How would you invest £750 per month?

[S9JTO]

Hi all,

Looking for some advice on what vehicle/s I should look in to. For some background; I'm 22, full-time employment, live at home and have no debts or dependents.

I currently work for an online investment platform so have become aware of various methods of investing, however none of it really suits my current situation. I am however planning on maxing out a LISA before the end of the tax year to receive the 25% cash bonus.

So; as mentioned in the title. I have roughly £750-£1000 per month which is disposable after bills, travel expenses, petrol (mainly), some car parts and general living expenses.

At the minute I only have one bank account with all of my savings in it, I don't split my money across multiple accounts as I like having it in one place. I'm currently with Santander in the 123 account which as far as I'm aware is still the best current account available. I have a very generous pension scheme so that isn't a worry. I have paid for my car in full now (I have just over £9k in savings left) so I'm looking for maximum growth with mid-high risk. However, the main drawback for me is that I would like to have access to my funds at relatively short notice 3-6 months therefore an ETF or fund could potentially be risky.

Could anyone help point me in the right direction?

Edited by S9JTO on Tuesday 21st November 10:47

Edited by S9JTO on Tuesday 21st November 10:49

[S9JTO]

Craikeybaby said:

LISA is obviously a good starting point, but I'd also look at a S&S ISA, but keep some in your existing account as a rainy day fund.

When you say 'some' is this something along the lines of 6 months of living expenses?

[S9JTO]

sidicks said:

If you potentially only have a 3-6 month investment horizon it’s hard to recommend equity investments unless you’re happy to take the risk of crystallising a significant mark-to-market loss?

That's my problem exactly as I'm not particularly comfortable risking my entire savings. I'm currently building my savings to a point where I can put X amount into a savings account and forget about it (rainy day fund) and then continually invest the £750-£1000 into Y

[S9JTO]

sidicks said:

I think Y should be a stocks and shares ISA if you have a high probability of not needing to access it for 5+ years.

Not a chance, I will need it before then! Unless I heavily reduced that £750-£1000 to say £250. Is there anything more accessible that's better than the 1.5% interest I'm getting currently that you know of?

[S9JTO]

Craikeybaby said:

Something like that.

Although if you need to access the whole lot in 3 to 6 months I would just carry on with what you are doing.

Seems sensible, however I was hoping this wouldn't be the case!

[S9JTO]

jeff m2 said:

22 years old.....Equity ir really your only choice, no telling what a Pound will be worth down the road.
Sub 2% return with inflation starting to elevate etc etc.

But you don't need to go "all in".
Three 250s, one to a UK 250 index fund, next 250 to a global fund, last 250 , cash set aside for opportunity.

I'm not a contributing investor anymore, but I would always look at value when I was funding something.
I would look at the exchange rate on the day I was making a contribution, if the Dollar was strong I would stick that money in a foreign fund.
Dollar weak.... money would go into a US domestic fund. On the day it would perhaps only save me a few Dollars but over the years I'm sure it helped.

You could set maybe the Dollar Pound ratio of 1.315 as your "decision" for an investment on that day. Should you choose to invest manually.

Whatever you decide to do you will probably prosper in the long term. As starting when you still live at home is one of the two times you can amass some money. (the other being when the mortgage is paid off)

However you have chosen a time at which things are flying high to begin.
Emerging markets up 40% YTD as are many Asian funds (mostly on the back of tencent) The US is doing very well and should consolidate those gains once the corp tax part of the new tax legislation is in.

Brexit and UK are really the unknowns. UK debt on the personal side is far too high and there is uncertainty as to how this will play out as int rates increase. It will undoubtedly squeeze overextended people and severely affect consumer spending. All you can do is, be aware of what will or could happen.

Thanks for your response Jeff, some interesting points in there that I will definitely consider. I have contemplated the 3 or 4 x £250 option or simply 2 x £500 for example.

I have never thought about the exchange rate before making an investment... It does make sense however.

I know what you mean re: Brexit/UK uncertainty as I have witnessed my SIPP's UK Smaller Companies fund fluctuate hugely!

[S9JTO]

soad said:

Spend it on cars and wimmin.

I already do! However, there's always room for more I s'pose

[S9JTO]

vindaloo79 said:

A mortgage once the zero stamp duty takes place, if it hasn't already?

Get friends as lodgers.

That's the long-er term plan, as mentioned above I'm gunna max out my LISA contributions before the end of this tax year and then top it up monthly for a few years (my girlfriend is doing the same) - I don't want to move out yet! I've got it too good at home haha - However, if by mortgage you mean for a rental property then maybe.

I haven't looked in to the details of the new stamp duty stuff yet so I don't know whether or not it'll only be available to first time buyers who live in the house for X amount of time rather than buy to rent out as this applies for the LISA bonus. I'm sure someone here will quickly correct me.

[S9JTO]

VAGLover said:

A good meal out each month?

Couldn't think of a worse way of spending my money to be honest

[S9JTO]

BoRED S2upid said:

Isn’t the LISA the one you can’t touch? Like a pension. I wouldn’t fancy that personally I’d max out a S&S Isa at your age you never know when you might need access to it LISA doesn’t give you that option.

You're half right - It can either be used to purchase your first home (which applies to me) or used as an additional pension fund.

[S9JTO]

M511 said:

Cryptocurrency

Has the ship not sailed yet?

[S9JTO]

jonny70 said:

@OP, what are your intending on doing with your savings? (Buys house in next few years ?)

If you plan on using/needing the money in the next few years keep it in cash in a savings acc (maybe the 123 acc and switch ur daily banking to another acc ) , if. U won’t need it for at least 5 years then invest it in funds/trackers in the stock market.

As mentioned above, I'll probably be looking to buy a house within the next 5 years as well as incrementally upgrading my car every couple of years (or less) - I am also already with the 123 account, made that switch a few months ago, good decision!

[95JO]

seb345 said:

That's a fairly nice starting point for investments. I feel like a lot of people are into investing these days.

OP here - Yeah, I ended up maxing out my S&S Lifetime ISA contributions for almost 3 tax years and I saw a healthy return over that time. I bought my first house with my girlfriend with the LISA pot late last year.

I also upgraded my car and subsequently paid the finance off it, so yeah it worked out well!

[95JO]

sociopath said:

Good job you didn't follow the advice of using Fundingsecure

;-)

Indeed