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  • FIRST POST
    • cjv
    • By cjv 8th Jul 17, 3:13 AM
    • 87Posts
    • 45Thanks
    cjv
    Looking for further investment options
    • #1
    • 8th Jul 17, 3:13 AM
    Looking for further investment options 8th Jul 17 at 3:13 AM
    Hello, I am looking around for an additional regular investment opportunity but feel like I have exhausted the obvious options.

    I know nothing about investing, other than what I have googled over the past couple of months so please forgive me if I make mistakes when explaining what I have done so far. The MSE site has been really helpful to me in learning the very basics (I hope) and I have tried to do as much research as possible so that I am comfortable with my choices.

    I decided in April that I would start a five year plan and save as big a deposit as possible for a property (I have never saved before this time).

    I am 36 years old and after discussing my plans with my parents they have kindly let me move in with them to help me reach my goal. This will allow me to save around £800-£950 per month if I am very careful with my budgeting.

    I am happy to accept some risk for the chance of better returns. I am also open to cashing in my investments if they are performing well after 4 years, or extending my five year plan if I need to ride out some downturns. Access to my money is also quite important to me, just in case circumstances change.

    My current plans are as follows:

    1.TSB and TESCO current accounts, to fill these up to the limits asap for the 3% interest.
    2.Nutmeg S&S LISA opened with £500. Plan to pay in the full £4000 per year
    3.Funding Circle, opened with £1000 and aiming to add another £1000 so I can spread my loans across 100 businesses (no more than 1% per business)
    4.Vanguard S&S ISA, currently £800 in a Life Strategy 60 and have just set up £300 per month regular payment (£100 into the LS60, £100 into FTSE Developed World ex-U.K. Equity Index Fund, £100 into FTSE U.K. All Share Index Unit Trust)

    I have tried to spread my money out to diversify, which I read on many sites is a good thing to do and am looking for one more investment. I would like to fund this investment with around £100 per month.

    Initially I was going to add another fund to my Vanguard ISA, but I think it would be more fun to have another type of investment in my portfolio.

    Any suggestions are most welcome, also why does typing "my portfolio" make me feel intelligent?

    Many thanks,
Page 1
    • AnotherJoe
    • By AnotherJoe 8th Jul 17, 6:05 AM
    • 7,235 Posts
    • 7,745 Thanks
    AnotherJoe
    • #2
    • 8th Jul 17, 6:05 AM
    • #2
    • 8th Jul 17, 6:05 AM
    I would open more regular savers, and perhaps more in FC or similar and minimise the share %.
    You dont say whats in the LISA, but overall this is a very high risk strategy* so i wouldnt put any more into the investments side of your portfolio than you are now.

    * if it all goes horribly wrong you could be living with your parents for a lot more more than 5 years eg well into your mid 40's ! Is that really your plan?
    • chockydavid1983
    • By chockydavid1983 8th Jul 17, 9:05 AM
    • 422 Posts
    • 237 Thanks
    chockydavid1983
    • #3
    • 8th Jul 17, 9:05 AM
    • #3
    • 8th Jul 17, 9:05 AM
    I would agree with that.
    Have you worked out roughly how much deposit you will need? Obviously it's hard to predict exactly but you should have an idea. Then you'll be able to work out how close you can get to that goal using current accounts and regular savers.
    Then if necessary you could take on some more investment risk, though as mentioned already that could set your plan back quite a while
    • TheShape
    • By TheShape 8th Jul 17, 9:41 AM
    • 1,018 Posts
    • 773 Thanks
    TheShape
    • #4
    • 8th Jul 17, 9:41 AM
    • #4
    • 8th Jul 17, 9:41 AM
    Where are all the accounts with a guaranteed 5% return?

    Nationwide FlexDirect, Nationwide Flexclusive Regular Saver. Regular Savers with First Direct, M&S, HSBC.

    I would try to get some/all of those first, perhaps getting a couple of switching incentives along the way.

    Fill the Tesco and TSB accounts with anything that doesn't fit in the 5% accounts or use them for the regular saver maturity proceeds.

    I wouldn't take any investment risk with savings for a deposit, I'd transfer the LISA to a cash LISA and just collect the 25% bonus each year.

    At £800 p/m and with the LISA bonus and interest you'll be saving around £11k per year.
    Last edited by TheShape; 08-07-2017 at 10:49 AM.
    • Thrugelmir
    • By Thrugelmir 8th Jul 17, 9:42 AM
    • 55,182 Posts
    • 48,375 Thanks
    Thrugelmir
    • #5
    • 8th Jul 17, 9:42 AM
    • #5
    • 8th Jul 17, 9:42 AM
    Open a LISA. The 25% bonus will be invaluable.

    I'd steer clear of markets. Too short a timeframe. Nor any guarantee as to value when you need the funds for a deposit.
    “ “Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria. The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell.” Sir John Marks Templeton
    • bigadaj
    • By bigadaj 8th Jul 17, 10:08 AM
    • 9,960 Posts
    • 6,357 Thanks
    bigadaj
    • #6
    • 8th Jul 17, 10:08 AM
    • #6
    • 8th Jul 17, 10:08 AM
    If you're prepared to do some research then p2p has opportunities, I'd avoid equities for the deposit timeframe.

    I don't use funding circle, but do use Moneything, Ablrate and collateral, all have been fine for me but there's still risk of default. Diversification should get you a net return of around 10% before tax.
    • Eco Miser
    • By Eco Miser 8th Jul 17, 11:43 AM
    • 2,983 Posts
    • 2,762 Thanks
    Eco Miser
    • #7
    • 8th Jul 17, 11:43 AM
    • #7
    • 8th Jul 17, 11:43 AM
    A few observations:
    1.TSB and TESCO current accounts, to fill these up to the limits asap for the 3% interest.
    Originally posted by cjv
    Why not the 5% accounts (as mentioned), also the 2%+ Regular Savers - not exciting, but guaranteed returns and no chance of capital loss.
    3.Funding Circle, opened with £1000 and aiming to add another £1000 so I can spread my loans across 100 businesses (no more than 1% per business)
    Originally posted by cjv
    With those qualifications, you must have exactly 1% per business
    4.Vanguard S&S ISA, currently £800 in a Life Strategy 60 and have just set up £300 per month regular payment (£100 into the LS60, £100 into FTSE Developed World ex-U.K. Equity Index Fund, £100 into FTSE U.K. All Share Index Unit Trust)

    I have tried to spread my money out to diversify, which I read on many sites is a good thing to do and am looking for one more investment. I would like to fund this investment with around £100 per month.
    Originally posted by cjv
    Life Strategy is already diversified across global equities and bonds. LS is already overweight in the UK, and you are adding an extra third of the S&S ISA into it.
    How are you handling the interaction between the Vanguard and Nutmeg investments?
    Initially I was going to add another fund to my Vanguard ISA, but I think it would be more fun to have another type of investment in my portfolio.
    Originally posted by cjv
    More bank accounts would be my suggestion.
    Eco Miser
    Saving money for well over half a century
    • Thrugelmir
    • By Thrugelmir 8th Jul 17, 11:48 AM
    • 55,182 Posts
    • 48,375 Thanks
    Thrugelmir
    • #8
    • 8th Jul 17, 11:48 AM
    • #8
    • 8th Jul 17, 11:48 AM
    If you're prepared to do some research then p2p has opportunities, I'd avoid equities for the deposit timeframe.

    I don't use funding circle, but do use Moneything, Ablrate and collateral, all have been fine for me but there's still risk of default. Diversification should get you a net return of around 10% before tax.
    Originally posted by bigadaj
    Also the issue of liquidity on the secondary market should times become tough. Underlying these loans is lot of property related activity. In the aftermath of the GFC. By default LLoyds Bank became the 4th largest housebuilder /property developer in the UK. Thanks to HBOS's loan book. Where much of the £10 billion loss subsequently reported within the Group Accounts was derived from.
    “ “Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria. The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell.” Sir John Marks Templeton
    • bigadaj
    • By bigadaj 8th Jul 17, 12:04 PM
    • 9,960 Posts
    • 6,357 Thanks
    bigadaj
    • #9
    • 8th Jul 17, 12:04 PM
    • #9
    • 8th Jul 17, 12:04 PM
    Also the issue of liquidity on the secondary market should times become tough. Underlying these loans is lot of property related activity. In the aftermath of the GFC. By default LLoyds Bank became the 4th largest housebuilder /property developer in the UK. Thanks to HBOS's loan book. Where much of the £10 billion loss subsequently reported within the Group Accounts was derived from.
    Originally posted by Thrugelmir
    Yes, loan terms could be selected on the basis of access requirements.

    Also experience of particular platforms and diversification can address some liquidity issues, but caveat emptor and higher returns mean higher risk.

    If anyone is uncomfortable investing in any asset class, arguably even cash with shortfall and inflation risk, then they need to acknowledge and act on this.
    • badger09
    • By badger09 8th Jul 17, 12:31 PM
    • 5,122 Posts
    • 4,337 Thanks
    badger09
    Open a LISA. The 25% bonus will be invaluable.

    I'd steer clear of markets. Too short a timeframe. Nor any guarantee as to value when you need the funds for a deposit.
    Originally posted by Thrugelmir
    OP already has LISA, with Nutmeg

    Agree with your second comment.
    • cjv
    • By cjv 8th Jul 17, 1:36 PM
    • 87 Posts
    • 45 Thanks
    cjv
    Thanks so much for all the replies and advice so far. It seems I have maybe jumped the gun and exposed myself to a bit too much risk for the five year timeframe. I took the "invest for a minimum of 5 years" too literally I think!

    I am typing from my phone, so I will come back this evening when I can sit down with my laptop to consider all your feedback.

    I'm so glad I posted now, before I am fully committed to the accounts.

    Thanks again
    • eskbanker
    • By eskbanker 8th Jul 17, 5:04 PM
    • 5,466 Posts
    • 5,270 Thanks
    eskbanker
    It seems I have maybe jumped the gun and exposed myself to a bit too much risk for the five year timeframe. I took the "invest for a minimum of 5 years" too literally I think!
    Originally posted by cjv
    The rule of thumb about a minimum of five years really applies to a lump sum - if you're investing monthly or annually over a five-year period then obviously very little of it would actually be invested for five years and on average it would be just half of that (assuming linearity).
    • Thrugelmir
    • By Thrugelmir 8th Jul 17, 5:46 PM
    • 55,182 Posts
    • 48,375 Thanks
    Thrugelmir
    The rule of thumb about a minimum of five years really applies to a lump sum - if you're investing monthly or annually over a five-year period then obviously very little of it would actually be invested for five years and on average it would be just half of that (assuming linearity).
    Originally posted by eskbanker
    Statistically there's a 15% possibility of the market falling in any one year. Averaging does not offer protection. If all the assets are to liquidated at one point in time. In this case for a deposit.
    “ “Bull markets are born on pessimism, grow on skepticism, mature on optimism, and die on euphoria. The time of maximum pessimism is the best time to buy, and the time of maximum optimism is the best time to sell.” Sir John Marks Templeton
    • Flobberchops
    • By Flobberchops 8th Jul 17, 6:37 PM
    • 553 Posts
    • 378 Thanks
    Flobberchops
    Hello, I am looking around for an additional regular investment opportunity but feel like I have exhausted the obvious options.
    ...
    My current plans are as follows:

    1.TSB and TESCO current accounts, to fill these up to the limits asap for the 3% interest.
    2.Nutmeg S&S LISA opened with £500. Plan to pay in the full £4000 per year
    3.Funding Circle, opened with £1000 and aiming to add another £1000 so I can spread my loans across 100 businesses (no more than 1% per business)
    4.Vanguard S&S ISA, currently £800 in a Life Strategy 60 and have just set up £300 per month regular payment (£100 into the LS60, £100 into FTSE Developed World ex-U.K. Equity Index Fund, £100 into FTSE U.K. All Share Index Unit Trust)

    I have tried to spread my money out to diversify, which I read on many sites is a good thing to do and am looking for one more investment. I would like to fund this investment with around £100 per month.

    Any suggestions are most welcome, also why does typing "my portfolio" make me feel intelligent?
    Originally posted by cjv
    Sounds fairly good, but what figures are we talking here? This is where I think spreadsheeting is a great tool. What lump sum are you putting into each asset class, what regular investment, how are those going to compound over time, how will this look in 5 years? What percentage of your money needs to be instantly accessible? What percentage needs to be FSCS/treasury backed for you to be able to sleep at night? Are you happy with the end result or do you need more bang for your buck? A good old fashioned spreadsheet can be very illuminating, I can recommend it.

    I gave bigadj's post a Thank as it covered almost exactly what I was going to say. Get some high-yield P2P into your portfolio, preferably with the Big Three of MT, Abl and Col. How much? Again, whatever lets you sleep at night. Me, I love P2P. I check my platforms almost every day and reinvest the shrapnel; I visualise it as coins falling from the sky as I go about my business. £100 a month is a perfectly respectable sum to put into P2P, that's equal to or below the "buy-in" cost of most platforms and you can diversify between multiple loan parts. The length of a P2P loan is usually on the order of six months to five years and so fits well with your timeframe. Visit the Independent P2P Forum for a wealth of information and divergent views on the three platforms mentioned.

    Financial language is nothing to be afraid of! Everyone has a portfolio - granted, in most cases it's 100% cash and often with a value of near (or below) zero, but oh well...
    I work for a UK bank, but any comments made on this forum are solely my personal opinion. Caveat Emptor!
    • eskbanker
    • By eskbanker 8th Jul 17, 6:55 PM
    • 5,466 Posts
    • 5,270 Thanks
    eskbanker
    The rule of thumb about a minimum of five years really applies to a lump sum - if you're investing monthly or annually over a five-year period then obviously very little of it would actually be invested for five years and on average it would be just half of that (assuming linearity).
    Originally posted by eskbanker
    Statistically there's a 15% possibility of the market falling in any one year. Averaging does not offer protection. If all the assets are to liquidated at one point in time. In this case for a deposit.
    Originally posted by Thrugelmir
    I'm not sure if you're agreeing with my post or taking issue with it but I certainly wasn't suggesting any protection from averaging, in fact quite the opposite! My reference to averaging was time-based, i.e. that drip-feeding over five years means that the sums invested will only have been so for significantly less than five years on average, thereby substantially increasing the risk if the end date is fixed(ish).
    • bigadaj
    • By bigadaj 8th Jul 17, 7:15 PM
    • 9,960 Posts
    • 6,357 Thanks
    bigadaj
    I wouldn't have said that those are the big three though, Zopa and Ratesetter would be two of the big three, though they do pay poor rates without explicit security.
    • cjv
    • By cjv 8th Jul 17, 7:52 PM
    • 87 Posts
    • 45 Thanks
    cjv
    Rather than multi quote I will try to cover all the questions, thanks all.

    Current Savings (approx)
    £400 TSB current account
    £350 Tesco current account
    £500 Nutmeg S&S LISA Fully Managed option with a 6/10 on their risk scale
    £1000 Funding Circle P2P currently spread across 57 businesses
    £800 Vanguard LS60

    My deposit/property target

    I am currently planning on getting a mortgage on a property close to my work(south east, ideally medway or immediate surrounding area).

    At the lower end prices seem to be around £80,000 for a studio/1 bedroom flat, up to £160,000 for a "nicer" 1 or 2 bedroom flat or apartment. Possibly a small house would be within my budget, so I will not rule that out.

    I plan to save as big a deposit as possible over the next 5 years, the dream is to get around £60,000 in that time giving me opportunity for a great mortgage rate, and the ability to be mortgage free sooner.

    Current debts

    Around £4000 across a few purchase credit cards all on Zero % interest for at least the next 2 years. I done this intentionally even though I could afford to make the purchases with cash, to start to build up a good credit history and allow me to save more, sooner. These will be paid off within 18 months at my current monthly repayments and I will continue to use the cards from time to time and pay in full just to keep my credit history active. My debt payments do not affect my current savings budget and I will hopefully be able to save more each month, in 18 months time when my debt is clear.

    I did look at other current accounts/regular savers, but I think I got caught up on the romance of investment options and wanted to put a bit of money in everything. I think the advice on putting more money in bank/regular saver accounts is sounding very sensible.

    I do use my TSB regular saver, £250 a month but this is set aside for my Tax and NI so I do not consider it my money. (this is not coming out of my savings budget)

    I do want to take a risk with some of my money for the chance of higher returns and the pitiful Cash LISA rate available makes me feel comfortable with my Nutmeg S&S LISA. Would you advise trying to place the max £4000 at the start of each tax year as a lump sum, or a regular saving of £333 per month? I could consider transferring this to a Cash LISA if a better rate becomes available in the future.

    I like the P2P idea and planned to add a further £1000 to my funding circle investment to become "fully diversified" as advised on their website. I will also use the auto bid feature, to reinvest continuously as my principals and interest are paid back, with the intention of selling any remaining loan parts I hold when the time comes to apply for a mortgage.

    Thank you for the advice in regards to my Vanguard choices, I did not even consider that I was doubling up on my investments by holding both the LS60 and Tracker funds. I think I will stick to just the LS60 and cancel the others.

    So with all that being said and all your advice so far, I think adjusting my plan to something like this would be less risky?

    Fill up my TSB and TESCO accounts, open further interest bearing current accounts and their linked regular savers such as Nationwide making sure I can meet all the requirements to get the interest.

    Get paid in my TSB account, then make a faster payment to TESCO>Nationwide etc. manually each month. Once they are all full, open and pay out the extra funds to the regular savers.

    Pay £4000 per year as a lump sum or £333'ish a month into my Nutmeg S&S LISA.

    Pay £100 a month into my LS60, but now instead of this investment being for my deposit in 5 years I will look at it as a much longer term investment. Possibly using it to pay off the remainder of my mortgage a long way down the line.

    Phew that felt like a long post, but I wanted to ensure that I covered everything in your feedback as it is much appreciated

    Thanks again
    Last edited by cjv; 09-07-2017 at 12:31 AM.
    • cjv
    • By cjv 8th Jul 17, 9:05 PM
    • 87 Posts
    • 45 Thanks
    cjv
    Just to add, Nutmeg do not currently have the option to pay in to the LISA except for the initial deposit I made of £500. This should be available soon though as I received this from their support yesterday...

    Thanks for your message.

    Adding the functionality to make further payments to your LISA is very high up on our list of priorities. The original aim was to add this functionality by the end of June, we were able to do this within that time-frame but an issue was discovered almost immediately meaning that we needed to remove it. We are working hard to get this fixed and back on to the website and we hope to have this done within the next few weeks.

    We'll be sure to send a message out to all our LISA customers as soon as it's made available, but if there is anything else that we can do in the meantime, please let us know.
    • bostonerimus
    • By bostonerimus 8th Jul 17, 9:14 PM
    • 862 Posts
    • 436 Thanks
    bostonerimus
    Why do people feel constrained to have money in everything.

    Keep things simple......a bank saving account, a work place pension and an S&S ISA and long term saving will be just fine for most people.
    Misanthrope in search of similar for mutual loathing
    • cjv
    • By cjv 8th Jul 17, 9:27 PM
    • 87 Posts
    • 45 Thanks
    cjv
    Why do people feel constrained to have money in everything.

    Keep things simple......a bank saving account, a work place pension and an S&S ISA and long term saving will be just fine for most people.
    Originally posted by bostonerimus
    That sounds sensible. I just want to get a little excitement out of my money and try to turn it in to a bit of a hobby to keep me motivated to save. I am in no way constrained, just exploring my options and I think the replies in this thread have made me realise I do not need money in every scheme and scam available to enjoy saving
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