Money saving newbie, help needed!
Discussion
Hi PH folk, looking for helpful advice preferably with laymans language used!!! 
I've been unlucky & lucky in inheriting a not inconsiderable sum. I have uses for a chunk already but there will be plenty left...
My questions are thus:
I'm aware investments are a risk, looking for something at the lower end of the risk scale if that makes sense.
Looking to invest £20k initially, followed by up to £400/month, possibly a bit more. Prefer to pay it in monthly if possible.
I've zero experience of the financial world, my BIL works for HSBC but deals with far more digits than my account would ever hold and would prefer independent thoughts as opposed to family.
Looking to save for minimum 10 years, more like 15/20
Me - 40 y/o now, can retire at 55, more likely 60.
Mortgage relatively small, not worried about paying it off as it's cheap borrowing and gives me a focus. Overpaying slightly anyway.
I see loads of people saying they get returns of 8% or more but no idea of where/how to start..
Thanks in advance
Big C
I've been unlucky & lucky in inheriting a not inconsiderable sum. I have uses for a chunk already but there will be plenty left...
My questions are thus:
I'm aware investments are a risk, looking for something at the lower end of the risk scale if that makes sense.
Looking to invest £20k initially, followed by up to £400/month, possibly a bit more. Prefer to pay it in monthly if possible.
I've zero experience of the financial world, my BIL works for HSBC but deals with far more digits than my account would ever hold and would prefer independent thoughts as opposed to family.
Looking to save for minimum 10 years, more like 15/20
Me - 40 y/o now, can retire at 55, more likely 60.
Mortgage relatively small, not worried about paying it off as it's cheap borrowing and gives me a focus. Overpaying slightly anyway.
I see loads of people saying they get returns of 8% or more but no idea of where/how to start..
Thanks in advance
Big C
Stock answer seems to be (unless you are Groat), how much pension contribution will your employer match? Start by putting all of that in, with as much extra as you are comfortable with. Free money from the employer, free money from Rishi, what's not to like?
Then think about the risk you are personally comfortable with, and pick from the posts that follow this one...
Then think about the risk you are personally comfortable with, and pick from the posts that follow this one...
Another thing to understand is pensions and ISAs are what is called a wrapper - you hold investments in them to pay less tax on your profits.
You can hold most kinds of common investments in either, so decide when you may want to access the money (typically before or after 57) to consider if you want a pension or ISA, and finally think about what you want to hold in the wrapper.
You can hold most kinds of common investments in either, so decide when you may want to access the money (typically before or after 57) to consider if you want a pension or ISA, and finally think about what you want to hold in the wrapper.
chazwozza said:
I'm aware investments are a risk, looking for something at the lower end of the risk scale if that makes sense.
Looking to invest £20k initially, followed by up to £400/month, possibly a bit more. Prefer to pay it in monthly if possible.
Look at ISA's and SIPP's as tax wrappers (ISA's are simple, with a SIPP your money is locked away).Looking to invest £20k initially, followed by up to £400/month, possibly a bit more. Prefer to pay it in monthly if possible.
For "lower end of the risk scale" I have a question.
If you put £20K into something today and you came to look at it tomorrow or in six months time what balance would you be comfortable seeing on the screen?
Try and be honest
grahamm said:
I have been very happy with my Fundsmith ISA. You can pay in a lump sum and set up monthly payments. The ISA limit is £20k pa. so you might need to put some in non-ISA account and transfer across next tax year. I am not a financial advisor, just a happy customer.
This is the kind of simple answer I like and probably the kind of thing i'll end up doing. Guess just which company to go with is the decision.May I ask what returns you've had?
b
hstewie said:
hstewie said:chazwozza said:
I'm aware investments are a risk, looking for something at the lower end of the risk scale if that makes sense.
Looking to invest £20k initially, followed by up to £400/month, possibly a bit more. Prefer to pay it in monthly if possible.
Look at ISA's and SIPP's as tax wrappers (ISA's are simple, with a SIPP your money is locked away).Looking to invest £20k initially, followed by up to £400/month, possibly a bit more. Prefer to pay it in monthly if possible.
For "lower end of the risk scale" I have a question.
If you put £20K into something today and you came to look at it tomorrow or in six months time what balance would you be comfortable seeing on the screen?
Try and be honest
chazwozza said:
Honestly no idea, but seeing as i'm looking to stash for sometime i'd try not to look, haha.
I'd at least try and put a number on it even if it's a finger in the air guess.It's pretty sobering when you think you're losing actual real money and the temptation to sell is very real.
Investing in a 100% equity fund isn't at the lower end of the risk spectrum.
If you can truly not look you're doing better than most people
bhstewie said:
hstewie said:chazwozza said:
Honestly no idea, but seeing as i'm looking to stash for sometime i'd try not to look, haha.
I'd at least try and put a number on it even if it's a finger in the air guess.It's pretty sobering when you think you're losing actual real money and the temptation to sell is very real.
Investing in a 100% equity fund isn't at the lower end of the risk spectrum.
If you can truly not look you're doing better than most people
Hard one, i'd guess maybe 25-35%? I'm here for queries like this. Just seems pointless to leave it in the bank.
chazwozza said:
Don't know what a 100% equity fund is...
Hard one, i'd guess maybe 25-35%? I'm here for queries like this. Just seems pointless to leave it in the bank.
Ah! Hard one, i'd guess maybe 25-35%? I'm here for queries like this. Just seems pointless to leave it in the bank.
Agree it's losing value in the bank but basically it isn't an all or nothing thing where either it's cash or it's shares (equities).
There are lots of multi-asset funds that mix shares with other asset types (like bonds) to try to blend the volatility of the fund to something that suits your attitude to risk.
If you go off recent history I'd be nervous about being 100% in shares if you don't think you could stomach seeing that £20K reduced to £10K for a period of time.
The Intelligent Money threads are a good suggestion and I'd also take a look at the Vanguard Investor site and Monevator.
bhstewie said:
hstewie said:chazwozza said:
Don't know what a 100% equity fund is...
Hard one, i'd guess maybe 25-35%? I'm here for queries like this. Just seems pointless to leave it in the bank.
Ah! Hard one, i'd guess maybe 25-35%? I'm here for queries like this. Just seems pointless to leave it in the bank.
Agree it's losing value in the bank but basically it isn't an all or nothing thing where either it's cash or it's shares (equities).
There are lots of multi-asset funds that mix shares with other asset types (like bonds) to try to blend the volatility of the fund to something that suits your attitude to risk.
If you go off recent history I'd be nervous about being 100% in shares if you don't think you could stomach seeing that £20K reduced to £10K for a period of time.
The Intelligent Money threads are a good suggestion and I'd also take a look at the Vanguard Investor site and Monevator.
chazwozza said:
Thank you, have been looking at Vanguard. May need to get some 'proper' advice once I have the cash in the bank.. no offence
None taken whatsoever I wouldn't invest a large chunk based solely off what some randoms on the Internet told me Watch and read stuff by Lars Kroijer as he breaks things down into plain English and common sense.
If you want something straightforward and low cost that you can just set and forget and that will be there or there about for a given appetite for risk I don't think you can go far wrong with the Vanguard LifeStrategy range.
Likewise no offence but £20K isn't a lot in as much as many IFA's just won't be interested - it's pretty much acknowledged that there's an "advice gap" for people in your situation.
That's where someone like Intelligent Money might be worth a look.
chazwozza said:
This is the kind of simple answer I like and probably the kind of thing i'll end up doing. Guess just which company to go with is the decision.
May I ask what returns you've had?
That's public information - look about half way down https://www.fundsmith.co.uk/fund-factsheet for a monthly performance table for the past 10 or so years.May I ask what returns you've had?
Look at the bad months as well, and think if you're up for numbers going up and down that dramatically.
Remember also prior performance is not a relable indicator of future performance :-)
As I said before, figure out the wrapper you want, and then pick what to put in in - can be a mixture of Fundsmith and some Vanguard funds for example.
chazwozza said:
grahamm said:
I have been very happy with my Fundsmith ISA. You can pay in a lump sum and set up monthly payments. The ISA limit is £20k pa. so you might need to put some in non-ISA account and transfer across next tax year. I am not a financial advisor, just a happy customer.
This is the kind of simple answer I like and probably the kind of thing i'll end up doing. Guess just which company to go with is the decision.May I ask what returns you've had?
bhstewie said:
hstewie said: If you can truly not look you're doing better than most people
I have a spreadsheet that automagically spits out a number. I typically look a few times a day.If you can keep your head when all about you are losing theirs and put money in when the number is getting smaller fast, is looking frequently a bad thing?
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