Topic: Personal Finance Thread

[newsted]

Jesus.

Carry on

[wormy]

Matt muscling in on 'steddy's domain here.

[Pip]

Well you'd hope obviously they don't go bankrupt.

But there's not particularly any more risk than any other shares investment, surely? If you've got money tied up in a company and the share price bombs then you lose out. The big difference (aside from tax) is with a SIP is you can get matching shares for free, so with mine the share price would have to drop to less than half for me to lose. And the dividends are nice.

But yeah, there's risk with any investment.

I guess I disagree that it’s not more risky because you’re already taking a huge risk by being an employee at the company. The matching shares are useful but I would almost suggest to sell every share possible after the vesting date. If you want to be exposed to your industry then it’d be safer to be employed at one company and invested in the closest competitor. If the industry does well then you’ll be equally well-off. If the industry goes tits up then you’ll be equally worse off. But if something happens to your company, you’ll still have your savings. If something happens to your competitor, at lease you’ll still have your job.

I assume the dividends for competitor firms would be similar, anyway. I just think that there’s too much risk after vesting date. Before that, sure, the extra shares are free money in a way.

[Pip]

I would suggest opening a Vanguard account and invest 90% of your cash abroad, preferably in a low cost index fund. Everyone is already over-exposed to their industry and their country because of their job and house. There’s no need to expose yourself even more by investing in the company that employs you or companies in the country. The risk-adjusted returns are terrible.

[Dave]

Got to admit I've never considered being an employee of a company as 'taking a huge risk'.

[SEMTEX]

It's just diversifying your portfolio innit. It's much riskier to have all of your eggs in one basket. And trust me, it's perfectly feasible that a business's stock price can fall way below half it's current value

[Dave]

Oh I know it's very possible, and obviously agree that you should look to spread your bets if you have substantial amounts of money to invest.

[Minhosa]

You can earn up to £1000 interest per year tax free outside of ISAs (if you are a basic rate payer, otherwise its £500) so the tax shelter of the ISA isn't doing very much for you (unless you have a substantial amount held in cash ISAs)

The simplest thing to do is to transfer part of your cash ISA to a shares ISA (do not withdraw the funds). Pick a decent online platform (Fidelity and Hargreaves Lansdown are user-friendly) and they can handle all the transfers for you. Alternatively you can start using current and future ISA allowances to contribute a fixed amount per month. You can keep cash in a shares ISA but will attract minimal or no interest.

Don't add cash to any kind of ISA that you think you may need in an emergency unless you're at the end of the tax year and your allowances wil otherwise expire. Leave it as late as possible.

Your point on peace of mind is very valid, it's not just about the numbers.

Am a higher rate tax payer so that has an impact.

So from your suggestion what I could do is leave the amount that gives me peace of mind in a cash ISA, then put new savings into a Stocks & Shares ISA, up to a maximum of £20k per year at the moment.

Am going to do some reading on S&S ISA's so I know more.

Maybe look at a peer to peer lending option through your Isa.

Would be a much better than your current savings return and, if there's a fund covering loads of them, then you'd be talking relatively low risk.

[Minhosa]

Also the Sunday Times has a big pull out on Isa's today which would be worth you buying.

[LoveItIfWeBeatU]

Invest specifically in which stocks and shares funds? That's the rub.

[Minhosa]

Invest specifically in which stocks and shares funds? That's the rub.

Yep - depends upon attitude to risk.

[newsted]

[Open_C]

nowt quite like watching the internet discussing what you do for a living, like

[newsted]

nowt quite like watching the internet discussing what you do for a living, like

I'm gannin for a bath. f*** this s***.

[LoveItIfWeBeatU]

Yes Newsted, you are a financial advisor. Therefore you don't give your advice away for free. There's plenty of free advice. People can do lots of research and take a risk or pay a financial advisor and hope their advice turns out to be good. Like I posted before, around 50% of funds fail to beat stock market trackers. Funds are created by experts who try to out perform the market.

[Beren]

I'm investing in a SEIS. Quality move, right newsted?

Spoiler

[close]

[wormy]

Yes Newsted, you are a financial advisor. Therefore you don't give your advice away for free. There's plenty of free advice. People can do lots of research and take a risk or pay a financial advisor and hope their advice turns out to be good. Like I posted before, around 50% of funds fail to beat stock market trackers. Funds are created by experts who try to out perform the market.

I'd just like to testify for newsted and say he's given me a lot of great general help and guidance without wanting anything from me in return.

[LoveItIfWeBeatU]

Well that's very good of him. I'm not saying he's not a good financial advisor. He may be a great financial advisor. The thing with financial advisors is it tends to be down to personal recommendation. As for people saying to invest on the stock market, if it was that easy we'd all be rich. The trick is investing in the right funds. It's best guess based on hopefully a lot of background research. It's not an exact science.

[Ashley17]

That's why a lot of advisers now go down the route of using strategy funds or DFMs. It's hard now for an adviser to justify picking 10-15 funds and then be able to manage that, not only because of the market but because of what the regulator requires. With a strategy fund you get the client to do an attitude to risk questionnaire and then put them in the hands of the fund manager. My holdings have done about 12% in the last year based on this, and I only invest £100 a month into an ISA.

[Matt]

Well that's very good of him. I'm not saying he's not a good financial advisor. He may be a great financial advisor. The thing with financial advisors is it tends to be down to personal recommendation. As for people saying to invest on the stock market, if it was that easy we'd all be rich. The trick is investing in the right funds. It's best guess based on hopefully a lot of background research. It's not an exact science.

Actually it's almost the opposite. It can be very easy to do and you barely have to think about it. You can buy the iShares MSCI Global tracker for example which reflects a huge array of equities from all global markets. You can put all your 'shares' allocation in that if you like and leave it there forever ('set and forget') and that can be your allocation to 'equities' all sorted. The rest can be in cash isas, fixed rate savings, property and so on.

Of course I don't follow this sage advice and have a lopsided mess of a portfolio of individual shares and a few funds with returns all over the shop.

[thomas]

keep the faith in Elon, lads. dump it all into TSLA.

[LoveItIfWeBeatU]

Well that's very good of him. I'm not saying he's not a good financial advisor. He may be a great financial advisor. The thing with financial advisors is it tends to be down to personal recommendation. As for people saying to invest on the stock market, if it was that easy we'd all be rich. The trick is investing in the right funds. It's best guess based on hopefully a lot of background research. It's not an exact science.

Actually it's almost the opposite. It can be very easy to do and you barely have to think about it. You can buy the iShares MSCI Global tracker for example which reflects a huge array of equities from all global markets. You can put all your 'shares' allocation in that if you like and leave it there forever ('set and forget') and that can be your allocation to 'equities' all sorted. The rest can be in cash isas, fixed rate savings, property and so on.

Of course I don't follow this sage advice and have a lopsided mess of a portfolio of individual shares and a few funds with returns all over the shop.

Opposite how so? I may be using the wrong term but when I say 'funds' I mean investments in stocks and shares like e.g. Fidelity Funds - Global Technology Fund. Only time would tell (5 years minimum investment time is the norm) if the fund/s your money are in are 'winners'.

I agree trackers are the way to go as they follow the market rather than try to beat it. Like I posted before, around half of the funds designed and managed by 'experts' to beat the market don't. If Warren Buffet thinks trackers are the way to go that's probably a good idea.

Massive gains (or losses) are made buying individual company shares. Trackers are the lower risk option.

My query is, if you wanted to follow Warren Buffet's plan and invest in the S&P 500 Tracker, what is the cheapest way of doing that? I find the fees each provider charges very confusing. They don't say how much it will cost in fees in layman's terms. They mention Platform charge, fund manager charge, account fee, etc.

[HTT]

Invest in yourself!

[Pip]

Well that's very good of him. I'm not saying he's not a good financial advisor. He may be a great financial advisor. The thing with financial advisors is it tends to be down to personal recommendation. As for people saying to invest on the stock market, if it was that easy we'd all be rich. The trick is investing in the right funds. It's best guess based on hopefully a lot of background research. It's not an exact science.

Actually it's almost the opposite. It can be very easy to do and you barely have to think about it. You can buy the iShares MSCI Global tracker for example which reflects a huge array of equities from all global markets. You can put all your 'shares' allocation in that if you like and leave it there forever ('set and forget') and that can be your allocation to 'equities' all sorted. The rest can be in cash isas, fixed rate savings, property and so on.

Of course I don't follow this sage advice and have a lopsided mess of a portfolio of individual shares and a few funds with returns all over the shop.

Opposite how so? I may be using the wrong term but when I say 'funds' I mean investments in stocks and shares like e.g. Fidelity Funds - Global Technology Fund. Only time would tell (5 years minimum investment time is the norm) if the fund/s your money are in are 'winners'.

I agree trackers are the way to go as they follow the market rather than try to beat it. Like I posted before, around half of the funds designed and managed by 'experts' to beat the market don't. If Warren Buffet thinks trackers are the way to go that's probably a good idea.

Massive gains (or losses) are made buying individual company shares. Trackers are the lower risk option.

My query is, if you wanted to follow Warren Buffet's plan and invest in the S&P 500 Tracker, what is the cheapest way of doing that? I find the fees each provider charges very confusing. They don't say how much it will cost in fees in layman's terms. They mention Platform charge, fund manager charge, account fee, etc.

Blackrock iShares and Vanguard are the cheapest options from my research.

[Pip]

I’m not sure of the brokerage options in the UK but I’m sure an international brokerage like Interactive Brokers will be competitive in terms of fees.