Considering dipping into S&S ISAs for the first time. Advice please.

jem16

K_P83 wrote: »

.I'm hoping to be able to do it all online though (subscribing, payments etc) as i'm running out of time to see any other IFAs. I'm still on crutches, but i'll be back at work in the new year.

You might want to read through this thread as well.

https://forums.moneysavingexpert.com/discussion/3153942

Main question to you though. Why do you feel the need for an IFA to set up your pension but not your S&S ISA as both are virtually the same in terms of investing?

fairleads

K_P83 wrote: »

At this moment in time, i'd accept a 30% drop. Getting on towards 45% would concern me though. Somewhere in between would be a "i can't decide" area.

Come on now, no fence sitting I want to know what other folks opinions are.

Get to understand, and accept, that your investing style will not be perfect.
Accept that even the best fund manager can't be top of the pops every quarter
Accept that volatility in pricing will occur. I do, and dips of even - 30% don't worry me.
Understand that price volatility brings opportunity, especially at your tender age, allowing you to purchase more assets cheaper than previous.
Purchase fund investments - Uts, Its, Oeics - managed by Alpha managers - check out www.trustnet for those.

BLB53

Have a look at some of the articles on www.monevator.com

Here's a section from a recent article

Let’s consider two investors: Captain Sensible and Captain Blithe.
From the age of 25, Captain Sensible invests £2,000 per year in an ISA for 10 years until he is 35. At 35 he stops and never puts another penny into his fund again.
Captain Sensible then leaves his nest egg untouched to grow until he hits age 65. He earns an average annual return of 8% and when he looks at his account 30 years later, he has £346,161 to play with.
Captain Blithe, meanwhile, spends the lot between the ages of 25 to 35. Only when he hits 35 does he sober up and start tucking away £2,000 per year in his ISA. He keeps this up for the next 30 years until he reaches 65.
Captain Blithe earns an average annual return of 8%, too. He ends up with £244,691.

Whatever you decide now will inevitably change as you become more experienced.
FWIW, I suggest start off with a couple of inv. trusts, say City of London and Murray International and arrange for dividends to be reinvested to 'supercharge' your portfolio. Keep dripping new money in at a steady rate, don't pay too much attention to the day to day ups and downs of the markets. Be patient.
At some point you may wish to buy individual shares e.g. solid FTSE 100 blue chips. In the long run, this will work out cheaper than buying funds and your investment pot will benefit.

Good luck!

Nine_Lives

Thanks for the feedback guys

jem16 wrote: »

Main question to you though. Why do you feel the need for an IFA to set up your pension but not your S&S ISA as both are virtually the same in terms of investing?

For the incorrect reasons of:
1) It's easier. I know easier is not better. If i'm at work, then any IFA meeting would have to be either on a weekend (don't know about them around your way, but they don't tend to like working weekends my way), or on a holiday - which i save for the 2nd half of the year.
2) I just associated it with buying a cash ISA - you do that online, so figured this would be the same.

Poor reasons i readily admit. If going through an IFA would be so much better then i would do it.

BLB53 wrote: »

Let’s consider two investors: Captain Sensible and Captain Blithe.
From the age of 25, Captain Sensible invests £2,000 per year in an ISA for 10 years until he is 35. At 35 he stops and never puts another penny into his fund again.
Captain Sensible then leaves his nest egg untouched to grow until he hits age 65. He earns an average annual return of 8% and when he looks at his account 30 years later, he has £346,161 to play with.
Captain Blithe, meanwhile, spends the lot between the ages of 25 to 35. Only when he hits 35 does he sober up and start tucking away £2,000 per year in his ISA. He keeps this up for the next 30 years until he reaches 65.
Captain Blithe earns an average annual return of 8%, too. He ends up with £244,691.

Is this one of those lateral thinking puzzles?

I've not got onto your link yet as i'm going to start top to bottom, but that tells me chap A invests a bit of money for 10 years & gets a whopping return. Chap B invests the same money for an extra 20 years, yet at a later date & gets considerably less. Instant reaction is that doesn't make sense. Yet it no doubt does.

oldvicar

From the other post of yours which you linked to:

I've £30k in savings. I'm getting married next year. My partner has £10k in savings & we're looking to get a house in 2012/2013

This suggests to me that you keep all your money in the best cash deposit you can find. Forget Stocks ISAs and Pensions for now, just hang on to your cash for a house deposit.

Nine_Lives

Since that post, the year is now 2013.

The IFA i spoke to said that it's a good idea to start with an ISA in my situation, but at the same time, it's no good saving for retirement without somewhere to live.

By the time it all happens, I would likely then be 30 instead of 28. If we go early 2013 i'd be 29. Either way, it's still 12 months of retirement planning totally gone.

I get £1100 per month (roughly). My "bills" amount just under £300pm, so let's say £300 to keep it round. That leaves me with £800pm.

I would've thought it a good idea to stick £100 in SOME sort of retirement fund NOW. Over a year that's only going to be £1200 gone. The gf was looking at £200pm (she's 29) into a fund. Personally i think that's quite a bit for our house situation. I would've thought that £2,400 (let's say she went £100pm instead) taken from a deposit wouldn't make much of a considerable difference when we've got £40k currently, but £1,200 in a retirement fund is, well a start.


EDIT: I've looked at trustnet & morningstar now. They look like complex websites. Maybe i'm overcomplicating things though. The H&L website looked a bit easier. I'm just curious as to what's so negative about moneysupermarket. I'm not saying it's great, i'm just wondering why it's not so good.

jem16

K_P83 wrote: »

2) I just associated it with buying a cash ISA - you do that online, so figured this would be the same.

S&S ISA is nothing like a cash ISA - it's more like a pension. You can buy a pension and a S&S ISA online if you want.

Poor reasons i readily admit. If going through an IFA would be so much better then i would do it.

Much the same as seeing an IFA for £100pm into a pension. The amount is small - only you can decide if it's worth it or not.

I've not got onto your link yet as i'm going to start top to bottom, but that tells me chap A invests a bit of money for 10 years & gets a whopping return. Chap B invests the same money for an extra 20 years, yet at a later date & gets considerably less. Instant reaction is that doesn't make sense. Yet it no doubt does.

Chap A is investing for 40 years in total - 10 where he pays in money monthly and 30 where it sits there as a lump sum.

Chap B is only invested for 30 years and it's only building up monthly.

jem16

K_P83 wrote: »

EDIT: I've looked at trustnet & morningstar now. They look like complex websites. Maybe i'm overcomplicating things though. The H&L website looked a bit easier. I'm just curious as to what's so negative about moneysupermarket. I'm not saying it's great, i'm just wondering why it's not so good.

Most of the time, it links to buying funds through the actual provider, i.e. Virgin and L&G. In most occasions this is the dearest way to buy and means that your selection of funds is limited to that one provider.

One or two of them link to using Cofunds which is a funds supermarket. That at least means you can pick funds from various providers. However they are not rebating any of the amc whereas with some providers you can get some of that amc rebated - usually up to 0.5% which is the normal IFA trail commission.

HL will rebate some of the amc if you have at least £1000 in each fund. Of course that then leads into the big changes afoot for platforms with bundled charging about to be banned which will see changes to platforms such as HL, Fidelity & Cofunds.

Nine_Lives

Do you have an opinion on what oldvicar suggested? Or does anyone for that matter?

It was a very valid point (imo) that was made. Simply, the more money that can be put down on a deposit, the better. Yet having left retirement for 8 years at least, i don't think leaving it any longer, even if that's just 12 months, is very wise.

The IFA i saw yesterday asked me what i wanted to do - deposit or retirement funds. My answer was both (as i think i'm right in saying that it's best).

I know that instantly, the final deposit will be hit by £1,200 that i'd be putting in a retirement fund, and it'd be hit by £1,200/£2,400 that the gf would be putting in her retirement fund (so a combined £2,400/£3,600 "loss"), but i would imagine that when we'd be putting down £40k+ (intending on a hard save next year, so hopefully £50k-£60k), a potential £3,600 "loss" wouldn't impact THAT much...? Or am i wrong? (I'm genuinely asking as i've never been there).

To get a scabby house around these parts you're looking at £80k-£100k. We'd possibly be looking at APPROX £120k. I did a very quick online mortgage calculator on this for a either 15 or 20 year mortgage (can't remember what i selected now) the other day & the mortgage was about £450-£500 per month. That's £225-£250 each, which would be very manageable.

I know the decision is always mine ATEOTD, but it's nice to hear other folks opinions, especially when they've done what i'm about to do. I always value opinions coming from anyone in an experienced position

jem16

K_P83 wrote: »

I know the decision is always mine ATEOTD, but it's nice to hear other folks opinions, especially when they've done what i'm about to do. I always value opinions coming from anyone in an experienced position

I did both.

The problem is that there is always going to be some reason for putting off saving for retirement. Just now it's saving for a house, then it will be paying the mortgage, a wedding, kids etc etc.

Before you realise it, you are 50 years old and no retirement savings at all.