46k to invest and dont know where to start

MrCornish_2

Hello,

I am new to the forum and this is my first post as I could do with some advise on what to do with some money that I now have after selling a small home business. Sorry if it sounds a little dumb but me and numbers just don't mix and to get the info below has just took me an age to sort out.

I basically have 46k in a Tesco's internet savings account that now only pays us 1% interest and was hoping to get a return slightly better. I am not good at moving money around and paying in certain amounts each month so a simple saving scheme is good for me.

I also have a mortgage with the Nationwide with £97389.28 outstanding on it and I am fixed on 5.18% for another couple of years.

And last of all I have about 10k invested with M&G mini stocks and shares ISA that is down 2k at the min from the 12k I invested a few years ago.

If anyone could offer advice I would be very grateful

Many Thanks

matthew74

Depending upon your circumstances and any penalties for overpaying your mortgage I would definitely consider taking a few grand off the mortgage, as after tax (proabably even before tax) you will not get a savings rate as high as your mortgage rate. Whatever you do don't sell the stocks and shares ISA.

I would also drip feed some of your cash into a regular saver every month - I think the best rates are about 5%. You could also consider fixed rate bonds if you don't mind tucking your money away for a year or two.

At the very least open a new easy access savings account - shop around you can get about 3%.

jem16

MrCornish wrote: »

I am not good at moving money around and paying in certain amounts each month so a simple saving scheme is good for me.

Are you looking to save or invest? Your title says invest but then you mention savings.

FreebieFreakie wrote: »

You should go see a bank for advice. They'll tell you how to invest properly because the more money you have, the more they have.

If the OP really wants to invest the last place he should go for advice is a bank.

ChuckCash

FreebieFreakie wrote: »

You should go see a bank for advice. They'll tell you how to invest properly because the more money you have, the more they have.

Seriously? Which bank would you recommend for advice? One which has not been bailed out, or one which has been bailed out so they can advise on what not to do?

D1zzy

If you do want to continue saving rather than investing - the Newcastle BS 5 year bond 5% is hard to beat. As long as you can give 90 days notice you can withdraw without penlty at anyt time -or just leave it there at 5% for 5 years.

DiggerUK

Mr. Cornish,
From what you have described it is a no brainer.

Make sure you have an emergency pot of up to 6 months cash on hand, then pay the rest off your mortgage.

Mortgage rates have to go up in the future, there is no way they can come down. You will have an increase in your disposable income following the lump sum payment, maybe even enough to consider over-payments. Will depend on type of mortgage you have.

I don't advise you to hang on to your S&S ISA. As equities are trending up a little at the moment you should wait until it turns down before selling. Again use this to pay off mortgage.
If you are convinced of green shoots and a recovery then leave your ISA alone.
Economic indicators are dire in my opinion.
Anyway having savings plans when you have a debt the size of your mortgage is a cart and horse story to me.

Best of fortune.

MrCornish_2

Thanks for the replys,


I think I would rather just do savings this time and play safe or get some off the Dam mortgage.

I just spoke to Nationwide and it is a 3% penalty for paying a chunk off. I can overpay £500 per month without any penalties. I am fixed until Nov 2011.

DiggerUK

Definitely go with the 500pm overpayment.
You should check out the NBS A/C. Read T&C's it only looks like a 5 year tie in, it is in fact a 90 day notice.

http://www.newcastle.co.uk/savings/5yearbond

ventra

Go see a Financial Advisor who is Whole Of Market or IFA, get a attitude to risk assessment, think about your longterm goals and make sure you diversify across a range of investments and providers that will help you maintain a balanced portfolio.

Think longterm.

Think quality.

Think Diversity.

Finally Get Professional advise. Don't go to a plumber about electrical work, if you know what I mean.

HTH

Bill

dunstonh

You should go see a bank for advice. They'll tell you how to invest properly because the more money you have, the more they have.

Bank advisers cant tell you how to invest properly. Their remit prevents them from giving proper portfolio advice.

Jake'sGran

matthew74 wrote: »

Depending upon your circumstances and any penalties for overpaying your mortgage I would definitely consider taking a few grand off the mortgage, as after tax (proabably even before tax) you will not get a savings rate as high as your mortgage rate. Whatever you do don't sell the stocks and shares ISA.

I would also drip feed some of your cash into a regular saver every month - I think the best rates are about 5%. You could also consider fixed rate bonds if you don't mind tucking your money away for a year or two.

At the very least open a new easy access savings account - shop around you can get about 3%.

This is sound advice. I regularly read the Money section in The Times and their advisers always say to people in your position to pay all/some off your mortgage before anything else.
I have not seen any regular savers paying 5% but if there is one Martin will have listed it at the beginning of this section. I prefer fixed rate bonds but only for 12 months and believe it is possible to get around 4% at the moment.

Then there is the stock market but in the unlikely event you decide to have a look at buying a fund with say £2-5K you must use a discount broker. Mine repays the initial charge in the form of extra units. If you have a look at Trustnet you can see the ones that are selling well at the moment. A lot ofpeople are buying bond funds that provide an income.