The Investment Thread

[101]

48 minutes ago, Margaret Thatcher said:

I don't have that now. And I don't know how much a financial adviser costs or what sort of adviser I'd want to talk to. But you're right I should look into it. I just don't have a habit of paying for "unnecessary" things, I didn't grow up with money so it's a bit alien to me, plus I've been spending my disposable on other things so haven't had the need. Posting on P&B was kind of the first thing I did after thinking about it.

I really was just kidding. You could always throw every penny at Queen of the South?

[Priti priti priti Patel]

1 minute ago, 101 said:

I really was just kidding. You could always throw every penny at Queen of the South?

Think George Galloway's got them sorted tbh

[Granny Danger]

1 hour ago, MixuFruit said:

If you're earning that kind of disposable dough and it's only going to go up, I'd recommend you just pay an independent financial adviser rather than relying on the P&B hive mind tbh.

Anyone looking to invest big sums in a pension, ISA or anything else should definitely take professional advice.  No one should depend wholly on such advice but should educate themselves as much as they can, relatively easy in the internet age.  That means even if someone does end up handling your investments you can monitor the performance with some degree of knowledge.

Prior to starting my SIPP six years ago I met with financial advisers from a very prominent firm; based on the sort of growth they projected I’m glad I didn’t take their advice.

For anyone in employment rather than self-employed/director status I reckon you would be hard pushed to do better than the NEST scheme.  

[hk blues]

51 minutes ago, Margaret Thatcher said:

I don't have that now. And I don't know how much a financial adviser costs or what sort of adviser I'd want to talk to. But you're right I should look into it. I just don't have a habit of paying for "unnecessary" things, I didn't grow up with money so it's a bit alien to me, plus I've been spending my disposable on other things so haven't had the need. Posting on P&B was kind of the first thing I did after thinking about it.

I'd ask around the work for names of Financial Advisors that your colleagues have used/use - like every professional there are good and bad ones and choosing the wrong one could cost you a packet in the long run.  If their advice doesn't pay for itself then you've made a poor choice.  Better get the ball rolling now even if you're not at the earnings level you will be - easier then to build on what you've  already set up and you're more likely to actually do it. 

[strichener]

39 minutes ago, Margaret Thatcher said:

Probably a valid point actually, I do tend to avoid hassle as much as possible. The difference I guess is the workplace pension for each employer would be total less than £100 each time, but yeah if a SIPP requires ongoing maintenance I can't guarantee I'd stay interested for a long time.

You could set up a stakeholder pension which your employer can contribute to or alternatively you can transfer your pension when you change employer.  The alternative is as you say you would have multiple small value pensions.

I am not sure if you are aware how the workplace pension schemes operate but the pension belongs to you and you can contribute to it without even being in employment.  For example lets assume that all your employers use defined benefits pensions -  if you start work with Employer A who provides their pension through, as an example, Scottish Widows, it is actually a personal pension that is setup.  If you then move to Employer B who uses NEST for their pension provider, you can either keep your Scottish Widows pension or transfer it into NEST.  If you then move to Employer C then you would have the following options:

a) if you had pensions with both NEST and Scottish Widows you can transfer them both into Employers C provider.

b) If you had already combined into NEST you could keep this and have a separate pension with Employer C

c) You can continue to keep them all separate.

Regardless if you have spare cash then there is no reason to opt out of a workplace pension.

[Derry Alli]

1 hour ago, Margaret Thatcher said:

I just don't have a habit of paying for "unnecessary" things, I didn't grow up with money so it's a bit alien to me

Genuinely, well done. I am - and I would quite confidently say most are - quite flippant about money when I win it/earn it due to the fact I've never had anything so just buy everything. 

Sorry to interject with a pointless post, I just felt it needed said. 

[Granny Danger]

26 minutes ago, Mr. Alli said:

Genuinely, well done. I am - and I would quite confidently say most are - quite flippant about money when I win it/earn it due to the fact I've never had anything so just buy everything. 

Sorry to interject with a pointless post, I just felt it needed said. 

Not pointless, quite the reverse.  Attitudes to money/spending/saving can vary significantly even when people have the same starting point in life.

 

[beefybake]

 @Margaret Thatcher.

Before going down the road to a financial adviser, if I were you, I'd do some reading up of free, or nearly free resources.

Warren Buffett, John Bogle stuff is freely available on Youtube. 

Blogs.... Monevator, Mr Money Mustache ( the latter because what you spend your money on can be  just as important as 

what you invest in ).  Also perhaps Dave Ramsey ..., Youtube, books.   I've not much time for his brand of American individualism, but

he's sound on basic financial management, and his view that in a financial adviser he wants to know that the adviser is more of a teacher,

than a salesman.  Yes, financial advisers do earn commissions from what they advise/sell to you.

 

Edited January 19, 2021 by beefybake

[The Holiday Song]

18 hours ago, Margaret Thatcher said:

Yeah, permanent employee, but for the past five years I've generally only stayed at each firm for about one year on average. The first time was for getting sacked but the other three moves have all been my choice and upward in both salary and company reputation (and on one occasion to a more senior role). I am hoping to make another move in the next couple months which may be long term, in which case I'd opt in, or maybe just for a year or so before going traveling. When I looked at it, the benefits of opting in seemed quite slim for such short periods of employment. I think you don't start getting employer contributions until three months in any way?

What did you do to get sacked?

[Priti priti priti Patel]

55 minutes ago, The Holiday Song said:

What did you do to get sacked?

Booted someone in the pie.

Spoiler

Generally be a bit socially awkward and not fit into their weird middle class ways. They extended my probation once and then this new girl who had previously had an internship there and was the darling of the partner (both female, so nothing untoward happening) joined the team and decided she didn't like me. A couple stories were whispered and that was it, I got called into an office and told "it's not working out". Managed to move upward anyway (from a Band 4 to a Band 1 firm if that means anything to you) and kept moving upward thereafter, to now be at one of the top firms globally. That company meanwhile halved its headcount over the next couple years, so a lucky escape.

 

[Priti priti priti Patel]

@Sergeant Wilson @AyrExile @Granny Danger @hk blues @beefybake @resk

Cheers all, will look into workplace pensions and speaking to a financial advisor, and also do some of my own reading. I'll ask around at work but would it also be worth chatting to someone at home whose time might be cheaper than in London?

 

4 hours ago, Mr. Alli said:

Genuinely, well done. I am - and I would quite confidently say most are - quite flippant about money when I win it/earn it due to the fact I've never had anything so just buy everything. 

Sorry to interject with a pointless post, I just felt it needed said. 

Thanks for the kind post - I do still buy a lot of shite though!

Edited January 19, 2021 by Margaret Thatcher

[Sergeant Wilson]

8 minutes ago, Margaret Thatcher said:

@Sergeant Wilson @AyrExile @Granny Danger @hk blues @beefybake @resk

Cheers all, will look into workplace pensions and speaking to a financial advisor, and also do some of my own reading. I'll ask around at work but would it also be worth chatting to someone at home whose time might be cheaper than in London?

 

Thanks for the kind post - I do still buy a lot of shite though!

Fucking Hell, you'll never be skint!

[Priti priti priti Patel]

13 minutes ago, Sergeant Wilson said:

Fucking Hell, you'll never be skint!

Sorry - you've lost me with that one?

[Sergeant Wilson]

Just now, Margaret Thatcher said:

Sorry - you've lost me with that one?

Thrifty, prudent...mean.

[Priti priti priti Patel]

1 minute ago, Sergeant Wilson said:

Thrifty, prudent...mean.

Haha thanks - although I also don't have a workplace pension because the form to get it transferred is too much hassle!

[Shtuggie]

Interesting discussion, and it confirms something I have been musing over for some months. It's no wonder that those with money have just accumulated more and more over the years, but the advance of technology and ease of access to information and trading platforms really should level the playing field in terms of accessing ways to manipulate your money.

Its the ability to influence the behaviour and education of those who are either intimidated or completely ignorant of the finance world and trying to get their money working for them that is the tricky part. We live in a consumer society where people live pay cheque to pay cheque and there is far too much normalisation of this behaviour. There are also those I think who subconsciously think they will always be poor and it will never work out for them. 

Anyway - to your plan. I am 31. I recently moved house (bought my first place using help to buy in 2014). I married in 2019 and my wife had a small flat in Edinburgh we sold a few years ago too. BTW - My house was bought entirely with money I earned - my parents aren't loaded and I work in an industry where your salary can scale quickly. I now have a manageable mortgage, and no other debts. I have a pension I have paid into for ten years through my employer (same employer) - I pay more than minimum amount - our pensions are with Royal London and they are easily transferred so no need for a personal pension. I am now in the position where I can think about additional investments.  I invest using Trading 212 and its pretty straightforward. I read up for a year on how to use it and opened a practice account first just to be absolutely comfortable with how it worked and how volatile certain markets can be. I stress I am using the 'invest' part of the website - not the inherently more risky CFD platform. 72% of CFD accounts end up as losers - you need to put a lot of time into that to make it work for you.  My investments are split at the moment thusly: 50% in stable ETFs (exchange tracker funds) and 50% split across a number of companies primarily in electric motors, tech and clean energy. I will be taking profits from the more risky investments and moving in to the ETFs as I get older. 

So - if you move into this new role and have that kind of money I would advise on buying property first. At the same time - make sure you opt in to your employers pension scheme and also set up a personal pension. At those kind of levels it will help your tax efficiency. Once that's done I would start looking into using spare income each month for investing and create a portfolio - NB you should be comfortable not touching this money for 5 years to make sure you get any kind of decent return on the money. 

It could be tempting to look at the big returns on investments right away but I would advise on getting on the property ladder first - great asset to have and you can actually use it! 

 

TL;DR - Buy a house and enrol in your pension scheme. Then start filtering money into investments of varying degrees of risk/return. 

 

 

[Duszek]

Interesting thread. I didn’t care about money until I got married, I was just living month to month and not thinking about savings/the future at all. But having extra mouths to feed is a great thing for concentrating the mind. In 2005 we bought a house near London with a 95% mortgage and a personal loan for the remaining 5% (I suspect this ruse may no longer be an option). Now living abroad, it basically pays for itself with the rent we get from it. The mortgage balance goes down each year and the value goes up without me doing anything. So I’d second the advice of property and workplace pension schemes. Without them I’d be screwed.

[Priti priti priti Patel]

1 hour ago, Duszek said:

Interesting thread. I didn’t care about money until I got married, I was just living month to month and not thinking about savings/the future at all. But having extra mouths to feed is a great thing for concentrating the mind. In 2005 we bought a house near London with a 95% mortgage and a personal loan for the remaining 5% (I suspect this ruse may no longer be an option). Now living abroad, it basically pays for itself with the rent we get from it. The mortgage balance goes down each year and the value goes up without me doing anything. So I’d second the advice of property and workplace pension schemes. Without them I’d be screwed.

Out of interest, how near London and what were prices like back then?

[Duszek]

14 minutes ago, Margaret Thatcher said:

Out of interest, how near London and what were prices like back then?

Maidenhead. Our 3-bed terrace house cost 189k. I was skint for years after that. Took out a loan for the bed, a loan for the sofa, a loan for a second-hand car... 

Cracking place to live though. The Thames valley is very nice, and Maidenhead United’s York Road ground (oldest in the UK I think) is right in the town centre.

 

Edited January 19, 2021 by Duszek
Edit

[Thistle_do_nicely]

might be worth a look at a Lifetime ISA if you can find a free £4k a year out of that disposable income and aren't interest in getting a property in London (can only be used up to £450,000 so doubt that would get you much apart from a fucking parking space these days!), pretty hard to beat an effective 25% interest rate on what you put into it, all just kinda depends on whether the limitations of it put you off or not

https://www.moneysavingexpert.com/savings/lifetime-isas/

Edited January 19, 2021 by Thistle_do_nicely