Money - advice!

[rootsnall]

Why is it an especially good strategy if you are on higher rate tax? You don't get any tax relief do you?

Just checking I haven't missed something here!

If your mortage is at at say 6% APR, everything extra you pay off then you make an ongoing 6% post tax risk free gain. To get that same post tax return if you are a 40% tax payer you'd have to make a 10% gain ( ie. invest 10K, get 1K return, tax 400 quid, post tax gain 6%. Obviously it's more complicated if you are making capital gains as you then get a tax free allowance that would work in your favour. I think it's a hard to beat way of using excess money unless you want to speculate and use leverage to try and beat it.

[SallyAnne]

Yes, Pay off the mortgage

100k mortgage = £600 a month at 5% over the term, 7,200 a year

that's effectively >7% cost per year for the near future

You can't get 7% on savings

Thats a really good point.

Hmmm, maybe a rethink is needed.

Cheers all

[TheRightStuff]

I wouldn't invest in anything that ties capital up for a long time at the mo. Keep liquid then if an opportunity arises...

I've got 30k in Premium bonds, which is liquid and so far has given me 6% in 8 months and better still, Gordo gets FA

I'll have to look at premium bonds - can't believe I'm saying this.
6% in 8 months sounds alot. Did you win some dosh?

[DaveB]

As a general rule it is always better to pay off debts before you start trying to save or invest. The interest you pay on a debt will always* be more than you earn on an investment.

*For varying values of always not including special circumstances such as short term offers on credit cards etc.

[Numptycorner]

I'll have to look at premium bonds - can't believe I'm saying this.
6% in 8 months sounds alot. Did you win some dosh?

£1700, so slightly under 6%, but only 8 months in. There is a theory new bonds are more likely to win.

[TheRightStuff]

Thats a really good point.

Hmmm, maybe a rethink is needed.

Cheers all

how about blow it all on a boob job

[rootsnall]

I'll have to look at premium bonds - can't believe I'm saying this.
6% in 8 months sounds alot. Did you win some dosh?

I'd be wary of premium bonds, they have created bigger prizes which means your average return won't be great unless you win a big one. National Savings Certificates, particularly the index linked ones will give you a better return assuming no jackpot ( http://www.nsandi.com/ )

[DimPrawn]

You are all missing the 100% guaranteed biggie.

Buy To Let.

House prices are going to double, rents will go through the roof and all the BTL'ers will be millionaires.

You KNOW it makes sense. Buy into UK property.

Kerrrrrrchinnnnnng.

HTH

[rootsnall]

You are all missing the 100% guaranteed biggie.

Buy To Let.

House prices are going to double, rents will go through the roof and all the BTL'ers will be millionaires.

You KNOW it makes sense. Buy into UK property.

Kerrrrrrchinnnnnng.

HTH

Do you want to buy one of me, haggling with a BTLer today but I'll give it away to you with an extra 500 quid off, available today and today only, you know it makes sense.

[freakydancer]

whack it all up your hooter.