19 and have £500pm to invest, what to do?

steampowered · 16 July 2018 at 1:29PM

ValiantSon wrote: »

You have written nothing that alters my view. I consider your "advice" to be reckless and based on a shaky understanding of macro economics. As I said previously, I have lost the will to engage because of your intransigence.

I consider your views to be incorrect. You have a hardline view on telling people not to take investment risk but seem to almost ignore the shortfall risk and inflation risk that people face when trying to buy a property.

Your approach is not "low risk" - it is merely "low investment risk". This is no help to people who face decades of trying to save for a deposit due to "shortfall risk" - a situation where people are unable to afford a deposit despite saving for many years in large part due to rising house prices (the average first time deposit in the UK now being c. £32k).

That said, the arguments have all been fully aired, so there is nothing left to add. If nothing else, the Op should now have a pretty good understanding of the pros and cons of investing versus keeping money in cash.

Op if you are still reading it would be very interesting to hear what you decided to do. It is completely your decision at the end of the day and you are smart enough to make your own decisions.

steampowered · 16 July 2018 at 1:36PM

ValiantSon wrote: »

You need to define your objectives more clearly, as this will affect which types of investment and/or savings products are right for you.

No, the Op doesn't need to define his objectives. The Op's objectives are what they are. The Op shouldn't be pigeonholed into making something up.

It is perfectly sensible for a 19 year old not to have a clear "objective" for his money while wanting to put a bit of cash aside. The Op's objectives will change as his life changes.

What the Op has to decide whether he wants to put his money in cash (protecting it from volatility and investment risk, but giving him very little return and exposing his savings to inflation risk) or invest it (protecting it from inflation risk and giving an expected average return of 7-8% a year, but exposing it to volatility and investment risk).

Then, the Op has to decide on his preferred savings or investment vehicle - which is likely to be a LISA to get the 25% bonus but again the Op should understand the pros/cons of that before deciding on it.

ValiantSon · 16 July 2018 at 2:19PM

steampowered wrote: »

I consider your views to be incorrect. You have a hardline view on telling people not to take investment risk but seem to almost ignore the shortfall risk and inflation risk that people face when trying to buy a property.

Your approach is not "low risk" - it is merely "low investment risk". This is no help to people who face decades of trying to save for a deposit due to "shortfall risk" - a situation where people are unable to afford a deposit despite saving for many years in large part due to rising house prices (the average first time deposit in the UK now being c. £32k).

Clearly you have missed the many times where I said that investment could be appropriate in the right circumstances; that I hold investments myself; and gave some suggestions to the OP about possible investment options to explore (before they suggested that this might be money being saved for a deposit)! Either you have somehow failed to read these comments, or you have deliberately ignored them because you are determined to have the last word.

What I have suggested is low risk. I understand very well about inflation, both in the wider economy and in the housing market, but a five year timescale really is too short for investment to be considered anything other than very high risk. Your "advice" could easily leave someone with no ability to purchase a house for a very long time; I suggest that you stick to the day job, and don't consider a career change to become an IFA.

ValiantSon · 16 July 2018 at 2:25PM

steampowered wrote: »

No, the Op doesn't need to define his objectives. The Op's objectives are what they are. The Op shouldn't be pigeonholed into making something up.

It is perfectly sensible for a 19 year old not to have a clear "objective" for his money while wanting to put a bit of cash aside. The Op's objectives will change as his life changes.

What the Op has to decide whether he wants to put his money in cash (protecting it from volatility and investment risk, but giving him very little return and exposing his savings to inflation risk) or invest it (protecting it from inflation risk and giving an expected average return of 7-8% a year, but exposing it to volatility and investment risk).

Then, the Op has to decide on his preferred savings or investment vehicle - which is likely to be a LISA to get the 25% bonus but again the Op should understand the pros/cons of that before deciding on it.

Stop turning this thread into an opportunity to argue with me.

I said that the OP needs to define his objectives as this will affect the decisions he makes. This is absolutely correct, and is the kind of thing any IFA would be asking too. You cannot define an investment and/or savings strategy without having some idea when and what you intend to use the money for! I did not say that they had to share this with us, so don't put words in my mouth.

steampowered · 16 July 2018 at 7:12PM

ValiantSon wrote: »

I'm not going to engage with you any further. You have ceased to engage in anything even approaching a discussion of the issues and have turned to making baseless and erroneous accusations about me.

Indeed, I think we are done here. Instead of sticking to the actual issue of holding cash vs. holding investments, you decided to attack me for disagreeing with you and engage in 'tit for tat' discussions. If you can't take the heat, get out of the kitchen.

I take your failure to confirm that you are an IFA as an indication that you are not an IFA. This makes your repeated banging on about me not being an IFA incredibly hypocritical.

I suspect you've derailed this thread enough and the Op now has what he needs to decide what approach he would like to take.

Terry_Towelling · 16 July 2018 at 8:51PM

Steampowered, are you saying that we really ought to take the questions posed by contributors at face value without ever seeking any context beyond what is freely offered at the outset and that we shouldn't ever try to dig any deeper?

What if the 'poster' didn't really understand that there was a difference between saving and investing?

OP freely offered his/her age and employment status but if they'd said nothing beyond asking for investment suggestions for £500 per month would you not have wanted to know a bit more before making any suggestions?

Surely there is a case for establishing context before trying to suggest one route or another? Or am I being unfair by zeroing in on only a few sentences from your posts?

19 and have £500pm to invest, what to do?

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