Best place to invest small amount of money?

nam1982

Hi folks :wave:

I am new and after a bit of advice if I may

After a nasty few years I have managed to sort myself out and get my finances straight. I purchased my new place in December and I am properly settled in now.

I have around £200-£250 a month spare cash, after all bills and enjoyment plus, maybe, £1000 to invest straight away.

Question is, where is the best place to invest that amount of money?

Nick

calypso_rhapsody

I'd suggest putting the £1000 into an instant access account to act as your emergency money (I think Santander or Coventry have best current rates but check and remember to check again every so often and esp when the bonus period ends).

Look at regular savers for the rest - check out the info on this site ... some require a fixed amount each month, some are more flexible but i think that all do not allow withdrawals in the year.

nam1982

Thanks, I am not worried about being able to withdraw it. I don't have any ISA's or any other type of savings though. It will be my first....

bigadaj

You need an emergency find of between 3and6 months spending. Put this into a cash ISA and then come back for more advice.

Totton

I'd agree you need the emergency money as a priority but I'd also start the investment pot going. I'd consider putting the 1k into a cash ISA and then adding half of your available monthly amount each month until you have 6 months salary saved. With the other half I would consider a monthly purchase of a low cost fund such as Vanguard Life Strategy until your investments are big enough to warrant a little more adventure. Whatever you decide, the most important thing is to get into the habit of saving each month, I wish that I had done it sooner myself :-)

Regards,
Mickey

nam1982

Cheers for the advice folks.

I have read the links on this site and gone for a fixed term ISA from Metro Bank. Going to chuck £1000 in there, leaving me a months salary in the Current account. I will, as Mickey said, put half available into that each month.

The Vanguard Life Strategy part has me totally confused though, looked on the website, where do i even start?

Totton

The Vanguard fund is difficult to access at least until RDR fully kicks in when it should become more readily accessible on most platforms (I think). At the moment you can get it from Hargreaves Lansdown as a monthly drip feed from £50, the cost is £2 per month for holding it though as it pays nothing to the platform (apparently).

Now £2 a month can be expensive for small sums but long term you are getting it as a monthly purchase and as your holding increases the charge stays at £2.

There are other places to get it but others will have to chip in about them.

There are various Life Strategy funds, they start at 100% equity and then go down n blocks, the lowest risk taker would opt for the 20% equity fund whilst the risk taker would go for the higher equity holding (usually). In your case you may want to look at the 80/20 http://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/v/vanguard-lifestrategy-80-equity-accumulation

or 100% global fund (http://www.hl.co.uk/funds/fund-discounts,-prices--and--factsheets/search-results/v/vanguard-lifestrategy-100-equity-income)

Usually with HL you need to start your account off with a lump sum (£3k?) but for a regular saver via direct debit they may allow an account, best to give them a ring and discuss as they are very helpful on the phone.

As I say, there may be equally as good places to get started and hopefully someone else will present another option.

Personally I don't hold the Vanguard fund as I prefer Investment Trusts but if you have time then I recommend a good read which may persuade you to stick with Vanguard or another such as L&G Trackers. The book is 'Smarter Investing' by Tim Hale which you may be able to get from your library. http://www.amazon.co.uk/Smarter-Investing-Simpler-Decisions-Results/dp/0273722077/ref=ntt_at_ep_dpt_1

Best Wishes,
Mickey