Ideas for making some money from £2k over 1-2 years.
Discussion
After selling my car and buying a pair of cheaper ones, I'm about £2k up on the amount of cash I feel comfortable with in the bank.
I have a personal loan that could be paid down (4 years remaining at 3.6%) but as it's a manageable amount I wondered if I could put the £2k to better use than paying the debt down, so need to make some money from it.
I'm willing to work a bit to make money from it, bonus if it is interesting, so it doesn't just have to sit in an account somewhere. I've got 2 TSB accounts already maxed so can't get another 5% there. But I'd like to aim for at least a 5% increase a year, so to £2100 after a year and £2200 after 2 years as a minimum. Only catch is I'm a bit time poor working full time with a 2 year old and another on the way so can't dedicate a lot of time to increasing this amount.
So to PH... any ideas? Here's 2 of mine for comparison:
1. Trying to buy and sell the odd car but obviously some risks involved and maybe waiting for a while.
2. I'd love to buy a nice watch and see it appreciate but not familiar with the market place or how easy they are to punt after and risk of scams?
I have a personal loan that could be paid down (4 years remaining at 3.6%) but as it's a manageable amount I wondered if I could put the £2k to better use than paying the debt down, so need to make some money from it.
I'm willing to work a bit to make money from it, bonus if it is interesting, so it doesn't just have to sit in an account somewhere. I've got 2 TSB accounts already maxed so can't get another 5% there. But I'd like to aim for at least a 5% increase a year, so to £2100 after a year and £2200 after 2 years as a minimum. Only catch is I'm a bit time poor working full time with a 2 year old and another on the way so can't dedicate a lot of time to increasing this amount.
So to PH... any ideas? Here's 2 of mine for comparison:
1. Trying to buy and sell the odd car but obviously some risks involved and maybe waiting for a while.
2. I'd love to buy a nice watch and see it appreciate but not familiar with the market place or how easy they are to punt after and risk of scams?
Off topic: The holding of "reserves" gives a comfortable feeling, and that's good. However, with interest rates on the floor it's difficult to find any return on cash hanging about in reserve. One way to cushion the need for instantly available reserves is to run credit cards with large credit limits which you DON'T use. Then if you have a sudden need to spend more the credit card can be used as a buffer - effectively a free loan for about a month while you get yourself organised. By that I mean it gives time to sell investments, raise a personal loan or whatever.
Note: I am not for one second suggesting anyone should pay interest at 20% to a credit card company!
Note: I am not for one second suggesting anyone should pay interest at 20% to a credit card company!
I don't agree with those who simply say 'pay down the debt'. If the debt is easily serviceable and you're happy to take the risk of your own solvency then the question to ask is 'would paying £2,000 off the loan save me more money over 4 years than I could make on it'.
You could open a Club Lloyds account, I think they still do 4%. Otherwise you need to take some risk. Have you looked at P2P lending? I find that quite enjoyable as I can pick my own debtors and assess risk myself, but at the same time it doesn't require much time.
You could open a Club Lloyds account, I think they still do 4%. Otherwise you need to take some risk. Have you looked at P2P lending? I find that quite enjoyable as I can pick my own debtors and assess risk myself, but at the same time it doesn't require much time.
Ozzie - TSB still offer 5% interest for up to £2k in their current account, they did allow people to have 2 of the accounts at one point which I got so have £4k fetching 5%, better in there than paying off a 3.6% loan unless they revise rates.
True about the credit cards, I tend to buy everything I can on credit card (only my local chippy don't accept any cards!) and pay off the entire balance at the end of the month, this gives added protection compared to a debit card and allows me to collect cashback/airmiles etc. I've got pretty decent limits on mine and can revert to paying off the minimum if I need to manage my finances in that way so already covered there.
Twin1 - My debt is about £8k now, so £2k pays a year off, it's easy for me to manage at this moment in time. The point of the thread was to see if anyone thought of something that would beat 3.6% over a year. But I've only just realised if I'm only just beating that then it's not really worth putting the time in.
I've done P2P lending before with Ratesetter, it was OK but the returns never amazed me, plus the cash often sat around not being assigned so earning nothing. I just checked out of interest and the rate for a 1 year loan is 2.8% return at the moment. Better than a few bank accounts but doesn't beat my loan.
Another one that's just popped into my head is the 6% saver that HSBC and First Direct offer, but as that has to drip feed money in rather than put a lump in up front I'm not sure I'll benefit over paying the loan down, will need to calculate.
True about the credit cards, I tend to buy everything I can on credit card (only my local chippy don't accept any cards!) and pay off the entire balance at the end of the month, this gives added protection compared to a debit card and allows me to collect cashback/airmiles etc. I've got pretty decent limits on mine and can revert to paying off the minimum if I need to manage my finances in that way so already covered there.
Twin1 - My debt is about £8k now, so £2k pays a year off, it's easy for me to manage at this moment in time. The point of the thread was to see if anyone thought of something that would beat 3.6% over a year. But I've only just realised if I'm only just beating that then it's not really worth putting the time in.
I've done P2P lending before with Ratesetter, it was OK but the returns never amazed me, plus the cash often sat around not being assigned so earning nothing. I just checked out of interest and the rate for a 1 year loan is 2.8% return at the moment. Better than a few bank accounts but doesn't beat my loan.
Another one that's just popped into my head is the 6% saver that HSBC and First Direct offer, but as that has to drip feed money in rather than put a lump in up front I'm not sure I'll benefit over paying the loan down, will need to calculate.
Xaero said:
I've done P2P lending before with Ratesetter, it was OK but the returns never amazed me, plus the cash often sat around not being assigned so earning nothing. I just checked out of interest and the rate for a 1 year loan is 2.8% return at the moment. Better than a few bank accounts but doesn't beat my loan.
If you're open to P2P you could try Funding Circle. I lend on there to short term property loans which average 7.2% net. The most I've had sat for any length of time is maybe £40 for a few days until a suitable loan comes up. That beats your 3.6% debt 
Twin1 said:
If you're open to P2P you could try Funding Circle. I lend on there to short term property loans which average 7.2% net. The most I've had sat for any length of time is maybe £40 for a few days until a suitable loan comes up. That beats your 3.6% debt
Except the 7.2% isn't risk free and (presumably) is taxable?sidicks said:
Twin1 said:
If you're open to P2P you could try Funding Circle. I lend on there to short term property loans which average 7.2% net. The most I've had sat for any length of time is maybe £40 for a few days until a suitable loan comes up. That beats your 3.6% debt
Except the 7.2% isn't risk free and (presumably) is taxable?No way that return is risk free.
Jockman said:
sidicks said:
Twin1 said:
If you're open to P2P you could try Funding Circle. I lend on there to short term property loans which average 7.2% net. The most I've had sat for any length of time is maybe £40 for a few days until a suitable loan comes up. That beats your 3.6% debt
Except the 7.2% isn't risk free and (presumably) is taxable?No way that return is risk free.
Twin1 said:
I didn't hold it out to be risk free, it's certainly not and I have experienced some bad debt from P2P lending although significantly less since I switched to solely property-backed bridging loans. My 7.2% average is after the 1% fee to Funding Circle and bad debt. The income is then taxable at your marginal rate which has until recently been nil - you can claim tax relief on bad debt where there's no reasonable prospect of getting any money back. Of course with the Innovative Finance ISA coming in soon there will be no income tax payable on P2P income held in an ISA wrapper.
But the important point to note is that the 7.2% isn't directly comparable to the 3.6% cost of debt!sidicks said:
But the important point to note is that the 7.2% isn't directly comparable to the 3.6% cost of debt!
It's not even double the risk but several magnitudes higher. The real truth of these old businesses revamped for the modern age is that you are getting shafted on the returns for the risk you are taking and that they only work as models because safe returns are now so low. If you look at the businesses you are actually lending to in the raw light of day you'd want a lien on the owners house and 50% return on the cash if it wasn't all wrapped up in a fancy app and marketed as some trendy thing everyone was doing.
That's why for many people with just a few grand and wanting some extra money nothing has changed, don't risk your capital, invest your spare man hours into labour for for others carrying the credit/default risk and keep your cash in the bank. There's no shortage of short hour, evening jobs that will result in an effective return of well over 100% based against your savings. Just ask anyone for whole English isn't their first language.
For people who aren't earning professional salaries the best return by far is to simply sell some of your spare time to established businesses. It's not handing over savings to shonky enterprises who should be paying you ten times what's on offer from a fancy website.
Marvtec said:
Such terribly boring replies, no inspiration to be found here from the no risk nerds.
OP perhaps repost in general gassing asking for ideas on the used car business, though you will get every used car dealer berating you.
So just put the 2k on scratchcards ??
Binary betting. You'll be driving a gold Ferrari in days. OP perhaps repost in general gassing asking for ideas on the used car business, though you will get every used car dealer berating you.
So just put the 2k on scratchcards ??
Work makes money, gambling makes losers.
Gassing Station | Finance | Top of Page | What's New | My Stuff