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TheEngineer

I have just come across some money, 70k to be exact and I need some advice on how to best benefit from this amount. I am 24 with no particular views on buying a preperty yet as my partner lives abroad and shall remain so until August 2007. Any advice would be very much appreciated. With my recent payrise I have just hit the lower part of the tax band. Should be looking into professional guidance or some saving/bond?

Thanks

Chrismaths

Welcome.

Just need a few clarifications.

1) What do you want from this money? Is your aim to buy a property when your partner returns next year? Or is this for longer term savings/investing?
2) When you say you've hit the lower part of the tax band, what tax band do you mean? 10%/22%/40% (Starting, Basic, Higher).
3) Saving or investing will depend on your attitude to risk - if you are prepared to accept the potential for short/medium term losses in order to increase the potential for long term gains.

All the best, Chris

TheEngineer

Apologies, I did not add all information.

My partner will be coming in a year however I find I will be first entering the propert market in about 2-3 years is that wise , to wait until it gets better as I live in London). The tax band I have just been on is the high (40%).

Some sort of dispersion I would imagine. 40k be added in a savings account and then the rest be invested.

Honestly, any advice or possible combinations would be welcome

Chrismaths

Ok. So you're looking to put this money away for 2-3 years in order to help finance a property purchase.

Just a quick note about cash - putting 40k away @ 5% interest would leave you with 3% return net of tax which is less than RPI inflation - currently 3.6%. Which is a pain. But by combining this with some investments you should be able to beat inflation easily. However if you actually want to increase the value of your 70k significantly in real terms, you might have to take on a bit more risk.

You have the right idea with "dispersion" - or diversification as it's known in the trade, and there are many ways to achieve this. Do you want to pay someone to do it for you, or do you want to learn about investing and DIY?

TheEngineer

Personally , I would like to do it myself. I found a bond with a 6.0% APR that matures in 18 months and its a no brainer that 70k will be worth less in 3-4 years time.

On the other hand, I find it very difficult to stamp this money as a stepping stone to further returns in contrary to a lucky break.

Yourself being in the trade can provide a valuable insight. I understand your word is not practice but theory.

What sort of investments should I be looking into?

Cheers

Stefanos

chesky369

What about the full amount - £7k - in a maxi ISA? Invesco do a good one - 29% interest last year. Other than that, why not think about buying property now - it's not going to 'get better' over the next couple of years.