Looking for some financial advice, as some of you seem to be quite familiar with that sort of stuff. I have what I think is a decent amount of money but I've invested it terribly (i.e. not at all).
32 years old, no debts, not a homeowner, around £1000 per month goes into savings.
I have £100k in cash. And £25k in Premium Bonds.
I have no interest in buying a house in the UK, and wish to remain quite agile with my money incase I invest in my own business or a property abroad within 2-4 years, the latter looking quite likely.
I know its dumb to just keep money in my bank like that, but the thought of losing my cash is frightening and I'm overwhelmed by all the products.
Speak to an Independent Financial Adviser. They can explain your options and help you to choose an investment strategy that fits your plans and your risk tolerance. With the amount of money you're putting away, good advice will pay for itself many times over.
Generally, you can do alright locking it in for about 5% at the moment — there's no risk there (you'd have to split it as there's an £85k limit per bank). So there's £5k a year.
Putting it in a mutual fund (a bunch of assets) is a nice and reasonably safe idea. You get a £20k allowance every year with a S&S ISA and so any gain is tax-free. With £20k allowance per year, you could only put £20k in now, until next April.
While a diverse mutual fund is pretty safe, there is obviously a chance that when you want to sell, the value would be less than you put in— some people can wait for it to go back up, others can't (and some panic sell). For this reason, people normally don't advise it if you are likely to need the money in the next five years, like a house deposit. Most of my deposit is in cash savings, but I have a little in a mutual fund because I'm a real wild one.
Naturally, the reason to use the mutual fund is that you expect greater growth than what you can get in cash. If you don't want any risk, go for cash. It is worth noting that there is always a risk, and by staying in cash you risk that capital losing value over time (you get 5% because banks can make more than that).
If you want to expose yourself to some risk in the form of volatility, put a comfortable amount into a mutual fund via an S&S ISA and see how you feel. Once you get comfortable, you can increase that.
It depends on the person as it's a balance of short and long term risks. Some people are OK all in a mutual fund, others only feel comfortable with a small amount in there. There are other things to factor in like your lifestyle and what you want (this is an IFA's job, to work out your actual risk profile). Many people think they can handle high risk investments, when they can't. Similarly, risk-adverse people can change their mind when they think about the long term risks of holding cash.
If you're new to this sort of thing, Vanguard is the simplest platform and has a small range of funds — most people choose the Global All-cap fund as it is, basically, the world economy. It's pretty easy to set up a S&S ISA today and whack a small amount.
A pension would also be a good idea, but it's locked away then so I've avoided talking about it. Check the UK personal finance subreddit as this sort of thing comes up a lot.
You're assuming the advice is good. Did you speak to an IFA? How did that help you? What problems did you have before speaking to them? You haven't seen an IFA, and you're just telling someone to speak to a state-approved expert. £100,000 isn't really an amount worth speaking to an IFA about, especially given what he's said. Are you going to compensate him if he gets a bad advisor at St.James' Place, and ends up paying 2% a year for less growth than he could get on cash?
Further, it's not helpful to join a conversation and state the obvious. Given the nature of his post, he's probably thought about this a little and has done some searches elsewhere. The reason you post in places like this is to get better qualitative information.
It makes me laugh that all the finance discussions on this website are dominated by dick-swinging wankers who are more correct about money than each other. It's like being wealthy turns you into a bellend.
>>9860 The long post is pretty helpful, I thought. Our finance posters aren't necessarily wankers; they just sound like wankers because they all have a fetish for cringeworthy jargon. "There are lots of ways to buy one of every share on a particular stock market; stock markets always go up if you wait long enough so that's the best place to start" is very sound advice though admittedly not in this case and it often gets given. You just wince when you read it because it will often be phrased as, "Yah, my S&P ETF has a P/E that offers over 8% ROI, bro" and it can indeed be challenging to put up with people who write like that. But the advice itself is sound.
> I have £100k in cash.
20k into an ISA, now. At your age I'd say S&S but up to you. As you do not own your own home, have about 20k in ready cash if it all goes south, the rest should go into a GIA. I use Vanguard funds, you might want to use them via II, at your saving pace you'll hit the rate where percentage brokerage hits you and you want per-transaction instead. Those investments are fairly liquid, fairly stable and you can get cash out within a few days.
Otherlad already said most of it but that's a lot of money to be putting into savings every month unless you're taking home 5k a month or aren't contributing to the pension. Why don't you listen to Ano and go get yourself a maccies sometime?
>>9859 Wait, what are we supposed to say if not Mutual Fund? Even HL just tell me 'mutual funds m8'. Not him but not woofter either.
