What's The Next Step now i am out of Debt....

debeast

Hi all
i've been with Moneysavingexpert since its inception and have finally managed to clear all my debts apart from mortage :-)

So now i want to make my money work for me , as the saying goes.

I'm going to have about £400 a month spare to invest as well as lump sums of approx 5k every now and again

So what do i do with all my new found wealth ??
I've started investing in a FTSE Fund to spread the risk of share dealing.

But if i wanted to be filthy rich where should i aim?

Shares,Property,Savings Accs. etc...

Any ideas on whats probably the best path to take?

thanks

Debeastie

gustav

Rule number 1 (another rule number 1!). Before you get carried away with big ideas, make sure you have sufficient stashed away somewhere very safe for a (possibly quite long) rainy day.
How would you pay the bills if you couldn't work for six months? Reality first; dreams later.

I'm starting to sound like my dad :rolleyes:

zzzLazyDaisy

gustav wrote:

How would you pay the bills if you couldn't work for six months? Reality first; dreams later

Yep, I'd play safe too.... I use up my tax allowance on my Isa as quickly as poss - you'd go a long way to beat the new FD offer (just waiting for 6th April ) Then max out the high paying regular savers. Stocks and shares / property etc can be good investments, but they require a really long view so you can ride out the ups and downs (trust me, I caught a bad cold when shares crashed in 2001, and haven't anywhere near recovered my starting point yet). I would get 6 months salary into safe high interest savings before looking at riskier options. But that's just my viewpoint

debeast

gustav wrote:

I'm starting to sound like my dad :rolleyes:

We all turn into our fathers/mother lol

thanks for the info. So do you think about 6 months salary worth of savings is the right way to go? or should it be more? or less?

So about 6k in ISA's (mine and the Wifes) and the rest in a high interest savings accounts.

Then can i start to get rich?

thanks ppl

budgetflyer

Plumb 1 could refer you to comdirect where you get £75 for depositing (at least £500 for share dealing. I dont know the ins and outs but it seems like a good way of getting a quick +15% inside a month or 2. PM him for the details.
There are various other offers around £25 from First Direct,£100 fom Nat West, £20 from A+L ,£10 from Egg etc etc.
Its a bit like Casino Scalping, You Could call it Bank or Stockbroker Scalping:-)

It would be nice if Martin or Tim L (Who seems to be a bit of an expert on this kind of thing) could do a HOW TO article on extracting the maximum from these current offers . I hope to be in your situ in around 18 months.Well done

gustav

debeast wrote:

So do you think about 6 months salary worth of savings is the right way to go? or should it be more? or less?
Then can i start to get rich?

Most of the advice i've read over the years suggests you need a rainy-day fund to pay all the bills for six months. Sounds reasonable to me.

As for getting rich...
Ok, heres a tip. Dont tell anybody else
Buy the FT on Saturday. Then see if you know what all those pages of numbers actually mean. Once you know (I mean really understand) what they actually represent, and why they're actually there, then consider investing in equities.
Also, try to get hold of one of Alpesh Patel's books. If I can understand it, anyone can. :beer:

Fatboy_NSS

There are plenty of people working in the city on high salaries who don't know what [italic]all[/italic] the pages in the FT mean, just the ones that relate to their particular job. The financial pages in the Times would be all the stuff the enthusiast investor would need to know.

debeast

Is there a guide to understanding the FT about do you think ?

thanks for all the info , gonna start saving me pennies for a little while now

deemy2004

Concentrate on the savings accounts first, as there is no risk of loss.

Then once you get experienced in those you can look at stocks

cheerfulcat

debeast wrote:

Hi all
i've been with Moneysavingexpert since its inception and have finally managed to clear all my debts apart from mortage :-)

So now i want to make my money work for me , as the saying goes.

I'm going to have about £400 a month spare to invest as well as lump sums of approx 5k every now and again

So what do i do with all my new found wealth ??
I've started investing in a FTSE Fund to spread the risk of share dealing.

But if i wanted to be filthy rich where should i aim?

Shares,Property,Savings Accs. etc...

Any ideas on whats probably the best path to take?

thanks

Debeastie

There is absolutely no doubt that historically equities have outperformed cash and bonds. £100 invested in the stock market in 1945 would be worth £4520 in real terms now. Had the £100 been kept in an interest bearing account it would be worth £172.

http://www.financial-guide.ch/ica/investing/asset_allocation/risk_and_return/wdaa4.html

But the risks you must take for the reward must be considered.

Cheerfulcat

deemy2004

cheerfulcat wrote:

There is absolutely no doubt that historically equities have outperformed cash and bonds. £100 invested in the stock market in 1945 would be worth £4520 in real terms now. Had the £100 been kept in an interest bearing account it would be worth £172.

http://www.financial-guide.ch/ica/investing/asset_allocation/risk_and_return/wdaa4.html

But the risks you must take for the reward must be considered.

Cheerfulcat

Not quite it would be £172 in REAL terms, £3,921 in nominal terms. Also what interest rates are barclays using ? After all the site does promote equity investments so is biased in favour of equities.

Also you have to take into account population dynamics, for the stock growth period was also accompanied by the baby boomers, now the baby boomers are approaching retirement, hence a larger non productive pool will impact on associated asset prices.