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AIBU?

Share your dilemmas and get honest opinions from other Mumsnetters.

Where would you invest your money?

60 replies

Jennyhatesjazz0 · 05/08/2017 11:03

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...

OP posts:
ihatethecold · 05/08/2017 21:11

Can you pm me details of the stocks and shares investing.
I'm looking around at investing some money but the high st is dreadful.

RedGrapeCornSnake · 05/08/2017 21:21

Actually @madnessabounds I'm really interested in the sort of investments you are talking about and who you use. Would you mind PMing me details too? I promise to do my research thoroughly before doing any investing!

OutToGetYou · 05/08/2017 21:26

WiganPierre

You don';t think that the highest levels of unsecured consumer debt, rising inflation, low wage inflation and a stock market high and a house price bubble are indicators of an imminent crash? The same conditions we had in 2008?

I know people do always say it's all about to crash - every time I have bought a house people have said don't buy now, we're just about to have a housing crash - but the actual evidence looks very familiar right now.

Snuppeline · 05/08/2017 22:27

I would be very grateful in receiving information about the investment you engage in too, if you wouldn't mind sending me a pm. I have dabbled in shares but fint it too time intensive and have been burned a bit too. Thank you!

Dacquoise · 05/08/2017 22:46

Hi, haven't read the whole thread so apologies if I am repeating something. Money invested in a pension gives you 20% tax incentive from the government ie free money, so £500 per month is worth £600 which you can draw down 25% of your total pot tax free at 55 to pay off your mortgage. There is an annual limit on what you can invest but split between two pensions in your case.

Mortgage rates very low at the moment, so you wouldn't save anywhere near as much by overpaying your mortgage.

Government quantative easing makes massive hikes in interest rates unlikely any time soon as the whole economy would go boom, that's the theory anyway.

thereinmadnesslies · 05/08/2017 22:52

@Madnessabounds i would love to know the name of the company you use, I want to make this sort of investment but I'm confused by all the options.

Genghi · 05/08/2017 23:15

@Augustwashout - I buy monthly into funds from reputed hedge fund managers, ensure an appropriately broad geographic spread (Asia, Europe, UK, and ensure my direct debit to my investments is treated like any other bill. I review weekly but don't withdraw. I do however keep an eye on sluggish funds in case they might need to be cashed in the minute they return to profit, but will reinvest the fund elsewhere.

I also buy into funds when they're new and love Asian equities but they can be high risk so unsuitable for everyone.

MadnessAbounds · 06/08/2017 08:45

OK, thereinmadnesslies (are we related? Grin), the company I use is the largest in the field, Hargreaves Lansdown. Another highly reputable company in the sector is Chelsea Financial Services. If you Google "Fund Supermarket" you will find others, although not all of them are fully independent or cover a wide range of funds, so choose carefully. I particularly like the manageability of the HL site, and DH moved his savings from CFS to HL for the same reason.

It is DIY investment unless you have savings of over a certain amount (I think £100k is when some level of personal advice can kick in if you need it), but the website contains huge amounts of information to get you started. They have suggested portfolios for low, medium and high risk which you can use to get started with if you want www.hl.co.uk/investment-services/isa/ready-made-isa , and also their "Wealth 150", which are their top recommended funds.

I tend to look at those first, but if I'm trying to balance my portfolio by sector or region, I might look at other funds and make my own decisions based on past history and the wealth of research provided on each fund, plus ideas from reading the financial sections of the weekend newspapers.

You can also set up "watchlists", which were previously known as a Virtual Portfolio, and add mythical sums to it to see how they perform over time, before actually investing.

I've only had my fingers burned in a very small way twice. One was a very high risk investment in the 3rd world where I put in £2,000, just as a toe in the water, and lost about £250. The other was some shares I received from a demutualisation donkeys' years ago, so in one sense I didn't actually "lose" any money, but I could have timed the sale of them much better.

That's why I only invest in funds not shares: funds are essentially just bundles of shares and other investments, where the fund manager is doing the research and constantly aiming to improve the return for his investors by buying and selling.

Your basic starting point is to open a Stocks & Shares ISA (assuming you haven't used your £20k allowance this year) and then "go shopping" with either real or virtual money. I tend to start with £2k/£3k maximum in a fund and add more later if it seems to be going well. If you've used your ISA allowance, you can still invest, but the returns will be taxable until you can move them into the shelter of an ISA.

It can be good fun, and is quite addictive at first, but as I said up thread, I don't review more than every 3 months because it's too easy to lose your nerve when markets get volatile, and continuous buying and selling can get expensive. It is definitely medium to long term investment.

Hope that helps!

VelvetSpoon · 06/08/2017 08:53

With 20 years left you should put the extra into your mortgage, provided there's no restrictions put on overpayment by your lender.

You'll then be in a better position should u want to move in 4 years or so. And longer term, you'll get your mortgage paid off quicker allowing you then to pour more into your pension.

OutToGetYou · 06/08/2017 12:12

I invest mainly in individual shares - there is plenty of evidence to show that fund managers do not out-perform trackers so if you want a mix you may as well buy a tracker. Trackers are also far lower cost, though you can buy funds at discount.

I have two funds, both high risk, both returning about 8% in dividends, plus, so far (I've had them about 18m) 30% in growth.

I had about 30 shares but I have sold 7 I think and lopped the tops off a few to release cash for my house purchase.

I also buy ETFs, which are like funds but far lowers fees and traded on the stock market so easier to buy and sell. My best performing so far is the US Small Cap one. But I don't expect that situation to last!

This is an interesting article:

www.fool.co.uk/investing/2017/08/06/3-top-performing-investment-trusts-with-low-fees/?utm_source=dlvr.it&utm_medium=twitter

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