W"hat to do with £80.000

JACKdaLAD

Last post http://forums.moneysavingexpert.com/showthread.html?t=888359&highlight=JACKdaLAD

Opened a direct savers account and linked it to my current account to make a income. There is £76.500 in there and becuase im not a tax payer im getting the gross amount off about £400.

I also opened a isa and put the £3.500 in there.

I seen a advisor from alliance leicester and she suggested investing the money in one of there low risk investments dont like the idear of that. What do you lot think?

im 25 should i be thinking about the future and investing some of this cash? But i still need a income as i cant work right now hopefully in the future thoe.

Some idears please?

Back tomorrow to see the answers

Hungerdunger

Jack - can I just ask you about one thing: you say that you are a non-taxpayer, but looking at your last thread it appears that you may be getting Incapacity Benefit which is a taxable income. If you are receiving it, then I reckon your total income (including interest) will be in the region of £8,700 per year while your savings remain where they are, and you will therefore be liable to pay some tax, as tax-free personal allowance is currently £5,435 (Increasing to £6,035 in September).

Just thought you should be aware of that, because if you have filled out a form to get your interest paid gross, you may not have completed it correctly.

Aegis

TRUSt_NO_1 wrote: »

... Silver...

The guy has said he doesn't like the idea of even a low risk investment. How on earth can you possibly recommend commodity investment for someone who identifies themselves as risk averse?

Remember what happened to your gold recommendations? You were shouting "buy" at over $1000, and now it's down to $894. You were recommending this as a short term investment too, so anyone actually following your advice could easily be down over 10% in the short term now because you happily glossed over the risk associated with commodities, especially when everyone shouts "buy" all of a sudden.

The fact of the matter is that commodity investment is almost certainly not suitable for the majority of investors because it's entirely dependent on market forces for growth, with no dividends payable for income. In short, not a great investment for someone risk averse, even with only a small part of their portfolio.

To the OP: if you want to invest your cash, you may be better off with some sort of risk associated with the investment, though I wouldn't suggest direct commodity, equity or property investment for you at all. Because you may have complicated needs if you are unable to work and on IB, it might well be worth contacting an Independent Financial Adviser, who would be able to assess your current financial situation and holistically plan for the future, both in the short term and the medium term. The advantage of this is that an IFA has a very large number of assets classes available to him from providers all over the UK, and you will almost certainly be able to diversify any investments you make in such a way that should a single company or commodity fail, you wouldn't necessarily even notice..

If you're looking at sticking with cash savings, then you should have a look at NS&I's index-linked savings certificates. You can put £15k per issue into these, and they offer a rate of RPI + 1% at the moment, tax free. If you're not paying tax, then splitting your income between some high interest instant-access savings accounts (like Kaupthing Edge) and some fixed term deposit accounts (not sure where the best ones are for this, but I think they're around the 7% AER mark at the moment) Might help maximise your income from savings.

Don't talk to the A&L adviser about investments, as they'll probably try to flog you their guaranteed equity bond, which sucks. If you want investments, go to an IFA. You'll be able to see some near you on https://www.unbiased.co.uk

Best of luck!

Former_MSE_Andrea

Hi everyone

Just a small reminder that this site isn't about individual investments so can you please stick to discussion about investing in general rather than individual stocks.

Many thanks

Andrea

Hungerdunger

Does anyone else find it annoying and extremely rude when someone asks a question; various people give answers (especially in this case, Aegis), and then the OP fails to return to the thread? Or am I being over-sensitive?

jr_xyz

not me :money::money::money::money::money::money:

weegie.geek

It's only been a few days since he started the thread, and if you look at his previous posts you'll see that he's managed 10 posts in 2 months. He's obviously not around as much as some of us.

It does annoy me when people just come here to harvest our knowledge, instead of getting off their !!!!!! and doing research themselves (which will almost always get them their answer faster than waiting for a reply), but 3 days doesn't mean he's not coming back.

Unless we scare him off by moaning about him having asked a question and vanished.

Aegis

Hungerdunger wrote: »

Does anyone else find it annoying and extremely rude when someone asks a question; various people give answers (especially in this case, Aegis), and then the OP fails to return to the thread? Or am I being over-sensitive?

If I was annoyed, I'd stop posting

In general I enjoy this sort of discussion, and it helps me keep up to date if I occasionally get questions from people about what they should do with X. Good revision if nothing else

jamesd

JACKdaLAD, you shouldn't really be using savings accounts for this money long term because they won't provide a decent income after inflation. You'll only be able to take about 1-2% of the money each year after allowing for inflation. If you use investments you can safely take 5% or 6% and still cover inflation so you don't get poorer over time.

You shouldn't use financial advisers (really sales people) at high street banks for this. Use unbiased.co.uk and find someone with Independent Financial Adviser, all three words, as their title. They aren't limited to providing products from only the suppliers one bank uses and are required to provide compensation payments if they use the wrong type of investment for your needs.

Using ISAs is good and you should expect to be advised to use the maximum 7200 a year in ISA money each year, of which 3600 can be cash and the rest in the stocks and shares part. The stocks and shares part is not limited to only shares, it has a broad range of options from UK government bonds called gilts that are safer than savings accounts through investing in single high risk shares or commodities, though neither of those two is likely to be appropriate for you.

An IFA will put together a range of investments that can meet your needs without taking excessive risk. For example, for some people this might be interesting:

30% BlackRock UK Absolute Alpha
20% Cru Investment Portfolio
20% Invesco Perpetual Monthly Income Plus
20% Invesco Perpetual Income
10% Neptune Global Equity

The chart shows how the volatilities differ and why so much is in the more stable ones (colors are red, blue, yellow, green, gray in fund order).

One benefit of this sort of thing in your situation is that the gain mostly comes from capital growth and you get a 9600 a year capital gains tax allowance. That means that most of the income could be tax free. What you or your IFA would do is keep some money in cash to provide regular income over the year and once a year sell some of the investments to top it up.

So: ISA good, savings accounts not good enough long term, get an IFA and then don't hesitate to come back here to get comments on what the IFA suggests so we can check that it looks OK for your situation.