How could I make about £30000 work harder?

Myron_2

I'm about to risk talking to the bank's advisor soon and thought I would try asking for some pointers and tip from anyone who would like to comment.

• I work, at the moment. I got myself into a task that has a very slight chance of costing my job.
• I have currently a-massed a little over £25,000 in one saving's bank account and a little over £6,000 in another. Both are Internet based e-savings accounts. Best interest rate for a saving's account.
• I have a Credit card that I use VERY wisely. Always clear it off before I get charged interest and only clear the balance after I get my salary.
• Got a complementary overdraft facility I DO NOT intend to use.
• I'm seriously jittery about going into the red. I've never been in the red to-date.
• I purchase very little. Whatever I get must have a practical use.
• "If I can live without it, I don't get it".
• I live at home with my mum. She does not want much rent. Usually if I give her rent, she ends up putting most into one of my bank accounts. She's got the account numbers.
• I have no mortgage. YIPEE!!!!!
• I have no loans. YIPEE!!!
• Apart from bills, I'm not in debt. YIPEE!!!
• My parents house is purchased out-right, but there ground-rent.
• My primary outgoing are vehicle maintenance, diesel, vehicle legalities, telephone and Internet.
• I budget through the year. By that I mean on spreadsheet I put aside amounts for Car insurance, road tax, etc. As a consequence I pay my insurance and Road tax outright each year. (My mentality is I may have £30000, but not all of that is mine, as in I'm minding the cash for whoever I'll be paying.)
• Yes, I shop around to try get the cheapest deals.
• I ain't perfect. ]=:
• I have a boring life really, but saving like mad. Normally, each month about £700 gets dumped into my primary e-savings account.

I do lot like to take risks with my hard earned money, so I don't want to do anything that can put my savings, or part thereof, at risk.

All ideas welcome. Jokes also welcome. Don't give me your bank account numbers as I ain't transferring any of my hard earned cash into your account, or any other account. ;D

deemy2004

Your credit rating is probably good.

So why not double your savings by stoozing, i.e. borrowing on 0% cards and saving the money.

Then watch your interest earned DOUBLE !!!
My credit cards earn ME over £100 per month !

Your bank advisor will never advice you to do that

Now if you don't want to touch your savings for several years, then fix them at higher rates, though obviously the rates available have dropped greatly since Sept 04, still you can beat the floating rates.

dunstonh

Dont see a bank advisor. Very limited product ranges with poor quality products with high charges and usually poor performance.

Its a sales driven process rather than a holistic approach. You wont get anything like deemy has suggested you investigate.

Myron_2

Your credit rating is probably good.

So why not double your savings by stoozing, i.e. borrowing on 0% cards and saving the money.

Then watch your interest earned DOUBLE !!!
My credit cards earn ME over £100 per month !

Your bank advisor will never advice you to do that

Now if you don't want to touch your savings for several years, then fix them at higher rates, though obviously the rates available have dropped greatly since Sept 04, still you can beat the floating rates.

You missed a point. If I borrow money then that money is not mine, which means I would need to repay it. In my list I imply that I spend next-to-nothing, so your borrowing advise is a very bad idea.

What would be nice is to be able to borrow off credit cards at 0% and not having to pay back what's borrowed, without declaring one-self as bankrupt.

I ain't that stupid.

Myron_2

Dont see a bank advisor.  Very limited product ranges with poor quality products with high charges and usually poor performance.

Its a sales driven process rather than a holistic approach.   You wont get anything like deemy has suggested you investigate.

Well, there is no harm in finding out what a bank advisor says, but I would have all the relevant question to hand the the entire session would start with a statement from me telling the advisor that the meeting is strictly a fact gathering, no commitment will be made and if I wish, I will contact the advisor if I wish more information, or I wish to proceed with [whatever].

I've already been screewed by one bank, but luckily I pulled out and lost only a small amount of money.  I ain't getting stung again.

Myron_2

Ah, I think I already do this without knowing what stoozing meant.  I may make a purchase on  the credit card, but pay off the entire balance before the card company starts charging me interest, so I don't have to take money out of the savings account and keep a minimum amount in the current account.  Typically I pay off the credit card balance the day my salary shows up in the current account and the remainder gets shoved post-hast into the saving's account.

I also found the following FAQ on stooging on another site: http://boards.fool.co.uk/Message.asp?mid=8661943

Thing is, I also see some traps that are not mentioned in this FAQ.  It looks like I need to find several FAQ's and merge/weigh them up.  One trap is keeping the credit cards up to the limit.  Where that could have an adverse affect on one's credit rating as a credit rating company would not know that I'm stoozing.  I would like not to risk my credit rating as who knows, maybe one day I'll need a damn good credit rating.

I'm looking for something that's easier to implement and manage.

cheerfulcat

Hi, Myron,

If you are seriously worried about taking risks with your money then there is nothing that you can do except put it into the highest paying bank or building society account you can find. Bear in mind that higher returns come from higher risk investments.

The bank chappie is going to want to sell you financial products. He will not give you advice on anything that doesn't involve charges.

You don't seem to have a cash ISA; that's certainly a good place to start. Find the one with the highest interest and bung £3000 in there.

http://www.moneysupermarket.com/ISA/CompareISAsForm.asp

You could consider putting some into Premium Bonds, maybe £5000. The capital is safe ( though subject to erosion by inflation,the "invisible" risk ), you may get prizes equivalent to a 3.2% ( net ) interest rate and you have a chance at winning a million squids :-)

As to the stoozing; are you sure that you've understood it correctly? It involves borrowing money at 0% and putting the cash into a high interest account. You pay the minimum payment on the card every month and at the end of the interest-free period, you give the cc company the money back and keep the interest that was paid on it while in the account. Free money, but you have to be careful to keep a strict payment schedule .

HTH

Cheerfulcat

MarkyMarkD

You missed a point.  If I borrow money then that money is not mine, which means I would need to repay it.  In my list I imply that I spend next-to-nothing, so your borrowing advise is a very bad idea.

What would be nice is to be able to borrow off credit cards at 0% and not having to pay back what's borrowed, without declaring one-self as bankrupt.

I ain't that stupid.

Myron

Welcome to the site by the way.

Deemy isn't missing a point and does know what (s)he is talking about.

If you have £30,000 and place that on deposit you can earn say £1,500 per annum on it.

If you borrowed another £30,000 at 0% then you could earn say £3,000 per annum on the total savings.

That is Deemy's point and that's stoozing.

Buying things on your card and paying the balance off in full is good practice, but it's not stoozing and makes you very little in interest compared to stoozing on the massive scale Deemy is talking about.

deemy2004

You missed a point.  If I borrow money then that money is not mine, which means I would need to repay it.  In my list I imply that I spend next-to-nothing, so your borrowing advise is a very bad idea.

What would be nice is to be able to borrow off credit cards at 0% and not having to pay back what's borrowed, without declaring one-self as bankrupt.

I ain't that stupid.

I am afraid you missed the point ;D

Yeh its not your money, but so what ? your not spending it, instead £30k is giving you an EXTRA £1500 a year, add that to the £1500 your earning from your own savings then thats a return of £3000 per year, so your doubling your interest earnings.

Off course at some point the £30k gets paid back, but hey, two years on and my stoozed total is still rising, come the Egg anniversary in a few months, and it will have risen to near £45k ! All nice and safely tucked away in savings accounts which can be paid back if I can no longer shift the debt to new cards AT 0%, well okay I'll settle for 1.9% offers

It is free money (the interest earned), that I am extremely grateful to the credit card companies for giving to me,

Thankyou, thankyou thankyou :-*

mikeorange7

Hi Myron

your information is useful but lacking in the finer detail I would need to be able to suggest some alternative uses for your £30k.

Can you answer the following please?:

1/ What are you saving for?
2/ How much of your £30k do you need to have easy access to?
3/ Do you have any income protection insurance?
4/ Do you have any dependants not living with you?
5/ What pension schemes do you belong to?
6/ How old are you?

You are doing the right thing by not jumping in to any financial committments without due consideration.