What would you do?

lolamancity

Argh, i do want to regularly pay into it, but it wouldn't have to be every month. Could i just do quarterly to get round that, or just forget it, stop making everyone go round in circles and go with the Cavendish one

Edit: Valiant pretty much said that! sorry, i think this calls for time to call it a day!

Alexland

lolamancity wrote: »

Argh, i do want to regularly pay into it, but it wouldn't have to be every month. Could i just do quarterly to get round that, or just forget it, stop making everyone go round in circles and go with the Cavendish one

For the small fee difference it might be worth phoning Cavendish to see if they will allow you to do £25 per month. If you mention that you have existing JISAs to transfer they are more likely to agree.

ValiantSon

lolamancity wrote: »

Argh, i do want to regularly pay into it, but it wouldn't have to be every month. Could i just do quarterly to get round that, or just forget it, stop making everyone go round in circles and go with the Cavendish one

Edit: Valiant pretty much said that! sorry, i think this calls for time to call it a day!

Yes, you can use Vanguard Investor at the 0.15% platform fee and just make deposits when it suits you, once you've transferred the existing JISAs in. If you like the look of the Vanguard option, then doing it this way is the simplest and cheapest option.

Don't worry about asking for clarification on things.

kidmugsy

lolamancity wrote: »

my deferred statement states a one-off lump sum of £4643 and a yearly amount of £3484.

That means that there's a good chance that your LGPS pension plus your State Retirement Pension (if the full amount) would both be tax-free. So the income won't perhaps be as dreadful as you fear. If you stay together as a couple and your man accumulates a useful bit of pension too you may not be in too bad a position.

I'd guess that keeping about £20k in cash accounts may be quite prudent, though as suggested above some use of regular savers might add usefully to the interest generated. This wisdom of keeping cash savings would be particularly true if the future inheritance money were invested for growth - say by putting £4k per annum into a LISA until it's all invested.

I thought the suggestion that you look at income protection was sound. Here are two links on that general area.
http://monevator.com/do-you-need-income-protection-insurance/
http://monevator.com/family-income-benefit-the-forgotten-policy/

To be blunt, paying for some such insurance may be a better use of money than the JISAs or overpaying the mortgage. Anyway, good luck with trying to think all this through, and best wishes.

Update: I'm having second thoughts about encouraging you to invest in S&S via LISAs. Maybe wait until late in the tax year 18/19 before you begin; caution may pay in this regard. Another thought: there exist (or used to exist) mortgages that were 'flexible" - if you overpaid you could borrow back the overpayment later on if it suited you. We had one and very useful it proved to be. It might be worth checking the T&Cs of yours to see whether that option is open to you.

ValiantSon

kidmugsy wrote: »

Update: I'm having second thoughts about encouraging you to invest in S&S via LISAs. Maybe wait until late in the tax year 18/19 before you begin; caution may pay in this regard. Another thought: there exist (or used to exist) mortgages that were 'flexible" - if you overpaid you could borrow back the overpayment later on if it suited you. We had one and very useful it proved to be. It might be worth checking the T&Cs of yours to see whether that option is open to you.

Why are you cautioning against opening a LISA until late in the next tax year? If it is because you think a market correction is due then what you are advocating is trying to time the market, which is not a good idea. Time in the market is what matters (sorry for the cliche, but it holds true). If it is for some other reason then perhaps you could explain.

lolamancity

Hi, me again!

I'm after some calming words of reassurance if anyone could be so kind?

I opened the 2x JISA's for my kids with Vanguard (Lifestrategy 80%) - the transfer of their Nationwide JISA's took forever, so their new ones with VG have only been active for just over a couple of weeks.

Week 1, they lost 1.5%, week 3, they've lost 3.7%. Am i ok to be alarmed at losing nearly £300 of their money in a matter of weeks? Should i not have checked it/how often should i check it? And what should i realistically expect from this, just so i don't end up having a panic attack when i do log in.

Thanks in advance

bowlhead99

lolamancity wrote: »

Week 1, they lost 1.5%, week 3, they've lost 3.7%. Am i ok to be alarmed at losing nearly £300 of their money in a matter of weeks? Should i not have checked it/how often should i check it? And what should i realistically expect from this, just so i don't end up having a panic attack when i do log in.

Thanks in advance

Over the long term, a nine to fourteen year period until age 18, you would hope to get something like inflation plus 3+ percent annualised. However, some years along the way, you might get negative 35%, and other years after a big drop you might get +40%. They will go up and down and the one invested for 14 years will have a greater chance of getting the "long term" result than the one for the nine-yr-old which has less than a decade to run, but even the shorter one has many years in which to recover from the fall of a few percent that happened in the last week or few.

Over ten years if you check every weekday you'll have 2600 opportunities to be happy, elated, disappointed or distressed. The solution is to only look at it every year or so or whenever you happen to be logging into the account to put money into it.

ValiantSon

lolamancity wrote: »

Hi, me again!

I'm after some calming words of reassurance if anyone could be so kind?

I opened the 2x JISA's for my kids with Vanguard (Lifestrategy 80%) - the transfer of their Nationwide JISA's took forever, so their new ones with VG have only been active for just over a couple of weeks.

Week 1, they lost 1.5%, week 3, they've lost 3.7%. Am i ok to be alarmed at losing nearly £300 of their money in a matter of weeks? Should i not have checked it/how often should i check it? And what should i realistically expect from this, just so i don't end up having a panic attack when i do log in.

Thanks in advance

While it might be disappointing, those movements are nothing to be alarmed about. Such movements in value are not all that unusual and certainly not dramatic (even if they may seem so). You need to remember that investing requires a long term approach; both positive and negative movements in values will occur over the years, but the general trend is most likely to be upwards.

There has been some recent volatility due to a variety of factors, including, but not limited to, fears of interest rate rises and Trump's apparent desire to start a trade war with China. While these things can look dramatic at the time, in the long run they are likely to appear as nothing more than blips along the way. Over the last 3 months, the fund is down 5.3%, but over the last year it is up 1.3% (with a period in April 2017 when it was down 1.9%), and over the last three years it is up 24%.

It sounds like you may be a little bit too anxious about how the investments are performing, and not logging in very regularly will help calm your nerves. Try logging in only once a year (some people would even advise longer with a "but and forget" approach when using a fund like this one). I check my investments nearly every day, but I don't get anxious about the movements like you seem to be. Each person needs to take the appropriate approach for them.

Don't panic.

Zorillo

You're in this for the long haul. You haven't lost anything unless you panic and sell. If you still feel the same way in six months time, you might have invested above your risk tolerance.

The plus side is as the price falls, you're buying more units per pound each month.

If it helps, not that it should, our JISAs have done the exact same thing and I'm in the process of investing my LISA money in the same fund as they're in (or similar, which will have done the same thing as VLS has in the last few weeks).

Alexland

Just remember the valuation you are looking at is the price other people are selling at. Be smart and don't even consider selling low.

Remember your fund gives you a stake in thousands of companies around the world across lots of sectors and these types of investments have always gone up again with time.

If anything buy more units while they are good value and it will reduce your percentage drop on the revised total. This means markets don't need to go all the way up again before you get to break even. And when they do recover back to your buy price you will be in profit.

Alex