Mortgage overpayment vs investing

chockydavid1983

Thanks for the clarification Steelbru.
That seems to make sense to me beefturnmail in that you're then comparing how much you think both will 'beat' inflation by.

I'm currently considering using a couple of trackers (one UK and one global) and buying shares separately in companies with good long term records of paying good dividends. I think I would rather be choosing the comapnies myself than investing in a dividend tracker.

Does that seem like a reasonable strategy for someone just starting out? I'm a bit wary of doubling up my portfolio as the index funds will likely be invested in the companies I choose.

Thanks,
Chris.

Eco_Miser

beefturnmail wrote: »

I think inflation is irrelevant as it affects debt and savings in the same way.

This is true insofar as it reduces the value of both savings and debt.

However reduced value of debt is a good thing, while reduced value of savings is a bad thing.

chockydavid1983

Thanks Eddie.
Having researched things a bit more I think I'm going to get a S&S ISA through iWeb and invest into the Vanguard Life Strategy 100.
I'll also be getting a SIPP most likely through Best Invest investing in the same fund.
Just need to work out how much to contribute to each now.

Thanks,
Chris.

badger09

chockydavid1983 wrote: »

Thanks Eddie.
Having researched things a bit more I think I'm going to get a S&S ISA through iWeb and invest into the Vanguard Life Strategy 100.
I'll also be getting a SIPP most likely through Best Invest investing in the same fund.
Just need to work out how much to contribute to each now.

Thanks,
Chris.

I don't think you've said how much you are planning to invest in your S&S ISA, or whether it will be lump sum or monthly drip feed. Apologies if I've missed it

If you're investing small amounts on a monthly basis, IWEB may not be your best choice as the charge is £5 per deal.

I'm invested in the VLS 100% with IWEB, but it suits me as I tend to invest in larger chunks (£2500 - £3500)

I'm sure you will have seen this, but in case you haven't

http://monevator.com/compare-uk-cheapest-online-brokers/

Good luck

chockydavid1983

Ah, thanks badger09, I think I got a bit confused here as I am planning to monthly drip feed :-).

I had been using the link you posted and it looked like Charles Stanley Direct would be best but then I used this link and iWeb seemed to come out on top:
http://www.comparefundplatforms.com/

Perhaps I entered the wrong info though- 1 fund, initial sum 500, monthly sum 400, number of trades 12.

Thanks,
Chris.

zolablue25

redpete wrote: »

I think it comes down to timescales and a bit of psychology. If I had a 25 yr interest-only mortgage I would be reasonably confident that investments would grow sufficiently to survive the odd market crash and provide enough to pay it off.

Wasn't this the theory behind endowment mortgages? That didn't seem to do so well.

In answer to OP I think it matters what your tolerance to risk is. I took the "pay off your mortgage route" but I can see the benefit of the investment route although it is riskier. Given that rates are at historical lows it is difficult to see how much of a millstone your mortgage could be if rates even reverted to the long term norm let alone should we go back to the nineties when 15% was not unheard of.

atush

Probably because those endowments were with profits, which hit a bad patch with guarantees meaning that they were hit with tighter regulation on what they could hold and reduced equity exposure?

they also had high commissions paid