46k to invest and dont know where to start

Aegis

I'm going to disagree with DiggerUK and say that you should probably hold on to the stocks and shares ISA. It's down a fair bit at the moment, so no sense in locking in the loss unless you need it. On the other hand, there have been far worse times to invest more into a stocks and shares ISA than after a fairly large crash, and many of the analysts that I speak to on a daily basis (as customers of mine, not of them trying to sell me anything!) are quite confident that after a small downturn we should see some steady recovery for a while. It might not work out that way, but it certainly acts as an opposite opinion to the idea that there are no good signs at all in the market.

Regardless, if you were to set up a regular contribution then if the market drops you buy in at a lower level, if the market rises then you've made a gain. Give it a few years and with any luck you'll have a fairly good lump sum for reducing your mortgage balance with.

Of course, this is only worthwhile if you think you'll get better returns on your investments than you'll pay on your mortgage. If you're too cautious to pick something with higher return potential, then pay off the mortgage.

King_Weasel

If you are a taxpayer then you might as well put any money you do decide to save into a cash ISA to avoid paying tax on the interest. And switch more into the ISA next April too if you have it.

Jake'sGran

King_Weasel wrote: »

If you are a taxpayer then you might as well put any money you do decide to save into a cash ISA to avoid paying tax on the interest. And switch more into the ISA next April too if you have it.

But he cannot use up much of the 46k doing this. Apart from this years allowance what should he do with the balance in the meantime?

MrCornish_2

After reading the reply’s I think I am going to put the money into the A&L 3.15% instant access account and overpay the mortgage by £500 per month until the fixed term ends and then pay a lump sum off. I will also put what I can away into an ISA and top this up each year.

I will take my chances on the stocks and shares ISA I already have and see if it grows in the next few years, I am tempted to invest a few grand more now into it but think I will leave it as it is for now

Many Thanks for your help

steveksullivan

Whilst it's always a good idea to get rid of debt whenever possible, one aspect always worth considering in my view is whether access to this sort of 'cash' may of some benefit in the future.

I've taken the decision to keep most of my 'assets' in high interest (ha!!) savings accounts and keep my mortgage (£83.5k) - bearing in mind that the true cost of the mortgage isn't over 5%,its the difference between whatever rate you are paying on the mortgage and the rate you couild get if you invested/saved the money. In my case over the last few years it has 'cost' me between 1 and 2% and its been worth paying that to have easy access to the cash if/when I need it (possible move abroad.) With plenty of equity in my house the house sale will finally pay off the mortgage.

Obviously everyones situation is different but worth bearing in mind I think....

Primrose

I'd avoid talking to your bank. Banks can only sell their own savings products which are usually abysumal from an interest rate point of view. Repaying part of your mortgage is generally a sensible move, especially if the interest on the loan is higher than the interest available on savings accounts but be sure to leave some savings readily available for emergencies. If I were in your shoes, I'd leave your M & G ISA invested in the hope its value will eventually increase.
If you are a taxpayer, I would certainly ensure you make full use of your annual ISA allowance. That might mean putting in the maximum £3600 this year (unless you're over 50 when you can take advantage of the higher allowance in October) in the best interest rate product you can find (check the savings section on this site), and perhaps put the balance in a one year savings account which should pay more than the 1% you're currently earning. When that matures in a year's time, use up another year's CASH ISA allowance, and repeat the process for another year with another one year bond, until it matures and you buy another ISA.

herbertthehelper

MrCornish wrote: »

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.

Start this ASAP the pennies will drop of the mortgage really quick!

Rollinghome

Aegis wrote: »

...and many of the analysts that I speak to on a daily basis (as customers of mine, not of them trying to sell me anything!) are quite confident that after a small downturn we should see some steady recovery for a while. .

I think we should be a little responsible on a public board like this in encouraging others to invest - especially doing so on the basis of anonymous "analysts". Who are these analysts, anyone we've heard of? Or perhaps just someone who works for a fund management company and so with a vested interest in getting the public to invest?

How reliable has their advice been in the past? Did they warn you to get out of equities a year ago before the big falls and if so did you post their warning to this board?

It may well turn out to have been a good time to invest, or not. Time will tell.

Valli

mrcornish wrote: »

after reading the reply’s i think i am going to put the money into the a&l 3.15% instant access account and overpay the mortgage by £500 per month until the fixed term ends and then pay a lump sum off. I will also put what i can away into an isa and top this up each year.

i will take my chances on the stocks and shares isa i already have and see if it grows in the next few years, i am tempted to invest a few grand more now into it but think i will leave it as it is for now

many thanks for your help

:T:T:T:T
FWIW I think you've made the right decision.

Primrose

Sounds sensible. The older one gets, the more uncertain one realises life can become. The day we paid off our mortgage early was a huge day of celebration. Just knowing that the debt was gone and that we were beholden to nobody was a very liberating experience.