Advice transferring Cash Savings to Vanguard

Shashy

dont_use_vistaprint wrote: »

Hi Shashy

I mean using the online platform directly myself , putting lump sums and regular DD's from my bank accounts into the life strategy products, logging on and seeing how they are doing etc. Selling them when I need to access money , but mostly buying / saving. Had a quick look at a friends account and it seems straightforward for savings, I don't want to be buying and selling during the day or anything like that

Does that make sense?

It does make sense, but it's important to make clear here that Vanguard has both "products" (the things you buy, such as Lifestrategy funds) and a "platform" (the place you buy and hold the products).
For clarity you can invest in the Lifestrategy products via platforms other than the Vanguard one, such as Charles Stanley Direct (just an example, not an endorsement). It's worth checking out the fees/costs associated with each platform before making a decision. The Monevator site is a great starting point for that.

Sorry but what does that mean to me , in regard to putting money into the 5 different lifestrategy products. does it mean the 100% / 80% products are a bad idea and I should go for the 20% and 40% instead ? Why is that ?

It means that if you need the money in, say, 5 years then it might not be best to expose the money to equities; if the markets crash tomorrow 5 years might not be enough time to fully recover your "losses" (losses in speech marks here to reiterate that it's only really a loss if you sell). If you need the money in that timeframe and markets are down, you'd be crystallising those losses in order to access the money.

Make sense?

dont_use_vistaprint

bostonerimus wrote: »

Is it a final salary one or a defined contribution one where you pick investment funds?

It's a basic private one, Aegon Group Pen Default, two years contributions, currently worth £15K. I have a couple others similar size, I have little interest in retirement or pension planning other than enough to live a basic life from 70-90yrs, I will work in some capacity until I drop or my mind fails me, when I'm done, ill downsize the property, give me some mash and day a week volunteering in a charity shop and I'll be fine. :-)

What matter mosts is the next 25 years, while i'm fit, active and have young adults to support through uni / house purchases etc etc.

dont_use_vistaprint

Shashy wrote: »

For clarity you can invest in the Lifestrategy products via platforms other than the Vanguard one, such as Charles Stanley Direct (just an example, not an endorsement). It's worth checking out the fees/costs associated with each platform before making a decision. The Monevator site is a great starting point for that.

Ahh I see.... I didn't realise that !

I heard an interview on R4 and really liked the Vanguard Philosophy and made the decision. It claimed to be amongst the lowest fees, and with the amounts I'm looking at can't see it making a huge difference. It just felt like right company to trust my money with and when I had a look around a friends account seems really simple and transparent.

bostonerimus

dont_use_vistaprint wrote: »

It's a basic private one, Aegon Group Pen Default, two years contributions, currently worth £15K. I have a couple others similar size, I have little interest in retirement or pension planning other than enough to live a basic life from 70-90yrs, I will work in some capacity until I drop or my mind fails me, when I'm done, ill downsize the property, give me some mash and day a week volunteering in a charity shop and I'll be fine. :-)

What matter mosts is the next 25 years, while i'm fit, active and have young adults to support through uni / house purchases etc etc.

Your pension is probably your most important investment. You need to get interested in it asap. Before you think about transferring your cash ISA understand your pension. The effort you put into doing that will help you in your ISA decisions. You need to think about your finances holistically so you can make sensible asset allocations.

Shashy

dont_use_vistaprint wrote: »

Ahh I see.... I didn't realise that !

I heard an interview on R4 and really liked the Vanguard Philosophy and made the decision. It claimed to be amongst the lowest fees, and with the amounts I'm looking at can't see it making a huge difference. It just felt like right company to trust my money with and when I had a look around a friends account seems really simple and transparent.

That's quite a strange way to look at things since the 'Vanguard philosophy' (if there is such a thing) is towards passive investment**, therefore you're not trusting anyone with the money other than the hundreds/thousands of individual businesses your money is subsequently invested in. Vanguard are effectively just the party who administer that for you.

**I appreciate products such as VLS aren't strictly passive before anyone gets pedantic....!

enthusiasticsaver

dont_use_vistaprint wrote: »

It's a basic private one, Aegon Group Pen Default, two years contributions, currently worth £15K. I have a couple others similar size, I have little interest in retirement or pension planning other than enough to live a basic life from 70-90yrs, I will work in some capacity until I drop or my mind fails me, when I'm done, ill downsize the property, give me some mash and day a week volunteering in a charity shop and I'll be fine. :-)

What matter mosts is the next 25 years, while i'm fit, active and have young adults to support through uni / house purchases etc etc.

I would strongly suggest that you take an interest as investing in your pension is the most tax efficient way of investing and usually the best way of providing for the long term. It can make a real difference if you direct funds from relatively young age as even in retirement you may still want to help your adult children as we do and most people are fit and active well into their 60s and sometimes 70s and 80s too.

Re the Vanguard Lifestrategy funds, I have the VLS60 as our main investment fund hopefully not to be touched for the next five years held in stocks and shares isas and SIPPs. We use current accounts, internet savers, fixed term cash deposits, DB pension income and income from investments to live off in the meantime. Having different savings and investment vehicles to cover different uses is a good idea for someone in your situation who is still supporting children but also looking to the long term. Property is a non liquid asset so we never used it in our investment planning as if there is a property crash just as you want to downsize that may change your mind about whether you want to do it.

It is easy to invest and sell via an investment platform but the general rule in investing is you do not consolidate losses by selling your investments at a time when the market is low or lower than when you bought it. If you are forced into a position of doing that by needing the money to pay for uni costs do you have an alternative pot of money in cash you could use or money from income instead?

No one knows whether the market will continue to rise as it has for the last few years or if it will suddenly crash next year. All you can do is invest according to your level of risk (how much are you prepared to lose should you need to liquidate the investment or part of it?)

I think if I were you I would start off by gradually dripfeeding some in or perhaps transfer the cash isa into a stocks and shares isa but leave yourself some back to pay out for anything which may be needed in the next year or so. No one is saying you have to leave it in for 5 years but no one knows what the market will do either so it is a guessing game. The market could go higher and you will miss out on gains or you could put it in and need it out in two years just as the market has gone down.

bostonerimus

Shashy wrote: »

That's quite a strange way to look at things since the 'Vanguard philosophy' (if there is such a thing) is towards passive investment**, therefore you're not trusting anyone with the money other than the hundreds/thousands of individual businesses your money is subsequently invested in. Vanguard are effectively just the party who administer that for you.

**I appreciate products such as VLS aren't strictly passive before anyone gets pedantic....!

Vanguard's (or Jack Bogle's) philosophy is basically "you get what you don't pay for" ie keep fees as low as possible. They offer many active funds as well as index trackers.

If you have a portfolio of index trackers there's still some management to do with rebalancing and adjusting allocations as your circumstances change. But it's strategic rather than tactical. If you have everything in a target retirement date fund management can be even less.

suts

"I think if I were you I would start off by gradually dripfeeding some in or perhaps transfer the cash isa into a stocks and shares isa"

Cant he drip feed into his pension and attract further tax relief?

badger09

suts wrote: »

"I think if I were you I would start off by gradually dripfeeding some in or perhaps transfer the cash isa into a stocks and shares isa"

Cant he drip feed into his pension and attract further tax relief?

He can, and probably should, but several other posters have already suggested he consider investing in his pension.