burnt out nurse and investing newbie

Eccles04

Stay away from financial advisers. With few exceptions they are in the "GCSE O-level" standard of financial advice more interested in taking some of your money rather than growing it. I agree with others that bank funds are not generally in the upper tier of investment returns. Now have a look at this:- https://www.dividenddata.co.uk/investment-trust-dividend-yields.py and pick out two or three which show high returns, i.e., above 4%. But don't dive straight in, you need to do some research to see if those you have picked consistently produce high returns. If you don't know how to do this use type "investment trust historic returns" or something similar.

AlanP_2

Eccles04 said:

Stay away from financial advisers. With few exceptions they are in the "GCSE O-level" standard of financial advice more interested in taking some of your money rather than growing it. I agree with others that bank funds are not generally in the upper tier of investment returns. Now have a look at this:- https://www.dividenddata.co.uk/investment-trust-dividend-yields.py and pick out two or three which show high returns, i.e., above 4%. But don't dive straight in, you need to do some research to see if those you have picked consistently produce high returns. If you don't know how to do this use type "investment trust historic returns" or something similar.

Why are you suggesting income generating ITs for the OP? From what I have read there is no requirement for income.

Maybe IFAs are at GCSE O-Level standard but at least they attempt to find out what the requirement is before proposing a solution.

dunstonh

Stay away from financial advisers. With few exceptions they are in the "GCSE O-level" standard of financial advice more interested in taking some of your money rather than growing it. 

They are not.  The 1994 level qualifications were but there was a mandatory increase that they all needed to have as minimum by the end of 2012.

 Now have a look at this:- https://www.dividenddata.co.uk/investment-trust-dividend-yields.py and pick out two or three which show high returns, i.e., above 4%. But don't dive straight in, you need to do some research to see if those you have picked consistently produce high returns. If you don't know how to do this use type "investment trust historic returns" or something similar.

Perhaps it should be said to stay away from internet posters who try to give solutions without knowing the scenario.    And sending a new investor into more advanced, high-risk investments is hardly likely to be suitable.

grumiofoundation

Eccles04 said:

Stay away from financial advisers. With few exceptions they are in the "GCSE O-level" standard of financial advice more interested in taking some of your money rather than growing it. I agree with others that bank funds are not generally in the upper tier of investment returns. Now have a look at this:- https://www.dividenddata.co.uk/investment-trust-dividend-yields.py and pick out two or three which show high returns, i.e., above 4%. But don't dive straight in, you need to do some research to see if those you have picked consistently produce high returns. If you don't know how to do this use type "investment trust historic returns" or something similar.

So rather than the OP seeing an independent financial advisers (independent was stressed by all previous posters apart from yourself) they should take advice from someone online* who is suggesting investing for income with no idea of whether this is suitable?

Investing based solely on the dividend yield and ignoring other factors is not really a sensible thing to do. 


*Edit - from your posting history I see you are a "retired financial professional" -  based on your post above are we logically to assume then that you are part of the 'majority' and are in the GCSE/O-level standard of financial advice camp then?

[Deleted User]

stellios84 - I'm curious about the appeal of Nutmeg. How did you find each other?

Eyeful

Eccles04 said:

Stay away from financial advisers. With few exceptions they are in the "GCSE O-level" standard of financial advice more interested in taking some of your money rather than growing it. I agree with others that bank funds are not generally in the upper tier of investment returns. Now have a look at this:- https://www.dividenddata.co.uk/investment-trust-dividend-yields.py and pick out two or three which show high returns, i.e., above 4%. But don't dive straight in, you need to do some research to see if those you have picked consistently produce high returns. If you don't know how to do this use type "investment trust historic returns" or something similar.

Did it not seem odd to you, to suggest to someone who knows basically nothing about investing and is nervous that they should get into investment trusts, with their premium/discount, and gearing. 

1. Please tell me exactly what you did in your job as a  "financial professional". 

2. Why should someone avoid a qualified Independent Financial advisor but listen instead to someone on this forum?

stellios84

ZingPowZing said:

stellios84 - I'm curious about the appeal of Nutmeg. How did you find each other?

I read very good reviews from Boring Money and also on this site. As a complete novice the simplicity of these sites is very appealing. I certainly didn't do it blindly. I would still be very interested to learn why these products are particularly flawed (in simple terms!). 

[Deleted User]

stellios84 said:

ZingPowZing said:

stellios84 - I'm curious about the appeal of Nutmeg. How did you find each other?

I read very good reviews from Boring Money and also on this site. As a complete novice the simplicity of these sites is very appealing. I certainly didn't do it blindly. I would still be very interested to learn why these products are particularly flawed (in simple terms!). 

To be fair, stellios84, I hadn't known of Nutmeg until it cropped up in another thread last week. I don't like what I have seen but look for the opinions of those who are their customers, I should think a few are on here, given MSE itself supplies a link (good sign). From which I note that MSE users can get their first year's platform fees waived. You're entitled to claim, I think.

https://www.moneysavingexpert.com/savings/stocks-shares-isas/#nutmeg

But I think the brand is questionable.


Nothing wrong with Vanguard and nothing wrong with Premium Bonds imo.

dunstonh

stellios84 said:

ZingPowZing said:

stellios84 - I'm curious about the appeal of Nutmeg. How did you find each other?

I read very good reviews from Boring Money and also on this site. As a complete novice the simplicity of these sites is very appealing. I certainly didn't do it blindly. I would still be very interested to learn why these products are particularly flawed (in simple terms!). 

They are not flawed.  They are perfect for people with small amounts.   However, for those with larger amounts, they are less attractive.

bluefukurou

stellios84 said:

ZingPowZing said:

stellios84 - I'm curious about the appeal of Nutmeg. How did you find each other?

I read very good reviews from Boring Money and also on this site. As a complete novice the simplicity of these sites is very appealing. I certainly didn't do it blindly. I would still be very interested to learn why these products are particularly flawed (in simple terms!). 

First things first, I would like to salute you for your work as an NHS nurse. A huge chunk of the population will never understand just how bad it has been for frontline workers in the NHS during the pandemic. It's a crime how this government has treated you.

Regarding your money, as a wise man once said: "Employ your time in improving yourself by other men's writings, so that you shall gain easily what others have laboured hard for." In this day and age it's never been easier to do things for yourself. Investing is really not that difficult as long as you are honest with yourself about what your goals are and you are willing to put the time in to get a basic understanding of how stock markets works. People that call themselves newbies tend to overthink things and worry that it is all so complicated, but it really isn't.

The reason that companies like Nutmeg are flawed for people like yourself is that they charge excessive fees. They will dress it up as being worth it because you get their expertise, but it's not the case at all. You're essentially paying through the nose for something that you could actually do better yourself. I'm not that familiar with Nutmeg, but a quick look at their website suggests you would be paying them fees of 0.75% on amounts up to £100k. If you have £80k invested, that's £600 per year, on top of which there are other fees for the funds you're money is invested in, a double whammy. If you bought a world index tracker instead, you'd only expect to pay about 0.25% give or take. Sticking with Nutmeg means you are going to be paying over £500 more in fees and add ons per year. You are paying for their executives' Porsche's and holidays in the Caribbean. Over time that money adds up to serious amounts, over a 20+ year time frame, we are talking tens, if not hundreds of thousands of pounds in money you paid to them and which is not growing and compounding for you. 

These figures are eye watering, but this is what happens; people who don't know what they are doing are being fleeced and fooled by advertising. They want you to think it's too difficult to do yourself. Nothing could be further from the truth. But don't take my word for it. Read up on the subject and you will see this for yourself. 

Look at the work of John Bogle. Do as much reading as you can about index funds and how you don't need to be a financial expert to beat most retail investors into a cocked hat. Warren Buffett himself advises the man on the street to just use index funds. 

I would avoid Life Strategy because it's overly concentrated in the UK, which is a small part of the world market, a bit like putting too many eggs in one basket. Nobody, and I mean absolutely nobody, Warren Buffet et al included know what the future will hold. Accept that and don't worry about picking the right vehicle for your money, let the market do the heavy lifting for you in the form of a world tracker and some bonds, the amount of which is dependent on your risk tolerance and time frame. It really is that simple, but many people are loathe to accept this, most likely because their livelihoods depend on it.

I strongly recommend Eyeful's reading recommendations. Lars Kroijer really knows his stuff and his simple, but effective strategy is all you really need.

Check out this video to get you started: https://m.youtube.com/watch?v=_x3j3Pse_e8

Good luck with your reading and I wish you all the best, you deserve it.