How to start investing? 30 years old

[Nickbrapp]

I’m now at the point where I’m starting to think seriously about investing each month, I’ve bought a house that il be in for some years and requires no work.

I earn 35k basic and 39k after bonus and overtime etc

No kids, never going to, single, after bills have approx £1000 to spend in the month

Currently maxing out pension at 7% which is matched up to 7%, I have thought about increasing this to 10% or more, have a company van that I use for personal use so can’t reduce BIK

I have a loan of 11k with 3 years on it at 2.2% and 2k on s credit card at 0% until 2024.

I’ve looked at Moneybox ISAs and I’m thinking of starting at £100 a month and perhaps using their save the change which rounds up each week to the nearest £1 and invests it.

Is this the right strategy? Currently after moving I don’t have a emergency fund or any real savings apart from what’s left in my current account, (moved in December and still paying off bits and bobs)

My only goal is to give up work early as I can, and move somewhere warm and sunny as soon as possible without having to do a real 9-5

[Simpo Two]

If you can't put any more into a pension then one suggestion would be to open an S&S ISA (limit £20K pa) and choose your investments within that. That just leaves the 'what investment?' question which I'll pass to my esteemed colleagues...

The benefit of an ISA is that you can sell/reshuffle/wihdraw investments whenever you like within it with no tax liability. You can also keep cash in a S&S ISA.

Edited by Simpo Two on Thursday 3rd March 21:36

[covmutley]

I'd get the credit card paid off, just to simplify, whilst at same time saving up a rainy day fund of 2k.

Then stocks and shares isa as suggested above.

[MG CHRIS]

Pay off debts first maybe over pay on mortgage then put say £200-300 a month in stocks and shares ISA on a broker platform like freetrade.very simple to use.
You also got dividend investing side which companies or index funds pay you a % of the shares you earn every 3 months.
It all depends what you want to achieve.,

[Nickbrapp]

Is there any point in paying off the credit card? The balance is intrest free for 2 more years, and I’ve set the direct debit up to make sure it’s gone in that time

I’m not sure what I want to achieve, good returns over the long term I suppose

[covmutley]

Given that it's 0%, then no not really. But sometimes it's easier to deal with things one at a time and focusing on it than scattering effort around.

[Steve H]

Getting rid of debt is always a good thing to do but if it is costing you little/nothing then you’re right, there’s no need to hurry.

ISAs are the go-to tax free route as mentioned already and it sounds like you aren’t looking at using more than the annual limits, have a look on the Intelligent Money investing thread on this forum for a lot more discussion on the general subject, types of fund to invest in etc.

[bitchstewie]

I'd look at paying down your debts and building up a bit of an emergency pot.

Others will have their view but it doesn't have to be all or nothing you could still open an ISA and drip into that every month but I'd want something to fall back on if I woke up one day and either found myself out of work or wanting to not work for a while.

[Mrr T]

When you say you are maxing out your pension I assume you mean your company pension. You can put up to 100% of salary capped at 40k into a pension.

I would recommend at least half as additional contributions to your company scheme if possible or start a SIPP. You will get your tax back so starts with 20% more than the same in an ISA.

[Steve H]

Be aware that the downside of putting it into a pension is that it locks it up for (in the OPs case) 25 years.

An ISA can be a rainy day fund with no penalties if you need to use it.

[Carbon Sasquatch]

You won't know until many years down the line what you should have done

I'd be inclined to split it 3 ways - S&S ISA, pension via salary sacrifice & over pay mortgage.

All have their pros & cons - ISA is available in an emergency, pension is most tax advantageous but locked up for many years - and mortgage is just a great sense of relief to be totally debt free.

Whether a S&S ISA will outperform a mortgage - who knows. Over the last x years, then an ISA would likely have been the better answer, but for the next x years, you just don't know.

[CinnamonFan]

If i were you,

Save 6 months of living expenses, stick it somewhere safe. Premium bonds or Marcus account. If for whatever reason you find yourself out of work, your house needs a few thousand spending at once you have it waiting. You will sleep better.

Next, if you arent going to clear your credit card, id split the spare £1000. £500 towards the loan and £500 invested in a stocks and shares ISA. When the loan is gone £1k invested per month.

The idea is to build an isa bridge to fund your lifestyle from when you stop working untill your pension pays out.

Look up Mr Money Moustache simple math behind early retirement.