I want to start saving/ investing £50 per month.....

jimjames

brasso wrote: »

£50 a month isn't enough for investment, IMO. With charges you would lose money.

I completely disagree here.

Most investments are charged on a percentage basis so £50 will not lose money from charges. The charges will be no more excessive at £50 than £500.

Starting with a small amount is a good idea in my mind as it sets the path to building investment knowledge and the principle of putting by a certain amount per month.

It's how I started nearly 20 years ago and has worked very well for me.

colsten

themanfromamarillo wrote: »

The big question is, do you have an emergency fund?

I agree, and I am surprised that experienced posters ventured into discussing the virtues of investing without asking that question at all.

Smithy101

Investment Trusts are the original type of investment fund invested by the Victorians and some of them date back to those times.

More importantly for you, they usually perform better than any other type of fund and some of them have really cheap savings plans.

Here's the evidence about the better performance: http://whichinvestmenttrust.com/chart-shows-just-good-investment-trusts-2/

I'd suggest you save your £50 with either Baillie Gifford or Aberdeen.
If you choose Baillie Gifford you have access to Scottish Mortgage Investment Trust - it's an amazing trust with a great manager. It's returned 42% over 1 year, 148% over 5, and 404% over 10 years.
See here for performance: http://www.theaic.co.uk/companydata/320/performance

Smithy101

Poolielad here is a link to the Baillie Gifford plan if you'd like to find out more:
http://www.bailliegifford.com/individual-investor/how-to-invest/share-plan.aspx

anoncol

Smithy101 wrote: »

Investment Trusts are the original type of investment fund invested by the Victorians and some of them date back to those times.

More importantly for you, they usually perform better than any other type of fund and some of them have really cheap savings plans.

Here's the evidence about the better performance: http://whichinvestmenttrust.com/chart-shows-just-good-investment-trusts-2/

I'd suggest you save your £50 with either Baillie Gifford or Aberdeen.
If you choose Baillie Gifford you have access to Scottish Mortgage Investment Trust - it's an amazing trust with a great manager. It's returned 42% over 1 year, 148% over 5, and 404% over 10 years.
See here for performance: http://www.theaic.co.uk/companydata/320/performance

Past experience is no guarantee of the future.

Smithy101

anoncol wrote: »

Past experience is no guarantee of the future.

Anoncol, the past experience you refer to looks at investment trusts over periods extending to 10 years but if you go back even further the same is true. This is not research on an individual fund or trust it's looking at the whole sector.

The reason why investment trust perform better is several but include that they have in independent Board who can sack the manager if they're under performing, cut the costs/fees if they're uncompetitive.

Beside the powers of the independent board investment trusts:

Can borrow or gear. Right now many are borrowing at on 2% interest or less.

With Unit Trust/OEICs (they're the alternative) - they suffer from investors being herd like. Too many investors sell when markets are down and buy when markets are high. That means these managers need a pot of money uninvested (earning nothing) to refund exiting investors. Also the manager might need to invest at the top of the market and sell at the bottom.

Investment trust don't need to do this because when you are buying or selling you buy and sell from other investors not from the manager.

bowlhead99

colsten wrote: »

I agree, and I am surprised that experienced posters ventured into discussing the virtues of investing without asking that question at all.

Well, he didn't ask us to question him about whether he had sufficient cash for emergencies.

He said he had some new money, a pay rise, available to invest.

It makes sense to point out that "investing" might not be appropriate if you want the money back in 5 years and are only drip-feeding it anyway so that some of the money is hardly invested for any time at all.

However, if you're expected to shoot him down and say "hang on, I don't believe your money is really spare and available for any kind of investing program, are you sure you can really spare the £50 a month or do you really need it for day-to-day living or perhaps a rainy day fund..?", then it will take you a while to get anywhere.

He has some spare money each month and is willing to take a bit of risk with it. Not sure he's looking for whole life financial planning and a wealth management plan with all the caveats that an IFA would provide. Answering his actual question somewhat recklessly, as anonymous internet funsters, is our God-given right!

atush

brasso wrote: »

£50 a month isn't enough for investment, IMO. With charges you would lose money. Best bet may be to save it into an interest-paying savings account, then every 6 months or so, pay the £300 into a S & A ISA and buy a different tracker fund each time -- or something like Vanguard LifeStrategy 100%.

If you're working, don't assume you'll have to stick with 50 a month. If you're developing a career, you should be able to increase save/invest more year on year. Perhaps 70 a month next year, then 100 a month etc. You'll be amazed at how this can build up. Knock up a spreadsheet to give yourself some motivation!

Good luck.

I started my first one when I had only 50/m spare. worth over 40K now lol.

So, is that worth investing? I'd say so