never lose a penny

davidssmith

Linton wrote: »

Does she really want to put the money where she cant access it for 5 years at her age? I doubt that any withdrawals would be allowed.

I would question whether the money is covered by the governement.

The guaranteed return is not very exciting - 9% over 5 years is 1.7% per year. It is taxable.

Check how they determine the final FTSE to determine the rise - these schemes normally employ some sort of average over the final year which could substantially reduce the chances of major increase. Look at what has happened to the FTSE over the past 10 years - its gone down by about 20%.

If she may need the money during the next 5 years why not have a ladder of 3 year fixed rate accounts. Divide into 3, put into a 1 year, 2 year, and 3 year fixed rate accounts. As one matures each year either take the money or reinvest in a new 3 year account. In this way you could get a completely safe return of say 25% over 5 years that really would be covered by the government, with partial access to the cash.

that sounds like a fantastic idea. The building society product is from a firm in the north east! and not northern rock so you can guess who that is. the product is a deposit and says it is covered by the FSCS which covers them. I like the idea of the 3 year split thing though. And yes Derek is a XXXX, she had a small leak on her Rad a few months ago and he caused untold problems!! Nice fella but has too much time and energy on his hands and manages to get himself involved in everything she does.

davidssmith

G_M wrote: »

Seems like Derics mum knows a lot more than her know-it-all boy.

Oops, sorry ERICS mum! Maybe know-relation?

:rotfl:

you are just too quick for me.......great spot though. made my xmas eve that has i cant stop laughing. i never knew discussing money with complete strangers could be so funny. And i take comfort in knowing that we all suffer the knowledge of a derek over the road, do they have their own website were they swap notes!!

ERICS_MUM

G_M wrote: »

Seems like Derics mum knows a lot more than her know-it-all boy.

Oops, sorry ERICS mum! Maybe know-relation?

:rotfl:

sorry to spoil the fun but no, I'm not Derek! I'm Linda and Eric is my cat! Mind you, Eric does answer to Derek (and Dalek, and tantric , and eccentric, arsenic, etc etc)

Linda xx

G_M

ERICS_MUM wrote: »

sorry to spoil the fun but no, I'm not Derek! I'm Linda and Eric is my cat! Mind you, Eric does answer to Derek (and Dalek, and tantric , and eccentric, arsenic, etc etc)

Linda xx

and I bet he knows more about savings than Derek!

davidssmith

ERICS_MUM wrote: »

sorry to spoil the fun but no, I'm not Derek! I'm Linda and Eric is my cat! Mind you, Eric does answer to Derek (and Dalek, and tantric , and eccentric, arsenic, etc etc)

Linda xx

did eric get turkey for christmas?? just read another thread on the investec account, seems a good idea. anyone know much about the FSCS scheme that newcastle building soc and investec says guarantees their investments? is that where the idea you can never lose a penny derives from?

davidssmith

opinions4u wrote: »

Everything has an element of risk.

- markets falling
- banks going under
- compensation schemes not paying out
- inflation eroding value
- your mattress catching fire with your savings under it

The skill is detemrining your level of risk and saving / investing accordingly.

Now i have read the stuff from newcastle i think i understand where the concept that you can never lose a penny comes from.

- markets falling - the capital is secure and returned with a minimum of 9%
- banks going under- covered by FSCS upto 50K
- compensation schemes not paying out- that would be the least of problems i the UK government wasnt able to pay out.
- inflation eroding value- there is a min 9% return which should keep pace with inflation over the next few years.
- your mattress catching fire with your savings under it- this seems to have most risk when looking at all above as i'm sure my home insurance wouldnt cover it.

so it seems there is a nivarna out there from the newcastle, something that gives you opportunity to get upto 45% growth over the next five years, not bad looking at the past 5 or 10 years! secure and keeping pace with inflation possibly. so it seems possible to save/invest and never lose a penny. perhaps derek aint so annoying after all.......no last point is incorrect he still is.

specialist_2

Isn't the compensation scheme funded by the financial services industry though? It's not the governments scheme is it?

Whilst I can see that the plan has its merits, wouldn't it be better to source a plan with similar or better attributes from a bigger, more financially sound institution? Building Societies are vunerable at the moment and therefore it would make sense to try a bigger firm, possible a government owned one which is less likely to fall?

davidssmith

specialist wrote: »

Isn't the compensation scheme funded by the financial services industry though? It's not the governments scheme is it?

Whilst I can see that the plan has its merits, wouldn't it be better to source a plan with similar or better attributes from a bigger, more financially sound institution? Building Societies are vunerable at the moment and therefore it would make sense to try a bigger firm, possible a government owned one which is less likely to fall?

Interesting point, that would restrict us to RBS or Northern Rock would it not? I will have to do some reading on who funds the FSCS and if it is indeed underwritten by the UK government????? I will let you know. Although I'm not sure biggest is always best.....think Lehman's weren't they considered very big?

nrsql

>> never lose a penny of your money?
Depends on what you mean by that.
Staying with deposit accounts or guaranteed pruducts gives you a high likelyhood of money not decreasing in absolute terms in anything but very abnormal circumstances.
If you want to take into account possibilities of inflation and currency issue then you have a very different question. You need to invest to mitigate these possibilities which necessarily mean diversifying with respect to currency and geography or maybe getting into the realms of derivatives. In any case this will almost certainly be looking at the probability of no loss rather than certainty.

D1zzy

Truusant wrote: »

I always loose penny's LOL

Penny's what?