Financial Advice needed

[Hunter87]

Hi,

I am looking for some advice I currently have £5,500 in a savings account which has a very low interest rate would it be better to take it out and buy physical gold with it? Or just leave it where it is?

I have no interest in stocks and shares as I see it as basically gambling and I am not prepared to loose it. 
 

Thanks in advance. 

[ChrisSilver]

I’ve approved this topic for the moment. But this topic may end up being moved to the finance section of the forum. 

[JunkBond]

I have put most of my spare cash into premium bonds.

[Pete]

Dead money that is not called upon within a week or two should not sit in a nil interest or fractional interest bank account.
The zero risk option is precisely what @JunkBond advised - PREMIUM BONDS.
A chunk of £5k could see you winning on average at least 3 prizes of £25 each year tax free with the chance of more of course.
Your money is safe and can be withdrawn at anytime.
Buy on-line and if you do this before the 31st your numbers will be live in the February draw which takes place in the first few days.
I won £25 from a £1,000 block in its first month but that's lucky.

[Roy]

If I had £5500 and I hadn't already, I'd invest in a Silver Forum Premium Membership. 

 

[sixgun]

Well you are highly likely to get a positive response regarding buying precious metal on a precious metal forum.
If you have no precious metal then it would be a good idea to have some. The issue is always, will you need that cash at some point? Sh it happens. 
i would recommend getting gold sovereigns. i would recommend looking out for them on the forum. There are plenty come up and you could blow through the cash you mention in no time and even in one go with some of the dealers who post sovereigns for sale here. 
Sovereigns are generally easier to sell. They are not bought at a big premium to the spot price, so you get more gold for your money. If you go for bigger coins, say 1 oz - that is a big chunk of your cash and if you did have to sell, you are having to liquidate a bigger percentage of your stack.

There is probably more upside in silver in the longer term but for someone starting out, get sovereigns - i know it is nice to get lots more coins for your money, but don't be drawn into that - get sovereigns - they should do well over time and they are easy to sell if you need to.

[MancunianStacker]

First step - Emergency fund for 6-12 months of expenditure, so Premium Bonds fits that bill.

Precious Metals are commodities and probably more volatile than a well spread investment fund (stocks and shares). I think it could be a bigger gamble for a lump sum.

Perhaps you could save a little each month in precious metals e.g a full Sovereign each month? It soon adds up! 

[Martlet]

1 hour ago, Hunter87 said:

...would it be better to take it out and buy physical gold with it?  ...I am not prepared to loose it. 

Depends how you'd cope with price of gold going down a bit?  If not willing to bear any risk, probably best to leave it in the bank or premium bonds.  Anything else has risk of loss. 

[Nick1368]

buy sovereigns ,1 oz Britannia and krugerrands are good too , try to stay as close to spot price as you possibly can but don't go for a deal that's too good to be true  and don't use eBay either .

 If something comes up as an emergency and you need the cash, you can always sell your Gold very very quickly so don't worry about keeping emergency cash , your gold is like cash just in a different and better form .

if you buy sovereigns and Britannias they are CGT free , Krugerrand is not CGT free but they are cheaper than all other 1oz gold coins in terms of their premium .

Buying on the forum is a good way to purchase because if you buy from a dealer they charge a premium and if you sell to a dealer they buy your gold under the spot price , when you buy on the forum the sellers normally  list the coins for either spot price or just a little over spot on bullion coins so it's a win win situation for both the buyer and seller  , however if it is your first time buying gold I would suggest you to buy from a dealer , you will pay a little bit more premium but you will have peace of mind, use the forum when you have a little bit more experience and knowledge  about PMs and don't buy proof coins just yet , just try to find bullion coins with the lowest premium from reputable dealers like : Sharps Pixley , chards , Atkinsons , Hatton Garden Metals , Baird & co , ATS Bullion , Gerarrds .

But yeah definitely put that money into PMs and good luck .

[sixgun]

i would not get Premium bonds - there is a lot of inflation in the system. The government does not disclose this, the inflation figures are being fixed and have been for years. In essence your cash is going down in value all the time and the pittance you make on Premium bonds will never match what inflation is doing to your money's purchasing value. You might win a big prize but more like you will win nothing. 

Stocks are at highs - the economy is in bad shape. At some point price will crash. Businesses are folding by the score. Stocks are more risky in my book. 
Gold is relatively volatile but assuming you are prepared to hold it for at least a year, i don't see you losing. Gold is never going to go to zero. Gold is in the early phase of a long bull market. It has to be in a bull market with so much currency being pumped into the system. This can only end in tears and when the Fat Lady sings there will always be gold. 

i completely agree with @MancunianStacker - you must have an emergency fund - i have seen members clearly in a spot and or over committed to precious metal and their car blows up, their rent is due, their boiler goes on the blink..... then they have to sell their gold. This is the point of sovereigns - they are easy to sell. There are buyers on the forum. You need to make sure you are not paying a big premium. Basic sovereigns - nothing fancy. You have skin in the game with a very liquid form of gold.
As long as you know you can hold for at least a year i think you will do well. As i see it we bottomed in price at the end of 2015 - there will be ups and downs - that is normal with gold but the chart is moving upwards and has generally been moving up since the early 2000's.

[Minimalist]

@Hunter87

This is the most sound financial advice you will ever get in your entire life and may retire early than the average UK citizen. Save at least 10% of your monthly salary into these mechanism below.

Step One

Open a current account (emergency fund) with at least 6 months (ideally go for 1 year - include inflation) of necessity outgoings/expenditure (In the UK ~ Base currency GBP). Make sure this is known between yourself and your wife/missus.

Step Two

Invest 60% of extra into Gold bullion. Hold until desired retirement.

Step Three

Invest the remaining 30% into non-dominated Federal Reserve Dollar assets (Russian and Chinese stocks).

Step Four

The last 10% put away in a crisis secret fund outside the UK. The chosen country and base currency is determined at your own desecration (I would recommend the Euro, with a German or Ireland bank). Do not tell your wife/missus about this, this is your own fund for anything desirable and at the worst case you can use this if you have the unfortunate experience of going through a divorce or a really bad breakup, mid-life crisis or random holiday etc.

Step Five

Do the following steps and you will sleep better, possess greater financial security and will slowly start questioning your own scarcity mindset of being reliant on a job. Its your one and only life, the money you own has no feelings; its a tool created for efficiency and control.

_______________

All the best, Minimalist. 

[Hunter87]

1 hour ago, Roy said:

If I had £5500 and I hadn't already, I'd invest in a Silver Forum Premium Membership. 

 

Thanks for your advice.

[Hunter87]

1 hour ago, sixgun said:

Well you are highly likely to get a positive response regarding buying precious metal on a precious metal forum.
If you have no precious metal then it would be a good idea to have some. The issue is always, will you need that cash at some point? Sh it happens. 
i would recommend getting gold sovereigns. i would recommend looking out for them on the forum. There are plenty come up and you could blow through the cash you mention in no time and even in one go with some of the dealers who post sovereigns for sale here. 
Sovereigns are generally easier to sell. They are not bought at a big premium to the spot price, so you get more gold for your money. If you go for bigger coins, say 1 oz - that is a big chunk of your cash and if you did have to sell, you are having to liquidate a bigger percentage of your stack.

There is probably more upside in silver in the longer term but for someone starting out, get sovereigns - i know it is nice to get lots more coins for your money, but don't be drawn into that - get sovereigns - they should do well over time and they are easy to sell if you need to.

 

29 minutes ago, Nick1368 said:

buy sovereigns ,1 oz Britannia and krugerrands are good too , try to stay as close to spot price as you possibly can but don't go for a deal that's too good to be true  and don't use eBay either .

 If something comes up as an emergency and you need the cash, you can always sell your Gold very very quickly so don't worry about keeping emergency cash , your gold is like cash just in a different and better form .

if you buy sovereigns and Britannias they are CGT free , Krugerrand is not CGT free but they are cheaper than all other 1oz gold coins in terms of their premium .

Buying on the forum is a good way to purchase because if you buy from a dealer they charge a premium and if you sell to a dealer they buy your gold under the spot price , when you buy on the forum the sellers normally  list the coins for either spot price or just a little over spot on bullion coins so it's a win win situation for both the buyer and seller  , however if it is your first time buying gold I would suggest you to buy from a dealer , you will pay a little bit more premium but you will have peace of mind, use the forum when you have a little bit more experience and knowledge  about PMs and don't buy proof coins just yet , just try to find bullion coins with the lowest premium from reputable dealers like : Sharps Pixley , chards , Atkinsons , Hatton Garden Metals , Baird & co , ATS Bullion , Gerarrds .

But yeah definitely put that money into PMs and good luck .

Thanks, I’ve just started buying PM’s about 7-8 months ago and currently have 7 full sovereigns I will continue to purchase as and when I can. 

[Hunter87]

Thanks for taking the time to offer help and advice gents it’s very much appreciated.

[Silverman2U]

2 hours ago, Hunter87 said:

Hi,

I am looking for some advice I currently have £5,500 in a savings account which has a very low interest rate would it be better to take it out and buy physical gold with it? Or just leave it where it is?

I have no interest in stocks and shares as I see it as basically gambling and I am not prepared to loose it. 
 

Thanks in advance. 

I’m not a FSA, just my opinion below. 
 

I’d go a bit in gold, silver and 1-5% speculation in a high market cap crypto like ETH, BTC or LTC... then again if you don’t know about Crypto stick to the PMs... even a cash isa? PMs are a protection of asset not necessary a fast profit spinner... that’s why you have shares with higher risk OR safety in the bank with no profit..
 

Hmmm. Thinking about it about it you maybe best to consider an ETF like Fund smith inside an ISA. So tax free.  Lot better than share traders like HL or interactive investor that charge you on buying shares... and a Maintenon charge. If you buy directly from Fundsmith you get over 30 tech stocks (with a number of blue chip companies) averaging 10-12% a year for the last 7-8 years since started. PM for more details if you like. I am doing one next year... unless you have £10-15k in an ISA with HL or II you’ll pay a reasonable amount in fees.  There are not as many it seems with Fundsmith as you are dealing directly with the fund rather than 3rd party broker. 
 

 

[silenceissilver]

I think everyone should have some cash for emergencies but with 5,5K, 6 or even 12 months of living expenses is just completely unrealistic, living in London (or anywhere in the West) for almost everyone. There will be the odd exception, of course. People that manage to get through with 1000 Pounds a year. This exists (if you have no rent to pay) but it's very rare.

With 5.5K savings I would keep 500 to 1000 in cash and buy Sovereigns for the rest.

Any kind of bonds, premium or not, are a very, very bad idea, in my opinion. We are at the end of a fractional reserve cycle, the governments are printing money like there is no tomorrow (Euro, currently with a rate of 100K new Euros a second and the pattern is the same in the UK), a huge junk of businesses is de facto bankrupt but they are compelled by the governments to commit balance sheet fraud and thus delay a mass bankruptcy. (I think the latest estimation by Markus Krall for Germany was one third of all companies are bankrupt, if I remember that correctly - in any case it's a staggeringly high number. And the reason for this are many years of artificially low interest rates plus now also the lock downs - all of which we also have in the UK, so it won't be substantially better in the UK). Trusting a government in this situation to get money back from them is - how do I put it politely - very optimistic.

If you want to gamble, put a part of your money into crypto currencies. At least there you have a chance to make a gain unlike with bonds where a near 100% loss is 100% guaranteed unless you are lucky enough to get out before it crashes - but good luck with getting the timing right. Most will try to get out at the same time and for most it will be too late.

 

[Kman]

13 minutes ago, silenceissilver said:

Any kind of bonds, premium or not, are a very, very bad idea, in my opinion. We are at the end of a fractional reserve cycle, the governments are printing money like there is no tomorrow (Euro, currently with a rate of 100K new Euros a second and the pattern is the same in the UK

You know this as a fact? where are you getting the information

[silenceissilver]

8 minutes ago, Kman said:

You know this as a fact? where are you getting the information

Yes, I do. Markus Krall has tweeted it and he is a serious guy who wouldn't tweet it if it was not true. He built the internal bank stress tests that 80% of German banks and 50% of the banks in the Euro zone use.

Good morning Germany,
The ECB passed the 7,000 billion mark of its balance sheet total shortly before Christmas. The lemming runs and runs and runs. Current money printing speed of the ECB: 100,000 euros per second. Just under 10 billion per day.

(Machine translated but accurately so)

[Robda1986]

Agree with the sovereigns if you need crazy quick money list them on here cheaper than ats Atkinson and bbp I sold some a while ago and basically had my arm ripped off yes there in a chance gold comes down in value but there is also a chance Banks go bust ie northern rock but gold could carry on increasing 

[Kman]

1 minute ago, silenceissilver said:

Yes, I do. Markus Krall has tweeted it and he is a serious guy who wouldn't tweet it if it was not true. He built the internal bank stress tests that 80% of German banks and 50% of the banks in the Euro zone use.

Good morning Germany,
The ECB passed the 7,000 billion mark of its balance sheet total shortly before Christmas. The lemming runs and runs and runs. Current money printing speed of the ECB: 100,000 euros per second. Just under 10 billion per day.

(Machine translated but accurately so)

 

The fed have trillions in assets and they printed no money to get them, just bank reserves 

This by itself doesn't confirm any euros were created, maybe they were I'm not familiar with the EU system

german 30 year bond yields are negative that says a lot

I will try and find out as I am interested how different central banks work now I've learned more about the federal reserve, unless you have any direct information about EU policies with QE

[Kman]

25 minutes ago, silenceissilver said:

The ECB passed the 7,000 billion mark of its balance sheet total shortly before Christmas. The lemming runs and runs and runs. Current money printing speed of the ECB: 100,000 euros per second. Just under 10 billion per da

Yeah I'm 99.9% sure they create bank reserves

https://www.ecb.europa.eu/press/blog/date/2020/html/ecb.blog200819~0d1d04504a.en.html

Bank reserves aren't money

[silenceissilver]

18 minutes ago, Kman said:

 

The fed have trillions in assets and they printed no money to get them, just bank reserves 

This by itself doesn't confirm any euros were created, maybe they were I'm not familiar with the EU system

german 30 year bond yields are negative that says a lot

I will try and find out as I am interested how different central banks work now I've learned more about the federal reserve, unless you have any direct information about EU policies with QE

Of course printing is meant in a figurative way. Of course it didn't enter the real economy, otherwise we would be in the middle of a hyperinflation, right now. But of course it has the potential to enter the real economy. It does enter the banking sector which has its own, secluded monetary cycle with the central bank (for all major central banks) which can work as basis for the broader monetary circle that we all are in.

It's a while ago since I have occupied myself with fractional reserve banking, thus I have no sources at hand that point out the differences between the FED and the ECB.

[silenceissilver]

2 minutes ago, Kman said:

Yeah I'm 99.9% sure they create bank reserves

https://www.ecb.europa.eu/press/blog/date/2020/html/ecb.blog200819~0d1d04504a.en.html

Bank reserves aren't money

Well, as said above, it's certainly legal tender but shielded from the non banking sectors. And it closely interacts with the money outside the banking sector.

[Roy]

8 hours ago, MancunianStacker said:

First step - Emergency fund for 6-12 months of expenditure, so Premium Bonds fits that bill.

Exactly.

5 hours ago, silenceissilver said:

I think everyone should have some cash for emergencies but with 5,5K, 6 or even 12 months of living expenses is just completely unrealistic, living in London (or anywhere in the West) for almost everyone.

Oops! Of course, £5500 is 6 months of living expenditure!

OMG, it sounded like such a lot of money at first but without an income, you'll burn through that very quickly. Thinking back, I was getting through £1000 a month 30 years ago 😬

Unless you own your property, surely you'd need £1000 a month for living expenses? (Please advise, non-uk resident.)

[HighlandTiger]

16 hours ago, Pete said:

Dead money that is not called upon within a week or two should not sit in a nil interest or fractional interest bank account.
The zero risk option is precisely what @JunkBond advised - PREMIUM BONDS.
A chunk of £5k could see you winning on average at least 3 prizes of £25 each year tax free with the chance of more of course.
Your money is safe and can be withdrawn at anytime.
Buy on-line and if you do this before the 31st your numbers will be live in the February draw which takes place in the first few days.
I won £25 from a £1,000 block in its first month but that's lucky.

For anyone who believes Premium Bonds are good, It's worth listening to Martin Lewis of Money Saving Expert. I first heard this thoughts on this a few weeks back on Radio 2 and he put this article up as well. It certainly opened my eyes. I personally wouldn't ever bother with bother with PB after reading this.

But as usual DYOR. 

https://www.moneysavingexpert.com/savings/premium-bonds/