What should I do with my money?

elie222

I'm 19. I have about £15k. I don't need to use £12k for the next 3-5 years. I don't have a job and won't have a job for a few years.

I don't have to pay tax.

I currently have money in a 5% ISA, a 6% savings account, a 2% dollar account and £700 on my card.

I just found out that I don't have to pay tax. Should I take all my money out of my ISA?

Should I convert my dollars to pounds and put it in a 6%+ account?

My plan at the moment is to put my money in a high interest fixed-term account. Possible places to put the money are Post Office Growth Bond 7.05% and Kaupthing Edge 7.15%.
Is Kaupthing Edge a safe place to put my money? What are people's opinions on the Post Office Growth Bond? Should I put all my money in one place?

I'm also interested in putting some money into shares (£500-£2000). I want to invest in shares to learn about shares. I'm reading books but I think I'll learn the most from actually buying and selling shares.
I don't want to lose money share dealing and if I buy shares, I intend to keep them long-term.
Is now the wrong time to enter the share market? Are commissions to high to make a profit?

Are there any other good places to put my money?

Thanks

Farway

First, do not withdraw from your cash ISA, you cannot put it back in once you take it out, and although you do not pay tax now you surely will at some time in the future, so hang on to the tax break there, and maybe even top it up next April

You could check around to see if better cash ISA rate available and move across

The Post Office bond is not Post Office, it is Bank of Ireland, and is just a savings account with another hat on, ignore the Growth Bond tag

As such it has same safety as Kaupthing, wich is OK up to 35K, so why not just choose Kaupthing, unless you like to go to Post Office counter and face to face. There was a tip on here recently, open two or so fixed rates with Kaupthing, so just in case you do need dosh urgently you will not lose all the advantages at once

Dollars, no idea how much you have in them, but given current exchange rate you may lose out there if you convert to Sterling

Shares, buy & sell commissions, plus stamp duty, could destroy any profits on a sum such as you mention unless you are very skilled at timing, but as you say you intend long term then this may be less of a problem

You could look into self select share ISA, although you do not pay tax again this could save you problems in long run, some are free of yearly fees, you would have to check around, iii & t d Waterhouse I think are two, no doubt others exist

PS - unless your £700 debt on card is at zero percent or interest you are charged is less than you can get in your svings accounts, pay it off from your savings

elie222

Thanks. The dollar is currently doing well against the pound. The exchange rate recently dropped from 2 to 1.85. This probably isn't the place to ask about forex.

I'm not going to be paying tax for at least 3 years. I currently have over half my money in an ISA, but I don't think there's any point in leaving it in there.

I'm really not sure about putting a big chunk of money into Kaupthing. I know I'm protected for up to £35k, but getting my money back if they go under will be a big hassle and it might takes months for me to get my money back.
I do like the Kaupthing website.

Does anyone else have any advice?

cundall

elie222 wrote: »

Thanks. The dollar is currently doing well against the pound. The exchange rate recently dropped from 2 to 1.85. This probably isn't the place to ask about forex.

I'm not going to be paying tax for at least 3 years. I currently have over half my money in an ISA, but I don't think there's any point in leaving it in there.

I'm really not sure about putting a big chunk of money into Kaupthing. I know I'm protected for up to £35k, but getting my money back if they go under will be a big hassle and it might takes months for me to get my money back.
I do like the Kaupthing website.

Does anyone else have any advice?

If it all goes under it should not be a big hassle just some forms... though it will take time (remember Iceland government protects the first £18k then the rest up to £35k is by the FSA so the first £18k should be back quickly)....

Don't take your money out of your Isa though.... you can move your isa to another provider to get a better rate. If you take it out now and put it in a high interest account yes you get a better return though when you start paying tax you would have lost out (i am talking about years down the line).

cundall

PS your dollar account.... no one knows what will happen as the dollar has been weak in the last few years though in the last few weeks it has got stronger though it was a lot lower before..... it is a gamble

amcluesent

IMHO, stock markets will be voilatile for some years yet due to to credit crunch, inflation in India and Russian expansionism.

You could try spread-bets which because of leverage don't require up front capital and could be more lucrative in a volatile market. But be prepared to sell very quickly to 'stop loss' if you are out the money.

jon3001

elie222 wrote: »

I'm also interested in putting some money into shares (£500-£2000). I want to invest in shares to learn about shares. I'm reading books but I think I'll learn the most from actually buying and selling shares.
I don't want to lose money share dealing and if I buy shares, I intend to keep them long-term.
Is now the wrong time to enter the share market? Are commissions to high to make a profit?

£2000 isn't nearly enough if you want to buy enough shares to have a diversified portfolio. Academic studies suggest you'd need a minimum of 30 (and ideally 60) shares for that. So really you'd be picking maybe 4 shares with a view to speculating and selling at some target.

If you really want to get long-term exposure to the financial markets then read up on building portfolios and using funds to buy diversified asset classes.

You can start here:
http://www.investorsolutions.com/v2content/book/index.cfm