Reply to: What should I do with my money?

[chasingtheaurora]

Chasingtheaurora: already contribute to charity on a monthly basis. I could and probably should increase that though (nice try with that dead link!).

Yeah, sorry about that. Blame Streamline.net and their inability to run MySQL.

Feel free to rock up at either of the following sites:

www.justgiving.com/chasingtheaurorapartone
www.justgiving.com/chasingtheauroraparttwo

Thanks!

[DBA_bloke]

Exactly what I thought!

Most of the ones on display were poor but there were a couple that made you stop and look.

RH won some awards as a younger man for his art. In fact, he won the "honour" to paint a portrait of some Aussie bigwig back in the 50s (I think). A superb portrait it was, too. But turned out that the sitter was a coont to the Aboriginals, and RH was horrified, upset, etc.

[RightLaugh]

no such thing as job security. If they can get rid of CEOs then they can get rid of you. Do you go around asking people 'Do you know who I am?'

Just because you have more money then your mates doesn't make you loaded. Your mates could be big issue sellers.

Job satisfaction = leaving at 5pm.

My God you've got a lot to learn.

Anyway at least your saving now. That's a good thing.


P.S all of the above = banter.

[maui50]

Trying to answer everyone at once...

Maui50 - OK listen, you need to learn the secrets of financial responsibility. I can't teach you a book on this forum but here are the basics:-

1) Pay off your debts, prioritising in order of cost.
2) Reduce your expenses and live below your means.
3) Buy assets that generate positive cash-flow.
4) Re-invest positive cash flow to purchase more similar assets.
5) Continue 3 & 4 until your monthly cash-flow covers monthly expenses. You are now financially free - well done. You no longer "have to" work every day.

Tazman: 1) and 2) are not an issue (have never had any debts, and already live 'sensibly'). So I'm now at stage 3 and hope to continue to stage 4 some day!

DBA_bloke: Yeah, read about investing in art recently too but not on a train (also my friend's super rich brother does this but then he's super rich, so he can afford to take stupid risks!). I ain't no Saatchi. Not gonna do it. However, I do wonder whether Rod Hull's Emu is up for grabs somewhere.

Chasingtheaurora: already contribute to charity on a monthly basis. I could and probably should increase that though (nice try with that dead link!).

RightLaugh: By your definition, yeah - I'm not worth 1m net and I'm in my mid 20s with no responsibilities (i.e. no kids, mortgage etc), so maybe I'm not 'officially' loaded. But I still have more money, more sense and surprisingly, more job security and job satisfaction than any of my mates (literally - ANY of my mates!). So I'm feeling pretty good all round. I reckon an ISA is the way to go!

Mace: your advice on pensions is great. I never liked the idea of having to wait till 55 to get my hands on my cash! I like the idea of building on investments i.e. buying to let; getting mortgage paid off for each house by the tenants. One step at a time though - still have to buy that first house!

Max: Premium bonds eh? Definitely worth thinking about.

Thanks all. Mucho food for thought! You all rock.

PS. I do live outside London. Thank GOD!!!!

[Bear]

Eh? RH is a pretty good artist - well, in his younger days he was, have a google around and see. He's old, so his stuff'll be worth a lot more once he's knocked his pipe out.

Exactly what I thought!

Most of the ones on display were poor but there were a couple that made you stop and look.

[GreenerGrass]

belive contributing to a tracker fund (ISA) on a monthly basis is a very good way of saving for the future.

Good luck.

A nice safe fund like Threadneedle China Opportunities, up something like 70% in about 6 months. When will the China bubble burst? Read some people in China are using houses as collateral on loans to invest in the stock market. Crazy.
Still a few bob to be made in the short and long term, although a big correction must be due in the next year or two.

[RightLaugh]

Hello all,

New to this forum and need some general advice from you all rich kids out there.

So, I'm an IT contractor. I've been doing it for nearly 2 years now, with no break in contracts, and I'm loaded! Plus, it looks like I'll have this contract for the next few years too so I will continue to build up my loadedness.

I intend to buy a house next year (buying with my lovely fiancee but waiting for him to get his finances ready first) so that's out for the moment. I don't want a car as where I live means I don't need one. And I'm too young for a midlife crisis so I won't be buying a motorcycle anytime soon either!

So what should I spend my money on? I've been a bit reckless already with the money, but I reckon now I should at least get a pension or something Maybe invest in stocks?

Sensible answers only please! (yes, really)

Define "loaded". No house, not married, I assume no kids. Loaded = more than 1m net. At the very least. That's if you live outside london of course.
'I'm too young' - spot on. You've got a 'few grand on the hip' (Del Boy) and think your loaded.
I would go with a lot of the advice that's been detailed above. All depends on your attitude to risk from cautious (cash - IceSave 6.25%) to speculative Turkey ETF ishare (could make/lose 6.25% in 1 day).
Seeing as your young then put a bit in cash away for emergencies and then some in a FTSE tracker and then some more in more specualtive funds. I belive contributing to a tracker fund (ISA) on a monthly basis is a very good way of saving for the future.

Good luck.

[TheFaQQer]

Latin American dot com startups are always reliable.

[max]

Hello all,

New to this forum and need some general advice from you all rich kids out there.

So, I'm an IT contractor. I've been doing it for nearly 2 years now, with no break in contracts, and I'm loaded! Plus, it looks like I'll have this contract for the next few years too so I will continue to build up my loadedness.

I intend to buy a house next year (buying with my lovely fiancee but waiting for him to get his finances ready first) so that's out for the moment. I don't want a car as where I live means I don't need one. And I'm too young for a midlife crisis so I won't be buying a motorcycle anytime soon either!

So what should I spend my money on? I've been a bit reckless already with the money, but I reckon now I should at least get a pension or something Maybe invest in stocks?

Sensible answers only please! (yes, really)

My suggestion....

at each budget, take note of the higher rate tax band, ie: for 2007-8, this is £34600. Any taxable income over that, and you might has well head down to Tower Hamlets, and hand out your hard earned readies to the local hoodies.

Your goal in life is to get as close as possible to this number(not below it,as that's a waste)

Pay dividends from you ltd company to get you to this level. Divis = £34k6 - salary - interest - other divis.

Take up your £7000 ISA each year..no tax on capital gains, and no other tax to pay.

Invest in stocks, and make use of the annual £9000 capital gain allowance.

Buy some premium bonds...no tax on winnings.

If you are non domicile setup offshore account so no tax to pay on the interest. No good if you later want to use the money for your deposit...or for anything in the UK. Maybe you plan to retire o/s?

Set up company personal pension - comes from your ltd and hmrc tops up contributions.

By this time next year you'll be millionaires...

[ChimpMaster]

You're well off when you can afford to live entirely off the income from your
investments. You're rich when you can afford to live off the interest on the income from your investments. Still a while to go, I imagine.

Thanks for making me feel great today

[mace]

Wow

Hello all,

New to this forum and need some general advice from you all rich kids out there.

So, I'm an IT contractor. I've been doing it for nearly 2 years now, with no break in contracts, and I'm loaded! Plus, it looks like I'll have this contract for the next few years too so I will continue to build up my loadedness.

I intend to buy a house next year (buying with my lovely fiancee but waiting for him to get his finances ready first) so that's out for the moment. I don't want a car as where I live means I don't need one. And I'm too young for a midlife crisis so I won't be buying a motorcycle anytime soon either!

So what should I spend my money on? I've been a bit reckless already with the money, but I reckon now I should at least get a pension or something Maybe invest in stocks?

Sensible answers only please! (yes, really)

Ok, I remember feeling loaded after about 3 years of contracting. By that time I'd paid off the mortgage on the 1st house I bought and wondered what to do with the rest of the cash. Eventually decided to move to London, and went from feeling rich to feeling really poor again. I imagine that the same will happen when I have kids. My point is that wealth's relative, so don't rest on your laurels.

In terms of investment it's all about spreading your risk (cash, shares, unit trusts, metals, bonds, property). The younger you are the more you should shovel in to high risk investments e.g. emerging market unit trusts (remember to use up your ISA and capital gains tax allowances) and the less you should put in to safe investments i.e. cash. However, you need to keep enough cash to pay your corporation & personal taxes plus your quarterly VAT bill plus about 3 months rainy day money.

I don't think pensions are a great idea for contractors. Although there's an argument that you're saving 40% on the investment and will only have to pay 20% on the income when you retire, the drawbacks are:-

1. You won't be able to access the funds until you're at least 55
2. As more people are of retirement age, the annuity rates that the insurance companies will pay on your pension fund will get less.
3. The annuity rates aren't great now. A lot of high street bank accounts pay more.
4. You don't get to access the capital e.g. if you have a £250,000 pension fund, then you might typically get £10,000 per annum (index linked) from that. However, when you die the pension fund belongs to the insurance company. Sometimes your spouse will get a lower annuity for a while but the insurance company is, in that case, definitely profitting as they're paying out a lower amount than the interest that they're making on the capital.

You're well off when you can afford to live entirely off the income from your
investments. You're rich when you can afford to live off the interest on the income from your investments. Still a while to go, I imagine.

[DBA_bloke]

Of firewood? Probably

Of art? Probably not

Eh? RH is a pretty good artist - well, in his younger days he was, have a google around and see. He's old, so his stuff'll be worth a lot more once he's knocked his pipe out.

[Bear]

or http://www.chasingthe DB9.com

[chasingtheaurora]

Give money to charity, visit www.chasingtheaurora.com for details!

[The Lone Gunman]

A shop near me is selling a load of Rolf Harris paintings, £1k a pop.

What do you reckon? Could I 'make a bundle'?

Depends which one it is. An original Rolf went for over 35K last year and most of his giclees were 400 quid last year so go figure......

I debated buying a Warhol print of Mick Jagger signe dby both a couple of years back. Number 1 in a series of 250, but couldnt stretch to the 18 grand asking price.