Where to start investing?

Mark_1985

Firstly I'd like to say hello to all the forum users.

I'm 28 self-employed and fortunately involved in a bouyant business, I have recently bought a house and a new car, nothing extravagant but I now wish to invest my residual income to develop some revenue streams for the future.

Currently I have approx £5000 to test the waters with, with an additional £30,000-40,000 bonus in a few months. I have no experience in investing in anything other than property and ISAs / savings acounts.

I do not require high risk, high reward
I do not need immediate access to my money
I would prefer secuirty and sustainability

With that in mind can people advise any suitable strategies for investing. I'm not fully up to speed with all the acronyms yet either.

Thanks in advance

ChopperST

I would look into opening yourself a SIPP and an ISA alongside to limit your tax exposure into the future.

Is the £30-£40k likely to be an annual figure?

Index trackers would fit your brief of being relatively low risk over the long term (circa 96% chance of beating cash over 20+ years).

Monevator and boggleheads (American but same principles apply to UK investing) would be useful resources to start with, alongside reading "Smarter Investing" by Tim Hale.

Get a full grasp of what you expect to achieve and set your goals, timescales before you dip your toe in the water.

http://monevator.com/category/investing/passive-investing-investing/
http://www.bogleheads.org/wiki/Video:Bogleheads%C2%AE_investment_philosophy
http://www.amazon.co.uk/Smarter-Investing-Simpler-Decisions-Results/dp/0273722077

Your_Hero

Depends on what your objectives are and what level of risk you like/able to take.


If you are looking to save for retirement with good tax benefits, then you ought to invest that money into a pension. £5,000 would give you £6,250 in the pension pot (20% tax relief) and if you are a higher rate + additional rate tax payer, you can claim a further 20% + 25% respectively through your tax-return. An obvious drawback is that you can't touch your money until 55 earliest (or 57 by April 2028), i.e. it is strictly for retirement.


If not, perhaps use ISAs to invest in equity funds for more flexibility but without the tax relief from the government.

Mark_1985

The £30,000 to £40,000 would be an annual figure.

In simple terms I don't have anything to spend the money on, or need. Therefore I'd like to see it working for me and growing until a point at which I need it.

I don't require any more property for another 3-4 years, I'm not getting any real benefit from it being in the bank either.

So as long as I could invest it somewhere with an acceptable return then I suppose I'd be happy

jimjames

Do you already have a pension in place?

lozzy1965

Mark_1985 wrote: »

The £30,000 to £40,000 would be an annual figure.
...
I don't require any more property for another 3-4 years, I'm not getting any real benefit from it being in the bank either.

So as long as I could invest it somewhere with an acceptable return then I suppose I'd be happy

What's an acceptable return?
Might you want to retire before the state allows you to get your mits on your pension?
I'm assuming from your earlier posts that you will not need the money in 3-4 years.
Rough figures, I recon I have made an average of between 8 -9% per year from individual FTSE100 and FTSE250 high yield shares since 2006. That's not counting this financial year, and takes in the big crash of 2008. That's an example of what can be achieved. Over to you...

Mark_1985

I'm hoping to retire before the state would allow me to draw a pension and for that reason it's not really on my radar as such.

I guess a return of between 6-8% would more than suit my situation at the moment.

Some posts mention premium bonds, but I view that as more pot luck than an educated investment....or is that a ill-informed oppinion?

I suppose I don't mind how I achieve a decent ROI as long as it's not in property and not massively risky I work too hard to speculate on uncertainties.

It's a little confusing to start with, I've looked at getting a portfolio established with Barclays, but I wasn't bowled over with optimism. Is there a generic platform to operate from or is most investing done through a broker / agency?

Thanks

Reaper

Mark_1985 wrote: »

I'm hoping to retire before the state would allow me to draw a pension and for that reason it's not really on my radar as such.

Although you can't collect a state pension until age 68 (and probably later by the time you retire) a private pension can be collected from age 55, though that is due to change to 57 in 2028. Or were you thinking of retiring sooner than that?

Mark_1985

In an ideal world I'd be happy if I could stop working around 50, and have sufficient revenue streams from investments to manage

Reaper

Mark_1985 wrote: »

In an ideal world I'd be happy if I could stop working around 50, and have sufficient revenue streams from investments to manage

I'm toying with the idea of retiring early. The plan being to use money from ISAs and other savings to fund myself until I am allowed to draw on my pensions. So it may still be a viable option for you. The reason I mention it is you will likely be a higher rate taxpayer either now or very soon in which case you can get back the 40% tax you paid on top of your contributions. It's tough for any other investments to catch up from such a head start.

gadgetmind

I'm also working towards early retirement, and do have decent non-pension investments, but every extra year derisks things so much that it would be silly of me to retire before 55.