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  • FIRST POST
    • dont_use_vistaprint
    • By dont_use_vistaprint 4th Feb 18, 8:59 PM
    • 49Posts
    • 18Thanks
    dont_use_vistaprint
    Percentage split cash, stock, bonds etc
    • #1
    • 4th Feb 18, 8:59 PM
    Percentage split cash, stock, bonds etc 4th Feb 18 at 8:59 PM
    HI

    I'm 47 and plan to start retiring in 20 -23 years. I have 18-yrs mortgage still, with salary sacrifice put 10% of gross earning into a pension, save 1/3 of household income for kids uni costs and investments.

    Currently that 1/3 goes into regular saver, Vanguard LS60, Funding Circle Loans, Premium bonds , and cash accounts for emergencies and holidays.. I also have a fixed amount in a Virgin ISA 1yr.

    I saw a post on someone holding only 3% cash and it got me thinking.

    What would a sensible->medium risk percentage split across these be - regular payments and current balances?

    Should I ditch all cash and just use premium bonds for instant access ?

    What about cryptos - worth considering ?

    TIA
    Last edited by dont_use_vistaprint; 04-02-2018 at 9:04 PM.
Page 1
    • Prism
    • By Prism 4th Feb 18, 9:20 PM
    • 293 Posts
    • 209 Thanks
    Prism
    • #2
    • 4th Feb 18, 9:20 PM
    • #2
    • 4th Feb 18, 9:20 PM
    We spit based upon how soon we need the cash. Pension (15-20 years) is 100% equities. Kids uni fees / house deposit is at least 10 years away still and we have a 100% equities ISA for that. We have cash savings worth about one years salary for one of us. In total you could say we are about 15% cash / 85% equities but that doesn't really paint a full picture as a huge chunk of that is pension
    • dont_use_vistaprint
    • By dont_use_vistaprint 5th Feb 18, 8:01 AM
    • 49 Posts
    • 18 Thanks
    dont_use_vistaprint
    • #3
    • 5th Feb 18, 8:01 AM
    • #3
    • 5th Feb 18, 8:01 AM
    Kids uni fees / house deposit is at least 10 years away still and we have a 100% equities ISA for that.
    Originally posted by Prism
    So that money technically is fairly instant access? (although its values moves up and down). You wouldn't lock a chunk of it away for 1-5yrs to get a guaranteed, maybe smaller growth for such an important pot ?

    We started using the uni costs post a year ago, but are still saving as we have another one who may need the same in a year or two, for us we need to get at about 2.5k 3 times a year, per child, we know the dates in advance, so lock it away in 1-5yr deals. I can't risk its value decreasing, so sacrifice the opportunity of higher growth. But for other longer term investments I want to take more risks
    Last edited by dont_use_vistaprint; 05-02-2018 at 8:06 AM.
    • Money Help
    • By Money Help 5th Feb 18, 8:35 AM
    • 63 Posts
    • 26 Thanks
    Money Help
    • #4
    • 5th Feb 18, 8:35 AM
    • #4
    • 5th Feb 18, 8:35 AM
    Ideally you should think about holding 6-12 months expenditure in a cash 'emergency fund' and any extra for short term larger expenses.
    I'm a Chartered Financial Planner. Trying to be helpful without giving advice.
    • Prism
    • By Prism 5th Feb 18, 9:50 AM
    • 293 Posts
    • 209 Thanks
    Prism
    • #5
    • 5th Feb 18, 9:50 AM
    • #5
    • 5th Feb 18, 9:50 AM
    So that money technically is fairly instant access? (although its values moves up and down). You wouldn't lock a chunk of it away for 1-5yrs to get a guaranteed, maybe smaller growth for such an important pot ?
    Originally posted by dont_use_vistaprint
    Yes its instant access within a day or two however you are right it could be the wrong time to withdraw. I don't see it as an important pot to be honest. We are 4 years away from the first maybe going to uni and 7 years until they may have to start to pay it back. The default situation is that they both get the student loan and pay the interest themself. Should the ISA be at a high level I will very likely use some of it to help with some of the loan. It will all very much depend on the current student loan deal vs the stock market growth. By that point we could have a labour goverment which could change things significantly (or maybe not). All we can do for the moment is grow that fund as much as possible to help with a very fluid future situation.

    We don't use any low risk options right now unless its for something required in the next 1-2 years. In general there is nothing we 'need' in our life that requires a guarenteed amount for yet. When we get closer to retirement then that will change but even that is flexible. We could retire anywhere between 55 and 70 depending on the value of equities in our pension pots.
    • dont_use_vistaprint
    • By dont_use_vistaprint 5th Feb 18, 7:26 PM
    • 49 Posts
    • 18 Thanks
    dont_use_vistaprint
    • #6
    • 5th Feb 18, 7:26 PM
    • #6
    • 5th Feb 18, 7:26 PM
    The default situation is that they both get the student loan and pay the interest themself.
    Originally posted by Prism
    Sure, but just remember if you earn above about 60k presently, they cant even get enough loan enough to live - you pay all their accom costs and they can loan their fees plus just a little bit of spending money.
    • jimjames
    • By jimjames 5th Feb 18, 7:39 PM
    • 12,553 Posts
    • 11,187 Thanks
    jimjames
    • #7
    • 5th Feb 18, 7:39 PM
    • #7
    • 5th Feb 18, 7:39 PM
    Sure, but just remember if you earn above about 60k presently, they cant even get enough loan enough to live - you pay all their accom costs and they can loan their fees plus just a little bit of spending money.
    Originally posted by dont_use_vistaprint
    Yes, it's very misleading when it's suggested that students can get a loan for university when the expectation is that you will cover their costs as the loan is very limited
    Remember the saying: if it looks too good to be true it almost certainly is.
    • thenewcomer
    • By thenewcomer 6th Feb 18, 1:08 AM
    • 82 Posts
    • 15 Thanks
    thenewcomer
    • #8
    • 6th Feb 18, 1:08 AM
    • #8
    • 6th Feb 18, 1:08 AM
    Hey, it depends on a few factors
    1. your living cost
    2. dependents- and their living costs
    3. your health- possibility of taking time off work or quit the job completely.
    4. your age- more difficult to find a job as we aged

    based on these two, you calculate the emergency fund you need. you should have at least 1 month salary for each factor, but this should increase with your age. for example if you are a healthy 27 yo working adult, then a month is fine. but if you are 47, then i would probably increase that to 3 months.

    as for myself, i have no dependents and no commitments- no house, car, etc. so you can tell my living cost is relatively low. it helps that i have a stable job too.

    i dont set a percentage of assets in shares versus funds/ cash. i have over 13k in cash at the moment, which i have been trying to bring it down to 10k, but am waiting for suitable investments, rather than diving in quickly.
    • dont_use_vistaprint
    • By dont_use_vistaprint 10th Feb 18, 12:13 PM
    • 49 Posts
    • 18 Thanks
    dont_use_vistaprint
    • #9
    • 10th Feb 18, 12:13 PM
    • #9
    • 10th Feb 18, 12:13 PM
    i have over 13k in cash at the moment, which i have been trying to bring it down to 10k, but am waiting for suitable investments, rather than diving in quickly.
    Originally posted by thenewcomer
    But when you say "CASH" do you mean literally in instant access current & saving accounts because aren't Premium Bonds,Funding Circle etc instant access too. And 1 year savings bonds are they CASH if they are within a couple months of maturity ?
    • Prism
    • By Prism 10th Feb 18, 1:15 PM
    • 293 Posts
    • 209 Thanks
    Prism
    Sure, but just remember if you earn above about 60k presently, they cant even get enough loan enough to live - you pay all their accom costs and they can loan their fees plus just a little bit of spending money.
    Originally posted by dont_use_vistaprint
    Sure. At the moment I guess thats between 4-5k per year for accomodation. I wouldnt have a problem with that just out of wages. I just don't intend on helping with fees up front
    • thenewcomer
    • By thenewcomer 11th Feb 18, 11:48 PM
    • 82 Posts
    • 15 Thanks
    thenewcomer
    But when you say "CASH" do you mean literally in instant access current & saving accounts because aren't Premium Bonds,Funding Circle etc instant access too. And 1 year savings bonds are they CASH if they are within a couple months of maturity ?
    Originally posted by dont_use_vistaprint
    my cash are in current accounts and regular savers. yes you are right with premium bonds and fixed deposit accounts being cash too. i am not into premium bonds, so i cannot comment on it. i dont like fixed deposit accounts because as an investor, the amount of cash i hold varies hugely month to month. i am up by 20k in cash this month because i have pulled out from some investments.

    anything less than 2% interest rate is really worth not putting much weightage for me. i might just park some cash there, but by no means i would try to earn the interest.
    • thenewcomer
    • By thenewcomer 11th Feb 18, 11:50 PM
    • 82 Posts
    • 15 Thanks
    thenewcomer
    just looking back at your initial post- please as a new investor, do not do crypto. i know everyone has different opinions on this, but this is just what i think is right.

    PS: i am not into crypto. no conflict of interest.
    • dont_use_vistaprint
    • By dont_use_vistaprint 19th Feb 18, 6:22 PM
    • 49 Posts
    • 18 Thanks
    dont_use_vistaprint
    Sure. At the moment I guess that's between 4-5k per year for accomodation.
    Originally posted by Prism
    More like 6-8K per year for a decent accomodation and other things that crop up. 1st year in halls can be a little more expensive
    • ValiantSon
    • By ValiantSon 19th Feb 18, 6:55 PM
    • 1,622 Posts
    • 1,388 Thanks
    ValiantSon
    Should I ditch all cash and just use premium bonds for instant access ?
    Originally posted by dont_use_vistaprint
    Why would you have all of your cash holdings in premium bonds? Surely it would make sense to earn some interest on your cash, rather than allow inflation to ravage it completely? You won't be able to completely protect against the effects of inflation, but with sensible diversification of your cash holdings you should be able to go a long way to reducing the impact. Premium bonds won't do this.

    You may get lucky and win big, but the chances are that you won't. Have a look at this to get a clearer idea why premium bonds are rubbish: https://www.moneysavingexpert.com/savings/premium-bonds-calculator/

    What about cryptos - worth considering ?
    Originally posted by dont_use_vistaprint
    No.

    You'd be better keeping it in premium bonds: at least your initial deposit would be safe.

    Cryptocurrencies are ludicrously high risk. The whole point of cash holdings is that they are extremely low risk.
    Last edited by ValiantSon; 19-02-2018 at 8:14 PM. Reason: Typo
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