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  • FIRST POST
    • Michael Hobson
    • By Michael Hobson 11th Sep 17, 4:51 PM
    • 3Posts
    • 0Thanks
    Michael Hobson
    Small Investments
    • #1
    • 11th Sep 17, 4:51 PM
    Small Investments 11th Sep 17 at 4:51 PM
    Looking for advice.
    This is my current situation:
    - home owner - value £250,000. left on mortgage £150,000 (split between my girlfriend).
    - I have around £25,000 in savings split across several bank accounts earning ~2% interest.
    - I have no other debts apart from my student load which is around £20,000.
    - my only direct debit is my phone which is only £20pm. I own my own car etc.
    - I currently put in the equivalent of 10% of my salary into a work pension (don't think its that good tbh).

    I know this is a very broad question but what is the best thing to do with my savings?
    ISA? pay morgage off? shares? bonds? Pay student debt off?

    I would like the £20,000 to work for me not the banks.

    Thank you in advanced,
Page 1
    • jimjames
    • By jimjames 11th Sep 17, 5:29 PM
    • 12,016 Posts
    • 10,455 Thanks
    jimjames
    • #2
    • 11th Sep 17, 5:29 PM
    • #2
    • 11th Sep 17, 5:29 PM
    If you already pay into a pension and have sufficient cash savings then a S&S ISA might be worth looking at. For the cash savings just make sure they are getting the best available rates which are currently between 3% and 5%, with the amounts you have an average of near 4% should be possible
    Remember the saying: if it looks too good to be true it almost certainly is.
    • sjp999
    • By sjp999 11th Sep 17, 5:58 PM
    • 7 Posts
    • 8 Thanks
    sjp999
    • #3
    • 11th Sep 17, 5:58 PM
    • #3
    • 11th Sep 17, 5:58 PM
    If you're not happy with your workplace pension, could you scale it back to the level at which your employer matches and put the balance somewhere else? Keep in mind that you may lose other benefits if you do drop your share - my son moves up to a 4x annual salary death in service benefit by upping his workplace pension payment. Watch out the inverse doesn't apply to you.
    • levdon01
    • By levdon01 12th Sep 17, 7:33 PM
    • 4 Posts
    • 0 Thanks
    levdon01
    • #4
    • 12th Sep 17, 7:33 PM
    • #4
    • 12th Sep 17, 7:33 PM
    HI Michael,

    The best thing for you really depends on your risk vs reward appetite. I have studied Economics and Risk and have a fair wealth of experience in investment. If you are happy to tie a proportion of your funds up into various investments then I would recommend holding some cash, shares and precious metals (Gold / Silver bullion).

    I usually recommend a balance is struck between these with roughly 25% Gold/Silver, 25% shares and 50% cash/bonds. Everyone is different though and the optimal allocation will depend on individual circumstances. I highly recommend only purchasing shares that remit a dividend that can be reinvested. I would not purchase penny shares unless they represent a very small proportion of your stock portfolio.

    I hope this has helped
    *removed by forum team - please do not advertise in signatures*
    • BLB53
    • By BLB53 12th Sep 17, 8:23 PM
    • 1,106 Posts
    • 890 Thanks
    BLB53
    • #5
    • 12th Sep 17, 8:23 PM
    • #5
    • 12th Sep 17, 8:23 PM
    In your position I would be looking to keep ~£5K in cash savings. The other £20K would be split between a SIPP and ISA and invested in a low cost index fund like Vanguard Lifestrategy.
    If you choose index funds you can never outperform the market.
    If you choose managed funds there's a high probability you will underperform index funds.
    • Audaxer
    • By Audaxer 12th Sep 17, 8:40 PM
    • 408 Posts
    • 168 Thanks
    Audaxer
    • #6
    • 12th Sep 17, 8:40 PM
    • #6
    • 12th Sep 17, 8:40 PM
    If you are happy to invest the £20k long-term, i.e. for at least 10 years but preferably longer, then an S&S ISA is a good option. You need to decide on what fund(s) to invest in the S&S ISA. I would go for a low-cost passive, global diversified multi asset fund. There are very good examples of these funds that you can find regularly mentioned on this forum. You can choose the version of the fund with the percentage of equities to bonds you are comfortable with. 100% equities would be fairly volatile, so not for the faint-hearted but in most cases would give the best longer term returns. A lot of people would be more comfortable with around 60% equities and 40% bonds.

    One of these global diversified funds is much less risky than investing in individual shares.

    An S&S ISA can be opened online on an investment platform. Again details can be found on this forum as well as on websites like Monevator, which is very good for information about starting investing.
    • Flobberchops
    • By Flobberchops 12th Sep 17, 11:16 PM
    • 553 Posts
    • 378 Thanks
    Flobberchops
    • #7
    • 12th Sep 17, 11:16 PM
    • #7
    • 12th Sep 17, 11:16 PM
    An investment ISA would be a solid choice for about two thirds of the £20k, mostly in nice cheap funds if you're planning on making regular ongoing contributions. The rest - and I'm inferring here that you're looking for a bit of excitement and bang for your buck - could be split between Premium Bonds (got to be in it to win it) and a well-diversified basket of P2P loan parts. Plenty of P2P opportunities at 12% and above; capital is at risk, etc.
    I work for a UK bank, but any comments made on this forum are solely my personal opinion. Caveat Emptor!
    • Shashy
    • By Shashy 13th Sep 17, 8:55 AM
    • 48 Posts
    • 43 Thanks
    Shashy
    • #8
    • 13th Sep 17, 8:55 AM
    • #8
    • 13th Sep 17, 8:55 AM
    HI Michael,

    The best thing for you really depends on your risk vs reward appetite. I have studied Economics and Risk and have a fair wealth of experience in investment. If you are happy to tie a proportion of your funds up into various investments then I would recommend holding some cash, shares and precious metals (Gold / Silver bullion).

    I usually recommend a balance is struck between these with roughly 25% Gold/Silver, 25% shares and 50% cash/bonds. Everyone is different though and the optimal allocation will depend on individual circumstances. I highly recommend only purchasing shares that remit a dividend that can be reinvested. I would not purchase penny shares unless they represent a very small proportion of your stock portfolio.

    I hope this has helped
    Originally posted by levdon01
    This is not good advice.
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