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  • FIRST POST
    • Adams18
    • By Adams18 14th Jun 19, 1:45 PM
    • 103Posts
    • 18Thanks
    Adams18
    Idea's for saving/investing in 2019?
    • #1
    • 14th Jun 19, 1:45 PM
    Idea's for saving/investing in 2019? 14th Jun 19 at 1:45 PM
    Hi,

    I am 30, and have saved up a fair bit in my savings account past couple of years, I've also spent the same amount on various things outside of normal expenditures.

    I have 40K to my name and it's just dawned on me that this is money that depreciates in line with inflation the longer it sits in the bank. What do to do with it for a meaningful return?

    5% on fixed savings accounts doesn't seem worth the hassle for me, having my money tied up somewhere for a few years, however investing in something long-term with high return (like property or shares) seems a good way to go.

    I'l be able to put away around 2500 a month for savings soon, as I clear some outstanding debts and inherited mortgage to free up income.
Page 1
    • MarkBargain
    • By MarkBargain 14th Jun 19, 2:48 PM
    • 1,623 Posts
    • 712 Thanks
    MarkBargain
    • #2
    • 14th Jun 19, 2:48 PM
    • #2
    • 14th Jun 19, 2:48 PM
    I would clear the debts, review your pension, keep some in cash for a rainy day, then look to invest 20k a year in a stocks and shares ISA. You can have a look at funds here. https://www.markets.iweb-sharedealing.co.uk/funds-centre/fund-supermarket/
    • Adams18
    • By Adams18 14th Jun 19, 3:13 PM
    • 103 Posts
    • 18 Thanks
    Adams18
    • #3
    • 14th Jun 19, 3:13 PM
    • #3
    • 14th Jun 19, 3:13 PM
    I would clear the debts, review your pension, keep some in cash for a rainy day, then look to invest 20k a year in a stocks and shares ISA. You can have a look at funds here. https://www.markets.iweb-sharedealing.co.uk/funds-centre/fund-supermarket/
    Originally posted by MarkBargain
    Thank you for your reply, do you think with recent performances of the stocks and shares ISA it offsets the UK inflation rate for the same period?

    I.e savings won't depreciate ? I haven't really followed either inflation or isa rates.
    • pinnks
    • By pinnks 14th Jun 19, 3:30 PM
    • 746 Posts
    • 1,559 Thanks
    pinnks
    • #4
    • 14th Jun 19, 3:30 PM
    • #4
    • 14th Jun 19, 3:30 PM
    Over the longer period stocks and shares are likely to perform better than saving in the bank etc.

    We invested in S&S ISAs in 2004 to 2006 - nothing particularly risky but not just an index tracker. They are currently worth about 3 times what we invested, so 200% growth over 14 years, despite the crash in 2008. I have not done the maths but I don't think aggregate inflation is at 200% over the last 14 years and interest returns are certainly not at that rate.

    HTH
    Last edited by pinnks; 14-06-2019 at 3:32 PM.
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    • steampowered
    • By steampowered 14th Jun 19, 3:50 PM
    • 3,635 Posts
    • 3,752 Thanks
    steampowered
    • #5
    • 14th Jun 19, 3:50 PM
    • #5
    • 14th Jun 19, 3:50 PM
    The average long term return on the stock markets is about 8% per year.

    So yes, over the long term the return on a diversified portfolio of shares will exceed inflation.

    Some years stocks they will lose money, some years they will make money, but over a 10 year+ period it is pretty guaranteed that a balanced portfolio of stocks will do well.

    If you want the low hassle route, simply open a S&S ISA, contribute as much as possible, and purchase a low cost diversified investment fund. Vanguard lifestrategy 60 would be fine. You then just leave the money there and forget about it.

    Have a read of https://www.ig.com/uk/trading-strategies/what-are-the-average-returns-of-the-ftse-100--190318. Look at the bit "FTSE 100 performance over the past 10 years", with dividends reinvested. This gives you a good idea of how the FTSE 100 has performed - i.e. the return you would have got if you chose a FTSE 100 tracker (before fees). No doubt someone will be along in a minute to say you should choose something more diversified than just the FTSE 100 but it at least gives you an idea of how shares perform.
    • AnotherJoe
    • By AnotherJoe 14th Jun 19, 4:59 PM
    • 15,913 Posts
    • 19,135 Thanks
    AnotherJoe
    • #6
    • 14th Jun 19, 4:59 PM
    • #6
    • 14th Jun 19, 4:59 PM
    Thank you for your reply, do you think with recent performances of the stocks and shares ISA it offsets the UK inflation rate for the same period?

    I.e savings won't depreciate ? I haven't really followed either inflation or isa rates.
    Originally posted by Adams18
    I think you need to do some reading. There's no such thing as "the" stocks and shares ISA. A S&S ISA is an empty "wrapper" into which you put investments so it's performance is entirely down to the investments of which there are literally tens of thousands to choose from.
    Perhaps start here https://www.kroijer.com/ to look at some basics.
    Please dont criticise my spelling. It's excellent. Its my typing that's bad.
    • Adams18
    • By Adams18 14th Jun 19, 5:03 PM
    • 103 Posts
    • 18 Thanks
    Adams18
    • #7
    • 14th Jun 19, 5:03 PM
    • #7
    • 14th Jun 19, 5:03 PM
    I think you need to do some reading. There's no such thing as "the" stocks and shares ISA. A S&S ISA is an empty "wrapper" into which you put investments so it's performance is entirely down to the investments of which there are literally tens of thousands to choose from.
    Perhaps start here https://www.kroijer.com/ to look at some basics.
    Originally posted by AnotherJoe
    Thank you and fair enough, I didn't realise it was merely a wrapper, I thought it was a tax free wrapper where the contents also gets invested into pre selected stocks and shares by an "expert" similar to the way private or corporate pension plans work.

    You just give them the money, and they'll invest it carefully for you (mostly them).. with some added tax-free incentive.
    • AnotherJoe
    • By AnotherJoe 14th Jun 19, 5:18 PM
    • 15,913 Posts
    • 19,135 Thanks
    AnotherJoe
    • #8
    • 14th Jun 19, 5:18 PM
    • #8
    • 14th Jun 19, 5:18 PM
    Thank you and fair enough, I didn't realise it was merely a wrapper, I thought it was a tax free wrapper where the contents also gets invested into pre selected stocks and shares by an "expert" similar to the way private or corporate pension plans work.

    You just give them the money, and they'll invest it carefully for you (mostly them).. with some added tax-free incentive.
    Originally posted by Adams18
    Well yes it's a tax free wrapper. There are no doubt hundreds to choose from, some where "experts" will invest in funds such as those run by Mr Woodford. and others who will use their own investments, and others who will use third parties investments, in many you select a "risk level" and they will choose investments and many where you pick them yourself .
    Watch the video I posted which talks about a simple DIY approach to investment selection. Then decide which way to go. Bear in mind you pay for the "experts" and in many cases the cost of that outweighs the benefits.
    Please dont criticise my spelling. It's excellent. Its my typing that's bad.
    • badger09
    • By badger09 14th Jun 19, 5:31 PM
    • 7,393 Posts
    • 6,938 Thanks
    badger09
    • #9
    • 14th Jun 19, 5:31 PM
    • #9
    • 14th Jun 19, 5:31 PM
    Hi,

    I am 30, and have saved up a fair bit in my savings account past couple of years, I've also spent the same amount on various things outside of normal expenditures.

    I have 40K to my name and it's just dawned on me that this is money that depreciates in line with inflation the longer it sits in the bank. What do to do with it for a meaningful return?

    5% on fixed savings accounts doesn't seem worth the hassle for me, having my money tied up somewhere for a few years, however investing in something long-term with high return (like property or shares) seems a good way to go.

    I'l be able to put away around 2500 a month for savings soon, as I clear some outstanding debts and inherited mortgage to free up income.
    Originally posted by Adams18
    You don't mention your pension provision. What is that like?

    You should consider either paying more into your company's scheme, or into a private pension. If you are a higher rate taxpayer, this is a no brainer, but the tax relief also makes it sensible for a basic rate taxpayer.

    If you pay into a S&S LISA (towards retirement as I'm assuming you're already a homeowner) you will also attract a government bonus of 25%. FREE money
    • Adams18
    • By Adams18 14th Jun 19, 6:01 PM
    • 103 Posts
    • 18 Thanks
    Adams18
    You don't mention your pension provision. What is that like?

    You should consider either paying more into your company's scheme, or into a private pension. If you are a higher rate taxpayer, this is a no brainer, but the tax relief also makes it sensible for a basic rate taxpayer.

    If you pay into a S&S LISA (towards retirement as I'm assuming you're already a homeowner) you will also attract a government bonus of 25%. FREE money
    Originally posted by badger09
    Excellent posts.

    I am going to be honest with you, I've been thinking like a young man I haven't bothered with pension provisioning. My corporate scheme pays out upto 9 per cent salary before salary sacrifice kicks in. of which I've dialled back to 4 per cent (the minimum) just so I can take 5 per cent as cash.

    Is the forum going to lynch me now?

    I am a higher rate tax payer and pobably should be paying more... if I pay more by way of salary sacrifice is this then what you mean by being more tax efficient as a higher rate earner???

    A private pension should probably be on my list of things to do then with excess disposable income... but I just never assume I will live long enough to retirement hence don't bother prioritising pensions too much.

    I am not a homeowner sadly... ive been paying my dads mortgage since he passed and live in the same property as my mom. Interest only mortgage about 80k due in 3 months... whole different story but separate cash pot is ready for that too.
    • AnotherJoe
    • By AnotherJoe 14th Jun 19, 7:05 PM
    • 15,913 Posts
    • 19,135 Thanks
    AnotherJoe
    Excellent posts.

    I am going to be honest with you, I've been thinking like a young man I haven't bothered with pension provisioning. My corporate scheme pays out upto 9 per cent salary before salary sacrifice kicks in. of which I've dialled back to 4 per cent (the minimum) just so I can take 5 per cent as cash.

    Is the forum going to lynch me now?

    I am a higher rate tax payer and pobably should be paying more... if I pay more by way of salary sacrifice is this then what you mean by being more tax efficient as a higher rate earner???

    A private pension should probably be on my list of things to do then with excess disposable income... but I just never assume I will live long enough to retirement hence don't bother prioritising pensions too much.

    I am not a homeowner sadly... ive been paying my dads mortgage since he passed and live in the same property as my mom. Interest only mortgage about 80k due in 3 months... whole different story but separate cash pot is ready for that too.
    Originally posted by Adams18
    No need to lynch you, Throwing away literally thousands of pounds of tax relief is punishment instead. Just stop that and start claiming it. SS is doubly tax efficient, you get 100 for every 60 plus you pay less NI
    Please dont criticise my spelling. It's excellent. Its my typing that's bad.
    • Gin and Milk
    • By Gin and Milk 15th Jun 19, 8:27 AM
    • 289 Posts
    • 334 Thanks
    Gin and Milk
    I'm not going to pretend to be an expert - I ask for a lot of advice on here myself, but I would ditch the stock market idea for the time being. Focus on paying off your debts, and please please please do something about your pension.
    Given that interest rates are currently so low, is switching to a repayment mortgage a possibility? Build some equity if you can.
    • grnglide
    • By grnglide 15th Jun 19, 10:04 AM
    • 155 Posts
    • 63 Thanks
    grnglide
    How do you " been paying my dads mortgage since he passed".


    Is it your mother's mortgage now that was not covered by life / mortgage protection insurance?
    Last edited by grnglide; 15-06-2019 at 10:05 AM. Reason: typo
    • ExremelyCautiousSocialist
    • By ExremelyCautiousSocialist 15th Jun 19, 11:28 AM
    • 100 Posts
    • 43 Thanks
    ExremelyCautiousSocialist
    Months ago multiple times i suggested on here to put in a small % into Bitcoin over 2019. Still think a small % in Bitcoin is a good option for 2019 and for anyone who did few months back you already doubled your money in 2019. Of course many will pass these results off as gambling or luck haha.
    • Adams18
    • By Adams18 15th Jun 19, 2:14 PM
    • 103 Posts
    • 18 Thanks
    Adams18
    I'm not going to pretend to be an expert - I ask for a lot of advice on here myself, but I would ditch the stock market idea for the time being. Focus on paying off your debts, and please please please do something about your pension.
    Given that interest rates are currently so low, is switching to a repayment mortgage a possibility? Build some equity if you can.
    Originally posted by Gin and Milk

    Thank you, yes I'll increase my contrubutions and dig into salary sacrifice on my corporate scheme, and maybe look at another private pension scheme.

    I have an interest only mortgage, due to mature at 80,000. I have 80,000 saved up for that as well with my mother, but don't know if I'll pay yet or not... it's another complicated topic.

    Personal debts can be cleared in a month, nothing major.
    • Adams18
    • By Adams18 15th Jun 19, 2:16 PM
    • 103 Posts
    • 18 Thanks
    Adams18
    How do you " been paying my dads mortgage since he passed".


    Is it your mother's mortgage now that was not covered by life / mortgage protection insurance?
    Originally posted by grnglide

    It's interest only, I been paying the interest component, with the capital required in 3 months time, 80,000.

    My father who took out the mortgaged passed 2 years ago, and he had no life insurance, no endowment policy on the mortgage.
    • MovingForwards
    • By MovingForwards 15th Jun 19, 3:01 PM
    • 2,297 Posts
    • 2,728 Thanks
    MovingForwards
    Before you think about saving this pot of cash you need to resolve the other issue, especially if you need to quickly get your hands on this pot as part of the cash to resolve it.

    If it isn't, then I apologise, and would look at stocks and shares, ready access in higher interest paying account and lock some away for a fixed term.
    • badger09
    • By badger09 15th Jun 19, 3:06 PM
    • 7,393 Posts
    • 6,938 Thanks
    badger09
    No lynching from me and its not surprising you've been thinking like a young man, but you're not getting younger. Just stop throwing away free money and get your company pension sorted asap. Then think about additional private pension.

    I don't understand why you say you are not a homeowner. You have an 80k mortgage. Surely, in order to obtain that mortgage you must have some interest in the property?

    I only mentioned that in my earlier post in order to point out that a LISA would only be useful for retirement planning, rather than 1st time home buyer. But you still qualify for the 25% bonus.
    • Adams18
    • By Adams18 15th Jun 19, 3:36 PM
    • 103 Posts
    • 18 Thanks
    Adams18
    No lynching from me and its not surprising you've been thinking like a young man, but you're not getting younger. Just stop throwing away free money and get your company pension sorted asap. Then think about additional private pension.

    I don't understand why you say you are not a homeowner. You have an 80k mortgage. Surely, in order to obtain that mortgage you must have some interest in the property?

    I only mentioned that in my earlier post in order to point out that a LISA would only be useful for retirement planning, rather than 1st time home buyer. But you still qualify for the 25% bonus.
    Originally posted by badger09
    Its my dad mortgage he passed away, me and my mom live in the property, if I dont pay we lose the home! We've saved additional 80k for it
    • cloud_dog
    • By cloud_dog 15th Jun 19, 3:39 PM
    • 4,540 Posts
    • 2,845 Thanks
    cloud_dog
    Regarding the below...
    I am a higher rate tax payer and pobably should be paying more... if I pay more by way of salary sacrifice is this then what you mean by being more tax efficient as a higher rate earner???

    A private pension should probably be on my list of things to do then with excess disposable income... but I just never assume I will live long enough to retirement hence don't bother prioritising pensions too much.
    Originally posted by Adams18
    Whilst you are a HRT payer and are able to utilise SS then use that method for any and all pension contributions. In theory your company shouldn't have an issue with you contributing more than their matched maximum (without further company contributions) but some companies do appear to refuse it.

    Only in this instance, where you have disposable income that you wish to put aside for retirement would you consider opening a separate personal pension.
    Personal Responsibility - Sad but True

    Sometimes.... I am like a dog with a bone
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