Investing Advice: Initial £5-10k budget
Discussion
Hi all,
I'm relatively new to PH, so apologies if there's a more appropriate area in which I should be posting this.
I've been scanning the forums and noticed that there's a lot of savvy business folk in here, so thought someone may be able to help/ point me in the right direction.
Anyway, does anyone have any advice on investing? As I've recently seen a 2 year cash ISA mature, with very little return over this period (£25!!).
As mentioned, I have an initial budget of between £5-10k. Of which I'm more than happy to have sit without touching it. My thinking is, I'd rather put it to some use, rather than have it sit in another crap ISA for 2 years.
So, just wondering if anyone has any advice, of which they're willing to share.
Many thanks,
Michael
I'm relatively new to PH, so apologies if there's a more appropriate area in which I should be posting this.
I've been scanning the forums and noticed that there's a lot of savvy business folk in here, so thought someone may be able to help/ point me in the right direction.
Anyway, does anyone have any advice on investing? As I've recently seen a 2 year cash ISA mature, with very little return over this period (£25!!).
As mentioned, I have an initial budget of between £5-10k. Of which I'm more than happy to have sit without touching it. My thinking is, I'd rather put it to some use, rather than have it sit in another crap ISA for 2 years.
So, just wondering if anyone has any advice, of which they're willing to share.
Many thanks,
Michael
Obviously it all depends on your risk appetite yada yada...
But general advice to people wanting to get a better return than a cash ISA, is to go for a low cost tracker fund within an ISA.
A popular suggestion is the vanguard life strategy funds. They vary from Vanguard Lifestrategy 100 (where 100% of your money is invested into shares) to Vanguard Lifestrategy 20 (where 20% is shares, 80% is safer bonds generally).
Someone will be along to ask your age, risk appetite, assets, financial goals etc but the above is the general one size fits all answer for what you’re looking for.
But general advice to people wanting to get a better return than a cash ISA, is to go for a low cost tracker fund within an ISA.
A popular suggestion is the vanguard life strategy funds. They vary from Vanguard Lifestrategy 100 (where 100% of your money is invested into shares) to Vanguard Lifestrategy 20 (where 20% is shares, 80% is safer bonds generally).
Someone will be along to ask your age, risk appetite, assets, financial goals etc but the above is the general one size fits all answer for what you’re looking for.
I was in a similar position, I've decided to drop feed £300/month to vanguard equity 60. As with any equities it's not always massive gains. However over the last 6 months I've seen around a 4.5% return including charges. Everyone's different, there are plenty of threads on here, have a read see where you sit.
Lots of useful relevant info from cloud_dog's post:
https://www.pistonheads.com/gassing/topic.asp?h=0&...
If you don't want to get your hands dirty, take regulated advice from an IFA.
https://www.pistonheads.com/gassing/topic.asp?h=0&...
If you don't want to get your hands dirty, take regulated advice from an IFA.
Also, be aware there are several types of advisor too.
https://www.fca.org.uk/consumers/types-investment-...
[quote]
Independent advisers
An adviser or firm that provides independent advice is able to consider and recommend all types of retail investment products that could meet your needs and objectives.
Independent advisers will also consider products from all firms across the market, and have to give unbiased and unrestricted advice.
An independent adviser may also be called an 'independent financial adviser' or 'IFA'.
Restricted advisers
A restricted adviser or firm can only recommend certain products, product providers, or both.
The adviser or firm has to clearly explain the nature of the restriction. If you are not sure you should ask for further information, but some examples of restricted advice are where:
the adviser works with one product provider and only considers products that company offers
the adviser considers products from several – but not all – product providers
the adviser can recommend one or some types of products, but not all retail investment products
the adviser has chosen to focus on a particular market, such as pensions, and considers products from all providers within that market
Restricted advisers and firms cannot describe the advice they offer as 'independent'.
Other types of financial advice
If you are only given general information about one or more investment products, or have products or related terms explained to you, you may have received guidance rather than advice. This is sometimes also called an information only or non-advice service.
The main difference between guidance and advice is that you decide what product to buy without having one or more recommended to you.
Buying an investment product in this way might reduce the cost involved but it also means you may not have access to the Financial Ombudsman Service(link is external) or Financial Services Compensation Scheme(link is external) (FSCS) if things go wrong.
If you are not sure whether you are receiving guidance or advice, and therefore how you would be protected, you should ask the adviser or firm to explain.
[/quote]
https://www.fca.org.uk/consumers/types-investment-...
[quote]
Independent advisers
An adviser or firm that provides independent advice is able to consider and recommend all types of retail investment products that could meet your needs and objectives.
Independent advisers will also consider products from all firms across the market, and have to give unbiased and unrestricted advice.
An independent adviser may also be called an 'independent financial adviser' or 'IFA'.
Restricted advisers
A restricted adviser or firm can only recommend certain products, product providers, or both.
The adviser or firm has to clearly explain the nature of the restriction. If you are not sure you should ask for further information, but some examples of restricted advice are where:
the adviser works with one product provider and only considers products that company offers
the adviser considers products from several – but not all – product providers
the adviser can recommend one or some types of products, but not all retail investment products
the adviser has chosen to focus on a particular market, such as pensions, and considers products from all providers within that market
Restricted advisers and firms cannot describe the advice they offer as 'independent'.
Other types of financial advice
If you are only given general information about one or more investment products, or have products or related terms explained to you, you may have received guidance rather than advice. This is sometimes also called an information only or non-advice service.
The main difference between guidance and advice is that you decide what product to buy without having one or more recommended to you.
Buying an investment product in this way might reduce the cost involved but it also means you may not have access to the Financial Ombudsman Service(link is external) or Financial Services Compensation Scheme(link is external) (FSCS) if things go wrong.
If you are not sure whether you are receiving guidance or advice, and therefore how you would be protected, you should ask the adviser or firm to explain.
[/quote]
I set up a Hargreaves Lansdown account and put in £200 a month, have been doing for a year or so.
I have £3k split over 3 funds...
AXA Framlington Global Technology Fund : +21.77%
AXA Framlington Japan Fund : +9.79%
Jupiter India : - 7.09%
Good to hedge bets over various funds, my overall gain is currenty sat at 7.79% according to the app... better than the bank!
I have £3k split over 3 funds...
AXA Framlington Global Technology Fund : +21.77%
AXA Framlington Japan Fund : +9.79%
Jupiter India : - 7.09%
Good to hedge bets over various funds, my overall gain is currenty sat at 7.79% according to the app... better than the bank!
MFSEO said:
Anyway, does anyone have any advice on investing?
No. MFSEO said:
As mentioned, I have an initial budget of between £5-10k. Of which I'm more than happy to have sit without touching it. My thinking is, I'd rather put it to some use, rather than have it sit in another crap ISA for 2 years.
What, ever????You must have some thoughts or ideas of what is reasonable/acceptable? Some people think 5 years is a long time, I would suggest that is below the minimum term for investing.
Do you have any debt?
Do you have adequate pension provision?
Without clarification any response on here is simply pi**ing in the wind.
MFSEO said:
Hi all,
I'm relatively new to PH, so apologies if there's a more appropriate area in which I should be posting this.
I've been scanning the forums and noticed that there's a lot of savvy business folk in here, so thought someone may be able to help/ point me in the right direction.
Anyway, does anyone have any advice on investing? As I've recently seen a 2 year cash ISA mature, with very little return over this period (£25!!).
As mentioned, I have an initial budget of between £5-10k. Of which I'm more than happy to have sit without touching it. My thinking is, I'd rather put it to some use, rather than have it sit in another crap ISA for 2 years.
So, just wondering if anyone has any advice, of which they're willing to share.
Many thanks,
Michael
I would start with trying to understand your timescales and risk appetite.I'm relatively new to PH, so apologies if there's a more appropriate area in which I should be posting this.
I've been scanning the forums and noticed that there's a lot of savvy business folk in here, so thought someone may be able to help/ point me in the right direction.
Anyway, does anyone have any advice on investing? As I've recently seen a 2 year cash ISA mature, with very little return over this period (£25!!).
As mentioned, I have an initial budget of between £5-10k. Of which I'm more than happy to have sit without touching it. My thinking is, I'd rather put it to some use, rather than have it sit in another crap ISA for 2 years.
So, just wondering if anyone has any advice, of which they're willing to share.
Many thanks,
Michael
Say you put £10K in today and in six months time you need it unexpectedly.
If there is £6K in there is that a problem i.e. do you need your initial capital guaranteed?
If so you should arguably be looking at saving products (and associated rates) rather than investments where the level of reward generally has a risk to capital attached.
My first comment would be to make sure you do an ISA transfer (rather than close the account and open another) if you want to look at a stocks & shares ISA.
At £5k - £10k this is not going to be the end of the world if you have already closed it, but the money would be classed as a new contribution (therefore lowering your annual allowance this year) rather than a simple transfer of a previous year's ISA allowance (which has no impact on your current year's ISA allowance).
You say you are happy to not touch this money, but for how long?
If it is at least five years then a stocks & shares ISA is certainly worth looking at - and others have made fund recommendations here already.
If it for the very long term (for retirement) then a pension/SIPP may be worth considering as this would give you an automatic 25% uplift through the basic tax relief that your selected provider would claim back from HMRC for you.
Equally, a Lifetime ISA would do the same (receive an automatic 25% uplift) and providing you use this money for retirement at 60 or put it towards a deposit on a first time property purchase any growth on your money (and the government uplift) is completely penalty and tax free.
You would need to be 39 or younger to access one of these though.
Finally, if you want to stick with cash then look for the highest paying account and ignore the ISA status, as you can receive £1,000 of interest tax free every year anyway (unless you are a higher rate tax payer, whereby a pension/SIPP is going to be the most tax efficient vehicle).
Just shout if this has thrown anything else up!
At £5k - £10k this is not going to be the end of the world if you have already closed it, but the money would be classed as a new contribution (therefore lowering your annual allowance this year) rather than a simple transfer of a previous year's ISA allowance (which has no impact on your current year's ISA allowance).
You say you are happy to not touch this money, but for how long?
If it is at least five years then a stocks & shares ISA is certainly worth looking at - and others have made fund recommendations here already.
If it for the very long term (for retirement) then a pension/SIPP may be worth considering as this would give you an automatic 25% uplift through the basic tax relief that your selected provider would claim back from HMRC for you.
Equally, a Lifetime ISA would do the same (receive an automatic 25% uplift) and providing you use this money for retirement at 60 or put it towards a deposit on a first time property purchase any growth on your money (and the government uplift) is completely penalty and tax free.
You would need to be 39 or younger to access one of these though.
Finally, if you want to stick with cash then look for the highest paying account and ignore the ISA status, as you can receive £1,000 of interest tax free every year anyway (unless you are a higher rate tax payer, whereby a pension/SIPP is going to be the most tax efficient vehicle).
Just shout if this has thrown anything else up!
cloud_dog said:
MFSEO said:
Anyway, does anyone have any advice on investing?
No. MFSEO said:
As mentioned, I have an initial budget of between £5-10k. Of which I'm more than happy to have sit without touching it. My thinking is, I'd rather put it to some use, rather than have it sit in another crap ISA for 2 years.
What, ever????You must have some thoughts or ideas of what is reasonable/acceptable? Some people think 5 years is a long time, I would suggest that is below the minimum term for investing.
Do you have any debt?
Do you have adequate pension provision?
Without clarification any response on here is simply pi**ing in the wind.
Been a member for a week and a half and first post asking about investments. Strange.
You'll probably find a lot of people on here have invested it all into their ride.
On a more serious note, you will at some point need a lump sum of cash, for car repairs, for central heating repairs or other 'life' costs that crop up when most inconvenient. Even if you decide to make some investments, keep between a quarter and half of your £5-10k cash reasonably accessible.
High-interest debt - more than low-single-digit percent - needs to be got rid of quickly, too, before looking at investments.
Pensions can work for most people but not for all. It depends when you want to retire, what your expectations are and whether the pension manager does a good job with your money. If you work for one company all your life and the company and its pension fund goes down the toilet just before you retire, you're screwed.
After that, maybe a modest monthly contribution into a low-cost index tracker fund.
I never advise people to dump lump sums into stockmarket related investments because you can never be sure whether you're buying before an uptrend, a downtrend or a prolonged stagnation.
By investing in a tracker you spread the risk of making a bad decision on an individual share. By investing little and often you smooth out the bumps and won't see your lump sum cut in half by in a once-in-a-decade market crash.
You'll probably find a lot of people on here have invested it all into their ride.
On a more serious note, you will at some point need a lump sum of cash, for car repairs, for central heating repairs or other 'life' costs that crop up when most inconvenient. Even if you decide to make some investments, keep between a quarter and half of your £5-10k cash reasonably accessible.
High-interest debt - more than low-single-digit percent - needs to be got rid of quickly, too, before looking at investments.
Pensions can work for most people but not for all. It depends when you want to retire, what your expectations are and whether the pension manager does a good job with your money. If you work for one company all your life and the company and its pension fund goes down the toilet just before you retire, you're screwed.
After that, maybe a modest monthly contribution into a low-cost index tracker fund.
I never advise people to dump lump sums into stockmarket related investments because you can never be sure whether you're buying before an uptrend, a downtrend or a prolonged stagnation.
By investing in a tracker you spread the risk of making a bad decision on an individual share. By investing little and often you smooth out the bumps and won't see your lump sum cut in half by in a once-in-a-decade market crash.
I was toying with the idea of investing £30k in something. There are various bonds available in wind farms & other energy Investments. I was quoted annual returns of 9% over a 3 year period, & you can take the interest amount out every 6 months. Sounds almost too good to be true!! Apparently guaranteed....
Biker 1 said:
I was toying with the idea of investing £30k in something. There are various bonds available in wind farms & other energy Investments. I was quoted annual returns of 9% over a 3 year period, & you can take the interest amount out every 6 months. Sounds almost too good to be true!! Apparently guaranteed....
I've got a bridge I can sell you! 
Biker 1 said:
I was toying with the idea of investing £30k in something. There are various bonds available in wind farms & other energy Investments. I was quoted annual returns of 9% over a 3 year period, & you can take the interest amount out every 6 months. Sounds almost too good to be true!! Apparently guaranteed....
Easy.You pay me your £30k.
I secret £18k of it off to an untraceable account in some foreign land.
The remaining £12k I keep in a normal account, paying you back £1.5k every six months (10% return, exceeding the 9% promised).
After you receive your first few payments you start telling everyone what a wonderful investment you've made.
I even offer £1k bonus for every new investor you 'introduce' to the scheme.
After a couple of years many people have joined and are lapping up their 10% return - plus £1k bonus for every new person they introduced to me.
At the end of year four, you don't receive your payment. You can't contact me on the phone. It's as if I never existed. Indeed there never was a wind farm/solar farm in the location you thought you'd invested in.
Meanwhile, I'm sunning myself on a beach somewhere far away with £18k of your money and many more £££££ from others who got hooked by my scheme.
Happy investing!
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