Overpaying v Investment

Ed_Zep

I'm fortunate enough to be only paying 1% interest, as I'm on a tracker. I know this won't last forever but I've been overpaying as much as I can for about 2 years or so and it's gone well.

Has anyone out there thought about diversifying into the stockmarket or other investments whilst rates are relatively low and have you had success?

I put £1000 into Barclays shares and they went up 10% in a couple of weeks (fallen back, now though!).

dimbo61

Hope you are using your ISA allowance and the OH !
Regular saver with HSBC and barclays also good way to save 8/6% before tax.
so 2x£5100 a year into isa,s and 2X £3000 into RS,s should keep you busy.

Peelerfart

"so 2x£5100 a year into isa,s"

isnt it 3,600 'til next year ?

littlemrtinkle

£3600 a year into a cash isa per person.

Jonbvn

littlemrtinkle wrote: »

£3600 a year into a cash isa per person.

Over 50's are allowed £5,100 from October, and everyone else from next April.

IMHO, investing in S&S as an alternative to overpaying the mortgage is too risky for us. We always fill our cash ISA's and pay into some regular savers, which we are certain are paying more than the mtg IR.

That is not to say S&S should be disregarded completely. Several big companies are well known for paying excellent dividends. Consider having a look at the high yield portfolio on The Fool.

dimbo61

Sorry forgot about all you young people on here !
I should also have said cash ISA,s Barclays were paying 3.61% Natwest 3.51% now both gone down.
HSBC paying 3.1% at the moment.
either way as most people on here have a OH save into 2 ISA,s and 2 RS

StuartGMC

Ed Zed
See my thread and recent posting showing our Funds ISA position plotted against FTSE 100 since 2006. Whilst we're better overall, we are still in negative territory and infact having improved to -15%, declines this past week has dropped that to -22%. Plenty of "content" on my thread and thoughts on investing and what I hope it'll do for us.... time will tell.

That said we also offset and OP, but, we don't have the cash ISAs - can't have it all! Hope though to "have it all" once we're MF - may not be October which is our very optomistic plan, but it will definitely be Feb 2010 if I have to move hell and high water to get there (mid way between 45th birthdays for OH and me :beer:)

As noted by others it is down to your consideration of the risk and whether you have the ability to leave Funds/S&S ISAs to run untouched for 7-10yrs (just growing and, selling/reinvesting plus contributing) with other monies elsewhere for needs. Obviously we continue to invest each month for the pound cost averaging and to be honest the low market Oct 08 to Mar09 has meant that the funds invested then have grown significantly helping to mitigate a little the losses on those invested from June 06 to May 08. Until recently I would have noted these are all in addition to my final salary pension scheme, but, the news today is very depressing on the likelihood of these all ending in the near future even for us already in them.....

Personally I go with funds as I don't have time for individual equities nor easy access trading to sell on demand (at work) although you can set automatic limits of course. If you have the time for the individual equities research and you can diversify, go with them (or do so simpy for the fun of it!) if not, I'd suggest alternatives such as Funds or similar. Personally I've recently subscribed to Money Observer (£1 for first three issues) to learn more for the broader financial planning.

Good luck.

Ed_Zep

Thanks to all. I've been very good with cash ISAs over the last 6 years. I hope to contribute and transfer it this year.

Thanks Stuart, I'll check that thread. I invested in Aegon's ethical fund and it's down 25%. Wish I'd gone the regular contribution route but anyway, it'll recover!

I've been reading The Zulu Principle, which seems a good introduction.