Why bother with Savings Accounts?

atush

tr7man wrote: »

Just wondering how to calculate what percentage of what I have.

I have a pension fund, some cash in a cash Isa, a property I rent out (which is paid off) but no shares (yet)

Fe you say 60% property - does that mean just the actual value of the buildings if sold (so must be a best guess at least) and do you calculate in cgt as a minus or incoming rent as a plus to find a net worth?

thanks, just learning this stuff

P

I like to value property conservatively. I'd get an EA valuation, then take off fees plus any mtg and then reduce the overall value from 10-20% depending on where you are as no one outside London is paying the list price.

You seem to be underweight in equities, but is hard to say as you again just say pension (which is usually equities). So you might need more in pensions and more in a S&S ISA but cant tell from what you said.

tr7man

Tbh I would have everything (except some emergency cash - eg 3mths salary) in property if I could. I know you may think that's risky but I am property savvy and would not have the problems a novice would have - it's just that I don't want to borrow and I havent got enough at the mo to buy another outright.

I would like to save up enough to do that but cash isa's are not worth a fig hence my interest in the op's thread - 'why bother with savings accounts'

I've been researching as much as poss over the last few weeks. I bought Tim Hales book and read lots of forum stuff here and at TMF and am slowly getting a handle on what's going on. One thing that does seem to keep drawing me back ever since I read a review on one of the money sites is Fundsmith. I like what Terry smith says and if you watch his shareholder meeting vids he seems to talk a lot of sense.

Your opinion?

(as if I need to ask for it )

P

atush

My opinion is that I own 3 properties in 3 different countries.

and I still think you are too reliant on an asset that has devalued greatly in recent years. That is not liquid, that could be vandalized, otherwise damaged, need maintenance, void periods, taxes etc.

you still haven't said what you hold in your pension, and you mistake the current interest for cash ISAs as being a deterrent- but not really if you are holding this cash to invest elsewhere short term (apart from devaluation due to inflation).

If you would like to go all eggs in one basket (or say 80%) that is your choice. I am saying I like property, esp if someone is 'savvy' and can redevelop and add value. But still know and have expereienced that even in the last ten/11 turbulent years equties hav outperformed property.

I am invested in property, and like it. But that doesn't mean that unlike you I can't see the forest for the trees.

I see the whole forest from trees, to other plants, animals, other life and the forces of nature. There is a lot to know about the 'Forest' before only considering the 'trees' for investments.

If you'd read some of the things you mention, you didn't understand the bit about Diversification.

pop_gun

Fund management companies like Jupiter advertise annual returns of 8%. Madoff investment securities promised returns of 18 - 20%. That eventually turned out to be a ponzi scheme.

Which begs the question how can the OP out perform an institution engaged in systemic fraud?

chucknorris

atush wrote: »

But what is in your pension? Mine is mostly equities (the OH has one that is mainly otherwise) so if yours is like mine I would say you could lump the shares and pensions together.

you are still a bit overweight in property though.

Apart from a minor pension fund of 42k it is mainly in the teachers' pension fund where I am buying additional pension in addition to the normal one earned.

I wish I was even more overweight in property as all of my mortgages are trackers with a low margin averaging a mortgage rate of only approx 1%.

atush

Gotcha, a FS pension doesn't count as equties.