How to invest

[LouiseToronties]

Hi everyone can someone please advise me if I have some money to invest would it be best to keep it for a few years and if so where could I put it to help it grow or would you advise to invest right now with the current economy going ok. Forgive me I have just arrived from Canada so am still not sure on how things work here but I just don't want to sit on my money and let it go stale. Thank you, Louise xx

 

[Nochexman]

Hi Louise, and welcome to the UK! A key question about your investment is how long do you think you will be able to invest for? Presumably you might want to save up a deposit for a house purchase or something at some point, so the amount of time you can leave alone is pretty important. Also, how much do you have to invest? Best of luck with whatever you are doing!

 

[LouiseToronties]

Hi and thanks for the reply. Well I will be living at home for the next 3 years while I study and then will decide after that to go back to Canada or to stay here I will see how it goes. So basically I have about £20,000 to invest and I can leave it for as long as it is needed really as long as it is a good investment. Hope this helps for more advice! Louise x

 

[Nochexman]

Well, I would invest in shares if I knew I could keep my hands off the money indefinitely and enjoy the amazing power of compound interest http://www.businessinsider.com/amazing-power-of-compound-interest-2014-7?IR=T. Basically, identify high value companies with a reliable and higher than average yield (dividends) and invest across a minimum of 15 of them in different market sectors. There is a very good explanation about how to do this here http://www.damiancannon.com/blog/how-to-construct-a-high-yield-portfolio/ and you can discuss investment ideas here http://boards.fool.co.uk/high-yield-hyp-practical-51676.aspx. I will declare an interest; I use this method to invest myself, but I don't derive any benefit from anything you do. You are of an age where if you decide to follow this route you can derive the most benefit. Shares are not without their risk, but this approach seems to mitigate some of that risk. I hope this helpful to you, but the best advice of all is always to Do Your Own Research!

 

[LouiseToronties]

Awesome thanks soo much for this and the links I will definitely give them a read and let you know what I think. It all looks really daunting and it makes me nervous when shares are mentioned but I hope this explains a few things for me. Louise xx

 

[MikeJ]

Max out your ISA then, and split that between a few different trusts.

 

[LouiseToronties]

Hi Mike ok what do you mean by trusts?

 

[MikeJ]

Sorry, I typed trusts but meant funds.

Essentially, a fund is a managed portfolio of shares. You place your money in the fund, and a fund manager trades shares to maximise the return. You can generally pick the fund you want based on whether you're after high risk/high return, return on investment, etc.

 

[MikeJ]

http://www.hl.co.uk/funds/master-portfolios

 

[LouiseToronties]

Ok so shares. Well like I said it shares scare me but I will look into the links that have been put on here as I really want to invest and the banks don't seem any good here I may as well just tuck my money down my top and it will grow more! Thanks for helping me x

 

[MikeJ]

That seems to have worked previously....

 

[LouiseToronties]

What has worked previously?

 

[Christine Hough]

Max out your ISA then, and split that between a few different trusts.

ISA is your first port of call but still needs a lot of research.

Investing in an ISA means you will not pay tax on the interest and the current annual limit id just over £15000 which can be invested this way.

However just because an investment is an ISA does not mean it is a good investment. The need as much research as any other investment.
I have just had a look and ISA are currently quoting 1.5 - 2%

But some bank accounts will give 3%-5% before tax = 2.4% - 4% after tax.

If you are a student and not paying tax, then ignore ISA's and look for a bank account with a good return then fill in the form to say you are not a UK tax payer and you will not have tax deducted.

Or you can invest some in cloud funding if there is something which inspires you.

 

[Julie M Davis]

Hi Louise,
The advice above is very sound and informative.
It doesn't appear like you are, but if you were interested in investing in hard assets, you could look at Davenport LaRoche. I have used them before, very good.
Julie

 

[Jasper Thornton-Boelman]

Hi Louise

Firstly - it's great that you have identified the need to grow your savings, rather than just accept the current rates available for cash deposits.

Investing is a long term decision, and an important one.

If you are planning on invest your lump sum, deciding on the type of service you need is likely a good place to begin. E.g. do you want to be self managing your money or do you want someone to do it on your behalf.

There are a number of levels of service available within the UK and its important to find the one that suits your needs best. Cost and service are two key considerations initially, because they are factors you have direct control and certainty over.

I hope that's made things a little clearer.

Jasper

 

[LouiseToronties]

Thank you soo much guys I appreciate it!

 

[miggygreene]

Well then, if you are not yet ready to invest, you can always deposit your money in a bank and let the bank interest rate increase and increase until the time you are ready and prepared for a new investment of your own.