Financial Advice: Savings

[The Anathemata]

Hey guys, new to the forum and decided to start my first topic!

I live in London for years now but have family back home.

I have some money (50k) sitting in a savings acc which is earning something close to nothing, as I keep rolling over 1 yr fixed terms in the vain hope that the market will pick up so that I can stick it in a 5 year at 5%. Clearly that isn't going to happen any time soon.

The term is maturing again in January. Apart from rolling over, should I bite the bullet and stick it in a 5 year at 2.5% or is there anything else you'd recommend? Given the exchange rate, conversion isn't viable.

All advice welcome!

[Oldschool]

Hey guys, new to the forum and decided to start my first topic!

I live in London for years now but have family back home.

I have some money (50k) sitting in a savings acc which is earning something close to nothing, as I keep rolling over 1 yr fixed terms in the vain hope that the market will pick up so that I can stick it in a 5 year at 5%. Clearly that isn't going to happen any time soon.

The term is maturing again in January. Apart from rolling over, should I bite the bullet and stick it in a 5 year at 2.5% or is there anything else you'd recommend? Given the exchange rate, conversion isn't viable.

All advice welcome!

You need to consider a few things.
0. What do you need the money for. In the long term that is.
1. Are you prepared to take a risk.
2. Why put all your money in one basket.
3. Would you be prepared to invest in the stock market.
4. What would you be prepared to invest and how much effort are you prepared to put into "knowing what you are doing"

Ignore any advice you get from a bank. They're only interested in your money.

[mikerob]

If you want a risk free gamble, what about premium bonds?

http://www.nsandi.com/savings-premium-bonds

I don't think you are likely to get more than 1% or so from the ongoing smaller prizes but there is always a chance (a small one...) of getting a bigger prize.

[FLIP]

In the UK, why not look at a Stocks and Shares ISA? Tax free in interest gained, and the return will be better than the 1% you'd get otherwise.

[The Anathemata]

In the UK, why not look at a Stocks and Shares ISA? Tax free in interest gained, and the return will be better than the 1% you'd get otherwise.

Have already maxed out my ISA allowance for this year. In any event I'm trying to avoid conversion, given the weak euro.

I'm leaning towards investing direct in an index tracking fund. Minimum investment seems to be 100k though. Anyone know of a fund with a lower tariff entry?

[RoboProp]

Hey guys, new to the forum and decided to start my first topic!

I live in London for years now but have family back home.

I have some money (50k) sitting in a savings acc which is earning something close to nothing, as I keep rolling over 1 yr fixed terms in the vain hope that the market will pick up so that I can stick it in a 5 year at 5%. Clearly that isn't going to happen any time soon.

The term is maturing again in January. Apart from rolling over, should I bite the bullet and stick it in a 5 year at 2.5% or is there anything else you'd recommend? Given the exchange rate, conversion isn't viable.

All advice welcome!

I know of this Nigerian prince who has found Spanish gold in an old shipwreck. If you're willing to front up some starter capital...ok I'll be honest I've got nothing

[The Anathemata]

Hey guys, new to the forum and decided to start my first topic!

I live in London for years now but have family back home.

I have some money (50k) sitting in a savings acc which is earning something close to nothing, as I keep rolling over 1 yr fixed terms in the vain hope that the market will pick up so that I can stick it in a 5 year at 5%. Clearly that isn't going to happen any time soon.

The term is maturing again in January. Apart from rolling over, should I bite the bullet and stick it in a 5 year at 2.5% or is there anything else you'd recommend? Given the exchange rate, conversion isn't viable.

All advice welcome!

I know of this Nigerian prince who has found Spanish gold in an old shipwreck. If you're willing to front up some starter capital...ok I'll be honest I've got nothing

No probs. I think my options are limited to an online broker platform - not going near those thieves in Goodbody's and Davey's.

Saxo and TD seem to be the main players in Euroland (Real lack of competition compared to UK).

Anyone trade with either of these two or someone else? I'm looking to stick the full amount in some indexed passive funds for long term.

[sheepshagger]

If you know your coffee from you copper maybe have a dabble in commodity trading (wouldnt put the whole lot in though).

RaboDirect have a number of options which give you access to the likes of Blackrock etc with low entry fees if you wanted to spread your investment risk.

https://www.rabodirect.ie/investments/i ... range.aspx

Re TD - they are probably your best bet if you go down that track.

[rooster]

If you know your coffee from you copper maybe have a dabble in commodity trading (wouldnt put the whole lot in though).

RaboDirect have a number of options which give you access to the likes of Blackrock etc with low entry fees if you wanted to spread your investment risk.

https://www.rabodirect.ie/investments/i ... range.aspx

Re TD - they are probably your best bet if you go down that track.

Stay well clear of commodity trading unless you really know the system as you are in with the real big boys who can control the market in most things and make a living out of those who don't understand the system, if you are good at insider dealing that's a different story though !

[Xanthippe]

Hey guys, new to the forum and decided to start my first topic!

I live in London for years now but have family back home.

I have some money (50k) sitting in a savings acc which is earning something close to nothing, as I keep rolling over 1 yr fixed terms in the vain hope that the market will pick up so that I can stick it in a 5 year at 5%. Clearly that isn't going to happen any time soon.

The term is maturing again in January. Apart from rolling over, should I bite the bullet and stick it in a 5 year at 2.5% or is there anything else you'd recommend? Given the exchange rate, conversion isn't viable.

All advice welcome!

Have you looked at An Post's Solidarity Bonds?

http://www.anpost.ie/AnPost/MainContent ... y+Bond.htm

[sheepshagger]

Hey guys, new to the forum and decided to start my first topic!

I live in London for years now but have family back home.

I have some money (50k) sitting in a savings acc which is earning something close to nothing, as I keep rolling over 1 yr fixed terms in the vain hope that the market will pick up so that I can stick it in a 5 year at 5%. Clearly that isn't going to happen any time soon.

The term is maturing again in January. Apart from rolling over, should I bite the bullet and stick it in a 5 year at 2.5% or is there anything else you'd recommend? Given the exchange rate, conversion isn't viable.

All advice welcome!

Have you looked at An Post's Solidarity Bonds?

http://www.anpost.ie/AnPost/MainContent ... y+Bond.htm

He has Sterling to invest, AFAIK those are for EUR amounts only.

[sheepshagger]

If you know your coffee from you copper maybe have a dabble in commodity trading (wouldnt put the whole lot in though).

RaboDirect have a number of options which give you access to the likes of Blackrock etc with low entry fees if you wanted to spread your investment risk.

https://www.rabodirect.ie/investments/i ... range.aspx

Re TD - they are probably your best bet if you go down that track.

Stay well clear of commodity trading unless you really know the system as you are in with the real big boys who can control the market in most things and make a living out of those who don't understand the system, if you are good at insider dealing that's a different story though !

Such a negative view

[rooster]

If you know your coffee from you copper maybe have a dabble in commodity trading (wouldnt put the whole lot in though).

RaboDirect have a number of options which give you access to the likes of Blackrock etc with low entry fees if you wanted to spread your investment risk.

https://www.rabodirect.ie/investments/i ... range.aspx

Re TD - they are probably your best bet if you go down that track.

Stay well clear of commodity trading unless you really know the system as you are in with the real big boys who can control the market in most things and make a living out of those who don't understand the system, if you are good at insider dealing that's a different story though !

Such a negative view

Nah just don't want to see someone getting their fingers burnt !
I will never forget the horror of a couple of top end grain traders who were wondering what to do with 15 k tonnes of Brazilian coffee beans that were rapidly approaching Rotterdam and the arse had fallen out of the market, they thought they had a nice Christmas bonus coming and it rapidly cleared 3 years savings instead.

[The Anathemata]

Hey guys, new to the forum and decided to start my first topic!

I live in London for years now but have family back home.

I have some money (50k) sitting in a savings acc which is earning something close to nothing, as I keep rolling over 1 yr fixed terms in the vain hope that the market will pick up so that I can stick it in a 5 year at 5%. Clearly that isn't going to happen any time soon.

The term is maturing again in January. Apart from rolling over, should I bite the bullet and stick it in a 5 year at 2.5% or is there anything else you'd recommend? Given the exchange rate, conversion isn't viable.

All advice welcome!

Have you looked at An Post's Solidarity Bonds?

http://www.anpost.ie/AnPost/MainContent ... y+Bond.htm

He has Sterling to invest, AFAIK those are for EUR amounts only.

Thank you both. No it's Euros, but I'm a UK taxpayer, so this ain't really an option.

[The Anathemata]

Stay well clear of commodity trading unless you really know the system as you are in with the real big boys who can control the market in most things and make a living out of those who don't understand the system, if you are good at insider dealing that's a different story though !

Such a negative view

Nah just don't want to see someone getting their fingers burnt !
I will never forget the horror of a couple of top end grain traders who were wondering what to do with 15 k tonnes of Brazilian coffee beans that were rapidly approaching Rotterdam and the arse had fallen out of the market, they thought they had a nice Christmas bonus coming and it rapidly cleared 3 years savings instead.

Agree with you there. I've made money in bull markets and lost them in bears, but never really had the inside edge, and that's why I'd never touch them again.

My head hurts from the conflicting/lack of info out there. I now know though why a load of people are about to get seriously burnt again in the Dublin prop market. There are literally no other viable investments that people can comprehend or be Confident that they'll make a viable profit on above bank savings acc. Davey's really are a disgrace. Compare their online platform to Iweb or AJBell in the UK and it's literal thievery. Themselves and Goodbodys really are running a cosy cartel - funny how their guys always seem to be moaning on Vincent Browne.

[Sionnach]

In the UK, why not look at a Stocks and Shares ISA? Tax free in interest gained, and the return will be better than the 1% you'd get otherwise.

Have already maxed out my ISA allowance for this year. In any event I'm trying to avoid conversion, given the weak euro.

I'm leaning towards investing direct in an index tracking fund. Minimum investment seems to be 100k though. Anyone know of a fund with a lower tariff entry?

You don't need £100k for an index tracker. You could buy into the Vanguard FTSE 100 ETF tracker, if that index was your bag. Or you could split the investment into some UK, US or Asian trackers. Vanguard are pretty cheap in terms of fees, and they're pretty liquid so you can turn your investment back into cash whenever you want.

Don't forget, capital gains will attract CG tax.

[The Anathemata]

Have already maxed out my ISA allowance for this year. In any event I'm trying to avoid conversion, given the weak euro.

I'm leaning towards investing direct in an index tracking fund. Minimum investment seems to be 100k though. Anyone know of a fund with a lower tariff entry?

You don't need £100k for an index tracker. You could buy into the Vanguard FTSE 100 ETF tracker, if that index was your bag. Or you could split the investment into some UK, US or Asian trackers. Vanguard are pretty cheap in terms of fees, and they're pretty liquid so you can turn your investment back into cash whenever you want.

Don't forget, capital gains will attract CG tax.

If you buy direct into an index fund from Vanguard then the min investment is £100k for UK taxpayer. If you buy through a broker then these amounts are far lower, though subject to broker entry terms and (often prohibitive and arbitrary) charges.

CC tax is a killer, but i'm currently paying them anyway on a euro savings acc earning 2% p/a - at least i ain't paying DIRT any longer.

[Oldschool]

1. Not onvinced about ETFs. As far as I can make out you get a punt on an average of shares, but who collects the dividends.
Dividend income is hugely important.
2. I use TD and find them pretty good however they are really pushing ETFs.
The cynic in me asks me why -For whose benefit?
3. Churning shares in the hope of CGs is a mugs gane unless you really know what your about, are prepared to put some effort into it and are ruthless and disciplined. Of course your broker will be delighted with you if you trade frequently.
The bottom line here is that there are only a small number of shares that are suitable for successful churning. Let me know if you find any. Please.
4. Exchange info - . I have used a web based entity called Transferwise to send from € to $ to the USA.
The exchange rate is very close to the intra day rate and the transaction costs are very low.
Way way cheaper than the bank. They do quite a range of currency pairs. AND It works for small and large amounts although there may be an upper limit on an individual transaction.
Transferwise.com
5. Investment club - Don't see the point. And I'm a socialist, I think.

http://news.yahoo.com/single-biggest-in ... 55907.html

[darkside lighteside]

In the UK, why not look at a Stocks and Shares ISA? Tax free in interest gained, and the return will be better than the 1% you'd get otherwise.

Have already maxed out my ISA allowance for this year. In any event I'm trying to avoid conversion, given the weak euro.

I'm leaning towards investing direct in an index tracking fund. Minimum investment seems to be 100k though. Anyone know of a fund with a lower tariff entry?

If you're in the UK, the ISA wrapper is your best friend - particularly these days when cash pays nothing.. As a first step fill it up each year - if you've filled your allowance for this year, do you have a gf/missus who hasn't? If so you can gift her money tax-free - obviously I'd only do this with a serious long-term partner etc, as the money gifted becomes 'hers'!

IMO your instinct to invest passively in a tracker is spot on - active funds are great for active fund managers' wallets, but are expensive monkeys throwing darts for investors. (Warren Buffett said when he dies, he wants his trustees to invest 10% of his cash in short-dated government debt and 90% in a low-cost S&P 500 tracker).

IMO the best (and cheapest) way to do this is to open a self-trade ISA account - mine is with TD, I think if you look you should find some comparison sites which should help identify the cheapest/best - transfer money across, and buy ETFs.. ETFs are really simple - they're basically index tracking funds that trade as if they were a share (see here for some info http://www.londonstockexchange.com/trad ... s/etfs.htm). So if you want exposure to the FTSE 100, or FTSE 250, Nikkei 225, or basically any index in any asset class you care to mention, you will be able to find an ETF which tracks it (in that LSE link there are a list of ETF issuers with links).

In practice how it works is - you decide you want to buy a FTSE 100 index tracker, and you want to invest £1,000. I'd advise you to look through the various options available on the issuers websites - pay attention to the Total Expense Ratio, this is a measure of the total fund costs that will come out of the fund (primarily management fees), and while TERs on ETFs are much lower than managed funds there will be some variability between issuers - let's say you settle on the iShares FTSE 100 ETF, look up the ticker (in this case ISF), go to the trading screen of your ISA account and tap it in along with the amount you want to trade, you will then be given a live quote which will be valid for a period of time, and you then confirm and execute the trade. You will then end up with a certain number of ISF 'shares', and going forward these will change in price in close proportion to the changes in value of the FTSE 100 index. As for dividends, these will be distributed every so often, again in proportion to what the index is paying (distributions can be in cash, or else they capitalise, i.e. an amount equal to the distribution is automatically re-invested)

ETFs aren't the only option for low-cost index tracking - you can also buy shares in funds, in the UK usually either OEICs (open-ended investment companies) or unit trusts.

In fairness if you have absolutely no clue about investing etc, I wouldn't advise this approach - but if you have a reasonable appreciation of investing / asset classes and importantly the risks you are running, I think self-trade + ETFs (or other low-cost trackers) are the way to go.. That said, if you don't feel 100% confident about what you're doing, you have another 6 months or so of this tax year, so get googling.. I'd spend time reading up about investing / your options etc etc - bearing in mind that some sources may be biased if they have something to sell! - and really familiarise yourself with the landscape. It might seem bewildering at first, but if you just stop and pretty much google every term you don't understand, it'll all add up. I think Monevator (http://monevator.com/) is a good read, with a bias towards passive investing.

(That's how to do it - as for where to put your money to work right now??? Don't ask me... I'm not an equity analyst, but most stockmarkets seem expensive and QE-bloated to me - and corporate bonds also seem over-priced, and govt debt yields pretty much everywhere in the developed world are rock bottom.. )

[The Anathemata]

In the UK, why not look at a Stocks and Shares ISA? Tax free in interest gained, and the return will be better than the 1% you'd get otherwise.

Have already maxed out my ISA allowance for this year. In any event I'm trying to avoid conversion, given the weak euro.

I'm leaning towards investing direct in an index tracking fund. Minimum investment seems to be 100k though. Anyone know of a fund with a lower tariff entry?

If you're in the UK, the ISA wrapper is your best friend - particularly these days when cash pays nothing.. As a first step fill it up each year - if you've filled your allowance for this year, do you have a gf/missus who hasn't? If so you can gift her money tax-free - obviously I'd only do this with a serious long-term partner etc, as the money gifted becomes 'hers'!

IMO your instinct to invest passively in a tracker is spot on - active funds are great for active fund managers' wallets, but are expensive monkeys throwing darts for investors. (Warren Buffett said when he dies, he wants his trustees to invest 10% of his cash in short-dated government debt and 90% in a low-cost S&P 500 tracker).

IMO the best (and cheapest) way to do this is to open a self-trade ISA account - mine is with TD, I think if you look you should find some comparison sites which should help identify the cheapest/best - transfer money across, and buy ETFs.. ETFs are really simple - they're basically index tracking funds that trade as if they were a share (see here for some info http://www.londonstockexchange.com/trad ... s/etfs.htm). So if you want exposure to the FTSE 100, or FTSE 250, Nikkei 225, or basically any index in any asset class you care to mention, you will be able to find an ETF which tracks it (in that LSE link there are a list of ETF issuers with links).

In practice how it works is - you decide you want to buy a FTSE 100 index tracker, and you want to invest £1,000. I'd advise you to look through the various options available on the issuers websites - pay attention to the Total Expense Ratio, this is a measure of the total fund costs that will come out of the fund (primarily management fees), and while TERs on ETFs are much lower than managed funds there will be some variability between issuers - let's say you settle on the iShares FTSE 100 ETF, look up the ticker (in this case ISF), go to the trading screen of your ISA account and tap it in along with the amount you want to trade, you will then be given a live quote which will be valid for a period of time, and you then confirm and execute the trade. You will then end up with a certain number of ISF 'shares', and going forward these will change in price in close proportion to the changes in value of the FTSE 100 index. As for dividends, these will be distributed every so often, again in proportion to what the index is paying (distributions can be in cash, or else they capitalise, i.e. an amount equal to the distribution is automatically re-invested)

ETFs aren't the only option for low-cost index tracking - you can also buy shares in funds, in the UK usually either OEICs (open-ended investment companies) or unit trusts.

In fairness if you have absolutely no clue about investing etc, I wouldn't advise this approach - but if you have a reasonable appreciation of investing / asset classes and importantly the risks you are running, I think self-trade + ETFs (or other low-cost trackers) are the way to go.. That said, if you don't feel 100% confident about what you're doing, you have another 6 months or so of this tax year, so get googling.. I'd spend time reading up about investing / your options etc etc - bearing in mind that some sources may be biased if they have something to sell! - and really familiarise yourself with the landscape. It might seem bewildering at first, but if you just stop and pretty much google every term you don't understand, it'll all add up. I think Monevator (http://monevator.com/) is a good read, with a bias towards passive investing.

(That's how to do it - as for where to put your money to work right now??? Don't ask me... I'm not an equity analyst, but most stockmarkets seem expensive and QE-bloated to me - and corporate bonds also seem over-priced, and govt debt yields pretty much everywhere in the developed world are rock bottom.. )

Some very good advice there. We are definitely of the same mind re: passives. That said I'm holding fire till I see the results next week of the Scottish election - British propaganda looks like it's going to scare the proles back into voting no.