I need to rebalance my assets, but into what?

andrewm1981

Hi, sorry for the long post

I came into some money a couple of years ago, and have invested in a way that suited me. It may not have been the best, but i haven't lost anything, and I was able to get my hands on money if I had needed.

I now need to think longer term, and I'm very aware that I'm not very well balanced. So I'm asking for some advice, and a couple of tips.

My money's been stagnant for the last year (been travelling), and I haven't employed an IFA because, to be honest I looked at the charges, and over time I felt that it wasn;t good value for money. I may well be wrong. I'll let you know in 30 years :P. It was suggested that I invest in my ISA which I've maxed out each of the last three years.

Firstly, about me:

35 years old, unemployed, but only been looking for work for the last month and on the cusp of getting a job. Shouldn't be an issue (live zone 4 in London so lots of opportunities), let's say £30K/year wage. Live with wife, no kids but probably a couple over the coming 2 or 3 years.

My goals: work life balance, rather save and retire early (58-62) then party all night and work till 75.

My investments:

£113K in Ratesetter.
£97K in rolling 1 month contracts earning 3%. (Clearly this where I need to take from). £15K in 5 year contract earning 6.2%. 3 years left

3 bed House worth £400K owned 50-50 with wife. 21 years of mortgage left,£180K equity, £220K owed at BOE+0.9% for term

£46K in HL S+S ISA (3 years worth of using allowance)
Shares -£20K - biggest is Astrazeneca at £3K, then others at 1K
Funds - £25K - biggest is LS100 (6K), then a few others at 3K

X-Ray shows: UK shares 55%, Int shares 35%(mainly USA), Int bonds 5%, UK bonds 3%, other 2%

Cash in the bank: £60K, earning an average of 2%

And now for the biggie....no pension!


My thoughts on this are: I love property (been a landlord before), so would like to get a small BTL once I get a job that ill allow me to get a BTL mortgage. So need some money (70-90k) that is accessible

I'm clearly very heavy in Ratesetter, so would like to pull most of it out from the 3% deal. Not adverse to dabbling with higher risk/return p2p but obv far far smaller amounts.

Like shares/funds, but very "buy&hold". I'll just put my 15K allowance in for the next few years. slightly nervous that the FTSE is high at the moment... but everyone always thinks that, right?

I'm quite pro-risk so happy to speculate to accumulate

Pension is obviously my next step (I think). Whatever my next company gives, I don't want to wait any longer and need to catch up.

So my questions are......

1) Assuming pension is next, and I got a SIPP with HL, would it be suggested to invest, say 30K to catch up (a bit), then set up a monthly £300-£400. what would be the best tax-wise?

2) Is my S+S ISA fairly balanced? in terms of bonds/uk/int

3) If it were you, where would you put that £97K from Ratesetter into? (I'm thinking £30K SIPP, £20K other P2P, maybe slightly riskier, but other £50K!?)

Sorry for the long post, and thanks for any tips you may have
Andrew

Startup1985

Yikes!! I love p2p but that amount in RS made my eyes water lol. I would split it up across some other platforms. Saving stream is my face, it pays 12% at 1% per month. I would also try ablrate. To be honest though I would not put that % of my wealth into p2p I would split some into maybe a vanguard ls

Edit** just seen you have already got a bit of vanguard Ls, maybe a bit more ?

andrewm1981

Yup, it's making my eyes water too! It's going to be leaving very soon!
I'll investigate savings stream tonight

I've already maxed out my ISA for this year, but I could invest outside of an ISA I guess. I'll deffo put less in shares and more in HL100 for next years ISA allowance.

I'd rather put it in a pension I suspect, maybe one of the suggested HL ones?

Startup1985

If you do decide to go for Saving stream give me a shout by pm I have a referral code and can split the bonus, every little helps lol. Good luck in whatever path you choose to take

masonic

andrewm1981 wrote: »

2) Is my S+S ISA fairly balanced? in terms of bonds/uk/int

Clearly the home bias is very high due to the individual shares you hold. Whether that's really the case depends on whether those companies are earning most of their revenue from the UK or internationally. A portfolio Xray may not give a true picture.

In terms of bonds, if you have cash in high interest current accounts (your average rate suggests you can do better here) and P2P investments, I'd question whether bonds were needed.

atush

And now for the biggie....no pension!


My thoughts on this are: I love property (been a landlord before), so would like to get a small BTL once I get a job that ill allow me to get a BTL mortgage. So need some money (70-90k) that is accessible

My thoughts are, you were not being ta efficient so should concentrate on pensions over the next few years for both of you.

And forget BTL until you have built up a decent pension base.

andrewm1981

Thanks,

BTL can wait, I'm inclined to agree now. With regards to pension, if I were to put £30k into a SIPP through HL, then I'd have £85k in shares/funds. Obviously the timescale is 20+ years, so short term drops are to be expected, but would that be too much exposure to shares/funds? I'm thinking not, but it just seems like an awful lot! (Certainly no worse than £113k in P2P I'm thinking though!)

I'm obviously going to cut the P2P drastically, and I may need to dip into my cash a little, so I'm that case would 10% bonds be ok? I'm planning to invest in LS100 more going forward, so I guess bonds would drop to 5% over the coming years until I start to increase again as I start to reach 50+years old.

Ray_Singh-Blue

I'd make things more simple
VLS 80:20 in ISAs and SIPP as the core, for example.
And anything bolted on to that would have to wash its face.

Thrugelmir

Is the mortgage interest or repayment?

Heard today that Goldman Sachs are currently bearish on both the US and UK markets saying they are overvalued by around 10%. So you need to consider carefully your next move.

kidmugsy

Wait until you've found your job. If it offers a pension that uses Salary Sacrifice, that's your tax-efficient way to contribute to a pension, especially when you allow for the employer contribution too.

andrewm1981

Hi, the mortgage is repayment, but it's cheap so not fussed about paying it off any sooner (at the moment anyway)

I'll deffo do company pension, but figured I've got some catching up to do. Can I catch up in a standard company pension? (Apart from AVCs) but yes probably right, I'll wait.

I haven't heard that(Goldman Sachs), but it echoes my sentiment. I'll hold for a bit. (Cue comments about trying to time the market!)