Long term savings.

Satele

Hi,

I'm looking for some advice. I want to save £50 per month, minimum, over the next 20 years. I want this to be relatively safe, but I'm not averse to slight risk, if there is a strong potential upside.

I'm not experienced in investments, so I'm looking for advice on how best to save this over the next two decades. I've had a look on the forum, but most posts are from seasoned savers/investors and I'm not sure they apply to me.

How should I start?

[Deleted User]

If you are open for some alternative saving method, silver is at its 5 years low.

You could buy 2 silver ounce coins a month (+VAT it's around £45-50). In a 20 year prospective it's quite a good deal. You have to shop around; silver prices are volatile and many merchants are applying a killer premium. If you are lucky to have bullion stores around, ask for their best deals.

My local jewellery has started selling pre-owned silver coins at 1% premium (+VAT) over spot, it's quite a good deal.

JohnRo

Satele wrote: »

I want this to be relatively safe, but I'm not averse to slight risk, if there is a strong potential upside.

Unfortunately that's not how it works, more's the pity.

I'd suggest the usual, somewhat boring, diversified global equity income option. Not without risk but over the duration it should provide a reasonable return, certainly when compared to cash saving.

jimjames

ciaccino wrote: »

If you are open for some alternative saving method, silver is at its 5 years low.

You could buy 2 silver ounce coins a month (+VAT it's around £45-50). In a 20 year prospective it's quite a good deal. You have to shop around; silver prices are volatile and many merchants are applying a killer premium. If you are lucky to have bullion stores around, ask for their best deals.

My local jewellery has started selling pre-owned silver coins at 1% premium (+VAT) over spot, it's quite a good deal.

Quite ridiculous advice I'm afraid.

Even if it was worth putting a small portion into silver or gold, to suggest that all money is put into one commodity for someone who states they are inexperienced is wholly inappropriate.

atush

I suggest doing what I did when i was starting out saving only 50/m Open an investment trust savings plan in a good general investment trust with a long history of dividend payment/increases. Use an ISa or not. CGT can be managed and dividends are already taxed.

Raise it by 50 once you an afford it, branch out into different trusts.

In 20 years, mine grew substantially.

Sabrina2000

seems everything is looking low now, except property.

bowlhead99

Sabrina2000 wrote: »

seems everything is looking low now, except property.

That seems poppycock, unless we should assume that what you mean by that is that the potential returns from everything is looking low, i.e. the price of everything is looking high.

Personal Assets Trust is an investment trust which is run like someone's personal set of assets, rather than some of the investment trusts which aim largely or solely at equities in growth areas. As such, it has a focus on wealth preservation first and foremost.

In their most recent quarterly update (which are free and always a good read whether you are invested with them or not) they make the point that nothing is cheap at the moment, even looking globally across most asset classes.
http://www.patplc.com/sites/default/files/documents/75_0.pdf
So, if you think everything is looking low, I disagree. Everything is looking ok-to-high.

I am not suggesting that this trust is the best investment trust in the world for the OP - because while they aim for a long term 'lower risk with upside' investment strategy, it is not going to work because the price of one share is £350, well above what OP has to spend each month. I am just using their quarterly report as an example of a fund manager being honest about prospects and speaking candidly about the state of the markets, rather than some of them who seem to be constantly bullish.

Satele wrote: »

I'm looking for some advice. I want to save £50 per month, minimum, over the next 20 years. I want this to be relatively safe, but I'm not averse to slight risk, if there is a strong potential upside.

So you only want a slight chance of losing money, and only if that gives you a strong upside? Well, wouldn't we all

Over a long period of time, investing rather than saving is the best thing to do. Saving money in cash is going to suffer the effects of inflation (£50 will not buy anything like as much in two decades as it does today) and so it makes sense to invest it in something that can produce a return which would hopefully do better than inflation.

With a nice long timeframe like 20 years, you can use investment trusts or investment funds which put most of the money into shares of companies (equities) and perhaps a bit into bonds. The money you put in this month will have benefited from 240 months of growth in the markets. While markets go up and down all the time, it is incredibly unlikely that this first £50 it will have lost any money after 20 years. However, the last twenty four £50s which you are only investing in 2033-2035, will have only been invested for under two years and therefore could quite easily not be worth as much as you paid.

On average, your total pot of money will be invested for about ten years and so you will find that, perhaps, a fund which has a medium to high risk of falling in a particular month, will only have a low risk of falling overall, in real terms. While the alternative of just using savings accounts would never fall month-on-month but could have a high risk of falling in real value when inflation is considered.

The two main choices for £50pm are to either go directly to a fund manager who has a monthly investment plan or go to a fund supermarket who has a bigger range of funds but has their own charges in addition to the management fees which are taken from the fund's value. Find one that does percentage-based fees rather than flat-rate fees because it will take you more than five years to even have a few thousand built up, so you don't want to be paying one of your monthly contributions each year to cover some flat-rate fee.

As the total amount of money being invested is not high, the exact choice of fund is not too important as long as it invests mostly in global equities (shares, around the whole world) and your total charges are no more than about 1% a year. At that level of investing, don't try and overcomplicate it by buying more than one fund.

Sabrina2000

where is the best long term place to store wealth?

[Deleted User]

Sabrina2000 wrote: »

where is the best long term place to store wealth?

Gold.






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badger09

jenny is still posting SPAM

jimjames

badger09 wrote: »

jenny is still posting SPAM

And spam that isn't even relevant to the UK either