Stocks and Shares ISA for a newbie

[cowboyengineer]

So, I'm totally new to this. I have never saved other than to save up and buy something that I want. However from today I want to save 10%of everything I earn for the future so don't need quick access to it or to really touch it.

So I'm looking at Stocks and Shares ISA as I don't have an ISA yet.

So... what are the steps and options. I really have no clue about it at all.

[Phooey]

https://www.pistonheads.com/gassing/topic.asp?h=0&...

Edited by Phooey on Friday 25th October 12:42

[JulianPH]

cowboyengineer said:

So, I'm totally new to this. I have never saved other than to save up and buy something that I want. However from today I want to save 10%of everything I earn for the future so don't need quick access to it or to really touch it.

So I'm looking at Stocks and Shares ISA as I don't have an ISA yet.

So... what are the steps and options. I really have no clue about it at all.

Hi Ian, that is a really good move to set your self up for future financial independence.

A S&S ISA is a good place to star, as is a pension/SIPP for the longer term.

An important starting point is to realise these things are just tax wrappers, it is what you choose to hold in them that are the investments.

An ISA wrapper mean there is no tax to pay on your investment gains and no tax to pay on any money you take out of it.

A pension/SIPP wrapper also means there is no tax to pay on your investment gains but the tax treatment on putting money in and taking it out is different than with an ISA.

Any money you take out of an ISA is free of income tax because you have already paid income tax on the money you put in.

With a pension/SIPP you don't pay a penny of income tax on any money you put in, so you pay income tax when you take it out (though you can take a quarter of your funds completely tax free).

The other main difference is that you can take money out of an ISA whenever you like. Because pension/SIPPs can offer higher tax breaks you cannot access the funds until you are 55 (currently).

So that is a quick crash course on the tax wrappers, not the investment you select within them!

There is probably to much choice available to people, so to keep this simple I will speak about the two major approaches used by most investors, Active and Passive.

Active is whereby you select fund managers who aim to outperform the markets themselves. This comes at a price and it needs to be said that there are not many consistent fund managers out there and many of these funds end up underperforming the markets (due to bad investment decisions and/or the effect of the higher fees).

Get the right ones at the right times though and this can work very well.

Passive is where you invest in funds that are designed to track the markets. This means you will never outperform the markets, but equally you will never underperform them either. These also have the benefits of much lower charges.

Of course there are approaches that sit in the middle ground.

You equally don't have to use funds at all and can pick your own stocks directly, however using funds does give you greater diversity, which is very important when investing.

I could go on but I'll leave it there for now so it remains more easily digestible!

Any question or further information just give me a shout.

[JulianPH]

Phooey said:

https://www.pistonheads.com/gassing/topic.asp?h=0&...

Edited by Phooey on Friday 25th October 12:42

Thanks for the heads up mate, you posted whilst I was typing my response!

[cowboyengineer]

JulianPH said:

Phooey said:

https://www.pistonheads.com/gassing/topic.asp?h=0&...

Edited by Phooey on Friday 25th October 12:42

Thanks for the heads up mate, you posted whilst I was typing my response!

Thank you both of you. You have validated my initial (Brief) research.

Time to speak to the company in the other thread. I think I will go for the managed isa, Julian, do you have anything to do with them?

Thank you.

[JulianPH]

cowboyengineer said:

JulianPH said:

Phooey said:

https://www.pistonheads.com/gassing/topic.asp?h=0&...

Edited by Phooey on Friday 25th October 12:42

Thanks for the heads up mate, you posted whilst I was typing my response!

Thank you both of you. You have validated my initial (Brief) research.

Time to speak to the company in the other thread. I think I will go for the managed isa, Julian, do you have anything to do with them?

Thank you.

Happy to be of some help.

Yes, I am the CEO!

I don't post here to advertise this though. For years I have simply enjoyed being able to help other PHers in the same way they have helped me in their specialist fields.

[Phooey]

cowboyengineer said:

Thank you both of you. You have validated my initial (Brief) research.

Time to speak to the company in the other thread. I think I will go for the managed isa, Julian, do you have anything to do with them?

Thank you.

Pleasure mate. It'd be time well spent having a quick chat with Julian or Nik at Intelligent Money. From the sounds of it you just want a simple passive fund/s to drop regular (ISA) money into (and then let it do it's thing). FWIW I'm in Intelligent Money's Optimum Global Growth fund for my ISA. Best to look at it as a 'long-term' investment.

[Simpo Two]

JulianPH said:

For years I have simply enjoyed being able to help other PHers in the same way they have helped me in their specialist fields.

And for what it's worth I'm happy to confirm this. JP-H has a rare talent, possibly unique in his industry, for making the complex simple, for replacing mystery with understanding, replacing doubt with empowerment.

[JulianPH]

Simpo Two said:

JulianPH said:

For years I have simply enjoyed being able to help other PHers in the same way they have helped me in their specialist fields.

And for what it's worth I'm happy to confirm this. JP-H has a rare talent, possibly unique in his industry, for making the complex simple, for replacing mystery with understanding, replacing doubt with empowerment.

Very kind word John, thank you very much mate!

[visitinglondon]

JulianPH said:

I don't post here to advertise this though. For years I have simply enjoyed being able to help other PHers in the same way they have helped me in their specialist fields.

[JulianPH]

visitinglondon said:

JulianPH said:

I don't post here to advertise this though. For years I have simply enjoyed being able to help other PHers in the same way they have helped me in their specialist fields.

I think you have to remember I have been posting here for years before IM did the sponsorship.

If you speak to anyone I have helped they will tell you that I never once put forward IM either.

[Phooey]

visitinglondon said:

I think Julian has done a bloody great service on these forums. Lets be honest most of us have benefitted from the FREE information and guidance both he (and recently) Nik has generously taken the time to educate us on. I also think some people underestimate how passionate he is about what he does. I'd have a lot more money if I listened to him 10 yrs ago

[JaredVannett]

That was an excellent primer Julian .... it really should be a sticky for this part of the forum.

[river_rat]

JulianPH said:

visitinglondon said:

JulianPH said:

I don't post here to advertise this though. For years I have simply enjoyed being able to help other PHers in the same way they have helped me in their specialist fields.

I think you have to remember I have been posting here for years before IM did the sponsorship.

If you speak to anyone I have helped they will tell you that I never once put forward IM either.

This 100%

[JulianPH]

Thanks for your comments guys.