Best way to invest?

KittyKate

I have a very small amount of savings and want to experiment with investing to see if there is any worthwhile profit in it for me. Ideally as a first timer I'd like to invest £100-£250.

Which route is the best way to a decent profit? I'll only ever invest roughly that amount and any over that I'll save. Obviously I know however I invest there will be an element of risk and this is an amount that I can afford to lose with no impact on my living circumstances (though I'd prefer not to obviously!!)

I'm a total newbie with investments so any tips would be gratefully recieved.

TomWantsToGoTraveling

Im kind of in the same boat. I want to invest a bit of cash without being skint.
I popped into Barclays and saw something called a Regular savers Account.....ie pays 10%, which is huge. I thought they had a decimal place in the wrong place.
You have to have £1000 in a Barclays current account, and you can put in using standing order £25 - £250 a month.

Now 10% I thought was a con. But it turns out to be real. Even if I get 25% taxes, that is better than an ISA....
....either that or I have been mis sold!

I have just read that Alliance and leicester do the same thing http://www.moneysupermarket.com/Savings/SavingsDetails.asp?SavingsID=23413&Source=MSE&BestBuy=1

KittyKate

Hmm, that sounds great - my wage goes into my Barclays current account and I generally always have over a grand in there. 10% is much more than I've seen on other Barclays savings plans.
But what happens if you make a big spend (I'm taking driving lessons eg) and your current account went to £900 say? What happens to your regular savers account does the APR drop?

cheerfulcat

Hi, KittyKate,

Do you mean £100 - £250 a month?

TomWantsToGoTraveling

Aparently it just has to be £1000 initially when you start the account up. I looked at Alliance & Leicester, and they do not have this start up buffer. The APR is fixed for a year.....but but but u cant take any money out until a year has past

KittyKate

cheerfulcat wrote:

Hi, KittyKate,

Do you mean £100 - £250 a month?

Sorry, yes, I do, should have been more clear! Now I've had a good think I might consider investing a little more. At the moment I'm getting a few coppers a month interest!

cloud_dog

I think you need to understand if you are looking to invest (with risk) or save (extremely little risk).

The Barclays 10% regular saver is a savings account (obvious I know) and not an investment vehicle.

There are some other questions worth considering before risking investment capital:

* Do you have sufficient savings for a 'rainy day'?
* Do you have adequate pension provision?

* Do you have dependants (relying on your income)?

If the answer to the first two are 'yes' and depending on your answer to the third it is possible that you may want to look at investments (with their different levels of risk / return).

cloud_dog

Edit: As a comment, my basic view is that at some point in our lives everyone should have some exposure to investments (and that includes pensions). Obviously the percentage of investments and the type of investments (risk) are dependant on your age, earnings, attitude to risk, etc, etc.

KittyKate

I do have savings for a rainy day, a great income, and no dependents. The only real cash I spend is £275 on rent, about £200 on bills and £100 on rubbish, the rest sits in my account and I feel I could be doing something better with it than in a low interest account. So I've decided to invest (not save) a small amount per month with the knowledge there is risk but possible decent return and that's what I want

Ted_Bloke

KittyKate wrote:

I do have savings for a rainy day, a great income, and no dependents. The only real cash I spend is £275 on rent, about £200 on bills and £100 on rubbish, the rest sits in my account and I feel I could be doing something better with it than in a low interest account. So I've decided to invest (not save) a small amount per month with the knowledge there is risk but possible decent return and that's what I want

Only £100 on rubbish? Clearly a misallocation of financial resources, you need a FA like ones I had who would certainly be able to counsel a greatly increased investment in that sector.:D

Quarantz

First I clearly state that you should NEVER invest with money you can´t miss. Having said that I can give you some possibilities:
1. Put it in one of the stockfunds of major banks-insurancecompanies. They charge some more, but their portfolios are widespread and will return a reasonably good result in time. Boring, but safer than trading yourself without experience
2. Buy a house with a stock/funded mortgage and use you extra´s to put into the stockfunds for the mortgage )as an extra above normal payments'. Your mortgage will be paid in full more quickly
3. Invest in other ways. Might be far more risky, could even cost all of your money, but could also get you `the jackpot`. Get yourself evry very very well informed before doing this

If I come up with more I`ll post again, but that`s it for now (it`s sunday for me too )

dunstonh

1. Put it in one of the stockfunds of major banks-insurancecompanies. They charge some more, but their portfolios are widespread and will return a reasonably good result in time. Boring, but safer than trading yourself without experience

Not in the UK they are not. Funds issued by banks and insurers tend to be more expensive and underperform the major fund houses.

2. Buy a house with a stock/funded mortgage and use you extra´s to put into the stockfunds for the mortgage )as an extra above normal payments'. Your mortgage will be paid in full more quickly

Investment backed mortgages have died a death in the UK. The change in economy, taxation and regulatory solvency requirements along with the stockmarket crash killed off that method for all but experienced investors.