Where would you invest your money?

[Jennyhatesjazz0]

We're not talking huge amounts, probably about £500 a month but these are my current options:

1. Overpay on our mortgage. We've got about £20 years left on a £200k mortgage

1. Overpay pension contributions, we're both investing the bare minimum on a combined salary of about £65k

1. Put it in the savings to buy a better house in a better area for when DS (six months) starts school

1. Go part time, lose that extra money per month and invest my time in my babies early years (working three days instead of five compressed to four resulting in a few very long days)

I just don't know what to do for the best...

Most of my investments in a stocks and shares ISA average a return of 10 percent per year (in total they have increased by 300 percent over the past 5 years). No debt is that expensive in the UK

Thats incredible, are you money minded or you do have a person to help you? ie do you manage and keep on top of it yourself.

It's perfectly possible, and I get the same sort of returns. There are very reputable investment companies/websites where you can create an online portfolio, sheltered in an ISA, using their best advice and recommendations for managed funds, etc.

Essentially, you are buying into their advice and in turn that gives you the expertise of the individual fund managers, who then invest in stocks, shares, gilts, whatever, in the UK or overseas. It's nothing like managing a portfolio of individual stocks and shares for yourself.

It's medium to long term investment, so once you've made the initial investment, it's just a matter of checking back in every 3 - 6 months to make sure you didn't buy a turkey somewhere down the line. You have to hold your nerve when markets fall, but the trend is generally upward and a lot better than 1% interest on a cash savings account!

you'll never earn as much interest as you'll save

This isn't true. What's your mortgage rate? It's likely you're better off investing than paying off the mortgage.

As said above 1 and 3 are the same but more beneficial to do one to reduce your interest. I'd either do that or the pension contributions. We're actually having the same debate at the moment so reading this thread is interesting.

With the mortgage check with your lender that there isn't a limit to overpayments as you don't want to be charged any penalties. If your on fixed rate then it's likely there are but definitely check with whatever deal you're on.

Ooh and google "mortgage overpayment calculator". It'll tell you how much you'll save in interest and how much quicker you'll pay off the balance if you make overpayments. Totally eye opener for me! (yes I know I should have realised....)

You should post this in money rather than AIBU. Don't listen to everyone saying overpay the mortgage that's bonkers in this financial climate, your mortgage is the cheapest loan you will get. The mortgage will get paid off anyway, you need to think long term.

Personally, I would go part time to spend more time with the children. Second choice would be to save up for the house you want to buy. Third, invest the money. But I would never overpay the mortgage, as every financial adviser would tell you not to.

I would split it OP
Some on the pension and some in the mortgage

Actually don't listen to me !!

But pension is a no brainer

Mortgage repayment doesn't really make much sense at present, with interest rates as low as they are - unless you are being ripped off by your mortgage lender. Back in the day when mortgage interest rates were 16%+ (I remember the 80s!) it was a different matter.

You would certainly be better off either putting the money into pensions or investing it wisely.

Crossed posts with WiganPierre

wigan I do find that very interesting, have been doing some research on that myself recently.

If you look at martin Lewis mortgage calculator

www.moneysavingexpert.com/mortgages/mortgage-overpayment-calculator

The economy is supposed to be contracting, there is said to be another recession on the horizon...we have Brexit coming at us....surely owning your own home is the best thing you can do?

Making the roof over head stable? But then I guess that depends on savings etc.
Another argument for paying down mortgage now is that there are v low interest rates. Yes its cheap loan however what if they do rise and suddenly you are paying large % on that mortgage? It has happened before back in 80.s 90's. My own DP had very very little left on mort but lost hte house because interest rates went too high ( there were other issues) but it was un expected enormous pressure on them.

Yes but surely whilst they are low it makes more sense to pay off that debt!

You can decrease it far quicker.

@MadnessAbounds

Thank you, very interesting.

I have approached H and L and a few others about a few things but have not had great reply though. Will try again.

I am not sure - how one keeps track of it either.

Mortgage rates don't go from 1% to sky-high overnight.

If the OP is worried about the "Brexit effect", she would be better off investing surplus funds wisely as a buffer against that possibility because they will deliver a better interest rate in the short to medium term.

If mortgage rates rise after that, she will be able to pay of a lot more of the outstanding debt.

I'm really surprised by the suggestion that investments pay out more than mortgage costs. My mum was looking to pay off our mortgage and then have us pay her back as she could get a better return and we could pay less. Unfortunately the sums didn't match so she paid off a chunk instead but she certainly couldn't find anywhere to invest which paid much of a return.

August: I have approached H and L and a few others about a few things but have not had great reply though. Will try again.

I didn't name them, because I don't want to be accused of advertising! I don't work for them, but I honestly do find their entire service very good.

Please feel free to PM me. It's slightly hard work when you first start out, but once you get going it's all so simple.

JennyBlueWren, I just looked at my account with the [very reputable investment site that I really don't want to advertise].

As an example, in May 2016, I invested £3589 in a particular fund. It's nothing special, and it's UK based, so blowing around in the wind of Brexit. It is now worth £4829, an increase of 35% in 15 months. That is not untypical of the sort of returns you can get if you invest wisely by using reputable advice and websites.

I'm beginning to worry that I'm going to be accused of some sort of investment scam or pyramid selling scheme here, but if you have some cash to start with, and know how to invest it, you can get richer quicker than going with the high street. It's sad that too many people have no access to this sort of advice and let their savings languish in building society accounts, earning a pittance in interest.

As I said, it is medium to long term investment, and not without risk, but the knack is to spread the risk by choosing a balance of investments. Advice is given on the websites as do how to do that.

Speak to an IFA, a genuinely independent one. They'll be able to advise you on your personal circumstances. If are under 40 and don't mind tying up money to age 60 a Lifetime ISA might be a good option as government match 20 of your contribution.

Sorry, OP, I've rather derailed the thread! I hope you find it interesting at least, and I'll try to shut up now!

I think your decision depends on how risk averse you are too. Yes you might get a good return on a stocks ISA atm but it could then drop to less than your investment. If you pay off the mortgage then it's paid, no one is going to take that away and so it's less of a risk. The property bubble could burst and you could save yourself from negative equity by over paying.

There are so many variables tbh and it's not a one solution suits all as we are all at different life stages with different priorities. Lots of good views/advice above but you need to weigh up which ones apply to you and apply to your long term plans.

I'm just taking just under a third out of my investments to buy my house mortgage-free.

Looking at returns on investments in the past year, and even the past 5-7 years, is not useful, the market is currently artificially high and has been in a sustained high for a few years, after more or less recovering from the 2009 crash (with a blip in 2012). I'm sure it is bound for a crash. Consumer debt is currently higher than it was in 2008 before the recession. The US is looking at putting up interest rates. UK inflation is outstripping wage growth.

I say, right now, play safe.

Mortgage.

Unless you're on a really low rate. Then look at the pension and see which is best - mortgage or pension ( IFA)

Bitcoin

As it goes, I trebled my money on Bitcoin this year. I bought £100 worth back in January just to fart around and see what blockchains were about then lost interest and forgot about it. I've just cashed out £300.

Don't do this obviously because it would be gambling not investing

I'm sure it is bound for a crash. People have been saying this for a very long time. I don't see it, personally.

Make sure you have a 3-6 month emergency fund first. Last thing you need is a few grand off the mortgage but no savings if anything bad happens.

That sounds very interesting, @MadnessAbounds. Is there a minimum amount that you have to invest in that type of fund?