Risky investment or pay mortgage off

[Motoforlife]

I’ve been fairly successful in the last 4 years or so trading stocks and ended up with around 200k in my stocks and shares isa. 90 percent of my portfolio makes up 1 stock so obviously very risky. I do like to go big, but not sure if this is too risky now I’m holding a fairly substantial amount.

I m 35 with a 200k mortgage, so do I keep investing (I m pretty confident this share will multi bag even futher from here, or just pay the mortgage off and build it all back up.

2 kids, nursery expenses, wife s got a half decent job but part time so gets 30k pa, we can manage with the mortgage, but it would feel nice to get rid completely.

Thoughts?

Edited by Motoforlife on Monday 31st August 20:53

[Deviation]

It sounds like you know what you want to do already.


But thoughts would be: crap happens, and if said crap hit the fan, I d rather know I ve got a house which I own.

[Motoforlife]

Yeh you re probably right. I know Debt is a good tool if used correctly, and it sounds a good idea until it isn t ?

That said the world s so uncertain now it won t take much to wipe out my portfolio. Maybe I should diversify, I just can t see anywhere else I can see these returns over the next year or 2. I could do half and half but I wouldn t feel the benefit as I d still have the same payments ?

[Dog Biscuit]

Get rid of the mortgage

[FWIW]

I wouldn’t pay the mortgage off, but I’d definitely move the shares into a fund.

[Panamax]

Motoforlife said:

I ve been fairly successful in the last 4 years or so trading stocks and ended up with around 200k in my stocks and shares isa. 90 percent of my portfolio makes up 1 stock so obviously very risky. I do like to go big, but not sure if this is too risky now I m holding a fairly substantial amount.

Are you sure about all this?

By what method is "day trading" available on an efficient basis in an ISA?

How does a "trader" end up with 90% in a single stock?

[Panamax]

Motoforlife said:

I'm 35 with a 200k mortgage, so do I keep investing (I m pretty confident this share will multi bag even further from here, or just pay the mortgage off and build it all back up.

What is "multi-bagging"? Sound like "tea-bagging" with a group of friends.

You haven't mentioned the interest rate on that mortgage, which is fundamentally important in your decision making.

[bogie]

Split it and do both ? paying a big chunk off your mortgage will save many years (and interest) if you keep payments the same.

[Motoforlife]

I’m not day trading. Swing trading, holding anywhere from a few days to a few months depending on profit.

Day trading can easily be done in a sas though, if you have cheap enough trading fees and know what your doing it can be done. I don’t really have time for that though, and with the youngest been a total handful, busy at work and a house extension going on I’ve not traded much recently. Just put most of it into the 1 stock and left it there for now..

[Motoforlife]

Panamax said:

Motoforlife said:

I'm 35 with a 200k mortgage, so do I keep investing (I m pretty confident this share will multi bag even further from here, or just pay the mortgage off and build it all back up.

What is "multi-bagging"? Sound like "tea-bagging" with a group of friends.

You haven't mentioned the interest rate on that mortgage, which is fundamentally important in your decision making.

Doubling my investment or more.

Interest rate is split over a 3 as we’ve moved and also added more for the building works but averages out at around 4 percent.

[chatsworth877]

Motoforlife said:

I ve been fairly successful in the last 4 years or so trading stocks and ended up with around 200k in my stocks and shares isa. 90 percent of my portfolio makes up 1 stock so obviously very risky. I do like to go big, but not sure if this is too risky now I m holding a fairly substantial amount.

I m 35 with a 200k mortgage, so do I keep investing (I m pretty confident this share will multi bag even futher from here, or just pay the mortgage off and build it all back up.

2 kids, nursery expenses, wife s got a half decent job but part time so gets 30k pa, we can manage with the mortgage, but it would feel nice to get rid completely.

Thoughts?

Edited by Motoforlife on Monday 31st August 20:53

Congrats on the run, but the real issue here isn’t the mortgage, it’s the 90% concentration. Conviction feels the same right before a stock doubles and right before it halves; the market already prices in what you know. With two kids and one income being part-time, your household has low resilience to a shock, and a 30-40% drawdown on that position (which happens to good stocks too) wipes out £60-80k overnight regardless of what you do with the mortgage.

Trim it to something sane, 10-20% of the portfolio in one name, then decide the mortgage separately. With that much sitting in an ISA, you can do it CGT-free. Personally I’d use a chunk to clear the mortgage for the certainty and breathing room, and diversify the rest. Not a recommendation, just what I’d weigh.

[Panamax]

Motoforlife said:

Interest rate ..... averages out at around 4 percent.

So you probably have to pay that 4% out of taxed income, unless you're already living off the ISA. So let's say you need 5% or 6% gross to pay the 4% net.

What rate of tax free return do you think you can achieve in the S&S ISA? If you have confidence in a number above 5% or 6% you're away and laughing.

Having said this, it's not obvious to me what shares eligible for ISA are a dead cert' of doubling in value in the near future. Mainstream S&S investments would typically give you 7% to 10%, although there are no guarantees.

[okgo]

Take the lucky run, diversify the (now very large relative to your other numbers) ISA balance into something less risky and let the mortgage be eroded by wage inflation. The £200k will become a very large and meaningful tax free number in 10 years or so. Paying off a mortgage now leaves you without a small payment each month but IMO a very large hill to climb to get anywhere near where you are today.

Having worked for or been close to a few companies where stock has plunged or flown, it s very hard to know how things will go - and that was being on the inside - if you re on the outside it s mostly luck.

[Motoforlife]

chatsworth877 said:

Motoforlife said:

I ve been fairly successful in the last 4 years or so trading stocks and ended up with around 200k in my stocks and shares isa. 90 percent of my portfolio makes up 1 stock so obviously very risky. I do like to go big, but not sure if this is too risky now I m holding a fairly substantial amount.

I m 35 with a 200k mortgage, so do I keep investing (I m pretty confident this share will multi bag even futher from here, or just pay the mortgage off and build it all back up.

2 kids, nursery expenses, wife s got a half decent job but part time so gets 30k pa, we can manage with the mortgage, but it would feel nice to get rid completely.

Thoughts?

Edited by Motoforlife on Monday 31st August 20:53

Congrats on the run, but the real issue here isn t the mortgage, it s the 90% concentration. Conviction feels the same right before a stock doubles and right before it halves; the market already prices in what you know. With two kids and one income being part-time, your household has low resilience to a shock, and a 30-40% drawdown on that position (which happens to good stocks too) wipes out £60-80k overnight regardless of what you do with the mortgage.

Trim it to something sane, 10-20% of the portfolio in one name, then decide the mortgage separately. With that much sitting in an ISA, you can do it CGT-free. Personally I d use a chunk to clear the mortgage for the certainty and breathing room, and diversify the rest. Not a recommendation, just what I d weigh.

That’s the sensible option that I know I should do. I fear I’m becoming a bit greedy, not sure when it’ll be enough. Timing the market is so hard

[Tighnamara]

What is the stock you hold 90% of ?

[Motoforlife]

Panamax said:

Motoforlife said:

Interest rate ..... averages out at around 4 percent.

So you probably have to pay that 4% out of taxed income, unless you're already living off the ISA. So let's say you need 5% or 6% gross to pay the 4% net.

What rate of tax free return do you think you can achieve in the S&S ISA? If you have confidence in a number above 5% or 6% you're away and laughing.

Having said this, it's not obvious to me what shares eligible for ISA are a dead cert' of doubling in value in the near future. Mainstream S&S investments would typically give you 7% to 10%, although there are no guarantees.

I never actually thought of it like that. With the spare cash I’d put more into my workplace pension so they’d be a 40 percent tax saving there so it’s not like everything would be gone, it would just take me a long time to build something substantial up again.

Nothing is a dead cert, but I’m fairly confident with my research and im pretty happy where my money is right now even with the heavy weighting

[Motoforlife]

okgo said:

Take the lucky run, diversify the (now very large relative to your other numbers) ISA balance into something less risky and let the mortgage be eroded by wage inflation. The £200k will become a very large and meaningful tax free number in 10 years or so. Paying off a mortgage now leaves you without a small payment each month but IMO a very large hill to climb to get anywhere near where you are today.

Having worked for or been close to a few companies where stock has plunged or flown, it s very hard to know how things will go - and that was being on the inside - if you re on the outside it s mostly luck.

That’s exactly why I’ve not sold up yet. It took me, or what felt like a long time to get past 100k. It grows a lot faster after 100k but I’d still be looking at 5-10 years of hard saving to get to that level again. I never understood the saying money makes money until I got into the stock market

[Motoforlife]

Tighnamara said:

What is the stock you hold 90% of ?

Metals exploration.- MTL

Junior gold miner, currently in the process of opening a new mine. Once it hits production early 2027 I think it’ll will re rate significantly. If we get a gold bull run, it will be even better.

[Tighnamara]

Motoforlife said:

Tighnamara said:

What is the stock you hold 90% of ?

Metals exploration.- MTL

Junior gold miner, currently in the process of opening a new mine. Once it hits production early 2027 I think it ll will re rate significantly. If we get a gold bull run, it will be even better.

Ok, I would struggle to hold that % / value in such a share, only because I was in your position a number of years holding a decent amount in two shares that were were connected in O & G Exploration in the Falklands.

Desire & Rockhopper

Sat on them both and had made a decent return, all was going to “take off” but then went “ pear” shaped

Rockhopper share price has risen a good bit in the last year but I was out a number of years ago.

Wasn’t 90% of my investments but was a hard hit and a big learning.

Personally I would be taking some profit to pay down mortgage and sit on the rest invested, if they take off taking some profit now won’t be any hardship but if they tank for some unknown reason it will be a big hit.

[okgo]

Motoforlife said:

That s exactly why I ve not sold up yet. It took me, or what felt like a long time to get past 100k. It grows a lot faster after 100k but I d still be looking at 5-10 years of hard saving to get to that level again. I never understood the saying money makes money until I got into the stock market

You don t need to sell up to continue to benefit from compounding returns. You just need to move it into more than one stock. Even us boring passive investors have been making 20% a year for the last few!

Those tiny mining stocks for me are one step removed from meme coins, completely wild swings that is far closer to gambling than investing for my money.

Anyway, when I bought a recent property I left both my wife and I’s ISA’s untouched - too valuable to waste on cheap debt IMO.