Just starting out...
Discussion
So, pretty much what it says on the tin.
Bottom line up front. looking to start investing some money, as C19 has demonstrated that actually I do not need to spend nearly as much as I have been.
Me. I am 33, earning around £47,000 p.a. (shortly to increase to slightly over £52k). Stable job, married (wife earns a bit more than I do - clever girl - but more vulnerable to change).
Financial situation. Investment flat (mortgaged), approx. £16,000 unsecured debt @ 6.9% (plus student loan), non-contributory pension. AmEx credit card that gets paid off every month (BA Companion Vouchers/Avios).
I have recently (two weeks ago) opened a Plum account, but I have little idea of whether it is any good and it (from the money it is putting in) seems a little unambitious for me.
My current (very rough) plan looks something like: stick £1000/mo into the unsecured debt until it is paid off, remortgage at the end of my fixed rate (Sept), clear student debt, invest something...
Any thoughts/advice would be very welcome; I can't promise that I'll take any of it, but I do promise to read and try to understand it!
Bottom line up front. looking to start investing some money, as C19 has demonstrated that actually I do not need to spend nearly as much as I have been.
Me. I am 33, earning around £47,000 p.a. (shortly to increase to slightly over £52k). Stable job, married (wife earns a bit more than I do - clever girl - but more vulnerable to change).
Financial situation. Investment flat (mortgaged), approx. £16,000 unsecured debt @ 6.9% (plus student loan), non-contributory pension. AmEx credit card that gets paid off every month (BA Companion Vouchers/Avios).
I have recently (two weeks ago) opened a Plum account, but I have little idea of whether it is any good and it (from the money it is putting in) seems a little unambitious for me.
My current (very rough) plan looks something like: stick £1000/mo into the unsecured debt until it is paid off, remortgage at the end of my fixed rate (Sept), clear student debt, invest something...
Any thoughts/advice would be very welcome; I can't promise that I'll take any of it, but I do promise to read and try to understand it!
NewbishDelight said:
Any thoughts/advice would be very welcome; I can't promise that I'll take any of it, but I do promise to read and try to understand it!
read some ofhttps://monevator.com/tag/investing-lessons/
and some of the other posts, particularly.
https://monevator.com/why-a-total-world-equity-ind...
While doing that kill off the higher interest debt, and look at the value of a world index tracker (and maybe any other companies you hear of in the news).
Decide from a rather more informed place if you want to try and pick companies, or just buy trackers.
Do you own your own home?
I would pay off the car finance first as that’s almost 7% apr.
How much rent and profit does your BTL make?
( are you aware of section 24, higher rate tax payers can only claim 20% tax relief on the mortgage interest payments instead of 40%.This can erode a lot of the profit on a BTL and make it not worthwhile in certain cases like a low yield etc)
I would speak to intelligent money about investing in an ISA (they sponsor the finance forum , lots of piston headers are fans & I have no affiliation)
I would pay off the car finance first as that’s almost 7% apr.
How much rent and profit does your BTL make?
( are you aware of section 24, higher rate tax payers can only claim 20% tax relief on the mortgage interest payments instead of 40%.This can erode a lot of the profit on a BTL and make it not worthwhile in certain cases like a low yield etc)
I would speak to intelligent money about investing in an ISA (they sponsor the finance forum , lots of piston headers are fans & I have no affiliation)
Edited by jonny70 on Thursday 4th June 00:37
Edited by jonny70 on Thursday 4th June 00:38
NewbishDelight said:
Any thoughts/advice would be very welcome; I can't promise that I'll take any of it, but I do promise to read and try to understand it!
If I were you..Open vanguard ISA. Put £1000 a month cash into account. Leave it as cash.
Come back here in 3-4 months and see what the lie of the land is before "investing" anything.
Given you are 33 and have at least 22 years left to work (assuming you don't retire early) then 3 months is not going to make any difference. We are, IMHO, not going to know the true extent of the damage of COVID till at least Sept if not into the early part of Q1 21.
IMHO. IANAFA.
Thank you all for the advice so far!
Bin off the 6.9% as quickly as possible (various). I'll aim to pay off a reasonable chunk before mortgage renewal in November, and move the rest into the mortgage.
Monevator (Xeny). Quite enjoying reading this - having a look around there are a few similar sites out there as well that I will look into.
Rental/Mortgage questions (Jonny). Mortgage + Fees (service charge/letting agent etc) is only slightly lower than rental income, but my tax bill normally ends up pretty neutral once you remove rebates for travel. Section 24 is a pain in the arse, but not disastrous. The flat is appreciating slowly, and I think it is worth leaving to pay off the mortgage by itself. I am in the fortunate position of being able to let it out while paying a rate that would normally be for a residential mortgage. I rent from work, but the cost is pretty negligible especially once split with the wife (not practical to buy currently).
Cash into Vanguard in 3mo (Red). Quite like this idea - might split monthly savings between paying off the 6.9 and stashing into an ISA.
IntelligentMoney(various). I will post something in there, probable in the next couple of weeks after my house move. They seem to give some interestingadvice thoughts.
Bin off the 6.9% as quickly as possible (various). I'll aim to pay off a reasonable chunk before mortgage renewal in November, and move the rest into the mortgage.
Monevator (Xeny). Quite enjoying reading this - having a look around there are a few similar sites out there as well that I will look into.
Rental/Mortgage questions (Jonny). Mortgage + Fees (service charge/letting agent etc) is only slightly lower than rental income, but my tax bill normally ends up pretty neutral once you remove rebates for travel. Section 24 is a pain in the arse, but not disastrous. The flat is appreciating slowly, and I think it is worth leaving to pay off the mortgage by itself. I am in the fortunate position of being able to let it out while paying a rate that would normally be for a residential mortgage. I rent from work, but the cost is pretty negligible especially once split with the wife (not practical to buy currently).
Cash into Vanguard in 3mo (Red). Quite like this idea - might split monthly savings between paying off the 6.9 and stashing into an ISA.
IntelligentMoney(various). I will post something in there, probable in the next couple of weeks after my house move. They seem to give some interesting
Gallons Per Mile said:
NewbishDelight said:
They seem to give some interesting advice thoughts.
You're already learning fast! 
OP - Pay the unsecured debt off first, before you do anything. This will make you c. 7% a year guaranteed. That is hard to beat.
Your next step is to build up a cash reserve fund (for emergencies).
Investing is important, but not as important as doing this.
When you have this in place then shift your focus to investing in the most tax efficient ways possible.
Right now the best investment you can make is paying off your high interest debt (and that is an investment BTW).
JulianPH said:
Cheers mate!
OP - Pay the unsecured debt off first, before you do anything. This will make you c. 7% a year guaranteed. That is hard to beat.
Your next step is to build up a cash reserve fund (for emergencies).
Investing is important, but not as important as doing this.
When you have this in place then shift your focus to investing in the most tax efficient ways possible.
Right now the best investment you can make is paying off your high interest debt (and that is an investment BTW).
Good ideas, thank you!OP - Pay the unsecured debt off first, before you do anything. This will make you c. 7% a year guaranteed. That is hard to beat.
Your next step is to build up a cash reserve fund (for emergencies).
Investing is important, but not as important as doing this.
When you have this in place then shift your focus to investing in the most tax efficient ways possible.
Right now the best investment you can make is paying off your high interest debt (and that is an investment BTW).
Gallons Per Mile said:
NewbishDelight said:
They seem to give some interesting advice thoughts.
You're already learning fast! 
True!
I’ve always thought this flowchart is a fair way to look at things: https://i.imgur.com/BfHzwr9.png
Good luck!
Simpo Two said:
'A pound saved is a pound earned'.
IMO it can be even better than that!Imagine a 40% taxpayer who earns £1,000 and has to pay £100 of mortgage interest.
So £600 net income less £100 of outgoings leaves him with £500 of cash.
But if he didn't have to spend that £100 on interest he could make a pension contribution of £100 for which, after recovering tax relief, he'd get £167 of value.
Thus in OPs case the real world "interest cost" on that 6.9% loan can be as high as 11.5%
and reducing it by £1 can pay back a princely £1.67 rockin said:
Thus in OPs case the real world "interest cost" on that 6.9% loan can be as high as 11.5% and reducing it by £1 can pay back a princely £1.67
He'll (probably) pay income tax on it when he takes it which will dampen the final sums, but yes in principle. Piling up money is one thing, getting it out cost-effectively is the next problem...! (unless it's an ISA) and reducing it by £1 can pay back a princely £1.67 Gassing Station | Finance | Top of Page | What's New | My Stuff