I don't understand why people can't be bothered!

Linton

CLAPTON wrote: »

I guess if one sees the purpose of investment as
-never using / needing the money
and
-never spending the dividends

then in the long term we are all dead and rich.

You invest now with some of your money with a timescale of perhaps 20 years. The rest of your money you can put in savings accounts - it should be enough to deal with life's normal emergencies. Assuming your investment portfolio is widely diversified, in 20 years you will almost certainly guaranteed to have gained far far more than with savings.

Almost certainly because there is one event that could wipe you out - consider a real global economic collapse. But what else would survive that? You cash savings would probably be worthless because of inflation and/or the collapse of all the UK banks would make it impossible for the guarantees to be honoured.

It's not really gambling because the intermediate ups and downs are irrelevent. You are relying on the long term underlying trend driven by the profits of the large number of companies you invest in. Any other way of making a return could be considered gambling. BTL? Here you are gambling on a steady availability of tenents who dont cost you more than they pay and/or on an increase in house prices.

Linton

CLAPTON wrote: »

yes indeed

but to be really safe, suppose they invested the money in the banks or in British Energy or in Nokia

With a properly diversified portfolio you may well have invested in British Energy or Nokia but that would be with probably less than 1% of yor money. Also you would be invested in Apple, the water and electricity utilities, the oil companies, small start-up pharamceutical companies that eventually are worth a £B.

Chickereeeee

bigfreddiel wrote: »

Now some years later, learning along the way, I moved from cash ISA's to stocks and shares ISA's and it's producing £500/month, or £6,000/year. Tax saving £1,200. My mates aren't laughing now!

If you are not a higher-rate tax payer, you would not be paying tax on the dividends, even outside an ISA, anyway....

(Higher rate tax would be 25%, not 20% as you quote, so I assume you are a basic rate taxpayer))

C

Linton

missbiggles1 wrote: »

And many people have little choice at all.

Look around you. How many newish cars do you see? How many people choose to live in houses bigger than the minimum they need and deliberately avoid areas where houses are cheap. People take more expensive holidays than they "need", assuming they need any. Not everyone buys their clothes in charity shops. All of these are choices.

Those people who dont have these choices clearly cant invest but simple observation shows that a large majority of people arent on the breadline.

jimjames

missbiggles1 wrote: »

And many people have little choice at all.

And yet a lot of people do have a choice. I know people who have the latest phone and a new car every couple of years yet have no savings or investments.
You can invest from £25 per month, which is better for your long term future, spending that £25 on a new phone or investing it so you have some financial security?

jimjames

CLAPTON wrote: »

I was proposing that sensible people should compare saving plus saved interest with investments with dividend reinvested.
presumably 'very likely' isn't gambling ?

Gambling is an activity where the most likely outcome is a complete loss of your stake. Investment may involve ups and downs and at any specific point in time the investment may be worth less than your initial capital but isn't going to be a total loss. If the FTSE100 drops to a value of zero then worrying about investment values is unlikely to be the main thing on people's minds.

I find it very surprising that someone who claims to be invested is so negative about investment in general. Many people who are looking for a good and rising income would be far better off with investments than cash savings and could get a substantially higher income as a result.

ChesterDog

Seasoned investors see the risks (in everything), embrace them for the potential returns they offer, and mitigate them by diversifying and restricting higher-risk items to correspondingly small proportions of their portfolio.

They would see sticking to 'safe' savings vehicles as horribly risky: inflation risk, sacrificing of growth, taking a chance on what life might throw at them and how long they will live, etc, etc.

Not seeking the best, most assured performance you can for your money is a frightening gamble as far as I'm concerned. Unless you are already fabulously wealthy and your wealth is secure. Hmm... where will such a person find that security?

ChesterDog

For anyone reading this thread and thinking investing does, after all, sound quite complicated - it can be done really simply. For example by purchasing a cheap multi-asset fund like a Vanguard LifeStrategy via an online platform.

There are plenty of people here - professionals and amatuers - who will help and guide you even with that.

We will argue about how to tweak it and so on, but that doesn't alter the underlying basic simplicity of the idea, we just enjoy discussing these things. :-)

FOREVER21

Perhaps the answer to the original question could be "The state will provide"

Consider person A. Always spends all their earnings cars,holidays, latest high tech, never worries about share prices. Retires on minimum state pension which will be topped up by Pension Credit, housing benefit, help with winter fuel costs , et all.
Fast forward they require residential care, no capital all paid by the state.

Person B steady saver, investor, worries about poor interest rates, share prices etc.
On retirement no additional state benefits paid. Again fast forward they require residential care, savings and capital needs to be used.

Yes I appreciate B will perhaps have availability to chose where they live and which residential home they go to, but is it worth all the effort.

Just my thoughts.

Thrugelmir

bigfreddiel wrote: »

What is it that stops anyone even starting a modest investment portfolio?

Jam today mentality. Lost are the old virtues such as take care of the pennies and the pounds look after themselves. Leveraging with debt ( aka BTL) is perceived to be a far quicker route to riches.