How do you become/maintain an interest in savings/investments?
Top sources of info?
After many years of not having very much money at all, we appear to have a good stable income and we now manage to save more money than I need to spend.
We have joint finances but neither DH nor myself are terribly good at managing it - in the sense we have savings in low interest accounts (are there any others these days?) and very few in investments/property etc.
I periodically feel I should get better at managing money but rarely manage to keep on top of it - to be clear it's not the budgeting aspect I find difficult it's the what to do with it when I've saved it.
So how did you get interested in investments, how do you maintain this and what are your top sources of information for new products/best investment advice etc etc.
We have no major debts beyond a mortgage on a very low interest rate, both have good pensions. I realise this is not the usual money problem most people have...
Sorry of no help with investments but would also love to see what others are up to. We're saving for a house so have a bit in current accounts, but need to start putting cash somewhere else.
We have a nationwide current account, and two bank of Scotland accounts which keeps £12500 getting interest. Those accounts don't need dd coming out.
I'm applying for a first direct account which will give me access to a savings account too, it only allows £300 a month, but the interest is better than ISAs ATM. This years ISA is a virgin 2 year one as I heard it was best.
Don't have enough money to do more than basic savings/ISA, so I use savingschampion.co.uk to see the best rates.
the 'best' rates are in current accounts at the moment, and this involves a varying amount of faffing about to just about keep pace with inflation.
this list will help:
best rates are summarised as follows. These accounts need varying payments in, but you can move money between them with standing orders so you don't need a big income. Or indeed any income!
5% in the TSB Classic plus, you can have 2 each, max 2k, no DDs needed
5% in the Nationwide, 1 year only, 1 each
4% Club Lloyds: max 5k, 2 DDs
3%: Bank of Scotland vantage (3 per person), TSB Enhance (3 per person)
Santander 123: 1 each but max £20k. £2 a month fee, needs DDs.
Tesco current: max 3k.
anything lower, don't bother.
Thanks for the suggestions!
I'm definitely mostly interested in non-bank savings investing right now.
Consider what risk you are happy to accept. Company bonds can give a 6% return but there is risk, you can lose the amount invested. Companies like JohnLewis have bond issues from time to time.
You need to think timescale - generally you should have 3 months income in short term savings accounts. After that, i would move into shares, probably through a low cost tracker fund.
Make sure you use the full ISA allowance each year first.
Unless you learn about it in depth and it interests you, I would do something simple and then review every year.
The other thing is to consider your saving goals -ie what will you spend the money on?
Thanks for your help ladies. We're there already with savings/ISAs etc. It's where do we go from here that I really need help with.
Where would you look first to learn about these kind of things?
It depends on what you mean about where you start. Do you understand how companies/stock markets work, bonds, investment trusts etc?
If not I would recommend the weekend money pages on the proper papers and saturday's FT.
I also like Warran Buffett's (world's most successful investor) letters he write to his shareholders here
Thanks for the link caroldecker. I do more or less understand how this stuff works. I think the problem is choice over load - there are just way too many products on the market and I don't even know where to begin in making a choice about what to go for!
It's a good idea to be goal focused though.
I think I should do this more...
Agree there is lots of choice, but I would look at it one of 3 ways (and can mix and match), depending on your interest/time and goals.
1. Goal - better result than cash - little day to day management - UK/US/Europe main market (FTSE/SP) tracker (although fx risk with overseas). Buy through fund supermarket, invest monthly and ignore (except for tax return and when you want to spend it). Make sure it is a proper traker and doesn't use derivatives.
2. Goal - holiday of a lifetime or bust - little day to day mangement - emerging market or commodity (eg gold) tracker - set a large goal (based on cost of holiday), check prices monthly and sell when you have made it - can be risky
3. Goal - get involved in managing money - review daily/weekly - set up an account with a broker (money supermarket has some options), read about companies (eg investor chronicle) - buy those that you think have potential, often those with products you see trending at school/work
Of the 3, option 1 is most likely to make money in the long term, but least interesting.
Option 2 does not involve much time and can be fun planning the spending (although you may never get the money).
Option 3 is great if you enjoy it, but rubbish if not
Thanks for that caroldecker that really helpfully summarises it for me!
Can I ask which companies (online in particular) you would use/suggest for these. I imagine moneysupermarket would be good for option 1? (Given cost of university these days, this is an appealing option.
I'm not quite sure I'm up to option 3 yet but I do like the idea of option 2 as well...
I may be flamed for this but have found the money section of the Daily Mail online app really useful in expanding my knowledge of finance and investment. Had originally started to read up as I had taken on Power of Attorney duties but being up to speed financially has caused us to pay more attention to our own finance (SIPPs, ISAs, trackers, remortgage).
Read the Motley Fool before getting into investments. Basically they suggest finding a FTSE All Share (ie 250 index not the 100) investment or unit trust with the lowest possible fees (Se M&G or L&G) and then investing monthly via direct debit. This uses share price averaging so that you don't have to worry so much about when to buy as you are drip feeding into the market. This will probably get you about 14% annualised growth if you hold for the long term and keep it in an ISA wrapper. Buying shares like this means that you just pay in and a computer does the rest so you don't have to be that interested or knowledgeable. Most computers beat the funds with higher charges that have active fund managers - or at least the lower cost of the tracking computer outpaces the fund manager in the long term as fees eat massively into your returns if you let them.
However alongside or instead of this I would highly recommend that you make overpayments on your mortgage. Many products allow this (check whether they are instantly credited or whether they have a particular day each year and/or any limits on amounts) and get paying to reduce the term. If you use a calculator like this you can see how many years are shaved off the term and more importantly how much you will save in interest payments. If you can pay up to £500 per month the savings get eyewatering large! Being mortgage free is f***ing brilliant. Best thing we ever did.
I am now looking into property to get better returns over the long term and to invest for the kids. I just need to find someone who can advise me on setting it all up properly so the tax man doesn't wreck it all later!
Before anyone comes along thinking I am some over priviledged type, I started work earning less than I could have behind the counter of a book shop. That made me concentrate and save £50 per month as soon as I could afford it into a unit trust (as above). Every time I had a pay rise, I would give myself half to "spend" and half to "save". Over the years this has served me very well so I have choices now because of the wonders of compound interest. I am doing the same for my kids now using the child benefit which we top up and save into low cost trackers/JISAs for them. The amounts are not large but over the long term small amounts really add up using the drip feed method.
Oh I forgot to say that all of the above is irrelevant if you have loans. Credit is expensive and must be avoided!! Before you start saving you must get rid of any outstanding loans - just compare the interest you pay out compared with the interest that you are getting in from a savings account and you will weep.
Thanks for all your input ladies.
This is really helpful background.
I have also had a couple of books recommended to me which I have started ploughing through. I thought I would post the titles here as they also seem to be quite good so far and may be useful to others. Namely:
The FT guide to wealth management by Jason Butler
FT guide to wealth management
And not looked at yet but same series:
The FT guide to Investing by Glenn Arnold
Don't bother with anything else until your mortgage is zero. Use any spare money to pay that off.
So, this is a real zombie thread but I thought I should come back and update it. I can see that I posted this message almost exactly 2 years ago. I haven't exactly been playing the markets or doing some full-time course on finance or investments in the meantime but thanks to the excellent advice of carol decker and tricot39 in particular and a fair bit of reading around and doing my own research, I do feel a lot more savvy about how to manage our money a bit more handily than I did two years ago. Which is nice and actually rather empowering.
Judging by the current top threads in this section it looks like lots of other people have the same question and given I'm not an IFA I can only share a few handy links of how to educate yourself in investments and the like and to urge you to go through the same journey.
It's made a huge difference as rather than leaving it all to my husband like a 19th century housewife we are now much more equal in being able to manage our finances. If either one of is should be run over the proverbial bus tomorrow it will not be such a struggle to make ends meet or even simply work out what is where.
I have a couple of observations, particularly relevant here:
Firstly, there seems to be a tendency in the UK in general to overfocus on property, make sure you don't put all your eggs in this basket, diversify.
Secondly, there is a tonne of dodgy advice on the internet (and also frankly and disappointingly from some credited financial advisers). Make sure you educate yourself (the books I listed above were really helpful in this respect) to be able to distinguish between those who know what they are talking about and those who don't.
Thirdly, investing makes no sense until your debts are paid off, but that does not necessarily mean you should have your mortgage paid off first before you start, it depends on your own circumstances. Make sure you know how much you earn, how much you spend and how much you have saved. Get a pension. Cut unnecessary costs and reduce your bills where possible
Finally, start as soon as you can understanding saving and investment on your own (and your family's terms). And then, and this is actually the really difficult step, start doing something about it.
I have actually found it really fun learning about personal finance. Watching money grow (and sometimes shrink) is much more interesting than I had ever thought.
In addition to the above links (the FT guides, the motley fool and the money pages of our newspaper) I also found good old Martin Lewis excellent:
and I discovered this blog:
which really demystified passive versus active investing and has tonnes of helpful practical advice on getting started.
This one is American but rather entertainingly written and focused very much on the FI (financial independence) route.
It's not something I'm aiming for but there's lots of helpful advice on cutting costs and how to track investments so worth a browse.
My plan next is to watch some of the HMRC webinars for guidance on paying the correct amount of tax.
In case anyone is interested in what we actually did (details deliberately vague here!):
We paid off mortgage on my old flat that I was renting out and also bought and renovated a new one. We deliberately chose a good location in a university city and bought in a historic centre rather than a new build a little way out as the prices seem to hold up better for these. We're in it for the long haul, I am more interested in getting and keeping good tenants than squeezing every last penny out so we have set the rent to a more reasonable level than the agent advised! The renovations/purchases etc were however handled by an agent as we have neither time nor expertise to do it ourselves. This may have cost us more than doing it ourselves, but the actual "doing something more than having cash sitting in an account" has already more than outweighed the extra costs, plus the speed and quality of the work was very good. We are using the income from these to invest in a fund (an OEIC if you want the detail) based on index trackers with some balancing by gilts (government bonds), bonds etc.
In the process of revising this we did a thorough analysis of our spending and cut more than 20% off our bills as well as reducing a lot of our other household expenses by working out where we are wasting energy + money.
We still have a way to go, some investments inherited last year need to be consolidated in some more efficient way and we still have a small mortgage (though at a very low interest rate) on our family home but
we now both feel better off than ever which is just as well as it's possible my husband may lose his job this year, fortunately we're much more able to cope with it financially than a few years ago.
It means the time we've taken (and it has been tough to carve it out between work and kids) to shore up our financial situation has in the long run taken quite a lot of pressure out of what is still a rather stressful work situation.
As I already said, if you are at all in doubt about this stuff, start today.
Hope this is helpful and not too ranty, there is a taboo of sorts in discussing money, especially among women and especially in the UK and it does none of us any good at all. Being able to openly discuss money and our joint finances actually felt bizarrely awkward at first but it's now become much more a normal part of our everyday conversation which has really helped.
Maybe Mumsnet would like to put together a decent guide or at least gather some helpful weblinks on how to handle money and investments to try and narrow the gender gap in income and wealth?
Thank you so much for this thread! I really want to start shaping up and improving my finances, and this is an incredibly helpful thread
And here is a really funny John Oliver segment on the importance of knowing what you're doing...
Glacierchick, this is really informative. Thank you! I would like to delve into investments but it's very daunting from the outside looking in.
This thread is a helpful boost in the right direction. 😊
I use Hargreaves Lansdown & started by having a bit of a flutter on their top 100 funds. No more than what you can afford to lose if things go tits up, (spread across 5-6 funds, look for low cost high performing funds in sectors you know about) & def no lump sums & see how that goes. I am really risk averse and so invested in countries/sectors I knew a lot about (Asia, UK equities, Europe) and since Brexit these funds have grown 50%. However you do need to keep your money in for at least 5 years before you can hope to see that level of gains.
glacier, thanks for the update and info. That link was rather funny - I enjoyed it.
About 6 months ago, I was debating whether to sign up with a St James Place IFA or go DIY with an index linked tracker. Though I liked the IFA and really wanted to go with her, I have to say I just could not bring myself to pay SJP's upfront fees. I went with the low cost tracker (Vanguard) instead.
The tracker seems to have survived Brexit pretty well. Which is good enough for me as a long term leave it alone investor.
Hargreaves Lansdown is an easy to use platform. For me, I just invest an amount that means if there is a 20-30% downswing I won't lose any sleep (money is never worth losing sleep over if it can be avoided!) in a mix of simple tracker funds.
For savings, I check Savings Champion which lists the best savings rate, plus Money Saving Expert is good for current accounts and bills.
My top tip for bills is just to call up each of your bill providers, say you're going to move to another provider. You'll often be able to get a reasonable discount so long as you agree to another 12 months. Sky is particular good for this!
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