, their investments will have higher growth potential and they may find that they are better off in the future because they decided to save a meaningful amount for the long term, instead of signing up to have a few pennies taken out of their bank account and thinking "job done". That sounds pretty constructive to me.
If saving pennies is your main method of saving then that doesn't bode well for your retirement, or any other long-term future needs. Pennies in, pennies out.I've already named Moneyfarm in a previous post as a viable alternative for small savers but they don't have the round-up feature which is my main method of saving - I don't miss the small amounts involved.
Forum injoke."Scottish Friendly" flew over my head: What do they have to do with it?0
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