Mortgage overpayment or invest for better return

atush

EdGasket wrote: »

Why do you think you will do better in funds? I've had a pension that has done nothing but fall in value for years no matter what its invested in! Luckily I paid off my mortgage first and advise you to do the same.

I have no idea what you invested your pensions in, mine even made money this year, while last year were up nearly 20%!

atush

EdGasket wrote: »

Oil shares when chancellor hiked North-Sea Tax. Gold post-peak but still prematurely, some AIM shares that turned out to be frauds, Mining shares, and last but by no means least the 'safe' supermarkets. These have been the main reason for the decline. I have had successes elsewhere but overall losing about 10% after several years so pretty dismal really.

I think I was unlucky with that surprise budget announcement on N. Sea oil; knocked 25% immediately off many of my investments. Gold should have benefitted from QE/inflation but hasn't so far. Mining - I was not aware until recently of commodity cycles; and supermarkets just plain unlucky again.

Jesu christo! What a high risk strategy you chose! Yikes!!!!!

People investing above their risk profile then pulling out at a loss is how you lose money.

Dont get me wrong, I own Gold (bought years ago when half the price of now) and Oil (bought BP after DH and Shell years ago) and supermarkets (bought Tesco after it's big dip) And I own Black rock world mining. But the bulk of my investments are in collective funds and some bonds,gilts etc.

You really should have a look at passive investing or at the very least collective investments.

Borrowedtune

Why not do both ?


e.g. your could invest savings regularly in an ISA Equity Income fund and then use the tax-free dividends to pay off your mortgage that little bit faster...

Doshwaster

Borrowedtune wrote: »

Why not do both ?

e.g. your could invest savings regularly in an ISA Equity Income fund and then use the tax-free dividends to pay off your mortgage that little bit faster...

That's what I do. I'm a great believer of not putting all of your financial eggs in one basket. At the moment I'm splitting my spare cash between
1) Mortgage overpayments
2) Long term Shares ISA investment
3) Short term "rainy day" Cash ISA savings

I'd also like to increase my pension contributions but there's only no much money to go around...

One disadvantage of mortgage overpayments is that you typically cannot cannot access the money but the idea of being mortgage free in the next 8-10 years is appealing. Barring a real emergency I don't intend to touch the stock ISA until retirement or I need to move the property ladder. The Cash ISA is for holidays, unexpected car repairs and a few months salary in case of job loss.

Eco_Miser

Depending on if you're anywhere near the ISA limit, letting your dividends accumulate inside the S&S ISA and paying an equivalent amount off the mortgage instead of paying it into the ISA would compound your dividends and get more into the ISA long term.

Short term rainy day savings should be in a current account earning 5, 4, or 3% AER, see http://www.moneysavingexpert.com/savings/savings-accounts-best-interest and numerous threads on this board.