making the most from my money

lesta1980

Posted a few times about my progress and had some good help pointing me in the right directions before so hoping the same happens

im mid 30s running my own company and have managed to do well from nothing. bought my dream house outright worth about £425k, with £80k left on a £132k mortgage with the house worth around £160-£170k at a guess which i rent out

ive now managed to save another £130k which i was planning on using to buy another house to rent out but have been advised against that on here before.

I only have a small old work pension and some shares worth about £3k in other things, my saving are just in a couple of savings accounts getting 1.3%, or around that mark anyway. oh and im a higher tax payer.

I know this is pretty difficult to nail down but which route should I go from here? I dont mind a bit of a risk but obviously dont want to risk it all on the toss of a coin. Would I be able to get my dough to now work for me and start pulling in a decent amount to help grow it? Also what sort of returns would be deemed as good and what would be normally looked at as achievable. I will be paying into my pension again next month so hopefully have that covered as well.

Any advice, information and/or guidance would be appreciated thanks

george4064

First of all, make sure you have a cash savings for emergencies etc.

Assuming you have that, I would suggest reading up on opening a Stocks & Shares ISA. Do your own research and reading to decide which funds/etfs/investment trusts you invest into.

Pincher

There is nothing stopping you from creating a virtual portfolio to try your hand at stock picking. Preferably one that adds dividends as well.

colsten

aidan1980 wrote: »

bought my dream house outright worth about £425k with £80k left on a £132k mortgage with the house worth around £160-£170k at a guess which i rent out

can you clarify please -

did you buy your dream house outright or do you still have a mortgage on it?

which house is worth £160-£170k? What if any mortgage do you have on it? How much do you make net from it?

All very confusing.

lesta1980

^^^ sorry, house I live in now I have bought outright, no mortgage and that is the one worth about £425k

my other house is what I rent out, it is worth about £160-£170k and has about £80k left on the mortgage of £132k

colsten

Thanks for clarifying.

So you have £130K cash savings(?) vs £80K debt in the mortgage of your rental property, right?

I'd say you need an Emergency Cash Fund of some 6-12 months living expenses, and then invest the rest. Assuming the return you can get is more than the interest you pay for the mortgage

For any remainder: unless you have plans for cash spendings (holidays / cars/ weddings / home improvements etc) in the next 5 or so years , you can think of putting any extra cash into SIPPs or ISAs (S&S ones) for yourself and/or your spouse/kids.

lesta1980

colsten wrote: »

Thanks for clarifying.

So you have £130K cash savings(?) vs £80K debt in the mortgage of your rental property, right?

yeah that's right. currently on nationwide's basic mortgage rate of 2.5% and over paying each month, overpaid £19k so far

bigadaj

As a higher rate taxpayer with your own company then look at hammering into a pension, as the government will be paying a huge percentage in terms of tax relief.

Apart from that then normal issues about emergency fund, using Hugh interest current accounts and stocks and shares isas.

Paying down the mortgage might be worthwhile with the changes to buy to let coming in, and p2p lending might be worthwhile for a portion though it's soemthing I've not started as yet personally.

lesta1980

what sort of realistic return should I be looking at?

atush

Long term, equities should (thru the ups and downs) return 5% plus inflation.

lesta1980

so basically from what I am briefly reading stick £15k in S&S ISA and you get the dividends each year (hopefully) and then hope the overall prices are higher when you come to leave?