First time investor - is £800 per month too much?

Albermarle

I will look at funds options in detail and pick the safer ones for sure.

In this context 'safer ' will mean different things to different people.

Many posters refer to global index trackers as a safe investment, but they can be very volatile in the short to medium term .Most likely they will give a good result in the long term but you need quite strong nerves to rise out the ups and downs.

On the other hand a low risk/return fund is not really suitable for someone of your age , as you will almost certainly be missing out on growth over the years.

As a separate point , whether you put more in your pension or not , you should monitor the investments in the pension ( many do not ) . Also you should see the whole picture of your financial position together - mortgage , salary , savings , investments , pension etc and not each in isolation . Maybe you do already , but many do not ( including me for many years !) 

McBainUK

Thanks MaxiRobriguez, some follow on in based on your comments:

MaxiRobriguez said:

ensure you have an emergency fund

I do. Based on advice on this very site

MaxiRobriguez said:

The general rule of thumb for pension provision is you need to put in half your age when you start, so 16% isn't a huge amount if you're 37 - if anything it might be on the shy side. You will inevitably be putting in more than most of your friends with such an amount, but that's not because yours would be enough, more than your friends will have a very big problem on their hands later down the line.

I started my pension when I was 24 (half of that makes 12%).

MaxiRobriguez said:

I think if it was me I'd use most of the ringfenced £800 to increase pension provisions - especially if you're in a salary sacrifice scheme.

This was a consideration but does it assume the long-term savings are for retirement? I'd like the flexibility of using the money for retirement or a house move so think (wrongly?) that S&S ISA is a better match.

McBainUK

Albermarle said:

As a separate point , whether you put more in your pension or not , you should monitor the investments in the pension ( many do not ) . Also you should see the whole picture of your financial position together - mortgage , salary , savings , investments , pension etc and not each in isolation . Maybe you do already , but many do not ( including me for many years !) 

I try to do this and strike a good balance. It's a lot to take in when it's not your day-job so to speak....

McBainUK

Albermarle said:

I will look at funds options in detail and pick the safer ones for sure.

In this context 'safer ' will mean different things to different people.

Many posters refer to global index trackers as a safe investment, but they can be very volatile in the short to medium term .Most likely they will give a good result in the long term but you need quite strong nerves to rise out the ups and downs.

On the other hand a low risk/return fund is not really suitable for someone of your age , as you will almost certainly be missing out on growth over the years.

A good point.

MaxiRobriguez

McBainUK said:

Thanks MaxiRobriguez, some follow on in based on your comments:

MaxiRobriguez said:

ensure you have an emergency fund

I do. Based on advice on this very site

MaxiRobriguez said:

The general rule of thumb for pension provision is you need to put in half your age when you start, so 16% isn't a huge amount if you're 37 - if anything it might be on the shy side. You will inevitably be putting in more than most of your friends with such an amount, but that's not because yours would be enough, more than your friends will have a very big problem on their hands later down the line.

I started my pension when I was 24 (half of that makes 12%).

MaxiRobriguez said:

I think if it was me I'd use most of the ringfenced £800 to increase pension provisions - especially if you're in a salary sacrifice scheme.

This was a consideration but does it assume the long-term savings are for retirement? I'd like the flexibility of using the money for retirement or a house move so think (wrongly?) that S&S ISA is a better match.

Yeah I was assuming you had a long term investing horizon.

If you're using this money to save for a house then a S+S ISA may not be appropriate given probable volatility. Usual advice given is investments need to be left in situ for 5 years, if not 10, to ride that volatility out.

It may be worth considering first maximising a Cash LISA? You get a 25% bump from the government every year, which will likely beat investment return from a S+S ISA. You'd still have some cash left over which you could pump into a S+S ISA if you were content with the prospect of potentially coming out with a lower figure than you put in when it comes to the point you want to buy your house.

JustAnotherSaver

Hmm, all other reading produced a result that said everyone else was only talking about investing £50 per month? Really? REALLY??

And this talk of the crowd. What does the crowd have to do with your end result, be that retirement or whatever? There's people on this forum talking about over a million quid. Makes absolutely zero difference to what I do.

Whether it was intended or not I don't know but the thread struck me as one of those hey everyone look how much I can afford to invest kind of threads that crop up from time to time, similar to the ones where someone says - I'm 20, is earning £5000 per month a decent wage?

Alexland

JustAnotherSaver said:

Whether it was intended or not I don't know but the thread struck me as one of those hey everyone look how much I can afford to invest kind of threads that crop up from time to time, similar to the ones where someone says - I'm 20, is earning £5000 per month a decent wage?

Was £800 pm supposed to impress us? I honestly don't remember the last time I invested so little in a month but I don't start a big thread to gloat about it I just cleverly and indirectly drop it into the conversation...

Albermarle

 is earning £5000 per month a decent wage?

Maybe  if it is  after tax  and large pension contributions ?

MaxiRobriguez

Alexland said:

JustAnotherSaver said:

Whether it was intended or not I don't know but the thread struck me as one of those hey everyone look how much I can afford to invest kind of threads that crop up from time to time, similar to the ones where someone says - I'm 20, is earning £5000 per month a decent wage?

Was £800 pm supposed to impress us? I honestly don't remember the last time I invested so little in a month but I don't start a big thread to gloat about it I just cleverly and indirectly drop it into the conversation...

That's what I thought, £800 seemed quite small if anything considering I'm investing 40x that each month. 

McBainUK

JustAnotherSaver said:

Hmm, all other reading produced a result that said everyone else was only talking about investing £50 per month? Really? REALLY??

And this talk of the crowd. What does the crowd have to do with your end result, be that retirement or whatever? There's people on this forum talking about over a million quid. Makes absolutely zero difference to what I do.

Whether it was intended or not I don't know but the thread struck me as one of those hey everyone look how much I can afford to invest kind of threads that crop up from time to time, similar to the ones where someone says - I'm 20, is earning £5000 per month a decent wage?

My searching method obviously needs refinement!

I searched this forum for "monthly" and read the MSE and TimesMoney guides. They all use sub £100 monthly examples or discuss lump sums of several thousand.

This didn't match my scenario so was concerned that the guides/threads and the advice contained in them would also not be a match. This was the reason for starting the thread.

MaxiRobriguez said:

Alexland said:

Was £800 pm supposed to impress us? I honestly don't remember the last time I invested so little in a month but I don't start a big thread to gloat about it I just cleverly and indirectly drop it into the conversation...

That's what I thought, £800 seemed quite small if anything considering I'm investing 40x that each month. 

Wow Thank you for taking the time to help others on the forum and for the tongue in cheek LOLs.