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    • AlphaWaves
    • By AlphaWaves 7th Jan 18, 1:35 PM
    • 3Posts
    • 0Thanks
    Where to invest 2.5k per month
    • #1
    • 7th Jan 18, 1:35 PM
    Where to invest 2.5k per month 7th Jan 18 at 1:35 PM
    Thanks to a recent promotion I find myself in the fortunate position of being able to invest 2.5k per month and am turning to the experience of the forum for some ideas of how best to invest this amount.

    I am 32 years old and targetting early retirement, preferably mid 50s, so investments at this stage will primarily be focused on long term growth or reducing the mortgage.

    I like the idea of overpaying the mortgage purely for the psychological effect of seeing the mortgage term reduced, but as the mortgage interest rate is quite low I expect that I can invest and earn a better long term return through a SAS ISA or my pension pot.

    Being a 40% tax payer my initial thoughts are to maximise pension contributions to maximise the tax relief. Although I expect that diversifying across various platforms is also a good option from a risk perspective.

    Currently I hold:
    • 48k cash being 15k in higher interest current accounts between 2-5%, 6k regular savings account at 5%, 27k cash ISA at only 1%
    • 1k P2P averaging about 3.5%
    • 43k in a pension pot in a single multi asset fund (SW Newton Managed)

    Current Liabilities:
    • 200k mortgage at 1.7% 30yr term

    My initial thought is to:
    • Reduce cash from 48k to 25k with as much as possible in higher interest accounts and reducing the cash ISA balance
    • Reallocate the balance of the cash, split between opening a SAS ISA and paying a lump sum off the mortgage
    • Investing the 2.5k a month as follows: 2k pension, 250 regular saving account, 150 SAS ISA, 100 mortgage over payments

    Does this seem a sensible plan or is there a more advantageous way of investing this sum?
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