Where would you put 500 a month for the next 10 years?

[watchesandwhisky]

That is not gold or crypto - over this time frame i am thinking just put it all on a stocks and shares isa and stick with low fee tracker funds but interested for other opinions. I know a lot see the market as due for a correction but would you say thats a long enough time frame to ride out any dips? 

Edited November 7, 2021 by watchesandwhisky

[Pete]

If you are paying income tax then definitely into a SIPP that you manage yourself on-line.
For every £500 you invest, your account will be credited by 25% to £625 through a tax refund ( could be even higher if a higher rate earner ).
Where can you get that instant return with cash these days ?
You can then decide on whether to remain in cash as low risk but no gain, buy trackers and follow the market or be slightly more adventurous with equity funds and there are lots of big institutions doing all the ground work so spreading the net. Mix & match and diversify as you choose - avoid the 'all eggs in one basket' !

Check the terms for being able to withdraw from a SIPP and how it may or may not affect your tax.

PS - this is not financial advice as I am not qualified, but this is what I would consider before anything else - or buy a flat to rent in a growing area or university town.

[watchesandwhisky]

Thanks Pete, not currently paying income tax - dont earn enough! I also dont own/or am anywhere near to obtaining a flat to live in.

That's what these savings are for though, towards a flat one day.

I have a Lifetime Isa - but its cash - I might open a stocks and shares one next year. 

I can put 4k a year into that and it gets topped upto 5 but I am unsure il ever get approved for a mortgage anyway so It feels risky putting money there, at least with an ISA i can take it all tax free when I need it without penalty.

Edited November 7, 2021 by watchesandwhisky

[motorbikez]

I'd put that amount into a stocks & shares ISA & within the ISA invest in it through investment trusts, I've actually done that over 25 years previously doing the same thing through PEPs it is very powerful if you can resist dipping into it. A big plus also (for me anyway) it doesn't have to be declared on a tax return.

[watchesandwhisky]

Thanks motorbikez, Was thinking along the same lines - I have set up a regular savings plan with a lot of legal and general funds, UK 100 index, global 100 index, HSBC FTSE 250, Vanguard global small cap index, Vanguard FTSE developed world EX-UK

Plus the odd £100 payments into other funds as and when (legal and general robotics and automation index ect)- but those five above are my core as of now. 

Edited November 7, 2021 by watchesandwhisky

[dicker]

Go tax efficient SIPP / ISA etc and then select some investments that you can put into these 'wrappers'.  Top tip from me is to treat VCT or EIS vehicles with the most extreme caution.  They are attractive because of the tax breaks but I know a number of people who have lost everything though their investments.

Personally, I go go for Dividend Stocks, and funds that I think are good for the time in the economic cycle.  

Cheers

Dicker

[Pete]

2 hours ago, watchesandwhisky said:

Thanks Pete, not currently paying income tax - dont earn enough! I also dont own/or am anywhere near to obtaining a flat to live in.

A non tax payer can, every tax year, put up to £2,880 in to a SIPP - drip feed or lump sums it doesn't matter - and the government tops it up to a maximum £3,600 so you automatically get 25% of your investment up to £720 as a free gift.
This is not guesswork as I have done this every year for many years for my wife.
You cannot access your SIPP until aged 50 ( maybe 55 needs checking ) so good to lock away your investment.
Making withdrawals you will get the first 25% returned tax free thereafter taxable - if you pay tax.
With a stocks & shares ISA all your withdrawals are of course tax free but you weren't given the 25% free boost to start with.
SIPPS and ISAs mostly use all the same funds if thinking about equities and trackers etc.

 

[watchesandwhisky]

Thanks @dicker, will give VCT a wide berth! I guess they make more sense for some with more funds. 

Cheers Pete, I do have a vanguard SIPP (with basically nothing in it) so the options already open - but my feelings are the best thing i can do towards securing my future is obtaining a place to live that I own. I feel i need to put 100% towards that goal and complete it before I think about pensions. 

Might be worth chucking a few quid in here and there I guess because I know il be in trouble when i retire otherwise, but il be in even more trouble if i dont have a place to live where i dont have to pay ever rising rent.

[MancunianStacker]

Hoo kers and alcohol, the rest I’d waste 😉 

[HerefordBullyun]

Well if you have that spare  - put it in my bank account 😁

[watchesandwhisky]

2 minutes ago, MancunianStacker said:

Hoo kers and alcohol, the rest I’d waste 😉 

This is half my misses money, im not entirely sure she would agree with that 🤣

We are getting married in december:) - Total cost of wedding including clothes and ring resizing and a couple nights honeymoon in a premier inn, £400 ... Shes a keeper 🙂

Rings were inherited from grandparents.

Doing it on the cheap:D

[HerefordBullyun]

19 minutes ago, MancunianStacker said:

Hoo kers and alcohol, the rest I’d waste 😉 

Is that expensive version of the bar Hoo ters?

[Stu]

5 hours ago, watchesandwhisky said:

This is half my misses money, im not entirely sure she would agree with that 🤣

We are getting married in december:) - Total cost of wedding including clothes and ring resizing and a couple nights honeymoon in a premier inn, £400 ... Shes a keeper 🙂

Rings were inherited from grandparents.

Doing it on the cheap:D

All the best with the wedding when it comes mate, others appear extreme at times. I heard in my country prior to WWII, you simply needed to declare your intentions with 2 witnesses present and you were legally married. Cost of some ink and paper. 
 

Regarding savings/investment. Access to SIPP is from 55 rising to 57 so that may be a determine factor. 
 

[Roy]

6 hours ago, watchesandwhisky said:

but I'll be in even more trouble if I don't have a place to live where I don't have to pay ever rising rent.

As an old man...I think you should put your energy here.

Maybe you will inherit property, maybe you won't? Your parents might outlive you!

You need a place to live, so make it your own. If things get tough in retirement, you have an asset to fall back on. You could rent out your garage, your driveway, a spare room maybe? International students, airb&b etc.

I can't imagine entering retirement without a property I own, sorry 😔

[watchesandwhisky]

Cheers Stu:) we would spend a little more if we could but decided the moneys needed in other places more than a lavish ceremony, I did notice the sipp is going up from 55 to 57, probably 60 again after too! 

I have to agree Roy, and thats a great point you make about how your own home can work for you too -. I am 38 years old - So I recon a good 30 years until any possible retirement. 

 

[Roy]

3 hours ago, watchesandwhisky said:

I am 38 years old - So I recon a good 30 years until any possible retirement. 

Plenty of time, use it wisely 👍

[watchesandwhisky]

Will do! left it pretty late so no time to mess around now - we are both in 100% savings mode for a very long time! 

The watch buying will be ending for the foreseeable future too. 

[Stacktastic]

On 07/11/2021 at 14:39, Pete said:

If you are paying income tax then definitely into a SIPP that you manage yourself on-line.

I need to look into this form wife. Surely with a SIPP you lock up the money & wont that loose is value over time with regards to purchasing power. 
As a self employed person who understand the money markets, would my money be better invested into that and tangible income generating assets (property)

On 07/11/2021 at 16:32, watchesandwhisky said:

Thanks motorbikez, Was thinking along the same lines - I have set up a regular savings plan with a lot of legal and general funds, UK 100 index, global 100 index, HSBC FTSE 250, Vanguard global small cap index, Vanguard FTSE developed world EX-UK

Have a look at the MSCI synthetic ETF's as the Vanguard ones are expensive. 
I dont pretend to understand it but these guys do. 
 

On 07/11/2021 at 17:26, dicker said:

Personally, I go go for Dividend Stocks, and funds that I think are good for the time in the economic cycle.  

Emerging markets are a fab hedge against the lunacy of the west! 

Totally there are a fantastic range in the UK @watchesandwhisky
GSK, BP/SHELL, BAE, EVRAZ, IMB, ULVR, NG, BATS, AV.B, BHP to name a few. 
I am planning on creating a pie & setting up and ISA with my wifes name on a separate account. 
This way it seperates my trading account from a drip fed one & reduces temptation to tamper with it. 
Just add it to the account & invest it into the pie when the markets take a tumble. 
Or have separate stocks and allocate it to the one that is on sale??

I shall also add
Scottish Mortgage (Bailey Gifford fund),
i-shares MSCI world small caps
i-shares core MSCI EM IMI
SPDR FTSE UK ALL SHARE
Block chain & crypto - not now though. 

BUT here is the dilemma. 

WHEN WILL THE MARKETS CRASH???
I DONT WANT TO BE 40% IN THE RED FOR A DECADE.  
AND WILL I WASTE 10 YEARS WAITING FOR IT AND NOTHING HAPPENS

Edited December 8, 2021 by Stacktastic

[Pete]

59 minutes ago, Stacktastic said:

I need to look into this form wife. Surely with a SIPP you lock up the money & wont that loose is value over time with regards to purchasing power. 
As a self employed person who understand the money markets, would my money be better invested into that and tangible income generating assets (property)

When you invest in a SIPP you get tax relief and if you are not paying any tax then the government tops up to a maximum annual gross investment currently £3,600per annum which costs you only £2,880 so an instant gain of £720. For long term investors you can buy equities from big fund managers like Artemis etc.
There are hundreds to choose from and sites like Hargreaves Lansdown provide recommendations. Investing £500 per month - maybe choose 5 funds spreading your investment to say 50% UK equities, 20% American, 20% Asia, 10% Emerging for example.
You can play safe or as adventurous as you wish.
Check the performance charts and experts opinions readily seen on Google but you are generally looking for stability rather than meteoric rises which can suddenly crash down. The optimum growth happens if you automatically have all dividends reinvested so you essentially get compounded growth and in the SIPP the dividends are added tax free. Over time this is a significant gain.
The beauty of a SIPP on-line is you should be able to monitor performance on a daily basis and switch funds without fees ( most funds are priced exactly the same when buying and selling ) so if a fund you chose earlier is out of favour or not fitting your profile, sell and buy something else and you are not paying commissions of a few percent to middlemen. Most transactions on-line are completed in 24 hours.
Currently you can withdraw from a SIPP if you are 55 years old and the first 25% is tax free thereafter taxed as income.
I believe for Inheritance purposes, money in a SIPP is not included in your estate valuation.
There are a few SIPP providers that have an arrangement with the Royal Mint so if you want to add gold into your SIPP and get all the benefits of a SIPP check it out. However these providers might charge annual fees etc and may not offer the ease of online trading - sorry don't know.
I think you can have multiple SIPPs but I am not 100% sure so maybe open a SIPP just for gold if you can !!

[CANV]

Property/sipps. The first one gets you huge leverage and you have to live somewhere.  
sipps, may seem far away and boring , but when you hit your late 50’s you will be happy to have such a tax efficient ‘untouchable in your crazed youth’ fund to fall back on 

[HerefordBullyun]

In cat deeleys purse if she lets me vigourously punch her in the fartpipe twice day each month 😁

[Norskgeld]

26 minutes ago, HerefordBullyun said:

In cat deeleys purse if she lets me vigourously punch her in the fartpipe twice day each month 😁

Hahaha "the healthy humour of the honest Tommy" as General Melchett would say. 😂

[HerefordBullyun]

1 minute ago, Norskgeld said:

Hahaha "the healthy humour of the honest Tommy" as General Melchett would say. 😂

Retired Sergeant now and for held the rank 11 years, now a dysfunctional veteran! Long time since I was a tom!

[CANV]

well played Sergeant 

[Stacktastic]

On 08/12/2021 at 12:12, Pete said:

When you invest in a SIPP 

 

1 hour ago, CANV said:

Property/sipps. 

I have been researching this over a few days thanks for the help guys.  

I was looking into inheritance tax as my mum has 2 properties & it seems that it would be best to set up a ltd company & put it on that. I want to buy property at some point anyway. 
I am not sure about a SIPP but it might be worth chucking a few quid in automated I don't have that long until im 55. Im self-employed so cans the benefits if you have a job. 

I just get the feeling that powers to be love you to lock up your cash so you cant enjoy life & when you want to spend it you have physical issues etc. 
My opinion is life is now & every moment should be cherished, but I guess im thinking about the general public just relying on that and that only & loosing tons of purchasing power. 

I am considering setting up a stocks and shares ISA in my wife's name & putting together 3 funds that encompass different economical situations. Probably mainly ETF's 
At the moment it would be 30% precious metals, 20% emerging markets, 20% UK dividend kings thats have world coverage (ie unilever) & not sure about the last 30%. 

I think we shall also add funds from our own income & also invest in stocks on sale - such as Ali Baba at the moment. 
Little and often as I have a massive advantage now in understanding world economics & 

I have thought about a childs ISA but it gets locked up for 18years and the child owns it.

I think I shall still gather collectibles like Rum & other things, but precious metals is where its at IMO for now on that front. 
It will change if/when asteroids are mined for other stuff & gold is the by-product