Investment/Saving Advice for Beginner

gilly4321 · 15 January 2019 at 2:20PM

Hi guys,

Long time lurker here. With a new year ahead of us my wife and I are looking to learn more about making our money do more for us with regards to longer term investments. I'll start with some background as that'll help set the scene.

Background
Both aged 33.
Wife works part time, I full time.
One child aged 15 months.
Our current house where we live is owned outright, no mortgage.
I have a student loan (before the rate increases came into play, I believe interest rate is only 1.5%)
2 buy to let properties; mortgaged; plan to keep long term
Pay into NHS pensions.

We currently have some savings spread across a number of accounts including a Santander 123 returning 1.5%.

We're not really sure where to go from here to be honest. We plan to try to keep around 6 months of salary readily accessible in current accounts but what after that. I've bunged a few hundred quid into NS&I premium bonds recently and could top that up.

Also plan to open a Junior ISA before April and top that up. Sound reasonable?

Any other ideas or pointers would be greatly appreciated. Should we continue with bricks and mortar? Perhaps move ourselves up the property ladder or another BTL. We don't know anything about stocks/shares but I've started reading about Vanguard Lifestratagy 60/80 or HL portfolios.

So what would you do? LISA S&S?

Thanks
:beer:

Heedtheadvice · 15 January 2019 at 4:24PM

I am not an expert -hopefully some will be along soon. I pose a few questions that may trigger thought to help you out!

It strikes me that you are starting to think reasonably early so that is a good start.
I would suggest you review your whole financial situation rather than just think of investments.
Such things as what do you expect on the employment front. NHS would seem to be a stable long term employer with little risk of job loss?

Is six months readily available cash enough? How would you pay for any unexpected expenses w.r.t your properties? Can you cope and still make a profit if your mortgage interest rate rises from these historical lows? Will you have any more family? Bringing up children can be expensive?

After considering those and others do you expect to have cash to stash away for the long term, say 10 years min. If so a stock and shares ISA might fit the bill.

Have you currently got most of your 'investment' assets in property? Do you need to diversify to reduce property risks? Are you fulfilling all your landlord responsibilities or have you a surprise coming?

Will your pensions be sufficient for you both? Can you estimate what it might be in todays terms, career average related? So, should you put in more?

Hope some of that helps on some of the things to consider.

gilly4321 · 15 January 2019 at 5:07PM

Thanks for the reply, certainly some things to think about. Will try to address them below.

NHS would seem to be a stable long term employer with little risk of job loss?

Jobs are reasonably secure but there can be nasty surprises for anyone around the corner. These for us are likely to be around time off with stress etc. Wife has income protection and it is something I will look into also.

Is six months readily available cash enough?

This is what I’ve generally read around that most people seem to use as a reference range. This for us is 6 months of joint income rather than purely living expenses. We’re pretty frugal though not excessively so rarely tend to have extravagant purchases.

Can you cope and still make a profit if your mortgage interest rate rises from these historical lows?

We tend to not see the monthly income as profit but more interested in the longer term growth. We have a reasonable buffer in that if interest rates were to increase the mortgages would still be covered by rental income. As for landlord responsibilities we are supported by my father and property letting agent.

Diversification is certainly why I’m posting here for ideas. I would look to start with perhaps 5k as I learn the ropes.

As for th NHS Pension scheme...this is an area I need to learn more about esp if I can actually pay in more as I’m a higher rate tax payer.

Investment/Saving Advice for Beginner

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