If you were me...

Mr_Curious

Hi Guys,

Some points of view sought here please. I'm trying to find something sensible to do with my money. I currently have a pot of cash spread over a range of accounts (FD, HSBC and just switching to NW for the reg savers as well as TSB). This pot is in the region of £15k. I also have money being paid into a share save scheme at work which is half way through (should amount to £18k upon maturity in 18 months). As a result of paying into previous share save scheme I have approx £8k in shares in an ISA. I have recently bought a house with my other half with a approx £152k outstanding on a fixed rate. I also pay into a work pension as they currently double my contributions. I am a lower rate tax payer.

I have no real plans for the money in the short term. I have it set by as an emergency fund but only really sat down, added it together and realized that its probably a little on the generous side.

If you were in my situation, how would you make the money work better/harder/more efficiently?

All opinions welcome

TIA

Mr_C

(Just a side note - I regularly look through these threads and I'm fairly sure Ive not seen a similar post like this before)

kidmugsy

£15k may be a reasonable size for a cash emergency fund.

People often recommend 3 to 6 months outgoings. If you add on a possible need to refurbish/decorate/furnish a newly bought house maybe £15k is OK. Why not wait a while and see whether the house does entail some expenditure?

Rafter

Hi Mr_Curious,


It depends on your attitude to risk and whether you believe shares will outperform cash over your investment horizon - the jury is out whether stocks and bonds genuinely outperform much if you are savvy and move your savings to best buy products.


Next time you are re-mortgaging I would suggest looking at an offset product so you can effectively safe interest on your mortgage rather than earning a lower amount in savings accounts - you can still get at your savings if you need to.


Be careful with your sharesave and stocks ISA - you don't want too much tied up in one company in case their performance does take a turn for the worse.


Other than that, you seem to be doing well - unless you are prepared to take significant risk though Peer2Peer lending or riskier funds I'm not sure you can make your money work much harder.


Good luck


R.

Thrugelmir

What rate of interest are you paying on the mortgage?

PeacefulWaters

Having lost a hideous amount holding shares in an employer who effectively became insolvent I'd urge you to reduce any exposure to single company shares. Especially your own firm. Diversify!

Are you getting the maximum doubling of pension contributions?

Suffolk_lass

It does depend on where you are in your life and what your appetite for risk is like. A few years ago I put £10,000 into a fund with a well known platform provider, in an ISA wrapper - so although it is a mix of stocks, shares, bonds and maybe other funds, it is all in a single fund bundle. It did little for about three years and then in the last year it has grown by over 10% - I elect to reinvest the income (dividends) as I am looking for growth with low risk.

Then earlier this year, I suggested to DH that he open an ISA account on one of the self-invest platforms and we split his fund (from a one year regular saver that had matured) across three funds, and that has grown well, again reinvesting income and also adding a small amount each month so it is growing slowly. Of course we may have picked absolute donkeys as we are very inexperienced but this year everything seems to have gone rather well.

I am not knowledgeable enough to invest in single shares with any confidence (would have probably picked out BP, Tesco, VW and Samsung as sure bets just before catastrophic reputational damage to all four has rocked their share price and more importantly dented their dividends) - so I stick with bundling my small pots into multiple funds across more than one platform. I hope I am mitigating risk.

I HTH
SL