Can you help me build some wealth? :)

bargaindoctor

Hello all,

I just graduated from uni and i'm now working as a junior doctor. Currently in savings I have around £5k, which is not alot, each month I'm making around £1k which is also not alot. I've always been a bargainer (hence love this site!), never been in debt, and love takin some risk to make more money.
I don't own a car, don't pay for my accomodation this year, so to be honest should be able to save most of this income. I however have been spoilt since before I started as a doctor in the NHS (all my friends are raving about how £1k is so much money...) I have had work that paid me the same amount of money that would have taken me a month working for the NHS vs a day of work. So I do spend alot of money on holidays, food, etc. I know I know something I have to change!

I really don't know how I would be able to step up my finances from here. At least I am not in debt, but I don't see how I can get rich with the kind of salary I'm making. I know the advice might be to put £3k into an ISA, and deposit part of my monthly earnings into some fund. But sometimes, I just wonder if it's REALLY worth it, in terms of the returns... but I know if I just leave it in savings I will just end up spending it on a holiday! I also don't know how long I will stay in the NHS so I wonder if hte NHS pension scheme is really worth it (I heard it's the best in the country).

maybe I should look into borrowing money and buying property, or starting a business? I really don't know much about this stuff (just came across this board today) so would love any advice there is on this....thanks!

ReportInvestor

I personally wouldn't borrow money to invest in shares.

For property investment or setting up a business, you perhaps need to try another MSE board.

Time is on your side and you just need to tap into the little known secret of compounded interest / compounded capital growth.

Regular monthly saving into the stock market can reduce some of the risk of shares, while starting to build up a significant nest egg.

On https://www.citywire.co.uk you can find out the best performing funds and the best performing fund managers - but keep an eye on charges, too.
https://www.trustnet.co.uk also helps you find and monitor all types of funds.

One example of a cheap regular savings scheme that might be considered for a core portfolio holding - before you diversify into more exciting investments - would be Foreign & Colonial Investment Trust. See http://www.fandc.com . The annual charge on the main F&C investment trust is only 0.3% (plus purchase & sales costs are 0.2% & government stamp duty of 0.5% is payable on purchases only) the investor scheme itself is free.

Your NHS pension scheme is a final salary pension scheme, and these are falling like flies in the private sector. You have heard correctly that it is a very valuable perk of the job.

ReportInvestor

ReportInvestor wrote:

Time is on your side and you just need to tap into the little known secret of compounded interest / compounded capital growth.

Regular monthly saving into the stock market can reduce some of the risk of shares, while starting to build up a significant nest egg.

This article in the Independent puts it better & elaborates further

".....Mr Russell emphasises for those who still don't get it that the power of compounding is the real key to achieving wealth from the stock market. In a table, he shows how an investor who makes just seven annual contributions of $2,000 a year between the ages of 19 and 25 (a total of $14,000) will end up with more money aged 65 than an exact contemporary who invests $2,000 every year from the ages of 26 to 65 (a total of $80,000).

"Compounding," Mr Russell explains, "is the royal road to riches. Compounding is the safe road, the sure road, and fortunately anybody can do it. To compound successfully you need the following. You need perseverance in order to keep you firmly on the savings path. You need intelligence in order to understand what you are doing and why. You need knowledge of the mathematical tables in order to comprehend the amazing rewards that will come if you faithfully follow the compounding road. And of course you need time: time to allow the compounding to work for you."

There are, however, two catches. "The first is obvious - compounding may involve sacrifice (you can't spend it and still save it). Second, compounding is boring. Or I should say it is boring until (after seven or eight years) the money starts to pour in. Then, believe me, compounding becomes very interesting. In fact, it becomes downright fascinating."

What follows from this? In Mr Russell's view, the answer is to try to get time on your side. Most investors - the "little guys" in his words - try too hard. They are always impatient for the big payoff and as a result fail....."

## - Note for bargaindoctor - he goes onto talk about people who have lost money in business, as well as investors putting lump sums into the wrong investments at the wrong time.