How should a young person save/invest for the long term?

JC_Maven

Hi everyone,

Apologies if this has been covered before but my circumstance may be different/new, feel free to direct me to the relevant thread if needed.

First i'll say i have read a book called 'I Will Teach You To Be Rich' which taught me a fair bit about Index funds, mutual funds, bonds and portfolio diversification, so i have the basics down.

The only problem is that this book was soley catered toward the US market so i was wondering if you could provide me with some similar UK solutions that (if you have read this book) the book details.

Also, having already maxed out the Cash ISA, where should someone looking to invest their money for the very long-term in England put it? We don't have anything like a Roth IRA over here do we?

If you could also recommend some investing books that detail solutions for the UK investor that would be great.

Thanks for your help,

Josh

Nine_Lives

How should a young person save/invest for the long term?

What's your definition of the above?

I'm 28, i'll be 29 in a few weeks. I don't consider myself 'young' but i still get referred to as young. Not as frequently these days but i still get it.

In terms of saving & investments, i certainly wouldn't classify myself as young.

My brother on the other hand is 19. IMO, he is young. He's in the opening years of his adult working life & plenty of time ahead of him.

Only 9 years between us, but our views could be totally different purely based on our ages, even though we're both 'young' to some.

innovate

Good book written for the UK market is Tim Hales' "Smarter Investing"

Also, monevator.com is a good resource.

JC_Maven

K_P83 wrote: »

What's your definition of the above?

Young is typically defined as 18-25.

Hmm this doesn't seem to be the place for such a question, might have to hop over to the business forums real quick (Edit: Proven wrong! Thanks for the great comments below)

Thanks for the book recommendation!

CLAPTON

JC_Maven wrote: »

Hi everyone,

Apologies if this has been covered before but my circumstance may be different/new, feel free to direct me to the relevant thread if needed.

First i'll say i have read a book called 'I Will Teach You To Be Rich' which taught me a fair bit about Index funds, mutual funds, bonds and portfolio diversification, so i have the basics down.

The only problem is that this book was soley catered toward the US market so i was wondering if you could provide me with some similar UK solutions that (if you have read this book) the book details.

Also, having already maxed out the Cash ISA, where should someone looking to invest their money for the very long-term in England put it? We don't have anything like a Roth IRA over here do we?

If you could also recommend some investing books that detail solutions for the UK investor that would be great.

Thanks for your help,

Josh

roth IRA seems very much like a S&S ISA i.e. tax free at the point of exit


but your strategy should be a mixture of

pension provision
property to live in
cash savings for rainy day and general
S&S ISA for tax advantages
Index linked savings (when avaialble)

the details depend upon your individual circumstances which you haven't shared but if you are 'young' then saving for a property is probably your top priority

Lokolo

Go to university and save some money whilst there -> Get a job after graduating -> Save into a pension -> Save for a house deposit -> Buy a house -> Start saving for longterm career path (for example I might start my own business) or start saving if you plan on starting a family

That's my Young Persons Plan.

I saved around £15k whilst at university (pretty much my student maintenance loan). Saved another £8k since starting job. Put that down for a house deposit. I have a further £4k in S&S ISA. Now back to the savings drawing board for that longterm plan, once I've bought the whole of Ikea decorating the house.

srcandas

Between 16 and 30 invest in education, job experience, life experience, moving your job expectations and salary as high as possible. Enjoy life (because that will let you work better, learn more, and move up the scale.

If you find the partner of your dreams (always taste and try before you buy ) get yourself a home as a high priority. A home gives you a base, stability, and some physical reward - and gives your relationship a real fighting chance

When that's in place worry about pensions and investments of an economical kind.

Remember you do not get to buy back years.

If by the time you are 50 you are a big fat boss of a company earning 7 figures any early pension investments will be irrelevant.

This is just my idea but think where you want to be in 30 years time very carefully. A highly employable 50 year old house owner with talents is I'd suggest richer than an unemployed 50 year old living in rented accommodation with a £350000 pension pot.

But as Anne Elk would say "this is my theory and my theory alone" or something like that

:beer:

BLB53

If you could also recommend some investing books that detail solutions for the UK investor that would be great.

A good basic overview of the UK stockmarket is covered in 'Slow & Steady Steps...' by J Hulton recomended by Monevator last month http://www.amazon.co.uk/Slow-Steady-Steps-Wealth-ebook/dp/B007EBLN3G/ref=sr_1_11?s=digital-text&ie=UTF8&qid=1336465214&sr=1-11,
also 'Smarter Investing' http://www.amazon.co.uk/Smarter-Investing-Simpler-Decisions-Results/dp/0273722077/ref=sr_1_1?ie=UTF8&qid=1336465357&sr=8-1
and 'Monkey with a Pin' http://www.amazon.co.uk/Monkey-Pin-missing-investment-ebook/dp/B007WRECVW/ref=sr_1_1?s=digital-text&ie=UTF8&qid=1336465257&sr=1-1 (free download from own website)

Hope that helps.

System

Lot of good advice from other posters.

Stocks and shares ISAs should definately be part of your portfolio of savings. Try Hargreaves Lansdowne or Best Invest as a starting point.

Personally I view a house as a home rather than an investment, but in the long run to own your own home outright is a goal most of us have and gives you stability.

margaretclare

One of my favourites is 'A Girl's Best Friend is her Money' by Birtles and Mack. It's aimed at young women on the premise that the knight in shining armour will not arrive, and even if he does, will never buy/pay for everything you want in life. Much of it is equally applicable to young males, if you take that premise out of it. It really deals with the basics and it's written in language anyone can understand.

My own view is that everyone should save a proportion of their income starting from day one at primary school (although I doubt that primary schools still have their own bank branch, taking in small amounts every Monday morning. This was how I was taught to save in September 1940).

If I had saved a shilling out of every pound that came my way - that's one-twentieth of income - I'd be a lot better off today. That's one simple lesson that I'd like to get through to young folks. If that was thought of as a good idea back then - when we were fighting for our very survival - it's surely a good idea for all time.

Lokolo

margaretclare wrote: »

One of my favourites is 'A Girl's Best Friend is her Money' by Birtles and Mack. It's aimed at young women on the premise that the knight in shining armour will not arrive, and even if he does, will never buy/pay for everything you want in life. Much of it is equally applicable to young males, if you take that premise out of it. It really deals with the basics and it's written in language anyone can understand.

Sorry ladies, I don't have time for you all :rotfl: