How to turn £32k into £52k in 6 years!!!??

N1AK

neilem wrote: »

I am also interested in this. When people say high risk, can they give examples? I assume they mean sticking money on DodgyInc in the stocks, or going to Las Vegas?

Would have thought there are better options than this...

Is a 10% chance of losing 50% of your investment 'low risk'? The real question is more, how much can you afford to lose. Many people would, including op, will answer: nothing.

If you can't afford to lose anything then even a 2% chance of losing 20% isn't viable.

I'm investing in FTSE, and other index, trackers because they are relatively low-risk low-maintenance option but I am willing to accept a slight risk that I'll lose a lot of money.

neilem

N1AK wrote: »

Is a 10% chance of losing 50% of your investment 'low risk'? The real question is more, how much can you afford to lose. Many people would, including op, will answer: nothing.

If you can't afford to lose anything then even a 2% chance of losing 20% isn't viable.

I'm investing in FTSE, and other index, trackers because they are relatively low-risk low-maintenance option but I am willing to accept a slight risk that I'll lose a lot of money.

I can afford to lose, but only if the probability of losing is very low. Unfortunately I'm not the gecko type and haven't dabbled into stock markets, so the risk would be pretty high if I were to blindly play that game. What would you recommend in that respect? What returns are you getting (as low/average/top percentage)?

I'm one that doesn't seen the benefit of locking my money up for 5 years only to receive the breadcrumbs of a loaf...

JimmyTheWig

charismatic13 wrote: »

Question: Can I invest the 32K over 6 years and make 52K, if so, HOW??

Buy adding £195.05 a month to it and putting the whole lot in a cash savings account earning 3% (assuming you pay basic rate income tax).

N1AK

neilem wrote: »

I can afford to lose, but only if the probability of losing is very low. Unfortunately I'm not the gecko type and haven't dabbled into stock markets, so the risk would be pretty high if I were to blindly play that game. What would you recommend in that respect? What returns are you getting (as low/average/top percentage)?

I'm one that doesn't seen the benefit of locking my money up for 5 years only to receive the breadcrumbs of a loaf...

I've made the decision to accept that I am not an expert, and don't have the inclination to become an expert in stocks and shares. On that basis I see index tracker funds as a 'fire and forget' investment which is likely to notably outperform savings over the long-term.

It's very hard to estimate returns but I'm confident it'll exceed 5% pa over 20+ years and expect it will be more like 7-9% effectively tax free (via S&S etc).

I wouldn't keep all my money in that form though especially as I get older. Personally I'm a big believer is diversity both in terms of markets (buying into foreign funds and currency) and investment type (savings, investments and property). Diversity limits potential and increases the risk of losing value from part of your portfolio but it minimises the risk of losing everything.

chewmylegoff

CKhalvashi wrote: »

I'd dispute that, but you won't get FSCS protection on that sort of rate

CK

and it won't be risk free...

jamesd

If the second one pays out the higher amount you need 4% a year. In that case you can be cautious if the second one pays out the higher amount because ISA term deposit accounts should get you to your target with minimal risk.

If the second one pays out the lower amount you need 8.4% return a year. You can't get that from term deposit accounts. You might investigate the Invesco Perpetual Income and Invesco Perpetual Monthly Income Plus funds, accumulation units of each and see whether you're comfortable with their volatility and what you think their future performance might be. I think that you would have a reasonable chance of meeting your objective with them and some similar types of fund.

The consequences for you are really important here. If you have £50,000 in a savings account that you can spend in six years you can take higher risks in the hope of ending up better off.

A somewhat more cautious stance is to make extra payments that will reduce the target needed to 4% once you find out what the second plan pays out. To get to that 4% you need to have the plans and future extra payments total £41k at the start. You have £23k already, so the remainder is 18k. If the second one pays out 10k then you need to make extra payments of 8k over the next six years. £111 a month.

richbeth

charismatic13 wrote: »

Hi!!


My dilemma is I still have 52K endowment mortgage which is due for payment in 6 years time.

Question: Can I invest the 32K over 6 years and make 52K, if so, HOW??

Hi,
can you overpay on your mortgage ? what is the interest rate on it ? and how much a month are you currently paying into endowments ?

If you just paid the £32k off your mortgage it would cost you ca £300 pm (depending on rates etc) to pay off the remaining £20k in 6 years. Given you're probably paying ca £150pm in interest and presumably will have some cash free when the endowment payment stops it might not cost you much more pm. This would be risk free, the only potential risk is if mortgage rates go up. But even an extra 2 % increase tomorrow would only add £1,200 over the next 6 years.

The downside is that you are probably paying ca £150pm extra to remove the risk associated with investments.
Richard

charismatic13

Thanks all for your replies, quite a lot of info to take in!! Don't think I can afford to take risks so will probably go down the ISA route 3.01% - and either turn some of the endowment mortgage to repayment or overpay £200 pound each month. Swift1, What are dividend re-investments please??:)

cloud_dog

charismatic13 wrote: »

Thanks all for your replies, quite a lot of info to take in!! Don't think I can afford to take risks so will probably go down the ISA route 3.01% - and either turn some of the endowment mortgage to repayment or overpay £200 pound each month. Swift1, What are dividend re-investments please??:)

So what interest rate are you paying on your mortgage?

If it is less than the IR on your savings then the above is the appropriate approach but if not then you are better off repaying as much as you can and then over-paying as much as you can, i.e. continue at your current monthly repayment plus the premium from the endowment policy, plus anything else.