Financial Advice: How to make your money work for you?

NAD57891

There is a vast amount of articles online aimed at people that are in debt or are managing their money very closely. I’ve been looking for information and experiences on the opposite end of the scale, the people that aren’t ‘rich’ but have been saving up hard for years.

Questions

In summary I have the following questions:

1. What advice do you have for managing your savings particularly if you have 00,000’s?
2. Has anyone had any experience of using a Financial Adviser to help with your personal finances? Worth it? How much do they cost?
3. What’s the best way of making sense of something like picking the right ISA, do I go for the usual or wait for the Cash to Buy ISA when available?
4. Does anyone have any experience of trying other investment methods?
5. How do you keep track of everything?

Context

A little about my background:

• I graduated around 5+ years ago.
• I’m in my mid to late twenties and have £60k+ saved up.
• I have no debts (never have and hate the idea of it, never had a credit card).
• Own a decent car (BMW), upgrade would be desirable but not currently necessary (tempting!).
• Have been saving up, initially with buying a house in mind. Hesitant on buying a house (committing money and a mortgage) and not even started looking.
• Risk averse, usually do not invest into something without considering it heavily. Open to change.
• Not married so joint accounts aren’t an option.
• I could easily change my mind and buy a house & get married in a year.
• Haven’t used my ISA allowance for this year, only used it for the first time last year (regret not using them in previous years).
• Up until a year ago I didn’t know anything, I just had a current account and put stuff into that, I was probably losing money to inflation at one point!
• Working out how much I get taxed makes me cry a little.

Bank Accounts

I recently overhauled my bank accounts (my credit score was still good afterwards):

• Santander 123 Current Account
• Santander ISA (last year was the preferential rate)
• Halifax Reward Current Account
• Lloyds Club Current Account
• Virgin Savings Account

This was done effectively after looking at the following guides (from last year so I am considering some changes and new accounts to maximise savings).

• moneysavingexpert.com/savings/savings-accounts-best-interest
• moneysavingexpert.com/savings/savings-loophole
• moneysavingexpert.com/banking/compare-best-bank-accounts

There is a nifty tool I found on this board but I can't link to external websites, it does try to provide an optimum setup regarding bank accounts and earning interests.

Investments

I haven’t really considered anything else as I'm new to it all but have heard of the following:

• Bonds
• Investments
• Shares
• Buy to Let
• Pension (I have a pension with Standard Life through my current company but I’m looking to leave my employer anyway.)
• Stoozing

Financial Advisers

Had a quick read of this, never really considered it and thought it was primarily aimed at businesses (sole traders, SMB’s, etc.).

• moneysavingexpert.com/savings/best-financial-advisers

Resources

Any advice or links to guides and further information are welcome.

AndyT678

1. Buy a house
2. Live in it
3. Spend less than you earn.
4. Keep paying money into a pension
5. Keep some money in cash for unforeseen expenses
6. Come back when you feel you've paid off enough of your mortgage to consider alternatives.

EdGasket

The only downside with buying a house is that it ties you down. If you are thinking of moving around or working abroad then house ownership is not ideal.

You can cry a bit less by investing some money in a pension. You get full tax relief on all contributions so if you are in a higher tax bracket, you should at least pay enough into the pension to bring you out of that tax bracket and back to the basic rate of tax only.

Eco_Miser

For help understanding investing read http://monevator.com/

TESCO and BOS have 3% AER current accounts, TSB and Nationwide, 5%.
Regular savers, see https://forums.moneysavingexpert.com/discussion/608697
At least £1700 per month can be saved at 4% AER or more.

http://www.bankaccountsavings.co.uk/ would be that tool you can't link to.

FatherAbraham

NAD57891 wrote: »

Working out how much I get taxed makes me cry a little.

Bah, read a copy of economist John Kay's book The Truth About Markets, think about the low quality of life in countries where there's no effective taxation, and be grateful.

However, consider using pension contributions to smooth the unpleasant consequences of living under a progressive taxation system.

NAD57891 wrote: »

I have no debts (never have and hate the idea of it, never had a credit card).

That's a shame, because the people who've done well over the last twenty-five years have generally been those who've leveraged themselves to buy loads of real estate. Of course, this phenomenon won't continue forever, and I'm not implying that now is the time to emulate them, but do note that their profits are real, and some of them have become astoundingly rich.

Do not dismiss debt out of hand.

If you want to get really confused, take a look at what the FT's Merryn Somerset Webb wrote, not entirely tongue in cheek, about the path young people should take:

Earlier this week, I went to talk to children at a secondary school as part of the Speakers for Schools programme. Before I went, I thought about what it was that I really wanted the young to understand about money before they enter a world where their lives will be dominated by how much of it they have.

http://webcache.googleusercontent.com/search?q=cache:Z0bdzdW3Q5QJ:www.ft.com/cms/s/0/ee8d5d78-05d0-11e5-868c-00144feabdc0.html+&cd=2&hl=en&ct=clnk&gl=uk#axzz3ecJUJ6yC

Warmest regards,
FA

FatherAbraham

NAD57891 wrote: »

Any advice or links to guides and further information are welcome.

And remember this above all else: most businesses go bust because of cashflow problems, not because they incur losses.

Warmest regards,
FA