Not enough for a worthwhile investment/save?

atush

Cash isa, and save more til it is full. Then save further until you have 3-6 months spending saved. The, start saving into S&S isas or investment trusts in an ISA or elsewhere.

And start a pension now if you don't already have one.

droopsnoot

sunny125 wrote: »

The money earned from a few grand is the equivalent of a days wage over a year or two of investment.

Yes, but the way to look at it is that it's money you wouldn't have if you didn't put your money in that account. All you have to do is transfer it, and you get that bit of interest, and it won't take you a day to do it, unlike the days wage which will take a day to earn. Think of it as being a free day off. It might not be much, but it's better than a poke in the eye.

sunny125 wrote: »

Or I could buy a state of the art home entertainment setup, and get bored with it in a few months time.

And it won't be state of the art in that time, either.

At the end of the day it's your money, and if you just want to have a new telly then it's up to you. But everyone starts somewhere, interest will compound over a period of time, you can keep shifting it around for best interest, but most of this stuff only happens over months or years, or even decades. If I knew of a way to increase my savings quickly and at a high rate, I wouldn't be sat here typing this.

infj

Depends on whether you ever want to be "financially independent" or not.
Do you love your job - do you want to work to 88 and drop dead?
Or would you like the option to walk away if and when you want? What is so euphemistically called "f..k you" money on the Net.

Again only you can make that decision - that savings could be the beginning of the FI money or not. As mentioned above 40 years of compound interest could mean not ever having to work again.

ermine

droopsnoot wrote: »

Yes, but the way to look at it is that it's money you wouldn't have if you didn't put your money in that account. All you have to do is transfer it, and you get that bit of interest, and it won't take you a day to do it, unlike the days wage which will take a day to earn. Think of it as being a free day off. It might not be much, but it's better than a poke in the eye.

I've got some sympathy for the OPs point of view. At the moment all the interest on cash is doing is compensating you for its slow silent death to the thousand cuts of inflation. It isn't a free day off, because my the time you get that money the real value of your capital will have depreciated. If you're living off the interest on cash you are simply running down your capital while looking the other way, and the steady numerical value of the balance is making you feel better.

To add insult to injury you have to pay tax on the interest compensating your for inflation, even though it is the Government playing fast and loose with the QE that is causing the problem. The could at least not tax you on interest up to RPI Which is why until recently I've liked NS&I ILSCs- they explicitly compensate you for RPI with no tax to pay. Theri proposed restrictions make them less attractive in future.

I don't think of saving cash as a way to 'make' money. You have to have cash savings to be able to handle the unexpected, and it's nice if you get enough interest to compensate for the dwindling value. If the OP is looking to 'make' money with hism oney, then he's into the realms of investments and all the volatility, risk and judgement calls that entails :eek:

droopsnoot

ermine wrote: »

I've got some sympathy for the OPs point of view. At the moment all the interest on cash is doing is compensating you for its slow silent death to the thousand cuts of inflation. It isn't a free day off, because my the time you get that money the real value of your capital will have depreciated.

Absolutely right, but what I meant was that transferring the money to the ISA compared to not bothering would leave the OP slightly better off for almost no work. Not enough to get excited by, nothing like what he might make by successfully investing the money, but if he didn't bother he'd be even worse off.