Looking for further investment options

cjv

Hello, I am looking around for an additional regular investment opportunity but feel like I have exhausted the obvious options.

I know nothing about investing, other than what I have googled over the past couple of months so please forgive me if I make mistakes when explaining what I have done so far. The MSE site has been really helpful to me in learning the very basics (I hope) and I have tried to do as much research as possible so that I am comfortable with my choices.

I decided in April that I would start a five year plan and save as big a deposit as possible for a property (I have never saved before this time).

I am 36 years old and after discussing my plans with my parents they have kindly let me move in with them to help me reach my goal. This will allow me to save around £800-£950 per month if I am very careful with my budgeting.

I am happy to accept some risk for the chance of better returns. I am also open to cashing in my investments if they are performing well after 4 years, or extending my five year plan if I need to ride out some downturns. Access to my money is also quite important to me, just in case circumstances change.

My current plans are as follows:

1.TSB and TESCO current accounts, to fill these up to the limits asap for the 3% interest.
2.Nutmeg S&S LISA opened with £500. Plan to pay in the full £4000 per year
3.Funding Circle, opened with £1000 and aiming to add another £1000 so I can spread my loans across 100 businesses (no more than 1% per business)
4.Vanguard S&S ISA, currently £800 in a Life Strategy 60 and have just set up £300 per month regular payment (£100 into the LS60, £100 into FTSE Developed World ex-U.K. Equity Index Fund, £100 into FTSE U.K. All Share Index Unit Trust)

I have tried to spread my money out to diversify, which I read on many sites is a good thing to do and am looking for one more investment. I would like to fund this investment with around £100 per month.

Initially I was going to add another fund to my Vanguard ISA, but I think it would be more fun to have another type of investment in my portfolio.

Any suggestions are most welcome, also why does typing "my portfolio" make me feel intelligent?:D

Many thanks,

AnotherJoe

I would open more regular savers, and perhaps more in FC or similar and minimise the share %.
You dont say whats in the LISA, but overall this is a very high risk strategy* so i wouldnt put any more into the investments side of your portfolio than you are now.

* if it all goes horribly wrong you could be living with your parents for a lot more more than 5 years eg well into your mid 40's ! Is that really your plan?

chockydavid1983

I would agree with that.
Have you worked out roughly how much deposit you will need? Obviously it's hard to predict exactly but you should have an idea. Then you'll be able to work out how close you can get to that goal using current accounts and regular savers.
Then if necessary you could take on some more investment risk, though as mentioned already that could set your plan back quite a while

TheShape

Where are all the accounts with a guaranteed 5% return?

Nationwide FlexDirect, Nationwide Flexclusive Regular Saver. Regular Savers with First Direct, M&S, HSBC.

I would try to get some/all of those first, perhaps getting a couple of switching incentives along the way.

Fill the Tesco and TSB accounts with anything that doesn't fit in the 5% accounts or use them for the regular saver maturity proceeds.

I wouldn't take any investment risk with savings for a deposit, I'd transfer the LISA to a cash LISA and just collect the 25% bonus each year.

At £800 p/m and with the LISA bonus and interest you'll be saving around £11k per year.

Thrugelmir

Open a LISA. The 25% bonus will be invaluable.

I'd steer clear of markets. Too short a timeframe. Nor any guarantee as to value when you need the funds for a deposit.

bigadaj

If you're prepared to do some research then p2p has opportunities, I'd avoid equities for the deposit timeframe.

I don't use funding circle, but do use Moneything, Ablrate and collateral, all have been fine for me but there's still risk of default. Diversification should get you a net return of around 10% before tax.

Eco_Miser

A few observations:

cjv wrote: »

1.TSB and TESCO current accounts, to fill these up to the limits asap for the 3% interest.

Why not the 5% accounts (as mentioned), also the 2%+ Regular Savers - not exciting, but guaranteed returns and no chance of capital loss.

cjv wrote: »

3.Funding Circle, opened with £1000 and aiming to add another £1000 so I can spread my loans across 100 businesses (no more than 1% per business)

With those qualifications, you must have exactly 1% per business

cjv wrote: »

4.Vanguard S&S ISA, currently £800 in a Life Strategy 60 and have just set up £300 per month regular payment (£100 into the LS60, £100 into FTSE Developed World ex-U.K. Equity Index Fund, £100 into FTSE U.K. All Share Index Unit Trust)

I have tried to spread my money out to diversify, which I read on many sites is a good thing to do and am looking for one more investment. I would like to fund this investment with around £100 per month.

Life Strategy is already diversified across global equities and bonds. LS is already overweight in the UK, and you are adding an extra third of the S&S ISA into it.
How are you handling the interaction between the Vanguard and Nutmeg investments?

cjv wrote: »

Initially I was going to add another fund to my Vanguard ISA, but I think it would be more fun to have another type of investment in my portfolio.

More bank accounts would be my suggestion.

Thrugelmir

bigadaj wrote: »

If you're prepared to do some research then p2p has opportunities, I'd avoid equities for the deposit timeframe.

I don't use funding circle, but do use Moneything, Ablrate and collateral, all have been fine for me but there's still risk of default. Diversification should get you a net return of around 10% before tax.

Also the issue of liquidity on the secondary market should times become tough. Underlying these loans is lot of property related activity. In the aftermath of the GFC. By default LLoyds Bank became the 4th largest housebuilder /property developer in the UK. Thanks to HBOS's loan book. Where much of the £10 billion loss subsequently reported within the Group Accounts was derived from.

bigadaj

Thrugelmir wrote: »

Also the issue of liquidity on the secondary market should times become tough. Underlying these loans is lot of property related activity. In the aftermath of the GFC. By default LLoyds Bank became the 4th largest housebuilder /property developer in the UK. Thanks to HBOS's loan book. Where much of the £10 billion loss subsequently reported within the Group Accounts was derived from.

Yes, loan terms could be selected on the basis of access requirements.

Also experience of particular platforms and diversification can address some liquidity issues, but caveat emptor and higher returns mean higher risk.

If anyone is uncomfortable investing in any asset class, arguably even cash with shortfall and inflation risk, then they need to acknowledge and act on this.

badger09

Thrugelmir wrote: »

Open a LISA. The 25% bonus will be invaluable.

I'd steer clear of markets. Too short a timeframe. Nor any guarantee as to value when you need the funds for a deposit.

OP already has LISA, with Nutmeg:cool:

Agree with your second comment.

cjv

Thanks so much for all the replies and advice so far. It seems I have maybe jumped the gun and exposed myself to a bit too much risk for the five year timeframe. I took the "invest for a minimum of 5 years" too literally I think!

I am typing from my phone, so I will come back this evening when I can sit down with my laptop to consider all your feedback.

I'm so glad I posted now, before I am fully committed to the accounts.

Thanks again