£25k and what to do with it

tizzle6560

As title suggests I have approx £25k that I ideally would like to invest in something.

I have 2 years worth of equity in my London property that has gone up in vlaue by around £100k because of area and work I've done to it. I've toyed with the idea of a 2nd rental property, but stamp duty and deposit for BTL is just absurd.

Currently this money is sitting in a Cash ISA with an average interest rate.

All ideas welcome, except the downright ridiculous

eskbanker

Not sure how you measure equity in years rather than the more conventional value metrics, but nobody can really offer any meaningful guidance without the usual relevant background info, such as

• Total value of your assets
• How they're broken down (i.e. cash v property v investments, etc)
• What are you keeping the money for?
• When do you think you might need it?
• Do you have enough emergency fund buffer?
• Attitude to risk
• Pensions
• Dependents
• Earnings
• Tax situation
• etc

Getting it out of a cash ISA is likely to be worth prioritising though!

tizzle6560

eskbanker wrote: »

Not sure how you measure equity in years rather than the more conventional value metrics, but nobody can really offer any meaningful guidance without the usual relevant background info, such as

• Total value of your assets
• How they're broken down (i.e. cash v property v investments, etc)
• What are you keeping the money for?
• When do you think you might need it?
• Do you have enough emergency fund buffer?
• Attitude to risk
• Pensions
• Dependents
• Earnings
• Tax situation
• etc

Getting it out of a cash ISA is likely to be worth prioritising though!

• Total value of your assets
  Property is worth approx £500,000
  Cash - approx £25k
  No investments as yet
• How they're broken down (i.e. cash v property v investments, etc)
  My property equity is about 35%
• What are you keeping the money for?
  Raindy day money for now / hopefully for investment
• When do you think you might need it?
  Not any time soon
• Do you have enough emergency fund buffer?
  Yes that is separate from this amount
• Attitude to risk
  Not adverse
• Pensions
  Company pension - 10%. I do not currently contribute any more
• Dependents
  0
• Earnings
  Appprox £80k annually
• Tax situation
  Not sure what you mean by this?
• etc

Thanks

eskbanker

If you're happy that you have enough readily-accessible cash for an emergency fund (keep this in high-interest current accounts) and that your pension provision is adequate, then shifting some or all of that surplus pot away from cash seems sensible in order to avail yourself of potentially greater returns elsewhere.

A couple of options spring to mind:

Transfer from cash ISA to S&S ISA and invest under that tax shelter. Numerous options for exactly what to invest in, but the starting point for many is a multi-asset fund in order to achieve the recommended diversification to avoid the 'all eggs in one basket' risk. Popular choices include the Vanguard LifeStrategy products and the equivalent from L&G and Blackrock - read up on investing principles at sites like Monevator and Motley Fool.

Alternatively, look into P2P lending, start at http://www.moneysavingexpert.com/savings/peer-to-peer-lending

AnotherJoe

10% is a very low amount to be putting in a pension.

Are you a higher rate taxpayer ?

eskbanker

AnotherJoe wrote: »

Are you a higher rate taxpayer ?

Seems likely unless there's some very cute avoidance going on:

tizzle6560 wrote: »

Earnings
Appprox £80k annually

Carrieanne

My suggestion - convert the fiat into real money. Buy circa 25 britannias or 100 full sovereigns (both CGT free). Hide 'em well then forget about them. The Yanks supposedly have 8,000 tonnes of the stuff which they hoard for tradition's sake (so said former Fed Chairman Ben Bernanke with a remarkably straight face), and the Chinese continue to accumulate with both hands. Look upon the shiny as an insurance policy that will offer you some protection from UK hyperinflation occurring sometime in the future the like of which Venezuelans are experiencing today.

grey_gym_sock

Carrieanne wrote: »

My suggestion - convert the fiat into real money. Buy circa 25 britannias or 100 full sovereigns (both CGT free). Hide 'em well then forget about them. The Yanks supposedly have 8,000 tonnes of the stuff which they hoard for tradition's sake (so said former Fed Chairman Ben Bernanke with a remarkably straight face), and the Chinese continue to accumulate with both hands. Look upon the shiny as an insurance policy that will offer you some protection from UK hyperinflation occurring sometime in the future the like of which Venezuelans are experiencing today.

i guess you missed this bit:

tizzle6560 wrote: »

All ideas welcome, except the downright ridiculous

Carrieanne

For being a silly boy, your homework today consists of researching Jacob Rothschild's lineage. If you're still scratching your head, ask google why gold remains the ultimate form of money.

- Rothschild Ups Gold Bets

Monday August 15, 2016 13:58

(Kitco News) - As central bankers continue their “greatest experiment in monetary policy in history,” it is important for investors to focus on preserving wealth, this according to one member of the Rothschild banking family.

One way to do that is with gold, noted Jacob Rothschild, chairman of London-based RIT Capital Partners, in a letter to shareholders Monday. - Full article: http://www.kitco.com/news/2016-08-15/Rothschild-Ups-Gold-Bets.html

grey_gym_sock

Carrieanne, you are now making 2 distinct claims:

1) gold is "the ultimate form of money"

this is simply wrong. currently, gold is not money. if you doubt this, try walking into any shop and paying for anything with gold. nowadays, we use credit-based money. there have been periods of history when people used bullion-based money (mostly, either gold or silver). but even then, it was normal for minted coins to be worth more than their value as bullion (otherwise, a small shift in the value of metals would have tempted everybody to melt down all their coins, which would have been very inconvenient).

the theory that gold is "real" money has not always been out there. it emerged in a particular historical context, when it was deployed by the people who controlled the gold, as part of a campaign to replace forms of money which they couldn't control with 1 which they could.

for more background, see david graeber's book, debt: the first 5000 years.

2) holding gold is a means of preserving wealth

from your link, RIT capital partners, an investment trust which does (i agree) have the aim of preserving wealth, has increased its gold allocation to 8% ... you just recommended a 100% gold allocation (for the OP's portfolio other than their mortgaged house and emergency fund). 8% is a sane allocation. 100% is insane.

the key to wealth preservation (and that may or may not be the OP's aim, anyway - they don't have as much wealth as jacob rothschild to preserve, and might be more focused on growing it, which would usually involve a higher allocation to equities) is to hold a range of asset classes: a significant amount in equities (which offer high returns in the long term, but are very volatile), but also a lot in more stable, lower-return investments, such as some kinds of bonds. a small allocation to gold is optional. you can also have a good defensive portfolio with 0% gold.

one shouldn't pay too much attention to the fact that RIT is changing its allocations to gold and equities. they are an actively managed IT, so they will make changes from time to time. these moves may or may not add value. the important thing is always to have allocations which are within sensible bounds. tweaking the allocations in response to events is much less important.

RacingDriver

Open multiple accounts starting with the highest interested. Don't worry too much about which provider it is with (just make sure they are FSCS protected), also make the most of high interest regular savers by opening a high interest current account and then depositing money monthly into the regular saver.

https://forums.moneysavingexpert.com/discussion/5374614