How much of your savings do you invest?

csgohan4

MEM62 said:

fryderykchopin said:

After having changed my mind, I have always kept £10k in a savings account ready for emergencies and invested the rest (£70k) in funds. Recently I have started to wonder whether that’s too much to invest given that it represents most of my savings (88%).

Unless you have considerable monthly outgoings why would you want more than £10k in cash? 
Everything I have is invested with the exception of circa six months living costs that I keep in cash.  What is not in cash in invested in 100% equity funds.   

Some people may keep more for that unexpected tax bill, especially if your income and pensions are complicated, ergo DB schemes, partnerships e.t.c

Certainly don't want to invest money that is ear marked as tax

wiseonesomeofthetime

I am risk averse, however, what is clear from this thread, and others, is that I need a change of mindset.

I am on a pension, so income is guaranteed, however, savings are 100% cash at the moment with 0% invested.

In April 2021, I intend to open my first ever S&S ISA and hope that in ten years time I don't regret it (assuming I'm still around to receive the benefits of course. This year has proven nothing is guaranteed in life).

My next question, to myself really, is whether I can be comfortable investing the full £20k in a S&S ISA, or just start with £10k.

barnstar2077

wiseonesomeofthetime said:

I am risk averse, however, what is clear from this thread, and others, is that I need a change of mindset.

I am on a pension, so income is guaranteed, however, savings are 100% cash at the moment with 0% invested.

In April 2021, I intend to open my first ever S&S ISA and hope that in ten years time I don't regret it (assuming I'm still around to receive the benefits of course. This year has proven nothing is guaranteed in life).

My next question, to myself really, is whether I can be comfortable investing the full £20k in a S&S ISA, or just start with £10k.

It might be an idea to invest in a few funds of varying volatility so you can sleep a bit easier at night.  After all you probably won't need to take all of the money out in one go, so you could stagger the risk depending on when you think you will need access to the money.  Always a good idea to keep some cash though.

Eco_Miser

wiseonesomeofthetime said:

I am risk averse, however, what is clear from this thread, and others, is that I need a change of mindset.

I am on a pension, so income is guaranteed, however, savings are 100% cash at the moment with 0% invested.

In April 2021, I intend to open my first ever S&S ISA and hope that in ten years time I don't regret it (assuming I'm still around to receive the benefits of course. This year has proven nothing is guaranteed in life).

My next question, to myself really, is whether I can be comfortable investing the full £20k in a S&S ISA, or just start with £10k.

Why wait until April?  Invest now, then you have until April 2022 to decide you can be comfortable, and bung a further £20k in.

wiseonesomeofthetime

Eco_Miser said:

Why wait until April?  Invest now, then you have until April 2022 to decide you can be comfortable, and bung a further £20k in.

Because you can only put £20k in an ISA in a year.

I put £20k in a Post Office fixed term ISA at 1.30% last April.

Notepad_Phil

wiseonesomeofthetime said:

My next question, to myself really, is whether I can be comfortable investing the full £20k in a S&S ISA, or just start with £10k.

Maybe consider putting £10k in as a lump sum and then set up a regular monthly amount to pay in the rest.

On average you'll make less that way then putting in the full £20k in one go, but it might prove easier for you to sleep at night if you take a bit of time to get the full amount in.

planteria

just crunched my own figures.. only 1.2% cash at the moment. have credit cards for spending which would provide more funds if really necessary, and could access business funds if pushed to that extent too.
rest invested in personal pensions & a SIPP, friendly society plans, direct equities in an ISA wrapper, bitcoin generating interest.

VXman

wiseonesomeofthetime said:

I am risk averse, however, what is clear from this thread, and others, is that I need a change of mindset.

I am on a pension, so income is guaranteed, however, savings are 100% cash at the moment with 0% invested.

In April 2021, I intend to open my first ever S&S ISA and hope that in ten years time I don't regret it (assuming I'm still around to receive the benefits of course. This year has proven nothing is guaranteed in life).

My next question, to myself really, is whether I can be comfortable investing the full £20k in a S&S ISA, or just start with £10k.

Retired here too. Have a regular income from my pension which covers everyday living but big items (Car, holidays, etc) will come out of savings/investments.

At the moment I have 48% in instant access, 4 % in Regular savers 12% in fixed savers and 36% in investments.

I would go for much more in investments (probably 70%) as they are returning an average of 10% but I'm keeping cash with a view to buying a house for my son soon. Cash savings are getting an average of about 1%.

Doshwaster

MEM62 said:

fryderykchopin said:

After having changed my mind, I have always kept £10k in a savings account ready for emergencies and invested the rest (£70k) in funds. Recently I have started to wonder whether that’s too much to invest given that it represents most of my savings (88%).

Unless you have considerable monthly outgoings why would you want more than £10k in cash? 
Everything I have is invested with the exception of circa six months living costs that I keep in cash.  What is not in cash in invested in 100% equity funds.   

I suppose wanting to have 3-6 months living costs in cash is a protection against having to divest at the bottom of the market. If I had lost my job in Feb or March this year then it wouldn't have been a good idea to sell investments.

JustAnotherSaver

Alexland said:

During your working life you only need a fixed amount of emergency cash in top rate savings account(s)

I've often wondered about what is an ideal figure to have but obviously the answer is nobody knows.

You mention the emergency savings. 3 months is ok, 6 months better, 12 months better still. Where do you stop? Personally i'm at about 4 months now working towards 6. That's purely emergency savings.

Everyone's view of 'emergency' is different. For me it's being put out of work be it being sacked, made redundant or if i'm on long term sick (proper long term, not just a few week). For others it could be their washing machine has packed in.

Then we get on to the rest of it. Aside from the emergency fund (many have x-months of bills whereas i'm working to x-months of wages as it's the higher of the 2), how much cash is required after that?

You mention a 'fixed amount' but what is it? All things being well you may only need a couple grand or something, who knows - but that's all things being well.

Take this year for us for example. My old car was coming to be replaced so i did that at £1,750. Now reading on this forum that is peanuts compared to what many of you seem to spend on your cars. This car has turned out to be a bit of a lemon so it's costing there. I may or may not end up keeping it.

Shortly after that, in whatever order it came in, my wifes car needed new brakes (discs & pads all round) which cost a bit, it needed a complete new exhaust system from the cat back at another couple hundred, then the suspension went on it which thankfully wasn't too bad at just under £100.

This is without any fridge/freezer/washing machine/dryer going on us or a roof needing doing etc etc.

When you have enough, you wont need it. When you don't, you'll find yourself fishing around for it. Seems to be my experience.