Newbie investor. Where to start?

Albermarle

Worth noting that I haven't got any constructive advice here yet, apart from people's sarcasm at my understanding of the matter.

You did get some very important advice ( several times ) that you should never forget.

To make worthwhile investment gains in the long term ,  you have to be prepared to lose  in the short/medium term , which can hurt  . This is the reality and no way around it. 

OldMusicGuy

These books are very helpful and frequently recommended on here:

DIY Simple Investing: A Guide to Simple but Effective Low Cost Investing by John Edwards
Investing Demystified by Lars Kroijer

You do need to be prepared to get out of the "I don't want to lose money" and "I need safe investments" mindset if you are going to invest. I'm very risk averse and having this mindset meant that I made some very bad decisions in the past. I've changed now (the above books and Monevator website helped a lot).

If you can't get out of this mindset (and many people can't, don't worry if you are one of them), look at saving your money in a ladder of fixed interest FSCS protected savings bonds (the longer you put money away, the better the interest, Google "bond ladder").

Mishomeister

So if  I suspect that I may need money within 2 to 5 years as I am saving for a buy to let mortgage deposit, I take I am better not getting to the investment game?

AlanP_2

If your timescale is  2- 5 years then investment will be a very high risk strategy as you could be in a loss situation when you need the cash. That is why 10+ years is suggested on here and was above.

Whether a BTL is low risk compared to investments has been debated on here quite a lot, consensus of opinion seems to be that both have downsides but on balance long term investing wins out over BTL (particularly as tax / environment around BTL is not as beneficial as it was a few years ago).

Thrugelmir

Mishomeister said:

So if  I suspect that I may need money within 2 to 5 years as I am saving for a buy to let mortgage deposit, I take I am better not getting to the investment game?

Correct. Stick to cash deposits. Though BTL isn't attractive as it once was. Pension should be the first priority as more tax efficient. 

OldMusicGuy

What they all said. Do make sure BTL is what you want to do. Make sure you read all the sticky threads on here about being a landlord, and read some of the threads about LLs having problems with tenants.......

FYI I assumed I would use a big chunk of my savings to buy a small rental property or a holiday let when I retired. When I started to look into it, I realised it was not a good use of my savings for what I wanted to do. Passive investing has been much better for me.

Mishomeister

Thrugelmir said:

Mishomeister said:

So if  I suspect that I may need money within 2 to 5 years as I am saving for a buy to let mortgage deposit, I take I am better not getting to the investment game?

Correct. Stick to cash deposits. Though BTL isn't attractive as it once was. Pension should be the first priority as more tax efficient. 

Thanks. I don't believe in investing in to pensions as you only benefit from those if you survive long enough

Really not interested in to putting my money in to something, where I will get no benefit of any kind from, for at least 20 year, until I turn 55.

With the pensions, the goverment also keeps moving the goalpost and by the time (if) I get there, they may say, that you are not allowed to access money until say 65.

Pensions are also an easy target for the government if they need money and the government wil need money very soon, to pay for coronavirus measures.

Might have to stick to ordinary savings or look at peer to peer platforms

Albermarle

Thanks. I don't believe in investing in to pensions as you only benefit from those if you survive long enough

The chances are that you will live long enough . Average life expectancy is around 80 and will probably be more in future.

look at peer to peer platforms
Pretty much the opposite of low risk . In any case many are partially frozen due to the Covid crisis.

thegentleway

On average, you will 'survive' until your are 80. Conventional wisdom is to have a plan for when you can't earn an income. Pensions tend to be the most tax efficient way to achieve that. It's not interesting at all when you are young but your older self will defenitely be very grateful. If you're in your 20s, 90% of your pension could come from compounding. Every pound you spend now would be worth £10 in your pension! It tends to be the best long term investment you can make. Governments like the ones in the UK print money and raise taxes when they need money; they don't loot pension funds.
Definitely stick to ordinary savings for short term. P2P is risky and it could take ages for you to take your money out (if ever in some cases). I've made a request to release some money from Ratesetter and there are over 20,000 requests to fulfil before they even take a look at mine...

ColdIron

Mishomeister said:

Thrugelmir said:

Mishomeister said:

So if  I suspect that I may need money within 2 to 5 years as I am saving for a buy to let mortgage deposit, I take I am better not getting to the investment game?

Correct. Stick to cash deposits. Though BTL isn't attractive as it once was. Pension should be the first priority as more tax efficient. 

Thanks. I don't believe in investing in to pensions as you only benefit from those if you survive long enough

Really not interested in to putting my money in to something, where I will get no benefit of any kind from, for at least 20 year, until I turn 55.

Your 55 year old self will look back and say: What a plonka I was