18 year old - how best to invest £10-13k?

[595Heaven]

My son had just over £13k in a matured Junior ISA.

Has no short term need for the cash, and also has a Help To Buy ISA into which we’re putting the max £200/ month.

Assuming he may want to keep some as cash, what should he be looking at to invest c. £10k over the long term (I suspect five years minimum)

S&S ISA / pension? Something else!

Thanks in advance!

[RSTurboPaul]

Given the impending global financial crash that will take place when the US QE-to-infinity machine stops printing, perhaps some precious metals would be a good bet as a long term store of value.

[BoRED S2upid]

I’d say a S&S isa but can he have one and a help to buy isa?

[bitchstewie]

Not sure of the wrapper options at that age but if you can get him interested enough to stick with it then a simple cheap global tracker is about as fire and forget as you can get.

HOW TO BUILD A COMPOUNDING MACHINE

Wish I'd read this at his age.

[595Heaven]

BoRED S2upid said:

I’d say a S&S isa but can he have one and a help to buy isa?

Thanks. I'd wondered the same, but it seems that you can - the Help to Buy ISA is a Cash ISA

[595Heaven]

RSTurboPaul said:

Given the impending global financial crash that will take place when the US QE-to-infinity machine stops printing, perhaps some precious metals would be a good bet as a long term store of value.

Not sure how easy that is to do in reality?

[bitchstewie]

595Heaven said:

Not sure how easy that is to do in reality?

Easy enough to buy an ETF or precious metals fund.

The hard part is knowing whether that's really the right place to be and when it isn't.

[595Heaven]

bhstewie said:

Not sure of the wrapper options at that age but if you can get him interested enough to stick with it then a simple cheap global tracker is about as fire and forget as you can get.

HOW TO BUILD A COMPOUNDING MACHINE

Wish I'd read this at his age.

That is the sort of article I was trying to find to show him - thanks!

[anonymous-user]

bhstewie said:

Not sure of the wrapper options at that age but if you can get him interested enough to stick with it then a simple cheap global tracker is about as fire and forget as you can get.

HOW TO BUILD A COMPOUNDING MACHINE

Wish I'd read this at his age.

Same here, I started one six months ago at the age of 47, better late than never I suppose. I am paying in around £1000 to £1500 a month and am hoping to have enough to pay my mortgage off in 7 years time.

As the article says, the first six or seven years are boring but I am hoping I will have enough to pay off my mortgage by then, but will leave it in the ISA as it is outperforming the 1.6% my mortgage is costing me.

That is the plan anyway. My one piece of advice would be don't buy cars on finance, I dread to think how much I would have if I had put all that money into a COMPOUNDING machine over the last 25 years.

[Phil.]

Open a S&S ISA. I did this with my kids via their Barclays account and they can view the investment on the app. Makes it more fun for them to see the increases and to understand the dips….. It’s also easy to invest and to sell/get cash out when required. I’m sure other banks have similar facilities.

Consider investing in a Baillie Gifford fund to two. I’ve used their ‘managed fund’ for some years successfully and it has low management charges.

https://www.bailliegifford.com/en/uk/individual-in...

[NowWatchThisDrive]

At his stage in life, with time and a positive earnings trajectory on his side, there's little sensible reason not to be almost entirely invested in equities (or risk assets more broadly). He's at the perfect point to start learning the kinds of lessons about markets, his own risk psychology and the power of compounding that will benefit him for the rest of his life, with money that he won't need for several decades yet.

Just don't pay too much attention to people like this, or he will psych himself out of ever owning a share in his life:

RSTurboPaul said:

Given the impending global financial crash that will take place when the US QE-to-infinity machine stops printing, perhaps some precious metals would be a good bet as a long term store of value.

[Ryan_T]

Bang it in VWRL or VUSA - Perhaps drip feeding a grand or so in a month so you’re averaging out your cost if you want to be steady.

People over complicate this, the S&P500 has returned about 9/10% per year throughout its history, no messing.

[anonymous-user]

Ryan_T said:

Bang it in VWRL or VUSA - Perhaps drip feeding a grand or so in a month so you’re averaging out your cost if you want to be steady.

People over complicate this, the S&P500 has returned about 9/10% per year throughout its history, no messing.

Thank you, I have been paying into the Life Strategy 100 fund so far, but I will start paying into the VUSA after reading this and doing some investigation.

I so wish I knew about this sort of thing 25 years ago......

[RSTurboPaul]

bhstewie said:

595Heaven said:

Not sure how easy that is to do in reality?

Easy enough to buy an ETF or precious metals fund.

The hard part is knowing whether that's really the right place to be and when it isn't.

ETFs are not physical metal... lol

Given the paper silver market is a fractional system and has little basis on physical silver availability, when it all folds, there are going to be a lot of people in SLV and similar left with nothing in their hands.

Buy Gold and/or Silver Brittanias from Bairds or Atkinsons or the other bullion dealers and put it somewhere safe, and just sit on it. When the markets finally fall over, the rush to metals should see them bump in price nicely, and even if they don't 'moon', they are a good hedge against long term inflation and market crashes.

NowWatchThisDrive said:

At his stage in life, with time and a positive earnings trajectory on his side, there's little sensible reason not to be almost entirely invested in equities (or risk assets more broadly). He's at the perfect point to start learning the kinds of lessons about markets, his own risk psychology and the power of compounding that will benefit him for the rest of his life, with money that he won't need for several decades yet.

Just don't pay too much attention to people like this, or he will psych himself out of ever owning a share in his life:

RSTurboPaul said:

Given the impending global financial crash that will take place when the US QE-to-infinity machine stops printing, perhaps some precious metals would be a good bet as a long term store of value.

You don't have to go all in, obviously, but 5-10% of a portfolio in physically-held metals would seem sensible. Buying small amounts regularly would also average costs out over time and help avoid dips and peaks.


I'm not an expert (obviously ) but browsing charts posted elsewhere of money supply, inflation and stock market trends, I don't see how it can be argued that now is a good time to jump into the stock markets in any meaningful way!

[bitchstewie]

You said precious metals which I didn't take to mean physical metal hidden under your bed.

If the whole system has collapsed to the point where a physically backed ETF or OEIC isn't good enough I suspect we've all got rather bigger things to worry about.

[chinnyman]

If both of you are comfortable with risk and how long do you want to stash it away.

Whack it into a tracker fund. If it went down 10% and you had 11k rather than 13 would it bother you?

Compounding is great but more for the long term

[Huntsman]

Mind if I hijack?

My son, age 6, has a cash junior ISA, its earning 0.1% I think, so in real terms its losing money. There's about £4k in it.

The Nationwide website says the loot can't be withdrawn, but can be transferred to another junior ISA manager.

So what do I do if I want to adopt the principle of the compounding machine? Log on to Vanguard, open an junior ISA account, take the details for Nationwide, ask them to wire it over? ONce its with Vanguard I can choose VWRL from a drop down list?

If say I wanted to add £200 a month into it, I can do that?

[Hobo]

As others have said, Stocks & Shares ISA is the way to go IMO. Open an account (I use Hargreaves Lansdown for myself, the wife and the kids accounts) and away you go.

Personally I pick 10 to 15 funds and put equal amounts into each, and then just review them every 3 to 6 months by looking at something like this;

https://www.ii.co.uk/analysis-commentary/top-perfo...

https://media-prod.ii.co.uk/s3fs-public/pdfs/funds...

That 13k can very quickly (relatively) turn into a sizeable amount which could set a kid up for life. If you can add monies monthly as well it would help (the earlier the better as when it gets to a more sizeable figure the monthly addition becomes less relevant).

[Mankers]

Hobo said:

As others have said, Stocks & Shares ISA is the way to go IMO. Open an account (I use Hargreaves Lansdown for myself, the wife and the kids accounts) and away you go.

Personally I pick 10 to 15 funds and put equal amounts into each, and then just review them every 3 to 6 months by looking at something like this;

https://www.ii.co.uk/analysis-commentary/top-perfo...

https://media-prod.ii.co.uk/s3fs-public/pdfs/funds...

That 13k can very quickly (relatively) turn into a sizeable amount which could set a kid up for life. If you can add monies monthly as well it would help (the earlier the better as when it gets to a more sizeable figure the monthly addition becomes less relevant).

It sounds like you are making extra work for yourself IMO. 10 - 15 funds will typically hold 40-80+ individual investments each, which is well over diversified. Perhaps refine the selection down by 50%, and cut your monitoring and selection work in half.

[paddy1970]

Coke and prostitutes ... you only live once