Investment advice & wisdom for a unique situation please!!

Caan

Hey guys,

I've spent a while reading through the forums and its great but im in a rater unique situation and can't seem to decide where i want to go with my future as far as investment and being wise with my money goes! Any advice would be great particularly from those who are wise and anyone having been in a similar situation would be even better...

Ok, so im pretty young (26) and have little to no investment knowledge, i live in a rented flat.
I work for myself and have done for several months spread betting so i don't have an employer (mortgage seems unlikely to say the least?)
I have no debt's or loans, have a credit card but only use it for the token credit rating scinario.
My income is variable although its considerable and i can currently put by about 3k pcm sometimes a bit more.
I have other streams of income although they are small and self generated also without an imployer.
Most days i have alot of time spare so learning about things aren't particularly out of the question.

What i keep pondering on is what is the best course of action for me likely to be able to take?

Im pretty certain i wont get a mortgage because of what i do to earn so property can't be help until i save enough to buy outright? Savings accounts are pretty poor as far as returns on investment go (im not scared of a little calculated risk either).
Shares interest me although it seems a bit like a mountain to climb in terms of learning which im not against although currently my savings are piling up pretty quick and im not making any use of them!!

Any wisdom and advice in making use of my money would be much appreciated!!

Thanks in advance

Caan

racing_blue

A rising tide floats all boats!

atush

Your employment is likely to go t*ts up one day, so you need to put some aside. And money put in pensions won't be able to be touched by anyone (incl your broker).

What is your tax situation? How much over your CGT allowance do you make each year?

Caan

atush wrote: »

Your employment is likely to go t*ts up one day, so you need to put some aside. And money put in pensions won't be able to be touched by anyone (incl your broker).

What is your tax situation? How much over your CGT allowance do you make each year?

Yeah i dont deny its not going to last forever and theirs several reasons for that. The tax situation is completely different to a broker, basically i spread bet through a bookie so im not acutally buying anying thus CGT does not apply. Infact its non-taxable, its effected in a different way though as it is through an independant company that have a 'monopoly' on this exchange model and there are seperate charges for that exact reason which pretty much replicate tax and where im at right now it probably only has about 2.5 - 3 years left in it, particularly if i impove even more! which is likely, so hopefully that answers the question....

I can probably afford to save more and would had i the incentive be there. Its just very confusing wether i should te tieing up my money longer term (pensions dont really interest me) as i would like to make it work as hard as i possbly can although its the usual conundrum of wanting to have it freely available enough to change my direction with what i have. At the moment im thinking i may be best off just keeping my investment money in an accessible account and spend a few hours each day learning about investing in the stock market?.... to get any good though would probably take years i would have thought.... could just do with some wise but fairly shrewd advice, which unfortunately is coming any time soon from my immediate circles of freinds of family.... which led me here to gather my thoughts......

innovate

I don't begrudge you any of the money and I know very well how much can be made in this sort of business if you go about it in a smart way. However, as you say yourself, there is an end in sight, even if that end is still a couple of years away.

Your biggest gamble is what to put on your CV when you are looking for employment at the age of 28-30. What did you do over the last 10 years? Spreadsheet jocking, taking some risks, done not much networking.....your income could nosedive because you will be up against applicants with several years of business experience, and may be even against people straight out of Uni/Business School, and it could take a long time before you get a job of sorts. So you should have 2-3 years of living costs available in cash.

Of course you could have plans to start your own business - but again, that is likely to require a lot of upfront investment, so a large sum of cash would again be helpful.

You should also be looking at starting investments that help feed you in your retirement. A SIPP and/or an S&S ISA would be top of my priority list in your shoes. Never mind pensions "don't really interest" you - - what will you be living of once you can no longer work? You are your own worst enemy if you do not start to make provisions now.

As to getting yourself educated "in the stock market" - - - there is a heck of a lot more to investing than the stock market. You could start reading some books such as "Smarter Investing" by Tim Hale. If you research the forum, you will find pointers to other resources. In the context, you should also start reading about best approaches to making provisions for your retirement.

Good luck with whatever you choose to do.

Perelandra

innovate wrote: »

You should also be looking at starting investments that help feed you in your retirement. A SIPP and/or an S&S ISA would be top of my priority list in your shoes. Never mind pensions "don't really interest" you - - what will you be living of once you can no longer work? You are your own worst enemy if you do not start to make provisions now.

If the OP currently doesn't pay tax, wouldn't pensions of any sort be best avoided for now? (no tax relief going in, and potential tax liability coming out). ISAs would be my vehicle of choice in this case; even unwrapped shares might be better than a pension (no further tax to pay if the OP is a basic rate taxpayer).

innovate

Even if you are not employed, you can put £3.6K p.a. into a SIPP. HMRC will pay £720 of that £3.6K, so it costs you only £2,880. Small beer compared with what you can put into a S&S ISA, and even smaller beer compared with what you can put into a pension when you are employed.

Having said this, £3.6K p.a. is 10% of a very reasonable salary for the average 28 year old, and properly invested over the next, say, 40-50 years will end up a formidable sum of money, even if you normalise the balance for inflation.

Caan

Sure, thanks things could change and it could last longer although im not so nieve to pin my hopes on it.

My extra incomes come online through consultation again on my CV id have to be careful as to what i put, a bold statement but i think i'd probably find a way around having to work for someone again anyway, its not like i've ever held a high profile job as i was in the military and worked as a telecomms engineer before i did this...

I have a small SIPP already and a very small pension from the military, I have a Cash ISA maxed already for this year i realise the pensions dont really interest me came across a little brash although i just meant hopefully by the time of retirement age i wont be relying on a pension for generating significant capital over the years, but i completely get what your saying! And agree.

I'll order "Smarter Investing" by Tim Hale straight away, if there any other books that people know of that are constantly advised on this sort of thing id appreciate it. The forums are very interesting so far i've been reading them all day! Thanks for the advice.

Still not sure what i should be planning to do with the immediate income though

Caan

innovate wrote: »

Even if you are not employed, you can put £3.6K p.a. into a SIPP. HMRC will pay £720 of that £3.6K, so it costs you only £2,880.

Didn't realise i could do that thanks, lots to think about ... just ordered the book.

innovate

Well, whilst you contemplate (and you should not make hasty decisions on investments), you could stick some cash in interest-bearing accounts. Don't keep more than £85K in any single financial institution - - you could lose it if the bank/BS goes bellies up.

The accounts I would look at are basically all current accounts. Santander 123, Lloyds Vantage, BoS Vantage, Nationwide Flexdirect, plus some reg savers such as the First Direct and HSBC ones. Not sure how many of these you already have but in terms of interest, they pay best - some even better than cash ISAs, and you can get about £110K (interest-earning) safely into a combination of them - assuming you pass the credit checks when applying. At least that would reduce inflation eroding your cash. Takes proper management of your finances but that shouldn't be hard to do for you. Information on all these accounts on the respective websites, plus you find threads discussing them here.

atush

So, 3.6K in a pension, and fill your S&S isa allowance for a start.

these monies wont be easily accessible, but the rest of your money is.