Investing ~£35k for the long run

Gaaraz

Hi guys, this looks like a great forum to ask for financial advice and I'd be incredibly grateful for any recommendations/suggestions, thank you!

I currently have the following, which I'm pretty happy with and would like to keep:

• NS&I Index Linked (RPI+5%)
• Pension through the company I work for
• Virgin Cash ISA Fixed (~3%)
• Vanguard Lifestrategy S&S ISA

But then I have just as much sat around doing not a lot split between Lloyds TSB Vantage accounts, a Santander 123 account and some P2P lending sites... earning maybe 3% at the very most.

I'm not sure what options are available to me, but having thought about it for a few weeks I think:

a) Try to get a very small house to use as a BTL
b) Invest my full ISA allowance into the S&S ISA, keep the rest earning up to ~3%
c) Invest my full ISA allowance, try to get a very small flat as a BTL
d) Invest my full ISA allowance, and then put the rest into other funds not within the ISA wrapper
e) Premium Bonds (1.5% return isn't particularly appealing though)

I'm leaning towards using my ISA allowance and going in for as cheap a BTL as possible... although I'm not particularly keen on the hassles and problems that potentially come with it, especially if you end up with nightmare tenants! A lot of my friends and family have all jumped on the BTL bandwagon in the past year or two, and I'm starting to worry if the house prices start jumping up again I may miss my chance.

Thank you

Gaaraz

Sorry, but bump... would really appreciate any suggestions, especially with the new ISA allowance starting up tomorrow! :-)

By the way, I also have a mortgage on my house, but it's for 2.5%... I'm guessing that would take priority over Premium Bonds, but should I prioritise it also over other investments such as funds, or even BTL?

vectistim

BTL: Do you have any experience/knowledge related to your local housing market? Try and do some research work out what's available using maybe £20k out of the £35k available. (You would do well to keep some cash float behind to cover any issues)

S&S: You could invest the whole lot now with as much straight into an ISA and then moving stuff across each year into the ISA. Doing this you need to consider what level of risk you're looking at. This maybe impacted by whatever your definition of 'long run' might be, eg: a 30 year old can probably bear a higher level of risk than a 55 year old as they have a longer time frame available.

Doing either or both you should still make sure you have some cash available to tide you over should weird things happen (eg: if you have an accident or your employer keels over, etc.)

Gaaraz

Thank you! I think from my options it definitely makes sense to do as you said, and go for the S&S ISA (just done this after reading your post) and then put some by for the BTL.

I think realistically I'll need to save a good while longer before heading into BTL, and try to build up as much deposit as possible. Thanks again

Bazofts_Revenge

I too went through this dilemma. I had a 2nd home which I was struggling to sell and owed family a considerable sum as they helped me buy the bungalow we needed for health reasons. I considered renting the house out but the returns on investment and all the other legalities required plus the risks of non payment or damage just made BTL seem too stressful.

I had studied the stock market on and off for a few years and had run a virtual portfolio based on real figures and made choices on companies I knew and used, Made over 4% profit regularly, Grew their profits Year on year and made enough profit to cover their dividends.

I was lucky enough to 'port' my interest only mortgage to the new house at a cracking 1% above the B of E rate and sold the old family home. I have now invested all the mortgage money and other savings taking advantage of 2 years worth of ISA's and the rest is in a nominee account. I have invested in approximately 36 companies that fit my brief outlined above avoiding tobacco and oil industries and made sure I avoid exposure to no more than 5-6% in any one company. I plan to reinvest all dividends plus any spare cash until I retire in about 20 years time.

Possibly my best investment will have been my PV solar panels. They are giving me a return of about 12% PA but I've not had them installed long but it is looking good.

All the best.

kidmugsy

I used to invest in Investment Trusts and very well they did for us. I'm getting interested again, but would need a trust or two to suit these bad times. The one I have my eye on at the mo' is Personal Assets Trust, which you could buy in their zero-charge S&S ISA or in their tax-exposed zero-charge Investment Plan. Worth a dekko, I'd say.

http://www.patplc.co.uk/index.php

Glen_Clark

Gaaraz wrote: »

I currently have the following, which I'm pretty happy with and would like to keep:

• NS&I Index Linked (RPI+5%)

WOW - I'd be happy with that too.
My NS&I Index linked only pay about RPI + 1% (5 year term bought 3 years ago - my more recent ones pay less)