Reply to: Savings vs Investment

[Jog On]

Joking when I posted that link? As soon as I've got enough to go into BTL I'll go through that company regardless of what the market's doing at that moment in time.

Like I said the guy who runs the company (Rod Thomas) is very experienced and a full time multimillionaire property investor himself, having met him in person and hear him speak I know he's the real deal.

Another investing rule of thumb I have is to only take advice from people who are in a position I want to be in ie. full time investors who live of the income from their investments.

For instance if I ask for advice on investing in shares and someone says "oooh it's risky investing in shares because stock markets go up and down (no sh1t)- you'd be mad to invest in individual stocks - you don't stand a chance - you'll get murdered and lose everything - invest in mutual funds instead" I know that whoever said that is in no way qualified to give out stock market investing advice.

Had I asked what were some good funds to look into I'd expect fund advice but not if I were asking about individual share investing styles, I'd hope to be pointed in the direction of some fantasy trading websites and some good tutorials/books/courses on different styles (value/growth).

Same with property, people are making money from BTL right now, I'm sure people who know what they're doing are buying properties right now - today that will provide very good ROI.

You just have to know what you're doing and learn from people who are doing well at it.

My main investment at the moment is in business growth training and product development to get my Ltd producing large flows of passive income, for me IT contracting is plan b/"the day job".

[ChimpMaster]

Stay in cash for now, or buy bonds.

When the credit "crisis" (ahem) has bottomed the market out, buy into Asian funds. For now I like the look of food funds (LSE:CORN for example) and silver (LSE:SLVR or PHAG).

If you can learn fast and can accept risk, then trade currencies - Yen/NZ Dollar, or Brazil Real/USD. So-called "unwinding of the carry trade" etc.

My current trade is a short on RIO. It's been open 30 minutes now and looks like it's time to close.

[King Cnvt]

Jog On, I thought you were joking when I read that, but the rest of your post seems reasonable enough.

3-4 years ago it would have made sense but I would have thought it's possibly the worst time to buy new build/off plan property for BTL at the moment, especially with the DFS-style pricing/discounts stated.
e.g. does anyone ever actually pay the "full market price" for these flats?
Also the rents stated can be as optimistic as the prices.

Even if the discounts are genuine they are in danger of being wiped out in the next two years.


I'd keep most in cash for now, stick some in share funds in a couple of months time once all the credit crunch/sub-prime drama dies down. That way you should catch what are usually the best gains in the market (November through to March).

Interactive Investor is a good site for buying funds with discounts on fees www.iii.co.uk
As Luke says, use up your ISA limits, maybe split between cash and shares ISAS.

www.nsandi.com good for safe tax-free savings and investments, you can stuff up to £15k per issue into inflation-linked certificates.

5 or 10 years down the line you might decide to quit IT and buy a business, half the people on this site daydream about their "plan Bs".

I'd revisit BTL in a couple of years time.

In the time it has taken you to write that post, a BTL would have made you £60 profit. Honest.

[GreenerGrass]

Here's a good source for BTL info:

http://www.axispropertyinvestment.com/

Jog On, I thought you were joking when I read that, but the rest of your post seems reasonable enough.

3-4 years ago it would have made sense but I would have thought it's possibly the worst time to buy new build/off plan property for BTL at the moment, especially with the DFS-style pricing/discounts stated.
e.g. does anyone ever actually pay the "full market price" for these flats?
Also the rents stated can be as optimistic as the prices.

Even if the discounts are genuine they are in danger of being wiped out in the next two years.


I'd keep most in cash for now, stick some in share funds in a couple of months time once all the credit crunch/sub-prime drama dies down. That way you should catch what are usually the best gains in the market (November through to March).

Interactive Investor is a good site for buying funds with discounts on fees www.iii.co.uk
As Luke says, use up your ISA limits, maybe split between cash and shares ISAS.

www.nsandi.com good for safe tax-free savings and investments, you can stuff up to £15k per issue into inflation-linked certificates.

5 or 10 years down the line you might decide to quit IT and buy a business, half the people on this site daydream about their "plan Bs".

I'd revisit BTL in a couple of years time.

[kingshuk]

CDOs backed by US mortgages? They are going rather cheap now. Lot of folks will buy you good dinner to sell you some of those I guess.

[Jog On]

I wouldn't mind a Mcdonalds or 2 - and I don't mean big macs either!

Then there are also things like art, wine, comics, Buzz Lightyears etc.

[Jason D]

Investments

Interesting that no one has mentioned investing it in business. Easy money to be had if you buy the right one.

I'm not saying work in a business rather than own one.

There are opportunities everywhere.

[Jog On]

Here's a good source for BTL info:

http://www.axispropertyinvestment.com/

I heard the guy who owns it talk and he's the real deal, as soon as I've got enough I'm in with both feet.

I think when it comes to picking your own shares it's really down to how much time and effort you're prepared to invest into learning how, there are plenty of books and courses if you're into it.

Definitely spread it around a bit as per above post - bit of property, some shares, some bonds, some cash and if you're into the more adventurous stuff some of that.

The rule of thumb (according to Benjamin Graham) if you want to play the crazy game is to set aside an amount (5-10% or whatever of your investment capitol) you want for speculative stuff like covered calls, forex, spread betting etc and just use that. Another rule of thumb (according to Warren Buffet) is never lose capitol!

How much you decide to place into property/shares/bonds/cash/crazy stuff is personal preference, there is no 1-size fits all, go with what you know and what is in your personal comfort zone.

Ignore the media, doomsayers and chicken littles as well the worst thing you can do is stay out of the market.

[lukemg]

Suggest you spread it around a bit.
1. Keep warchest where you can get at it, enough cash to cover you for a few months (put on deposit, 30-day access maybe)
2. IF you can leave some money alone for minimum 5 years, maybe 10 then use up shares ISA annual allowance = 7k (invest in tracker or general managed uk fund, see hargreaveslansdowne for some info + discounts on purchase but not advice, consider 2 seperate funds)DONT use an IFA for this. Following year choose different area, maybe europe fund, USA, global etc. Doesnt need to be declared on tax return = easy admin. DONT try to buy individual shares/guess the market, you haven't got a hope, hence a tracker or something safeish for first choices.
3. I think you have missed the BTL boat, relies on capital appreciation, even with gearing (use of borrowed money) to justify all the possible grief (mate got a phonecall saying if you come here I will kill you). Consider heavy investment in own house for property exposure (exempt from capital gain also)
4. I have got a SIPP also, just for the hell of it.

Good luck

[TheFaQQer]

Latin American dot com startups - it's the future.

[weboo]

Thanks for your replies and links, will take a look at all this. But the BTL stuff looks very interesting

[_V_]

The only truly safe place for money in the UK is property. Stick it down as a deposit on a BTL and repeat every few years until you have £53M in property.

[Jog On]

Depends on things like your appetite for risk, how much you know about investing etc.

If you aren't sure but want to make more than what you would in a high interest account you could put it in a mutual fund or index tracker.

A good place to find out more is the Motley Fool:

http://www.fool.co.uk/school/2006/sch060130.htm

They do a good book on UK investing as well:

http://www.amazon.co.uk/Motley-Fool-...7702610&sr=1-1

[VectraMan]

Spend it on fast cars and loose women.

(Word highlighted to help Ardesco with his spelling).

[Ardesco]

Shares = Make/Lose a fortune depending on many factors
Bank = Average income(unless the bank goes down the pan)