8 year to make 10K into 20K ?

darentriskit

I,m a newbie and have been reading and researching for a very short while on the site - dont get me wrong please I am willing to do my homework here but would appreciate any help / advice you guys are willing to share re- my predicament - my aim is to convert my 10k lump into as much as possible when I reach state retirement age in 8 /9 years time - whats holding me back is its all i,ve got in the world and am afraid of losing it if i risk it
my own ideas at the moment are
- - will i get better returns opening a series of drip feed accounts like first direct @6% for instance , than stashing the whole lot away (10K) at one go in Santander 123? - and opening some account to slip the monthly interest into which is a bit "riskier" - like trying my toe in the water with a stocks and shares isa - in fact is there one which will accept such low amounts as £25 a month regular?
Or do you have any other routes / options you might suggest I consider ?

Come april 2014 I will be a non taxpayer due to earning less than 10k per annum so ISA's may not even be in the running since I beleive they are only efficient savings vehicle for tax payers - I am willing to read if there are any books anyone can suggest ,

many thanks for your help

Archi_Bald

You would need to achieve something like a net 9% on your entire savings every year for 8 years to double your money in that timescale. From what you have posted so far, this is unlikely to be a realistic proposition for you. Even if you were prepared to invest your entire sum now, there is no guarantee you could achieve anything like a 9% year-on-year growth rate. Sorry.

Rob_192

You've double posted this - here' my reply to the same question in the Pensions Board:-


To double your money over 8 years you're going to have to achieve compound growth of approx 9% (after tax). In terms of savings accounts, there's nothing around at the moment that's going to even remotely achive that. The sort of things you mention are currently some of the best ways to maximise the interest you'll receive, but that sad fact is, you will struggle to even keep pace with inflation.

The effect of inflation, at say 3% is going to reduce the value of your current savings over that 8 years and the likelyhood is that with cash savings rates, you are actually going to have less, in real terms, in 8 years time than you currently have.

To achieve the sort of growth you're talking about, you would need to be considering equities. I personally don't like managed funds because of the level of charges, in fact I don't like funds full stop and would be personally looking at a basket of high yield shares, plus hope for some capital appretiation. The trouble is you would struggle to buy a sufficient number of different shares to get adequate diversification, without ending up with reasonably high trading fees.

I don't know that there is a simple answer to your dilemma, but good luck.

BarrBru

You have to be ready to take a risk with your money.

I know of two funds that I have money in that could deliver that for you but THERE IS NO GUARANTEE.

I did my research and I like them one is Diverse Income trust. A great manager with a long track record at Henderson Gartmore, now at Miton
See the articles on Whichinvestmenttrust.com and the Daily Telegraph.
Basically he invests in smaller companies and he makes an impassioned argument that we're at the beginning of a 7 year bull run in smaller companies.

Also, GLI Finance (used to be called Greenwich Loan fund). A great manager for a fund that fills some of the gap left by banks. But, importantly, all loans are secured against physical assets and it's lower risk.
Again read the articles and decide yourself.
These are investments I believe in but only you can know if they're right for you.
Look at the articles on Whichinvestmenttrust.com (they're bloody long though) and I think Fool.co.uk (if you cant find them let me know and I'll have a look.