How to invest £10,000

Daviddarius

Hi there,

I've got a 10,000 in a high street savings account.

Some background: I've just bought an ex-local authority flat in central London, and I feel I need a financial cushion in case any works are done to the block, in which case I could be charged (there is nothing pending for at least the next 12 months).

I'd quite like to move again in about a year-18 months, and am aware that this will cost.

I'm saving about £300 cash a month + £170 into a private pension.

Now, I'd like to do something interesting with at least some of my 10,000, for example buying some contemporary art, or tangible assets that will appreciate, rather than investments. And obviously there's not much to be gained from letting it sit there at the moment.

Does anyone have any thoughts? Really appreciate it-

Thanks a lot, David

ermine

I feel I need a financial cushion in case any works are done to the block

Now, I'd like to do something interesting with at least some of my 10,000, for example buying some contemporary art, or tangible assets that will appreciate, rather than investments. And obviously there's not much to be gained from letting it sit there at the moment.

Eh? These two statements are totally not compatible with each other. You have 12 months where you won't need to make a call on this, but you may need it afterwards. National Savings Index Linked Savings certificates are what you need. Guaranteed return of RPI provided you hold for at least a year (don't worry about the 5 year term, you can get your money back at any time, though indexation is only added yearly).

There is no reliable make money fast scheme that will give you a riskless return in less than a year, and those that do usually have a risk of enjoying some time at Her Majesty's pleasure

art and tangible assets are illiquid and volatile. They have their place in an investment portfolio, but not over an investment horizon declared in months rather than many years...

Totton

Hi,
I wouldn't be putting it into todays stock market if you need it in a year or so, possibly take a look at high quality bordeaux wines but be careful as the market for that has gone up with the rise in Chinese buyers. I sold a few cases recently and did well but again you need to be very careful investing for just one year, I'd had some of that wine for 10 years before it turned a decent profit. For interest, I used bbr.com for my wine purchases and sells but on reflection I'd advise you go for a deposit account paying around 3%, anything else could easily showing a loss in 12 months as will the deposit if inflation remains at current levels.

HTH,
Mickey

atush

Investing in assests such as you suggest could be a poor decision as they are illiquid and you could wait ages for abuyer or take a big hit on the price. These types of assets can be a good idea for experienced investors who have a lot of other assetsd and dont' need the money as soon as you do.

If you need the mone in a year, there is nothing more suitable than a cash deposit such as one year bond, cash Isas, or NSI ILSCs.

If you want some risk and equity exposure, then why not save intoa s&S isa, or better yet an investment trust savings plan. You could invest 100/150 per month into several different trusts and the rst in cash. Give the current market volatility, Pound cost avergaing could help you with risk in this case.

I also feel that you wanting to move on in a year or so time is a bit optimisitic as well.


Also, 170/mon into a PP? Is there an employers cntribution? What is the toatl invested each month (as a percent of your salary)? Is that half your age or more?

Daviddarius

Hi thanks for the responses.

I've given myself quite a significant cushion against possible repairs to the block - it's not necessarily the case that there will be expenses after 12 months , it's just that this is the longest period for which they guarantee no works will be done. And they replaced the roof and all the windows within the last 18 months.

ermine
I am tempted by the NSI index-linked certificates, will consider that.

But I'm still interested in spending some of the money on something that I can enjoy and am unlikely to have to sell soon, but can do in an emergency - that's why I was thinking art.

Totton
Not sure I know enough about wines, or have the ability to store them properly.

atush
Why would moving necessarily be optimistic? I suppose you mean because I wouldn't have recouped the costs of moving the first time? Also the PP is in addition to a 5% salary contribution matched by my employers - it's just something I bought myself as an extra thing.

Cheers,
D

CB27

Investing in something like art or anything where the price is subject to opinion alone* is not something I'd suggest as a major part of your portfolio. The reasons are that the prices could easily fall dramatically, and they may not be easy to sell in a year's time.

There are various ways of putting your money into things like bonds, ISAs, premium bonds, unit trusts, sharebuilding, etc. You don't have to put everything in one place, you could split the £10k into more than one product, and split your monthly savings into a couple more.

If you have some time on your hands, and some space in your property, you could also look to put some of the money towards buying and selling on eBay or elsewhere (you can easily start with less than £100 and build yourself up).

* All investment prices, including shares, are subject to the opinions of people, but at least with shares and other investments there is a value to the asset it's linked to.

atush

atush
Why would moving necessarily be optimistic? I suppose you mean because I wouldn't have recouped the costs of moving the first time? Also the PP is in addition to a 5% salary contribution matched by my employers - it's just something I bought myself as an extra thing.

Because prices may have dropped in that time, noit risen. Or stayed the same. These days you can't guarantee a profit each year like days gone by. And then there are the costs of moving alongside as you mentionned. Prices need to rise quite strongly to make moving after one year a profitable experience.

The reaon I asked about your pension is that you should save 1/2 your age of salary into your pension to make a good sum to retire on Haven't done the math with yours as you have 5% plus 170 plus taxt at your higherst rate so you can work that one out- I am not being paid lol.

ermine

But I'm still interested in spending some of the money on something that I can enjoy and am unlikely to have to sell soon, but can do in an emergency - that's why I was thinking art.

Nothing wrong with that as an aim, the problem is an emergency fund needs to be liquid, because you don't usually schedule emergencies.

You could take the line that you're prepared to sell at a loss, the difference being the utility you gain from the enjoyment of the object. If you're prepared to eat a 50% loss, you might be able to achieve your aim, and enjoy £10k's worth of art (to you) for £5k if the emergency turned up.

I cannot think of any non-financial investment that is liquid enough for a one year time horizon. Perhaps that's a limit on my imagination or experience, but I think you are making a big ask if you want to get all your investment back, never mind make a profit on the deal. NS&I may be boring, but it'll give you all your money back in real terms

But hey, if you want to buy toys, go for it - at least you've saved up front. Just don't call it an investment - saving money isn't the only goal in the world, and you can't take it with you. Telling yourself something is an investment when it's largely an expense is what's wrong. There's nothing wrong if you make your purchase in the knowledge you may lose a significant part of the original cost on selling it, as long as what you're left with has a reasonable chance of underwriting the cost of servicing the property maintenace costs next year.

oliviaskye

hi.....
i think you should invest your money in insurance money so that in future, if you are in trouble that you can use it and recover your damages.

downsizer3

Have you thought about premium bonds? I made more on that than any savings accounts and its nice to get cheques in the post.............you can get it back instantly.

Aegis

downsizer3 wrote: »

Have you thought about premium bonds? I made more on that than any savings accounts and its nice to get cheques in the post.............you can get it back instantly.

The downside being the incredibly poor rate that the majority of holders will get on their bonds.