First Time Investor Help Please

RvW

Hello all,
frequent lurker on these boards but finally signed up and looking for some solid investment advice. I realise this might be a bit long winded but any help would be greatly appreciated...so here goes:

I’m almost 35 and have been working in the oil & gas industry for the past 11 years (with a couple of 1 year breaks to go travelling and enjoy life). I’ve never really been a deliberate saver but always managed to put money away, hence being able to take two extended breaks from work. I’m now in the fortunate position to work a month/month rota in the Middle East and live on an idyllic Thai island on my time off.

This means my wages are tax free as i’m non resident in the UK (still work for a UK company and paid out of UK in GBP) so now i’m looking to invest for the future.

I want to put down an initial £10k and pay in £1k every month. What would be a good investment/s to consider. No need to withdraw this money at any point so i’m looking at a +10year investment minimum.

About me:
34. Single. Earning approx £70k take home pay per annum.

House in UK. Worth approx £300,000 with £190,000 left on the mortgage. Mortgage term 26 years. 1.59% rate until April 2018. Friend rents a room and looks after the property while i’m living overseas. £350pm. Mortgage £750pm Overpay by 100% pm

Flat in UK. Worth approx £115,000 with £46,000 left on the mortgage. Mortgage term 15 years Buy-to-Let at 2%. Rented out at £480pm. Mortgage £106pm overpay by 100%.

£2500 at 5% in Nationwide account.

£25,000 in Lloyds bank account earning no interest.

Pension: 3% contribution matched by employer. (only 18months worth of pension contributions so far so behind pensionwise)

£2000 in ETHEREUM
No ISA.

With that info what should I do?
Am I wrong in Overpaying both mortgages by 100%?
Should I have an ISA? Being non resident am I even eligible for one?
Would a LISA be a better option or wait until i’m 39?

Are Tracker Funds the way to go? If so what fund and how many funds? I quite like the sound of a global tracker, a FTSE 250 tracker or an Emerging Markets tracker. Bad idea?

So much info to process but would really like to get the ball rolling with my investment for the future. I’m quite happy to take some risk but don’t want to buy individual shares. Got stung by GKP in the past for about an £8k loss (still hold all the shares so technically not a loss).

If you were in my shoes what would YOU do? :beer:

Linton

1) It seems a waste to use your spare cash to pay off a cheap 1.59% mortgage when you might expect to get a much larger return by investing the money. I would continue to pay the standard amount but not overpay.
2) Are you paying tax and meeting the legal requirements for renting both your main residence and the BTL?
3) It would seem you have virtually no pension. As you have plenty of cash to cover emergencies you need to start serious saving/investing.
4) You need to invest as widely as possible so you wont be seriously hurt by anything another than a major global fall. These will happen, you have to learn to just take advantage by buying more fund units whilst prices are cheap rather than panicking.
5) Whilst the pot is small it makes sense to just use one fund - look for a high equity multi-asset fund. Such funds hold a set of more focussed funds which may be trackers but neednt be. You have a good income and plenty of time before retirement so you dont need to be too cautious.
6) Once you have accumulated say £20K you could look into niche investing in areas not strongly covered by your core fund. I like small companies, better to be global than just UK.
7) I think you cant invest in ISAs whilst being non resident but you can continue to hold one set up beforehand. However others will know more than me. If you were UK resident a SIPP (pension) could be most advantageous but I doubt you can open one and get tax relief for the tax you arent paying. So you may need expert advice on the optimal way to hold your investments. Even though you may be outside UK tax are there any complications from local taxation?

RvW

Thanks for taking the time to read over and reply Linton.

1) What I figured from reading these boards lately.
2) Yes the rental income is declared on my self assessment tax return. (Less than my annual tax free allowance so no tax paid on it but obviously eats into my allowance for any other profits made from investing).
3) Agreed. I have basically nothing for when i retire.
4) Noted.
5) One fund it is. Seems logical for now.
6)In 12 months time this should be the case.
7) No local tax implications from the Thai tax authority.

So if you were picking one passive index fund to invest £5k today and top up £1000 a month what would you choose? (obviously i need to do my own research and anything I do invest in is 100% my choice).

Linton

The most commonly mentioned diversified fund of funds are the Vanguard Life Stategy Series and the L&G Multi Index funds. They both offer a choice of risk levels. Suggest you look at them in detail on www.trustnet.co.uk.

AlanP_2

Linton wrote: »

The most commonly mentioned diversified fund of funds are the Vanguard Life Stategy Series and the L&G Multi Index funds. They both offer a choice of risk levels. Suggest you look at them in detail on www.trustnet.co.uk.

Blackrock do a similar range as do HSBC with their Global Strategy range.

Mutton_Geoff

Pointless to have money in zero interest accounts with 20-30 years to retirement. Also if you're in a tax free situation, then no point worrying about NISAs etc.

If you want individual shares, my personal favourite is Unilever.


With your sort of spread of investments and income, I'd seriously consider professional advice, you're not going to get that on the internet. I have a substantial part of my pension pot with St James Place who are slated for high fees, but in the last 12 months, they have grown my money 20% after fees.


There are cheaper options, right down to SIPPs, but do you want to enjoy your tropical island or be forever watching markets on your laptop whilst being massaged with coconut oil or pay someone to do it for you?

ChesterDog

Mutton_Geoff wrote: »

Pointless to have money in zero interest accounts with 20-30 years to retirement. Also if you're in a tax free situation, then no point worrying about NISAs etc.

If you want individual shares, my personal favourite is Unilever.


With your sort of spread of investments and income, I'd seriously consider professional advice, you're not going to get that on the internet. I have a substantial part of my pension pot with St James Place who are slated for high fees, but in the last 12 months, they have grown my money 20% after fees.


There are cheaper options, right down to SIPPs, but do you want to enjoy your tropical island or be forever watching markets on your laptop whilst being massaged with coconut oil or pay someone to do it for you?

As a counterpoint, my portfolio has made 30- something percent in the last year, I wouldn't consider investing in any individual equities and (apart from an occasional rebalance) I never do anything to it, regardless of what the market does.

It's a mix of active (OEICs, Investment Trusts) and passive (global equity tracker, some property and a sniff of commodities) investments, and is very diversified.

Rollinghome

Mutton_Geoff wrote: »

With your sort of spread of investments and income, I'd seriously consider professional advice, you're not going to get that on the internet. I have a substantial part of my pension pot with St James Place who are slated for high fees, but in the last 12 months, they have grown my money 20% after fees.

As has often been pointed out, stating a return without any reference to the level of risk is meaningless.

For example, had you plonked your money into the Vanguard Life Strategy 100 (or a similar fund) you would have got a return of 32% instead of the measly 20% you got using SJP.

On the other hand had your money been in the much lower risk Vanguard LS 20 your return would have been just 9%. If the SJP investment was similarly low risk then their return would have been miraculous.

So your return was well below what it could have been but better than it might have been and, depending on the risk taken, SJP were somewhere between being very good or very poor. Probably best to find out which before you give them any more money as the most consistent indicator of likely poor returns is high fees.

bigadaj

Mutton_Geoff wrote: »

Pointless to have money in zero interest accounts with 20-30 years to retirement. Also if you're in a tax free situation, then no point worrying about NISAs etc.

If you want individual shares, my personal favourite is Unilever.


With your sort of spread of investments and income, I'd seriously consider professional advice, you're not going to get that on the internet. I have a substantial part of my pension pot with St James Place who are slated for high fees, but in the last 12 months, they have grown my money 20% after fees.


There are cheaper options, right down to SIPPs, but do you want to enjoy your tropical island or be forever watching markets on your laptop whilst being massaged with coconut oil or pay someone to do it for you?

St James place are a terrible choice simply for the fees.

This poster doesn't state how long he's held the investment with sjp, but they are one if the very few advisers to still charge a 5% initial fee, in many years that's the first years return gone straightaway.

For the record my portfolio has a current year return of 28%, though we don't know how this compared to this poster in terms of risk, asset allocation etc

economic

bigadaj wrote: »

St James place are a terrible choice simply for the fees.

This poster doesn't state how long he's held the investment with sjp, but they are one if the very few advisers to still charge a 5% initial fee, in many years that's the first years return gone straightaway.

For the record my portfolio has a current year return of 28%, though we don't know how this compared to this poster in terms of risk, asset allocation etc

Is that return ytd return or over the last 12 months?

bigadaj

economic wrote: »

Is that return ytd return or over the last 12 months?

Over the last 12 months, year to date is probably around 12%.

That's not a perfect figure as I've simply gone from my trustnet dummy portfolio, and there have been some changes during that year, but it's a reasonable approximation.

The point is that it's an average return from an equity heavy diversified portfolio, to put the returns from sjp into context, their charges would be costing the average investor several per cent per year.

And the last year has been an unusually good one, most years the extra few per cent in costs will represent a large proportion of the total return.