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    • principa
    • By principa 10th Oct 16, 10:40 AM
    • 58Posts
    • 16Thanks
    principa
    no goals - wtd?
    • #1
    • 10th Oct 16, 10:40 AM
    no goals - wtd? 10th Oct 16 at 10:40 AM
    I want to invest in an ISA. I have mortgage which is almost fully offset with cash.

    how would you calculate which is riskier?

    A high risk investment with a small amount of money not from the offset i.e. emerging market fund?

    Or

    A medium risk investment funded with money from the offset i.e. a FTSE tracker?

    Or

    A low risk investment with all of the mortgage offset used i.e. a bond/equity income fund ?


    In terms of the eventual outcome, are they all the same?
Page 2
    • principa
    • By principa 11th Oct 16, 1:53 PM
    • 58 Posts
    • 16 Thanks
    principa
    The question is whether you want to borrow money - because that's what it comes to - to invest in equities, and if so, how much. In turn, the first resolves into two questions. (i) Do you want to invest in equities with this money at all, and (ii) if so, is now a good time to do it?

    Only you can answer (i); my guess for (ii) is that now is not a particularly good time to do it.

    But you have 15-25 years before retirement. Why not put your toe in the water by investing your monthly surplus income to begin with?
    Originally posted by kidmugsy
    Global equities are my choice of investment - they are liquid, yield without any effort on my behalf and diverse. Yes, toe in water seems a good idea...
    • atush
    • By atush 11th Oct 16, 1:56 PM
    • 15,293 Posts
    • 9,164 Thanks
    atush
    I would invest new money, and leave your current offset as is- you c an always pay off the mtg later when rates rise.

    I do not advise, as Edgasket suggests, as you would be 'spending' your emergency money on the mtg, then you c an t invest as you need to build up MORE emergency cash. Unless you have the guaranteed right to take the offset cash out again from the mtg, you need an emergency pot of cash before investing (outside of a workplace pension anyway).
    • principa
    • By principa 11th Oct 16, 9:10 PM
    • 58 Posts
    • 16 Thanks
    principa
    I would invest new money, and leave your current offset as is- you c an always pay off the mtg later when rates rise.

    I do not advise, as Edgasket suggests, as you would be 'spending' your emergency money on the mtg, then you c an t invest as you need to build up MORE emergency cash. Unless you have the guaranteed right to take the offset cash out again from the mtg, you need an emergency pot of cash before investing (outside of a workplace pension anyway).
    Originally posted by atush
    Using the offset for emergency cash is a good idea.
    Perhaps I will do this and then invest only non offset money.
    when the mortgage ends in 15 years - the offset will go.
    so i have to pick an investment which will be low risk in 15 years
    hmm...
    • atush
    • By atush 12th Oct 16, 11:49 AM
    • 15,293 Posts
    • 9,164 Thanks
    atush
    Over 15 years you can be in equities up to some point, as they outperform cash and bonds over longer periods.

    Diversification is key. So look at Multi asset funds.
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