New to investing

Options
timmy963
timmy963 Posts: 123 Forumite
First Anniversary First Post
in Savings & investments
Hello all, I’m looking for a bit of advice and criticism.

I’ve been doing a lot of research on investments in hopes to get better returns on my money and have taken quite a liking to Vanguard because it seems very straight forwards and less intimidating than other places I’ve seen.

I’m in the process of transferring my ISA to them and opening up a VLS100 fund. I plan on putting £20,000 in there and leaving it for a very long time (15+ years).

About me:
* I’m 26
* I work in retail and earn about £1,100 each month after tax
* I have £57,000 in savings spread across all the best accounts I can find (2%, 3% & 5% accounts)
* I live with my mother who is 61, works as cleaner and probably retiring in a few years
* My mother and father own 70%/30% of the house which is mortgage free
* My father wants us to sell the house after 10 years which was part of the divorce agreement
* My mother and I will most likely downsize and I’m happy to pay any difference

Is a VLS100 a good choice?

Is it right to invest now with brexit around the corner?

Is there anything you would do differently?
«1

Comments

  • BLB53
    BLB53 Posts: 1,583 Forumite
    Options
    Is a VLS100 a good choice?
    At your age and with a timespan of 15 yrs to invest its probably a good choice however be aware that it will be more volatile compared to the lower % equity offerings so consider VLS80.

    Investing is largely about self awareness - how you will react when the markets suddenly drop 20%. If you are investing long term you have a good chance of getting the better returns...provided you can stick with it through all the ups and downs.
    Is it right to invest now with brexit around the corner?
    The markets are riding high so there will be a correction at some point but nobody knows when that will be (although there are plenty of pundits and commentators who think they know). It may not make much difference over 15 yrs but you could stagger your £20K so its not all invested just before the market fall.

    Good luck!
  • timmy963
    timmy963 Posts: 123 Forumite
    First Anniversary First Post
    Options
    At your age and with a timespan of 15 yrs to invest its probably a good choice however be aware that it will be more volatile compared to the lower % equity offerings so consider VLS80.

    Investing is largely about self awareness - how you will react when the markets suddenly drop 20%. If you are investing long term you have a good chance of getting the better returns...provided you can stick with it through all the ups and downs.

    I'm not saving for anything and I don't really have a savings goal in mind. Most likely It will probably only be accessed when I'm old and grey. This is why I thought the VLS100 would be more suitable for me.

    I was originally set on the VLS80 but didn't see much point considering the length of time I plan on keeping the fund.

    My plan is to not touch it at all no matter what happens in the market.
    The markets are riding high so there will be a correction at some point but nobody knows when that will be (although there are plenty of pundits and commentators who think they know). It may not make much difference over 15 yrs but you could stagger your £20K so its not all invested just before the market fall.

    I plan on putting £10K in as soon as I can, then another £10K when my Nationwide regular saver matures and current account interest expires in August.

    I will then probably add more chunks next tax year because any more than £40K in a bank account is way too much for me considering I can easily support myself and my mother on just £7K a year.
  • bostonerimus
    bostonerimus Posts: 5,617 Forumite
    First Anniversary Name Dropper First Post
    Options
    You are doing very well. Obviously pay off any debt you have and contribute to a work place pension.

    I like your starting choice of VLS100. It is mostly invested outside the UK so any Brexit depression of UK stocks won't be fully felt and you might do rather well if the pound sinks more.

    I'd continue to read and educate yourself so that you can add other investments as you go along and your needs change....you might want something in addition to cash that isn't correlated closely with stocks so you can rebalance your portfolio through the years
    “So we beat on, boats against the current, borne back ceaselessly into the past.”
  • timmy963
    timmy963 Posts: 123 Forumite
    First Anniversary First Post
    Options
    Obviously pay off any debt you have and contribute to a work place pension.

    I've never been in debt and will try my best to never be. My parents argued so much with money because my dad would continually rack up debt and brush it under the rug, which usually ended up with my mother having to pay out. Keep in mind she's been a cleaner most all her life and doesn't earn very much.

    I currently contribute to a workplace pension at a measly 1% which is managed by L&G. I was thinking of increasing it to 5% but I'm put off considering my employer can't match it.

    It's probably worth looking into again. My pot at the moment is only worth £200 so it could really do with some lovin'.
    I'd continue to read and educate yourself so that you can add other investments as you go along and your needs change....you might want something in addition to cash that isn't correlated closely with stocks so you can rebalance your portfolio through the years

    I'd be a fool not to educate myself more. I've always taken my money very seriously, even when I used to get spending money each week as a child.

    When I'm a lot older I would most probably be on the look out for something less volatile.
  • dunstonh
    dunstonh Posts: 116,605 Forumite
    Name Dropper First Anniversary First Post Combo Breaker
    Options
    How would you feel if your money in VLS100 halved in value between statements? Not so much an if but when.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • timmy963
    timmy963 Posts: 123 Forumite
    First Anniversary First Post
    Options
    I admit I'd feel a bit gutted. I would still be happy to leave it where it is though.
  • bostonerimus
    bostonerimus Posts: 5,617 Forumite
    First Anniversary Name Dropper First Post
    Options
    timmy963 wrote: »
    I admit I'd feel a bit gutted. I would still be happy to leave it where it is though.

    The chances of a 50% decline are very small....but there will be times when you see 20% drops.
    VLS100 will be a bumpy ride and you might want to smooth that out with some fixed income and definitely keep a good emergency fund in cash.
    “So we beat on, boats against the current, borne back ceaselessly into the past.”
  • timmy963
    timmy963 Posts: 123 Forumite
    First Anniversary First Post
    Options
    bostonerimus wrote: »
    The chances of a 50% decline are very small....but there will be times when you see 20% drops.
    VLS100 will be a bumpy ride and you might want to smooth that out with some fixed income and definitely keep a good emergency fund in cash.

    I'm prepared for that ride.

    I plan on keeping my current accounts maxed out and my wages pretty much will go straight into 5% regular savers.

    Anything which is left over I'll probably throw into the VLS100.
  • Linton
    Linton Posts: 17,238 Forumite
    Name Dropper First Post First Anniversary Hung up my suit!
    edited 24 June 2017 at 8:49AM
    Options
    bostonerimus wrote: »
    The chances of a 50% decline are very small....but there will be times when you see 20% drops.
    VLS100 will be a bumpy ride and you might want to smooth that out with some fixed income and definitely keep a good emergency fund in cash.

    The FTSE World Index dropped by about 50% from the height of the tech boom and about 40% in the 2008/9 crash. A very large fall twice in 17 years so the chances of a 50% decline in the FTSE World Index don't seem that small. . Any reason why VLS100 would have behaved very differently?
  • elephantrosie
    elephantrosie Posts: 467 Forumite
    Options
    when i was a 26 yo child, i have about 2k of assets.
    Another night of thankfulness.
This discussion has been closed.
★ ★ ★ Meet your Ambassadors

Categories

  • All Categories
  • 343.7K Banking & Borrowing
  • 250.2K Reduce Debt & Boost Income
  • 449.9K Spending & Discounts
  • 235.8K Work, Benefits & Business
  • 608.9K Mortgages, Homes & Bills
  • 173.3K Life & Family
  • 248.4K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.9K Discuss & Feedback
  • 15.1K Coronavirus Support Boards