Building a Balanced Investment Portfolio

EvilJaz

Hi All,

I was hoping that through this thread i would get some good advice/opinions with regards to the various savings and investment options out there. I intend to use this thread as also a tracker of what i decide to do.

Background Information
I am fairly young (24), and am fortunate enough to have a relatively high paying job (£39k); having completed university and my accounting qualification fairly quickly.

I have recently purchased a house, with a relatively high LTV of 88% (unfortunately in the area i live house prices are extremely high ).

Currently after mortgage, bills and various other costs i am able to comfortably save £500 a month. Although i tend to spend it on rubbish that i do not need nor really want .

At the moment all i would do with this money is stick it in an HSBC online savers account that attracts 1.75% interest or leave it in a current account that the mortgage and bills come out of (with the intention of building a safety net).

My job is very secure, and i am willing to take some risk.

Debt and Savings
£209,000 Mortgage
£1,500 in Savings
£1,500 in Shares

Any Recommendations?

kidmugsy

i) accumulate an emergency fund: £1500 is pretty thin.
ii) then overpay mortgage until LTV < 75%, unless
a) your mortgage is already very cheap, and
b) You really, really want to invest in shares or whatnot.

Also
iii) For heaven's sake find a better savings account than that e.g. the interest-bearing current accounts that are around at the moment -Santander 123 and others.
iv) Consider a regular saver account too, e.g. the 6% p.a. account at Firstdirect.

F1F93

I'd second the 123 account, as you'll get cashback on your bills as well.
Build up a larger safety margin, most people say 6 months of living costs.
Definitely get it over £3000 to earn the maximum 3% interest on the 123 account.
Also consider the nationwide FlexDirect, giving 5%, and maybe even the First Direct Regular Saver giving 6% as said above.

Once you have your safety barrier sorted, then I'd overpay your mortgage with the rest unless you have something in particular you want to save for.

Also bear in mind that if your mortgage rate is lower than your savings rate (don't forget to factor in tax, though!) you'll gain more interest on your savings than you will pay in mortgage interest, so technically it's better to save instead of overpay. Although some people will prefer to get out of debt quicker, so it's up to you .