Vanguard Investors - Anyone Using It?

Alexland

If like me your TV is permanently tuned into Cbeebies then it's more like Tellytubbies (steady dull VLS40), Octonauts (slightly interesting VLS60) or Hey Duggee (squirrels earn badges on fun adventures with VLS80).

You only need one or maybe two if trying to create a custom blend - unless you are investing for different objectives?

webjaved

For some reason, I am having problems multi-quoting messages and some that contain links, so I'll have to reply like this.

@Herbalus thank you for the breakdown on the explanation, that makes sense to me now. The curry explanation was the game changer haha.

@Alistair31 I think you are right, I should concentrate on one Life Strategy and not spread it out, otherwise, it will confuse the crap out of me which it has done at the start.

@dunstonh after sleeping on it, I think the best move for me would be to hold 60 & build up my knowledge in the meantime. A better understanding of shares, investments etc will help in going a long way.

@Alice thank you for the link, I'll be reading quite a few articles on that site. I've not really thought about how long my investment horizon is. It'll have to be long term. My risk tolerance will be quite low, I'd want to play it safe and not go in all guns blazing and end up getting burnt, losing out on the money.

@redpete I'm looking to buy a property towards the end of this year, so I'm trying to grow my money for that. But in the longer term, I'd probably want to look at putting money aside for my son's future.

@bostonerimus I'll be 30 at the end of this month, yikes! The money is for hopefully buying my own property towards the end of the year. With my own little family now, I want that security and independence.

@Bravepants thank you for the list of points, I will spend the weekend looking into the points you've raised.

webjaved

Just to add, I also have a Cash ISA account with Santander that has £20k in. The interest rate on that is 0.60%. It was opened last year with the bank. I also have a 123 Current Account with them where I get 3% cashback on any direct debits and damn, I can't remember what the interest rate is on this. It's around £24-25 interest from the bank. Other than that, I don't have any other accounts.

_CC_

Is the property you're looking to buy soon your first property?


If so, I would fill up on a Help To Buy ISA over putting it into funds. The Government bonus you get is far superior to any growth you'd see elsewhere, not to mention having a short term saving pot is safer in cash.



As for the Life Strategy, I'm guessing it has already been said, but holding equal amounts in 40/60/80 is pretty much the same as just holding it all in 60%. The 40% and 80% average out to 60%, so at the end of the day you're holding 60% equities / 40% bonds - the same as the 60% fund.



It won't matter if one does better, your overall holding is 60% equities.



Regardless, if one does better than the other it won't really tell you much about which of the underlying funds is better over the long term, it will probably just be indicative of whether bonds or equities have performed better over the short term.


It would be better to just select one which best suits your risk level. I'd suspect putting the lot into the single 60% fund for the long term would be the best choice.

webjaved

_CC_ wrote: »

Is the property you're looking to buy soon your first property?

If so, I would fill up on a Help To Buy ISA over putting it into funds. The Government bonus you get is far superior to any growth you'd see elsewhere, not to mention having a short term saving pot is safer in cash.

As for the Life Strategy, I'm guessing it has already been said, but holding equal amounts in 40/60/80 is pretty much the same as just holding it all in 60%. The 40% and 80% average out to 60%, so at the end of the day you're holding 60% equities / 40% bonds - the same as the 60% fund.

It won't matter if one does better, your overall holding is 60% equities.

Regardless, if one does better than the other it won't really tell you much about which of the underlying funds is better over the long term, it will probably just be indicative of whether bonds or equities have performed better over the short term.

It would be better to just select one which best suits your risk level. I'd suspect putting the lot into the single 60% fund for the long term would be the best choice.

It'll be my first property ever, there will be a host of new developments going on around the town so it would be a good time to look for a property then, at the moment I am not ready for it, there's other commitments this year that need to be sorted first, but there won't be any harm in saving along the way for a property.

The Help to Buy scheme is about to end in November 2019 but if you hope on to it you have till around 2020 or something like that to purcahse a property. The maximum the government can pay out is £3,000. I think the HTB is something I need to look into more and get an account sorted. Once the scheme is ended, then anyone that is not on it would have to look into a Lifetime ISA?

eskbanker

webjaved wrote: »

Just to add, I also have a Cash ISA account with Santander that has £20k in. The interest rate on that is 0.60%.

Worth finding a better home for that: https://www.moneysavingexpert.com/savings/savings-accounts-best-interest/

webjaved wrote: »

I also have a 123 Current Account with them where I get 3% cashback on any direct debits and damn, I can't remember what the interest rate is on this. It's around £24-25 interest from the bank.

Worth finding a better home for that too - the interest rate is 1.5% but the monthly £5 fee effectively dilutes that down to circa 1.2% for a fully-funded account with £20K in it. The cashback isn't 3% on all DDs, just some, others are 1%, 2% or even 0%, but the same cashback can be obtained with a 123 Lite account at a lower fee (no interest so you'd need to put the capital elsewhere, e.g Marcus).

webjaved wrote: »

The Help to Buy scheme is about to end in November 2019 but if you hope on to it you have till around 2020 or something like that to purcahse a property. The maximum the government can pay out is £3,000. I think the HTB is something I need to look into more and get an account sorted. Once the scheme is ended, then anyone that is not on it would have to look into a Lifetime ISA?

It won't be possible to open a HTB ISA after November as you say, but once opened the scheme itself continues until 2029 (for contributions) and 2030 (for property purchase) not next year! Lifetime ISA has some advantages anyway (higher annual contribution limit, higher property value cap outside London, higher total bonus achievable) but also some disadvantages (can't be used penalty-free in first year or when not buying first property or reaching 60, smaller range of providers with low interest rates).

webjaved

eskbanker wrote: »

Worth finding a better home for that:

Worth finding a better home for that too - the interest rate is 1.5% but the monthly £5 fee effectively dilutes that down to circa 1.2% for a fully-funded account with £20K in it. The cashback isn't 3% on all DDs, just some, others are 1%, 2% or even 0%, but the same cashback can be obtained with a 123 Lite account at a lower fee (no interest so you'd need to put the capital elsewhere, e.g Marcus).

I've just been looking at Marcus - so just say if I opened up an account with them, transferred the £20k in, would I get a monthly interest of around £300 per month? I've used an online percentage calculator for it - can't post a link to it as I'm a new user on here.

It definitely looks like I could have my money in better bank accounts that pay a higher interest rate.

eskbanker

webjaved wrote: »

I've just been looking at Marcus - so just say if I opened up an account with them, transferred the £20k in, would I get a monthly interest of around £300 per month?

£300 per year not per month!

The 1.5% is the AER (Annual Equivalent Rate)....

webjaved

eskbanker wrote: »

£300 per year not per month!

The 1.5% is the AER (Annual Equivalent Rate)....

Ah damn, I meant to put year, not month. Got bit carried away then haha! I'll spend the weekend looking at this in more detail and hopefully look to maximise my savings.

msallen

If this money, i.e. the part you're talking about putting into Vanguard, is intended to be used for a property purchase within the next year or so, then you should NOT be investing this in S&S at all. Investing is for the medium or preferably long term (absolute minimum 5 years, realistic minimum of >10 years) as its value will fluctuate up and down, but tend more towards the upwards the longer its invested. If you're only intending to invest for a a year or so then it could well be worth less than you put in when you want to withdraw it.