i no the banks interest rates are rubbish,a friend has suggested i buy premium bonds,i dont want to touch the money for a while,
anyone got any suggestions????????????

Yeah, give it me and you'll never see it again! :bigsmile:

you sound just like my hubby,,,,,lol

Keep away from the stock market (including unit trusts or similar) and go for fixed interest investments (such as guaranteed bonds etc). I believe the stock market at the moment is too difficult to read to invest with any confidence at all - unless you are willing to take a substantial risk and can afford to take a big loss. .

Premium bonds are safe in terms of the capital invested, although of course you get no interest and are not guaranteed to win anything. But they can be fun (waiting for the post after each draw to see if a nice little cheque is coming your way).

the simplest thing to do would be something like an ISA. Tax free, 0 risk and a reasonable return.

When you say the banks rates are rubbish, that mainly applies to current accounts, savings accounts are a lot better (although not as good as an ISA or similar device).

Premium bonds don't guarantee any return, it's effectively a risk free form of gambling.

You could also think about stocks and shares if you wanted too, potentially a higher return, but there is also risk that you could loose money.
Maybe spreading your savings between the various options would be appropriate if you have enough to warrant it.

Premium Bonds in £5000 blocks upto £30,000!

:clap: BIG WINNER! :clap:

Originally posted by LordChaverly
Keep away from the stock market (including unit trusts or similar) and go for fixed interest investments (such as guaranteed bonds etc). I believe the stock market at the moment is too difficult to read to invest with any confidence at all - unless you are willing to take a substantial risk and can afford to take a big loss.

You;re broadly right there LC, the stock market is quite volitile but it does have to have picked up considerably in the last 4-5 months (seeing a good few grand difference between fund values in the spring and now, which wasn't happening this time last year).

It all comes down to your atitude to risk - more risk means potentially more reward but greater danger to your capital.

The reason bank account interest rates are poor is that your money is almost 100% safe - only the bank going under will lose your money and the likelihood of that is near zero.

Without knowing your individual circumstances and how much you have to invest it is difficult to say what you should put your money in. ISAs are usually a good bet, as the interest rates are better than the bank, it grows tax free, and as long as you stick to a Cash ISA there is little risk to your capital. Stocks and shares ISAs, as you can probably imagine are a riskier prospect.

Before you invest any money, make sure you have cleared any existing debt you have (credit cards, store cards, personal loans etc).

www.fool.co.uk is a good site, take a look.

GazB

Originally posted by julie23
i no the banks interest rates are rubbish,a friend has suggested i buy premium bonds,i dont want to touch the money for a while,
anyone got any suggestions????????????

How much do you have to invest? There are various high-interest, illiquid accounts available from high street banks. The rates can be raised even higher if you're willing to adopt a 'hands-off' approach. I can explain more if required.

Edit: Julie23, probably best not to reveal that on a public forum actually. Just say if it's a large or small sum.

If you want to buy shares you could invest in a tracker fund: the safest option because it tracks the FTSE 100 (top 100 shares on the Financial Times Stock Exchange). It's also quite boring and wont make you rich.

Or you could do a bit of research yourself:
Look at the share prices in the papers, see if they are at year highs or year lows and then buy ones that you expect to grow. This is a very difficult thing to do but can be very rewarding and fun!

Or look at the dividend yield: This is in small print near the share price. A lot of companies pay dividends that are over 5% per share against the price of the share.

Or you could scan for new issues and penny shares. This is the riskiest of them all but also potentially the most rewarding: invest a grand in a company that is worth 1p a share watch it grow until it is worth 37p a share... doesn't seem like much but your £1000 is now worth £37 000 !!! - People actually do this and make a fortune but as many if not more do this and lose all their money. So be careful!

(go and have a look at QXL's share price history... imagine sinking £1 000 in the shares three years ago, now work out what that's worth today)!!!

I'd actually suggest what's already been said - clear any non-Mortgage debts.

And if it's a very large sum, clear that Mortgage as well!

Better to be debt free before you start investing.

Joe

Even if it's relatively small, making an overpayment on a mortgage is likely to save you more than saving, unless you either have a very good mortgage rate or find a very good savings rate.

Originally posted by Cyclone
Even if it's relatively small, making an overpayment on a mortgage is likely to save you more than saving, unless you either have a very good mortgage rate or find a very good savings rate.

You could also look at "Off-setting" where, instead of getting interest on your money, it's off-set against your mortgage, but still available to you to spend as and when you wish.

Example: you have £80k mortgage and £10k in savings. Therefore you only pay interest on £70k of mortgage, meaning payments are less or you can pay it off quicker.

Quite a few banks offer these now.

Originally posted by julie23
i no the banks interest rates are rubbish,a friend has suggested i buy premium bonds,i dont want to touch the money for a while,
anyone got any suggestions????????????

why not invest it DD housing fund?! I can guarantee that you won't touch the money for a long time ;)

Originally posted by Deavon
If you want to buy shares you could invest in a tracker fund: the safest option because it tracks the FTSE 100 (top 100 shares on the Financial Times Stock Exchange). It's also quite boring and wont make you rich.

But it will return you an investment much higher that the interest of an ISA year on year, assuming we don't have a world economic disaster.

Originally posted by Skatiechik
But it will return you an investment much higher that the interest of an ISA year on year, assuming we don't have a world economic disaster.

It does have to be over something about 20 years if historically you were to look for a guaranteed return at higher than inflation.

Originally posted by Cyclone
It does have to be over something about 20 years if historically you were to look for a guaranteed return at higher than inflation.

Unfortunately there is no guarantee with shares and as many fund's small print will tell you, past performance is no guarantee of future performance.

But let's take a look at the FTSE 100:

This time a year ago the FTSE was around 4400 today it's at 5430. That's an inflation beating rise of 23 - 24%. Not bad at all.

So £10 000 invested last year would be worth about £12 400

however if you had invested that money November 1999, when the FTSE was at 6 800, that £10 000 would be worth
roughly 25% less: About £7 500.

So the timing is more important than the length of time you hold the shares. Although Cyclone is correct in saying that the longer you hold shares the better your chances of making more from them as the long term drift in prices is definitely up!

Rather than clearing your mortgage, isn't it better to buy more property?

The rate at which property increases in value out performs the typical mortgage rate?

depends on how much and how long really...

thanks for all of your ideas,i have no debts other than my mortgage that finishes in 6 years,so thats how long i would be looking to invest my money for,:)

Originally posted by Deavon
Unfortunately there is no guarantee with shares and as many fund's small print will tell you, past performance is no guarantee of future performance.

But let's take a look at the FTSE 100:

This time a year ago the FTSE was around 4400 today it's at 5430. That's an inflation beating rise of 23 - 24%. Not bad at all.

So £10 000 invested last year would be worth about £12 400

however if you had invested that money November 1999, when the FTSE was at 6 800, that £10 000 would be worth
roughly 25% less: About £7 500.

So the timing is more important than the length of time you hold the shares. Although Cyclone is correct in saying that the longer you hold shares the better your chances of making more from them as the long term drift in prices is definitely up!

I think I was shown data once (in an economics lesson) that showed that historically at no point would you ever have lost money if you invested for a minimum of 20 years. Which means that no drop has ever wiped of more than 20 years of gain (or conversley it has never taken more than 20 years to recover from a crash).
Of course 20 years is nearly half a working life, or a quarter of a lifespan, it's certainly a long term view on things.

Originally posted by Cyclone
I think I was shown data once (in an economics lesson) that showed that historically at no point would you ever have lost money if you invested for a minimum of 20 years. Which means that no drop has ever wiped of more than 20 years of gain (or conversley it has never taken more than 20 years to recover from a crash).
Of course 20 years is nearly half a working life, or a quarter of a lifespan, it's certainly a long term view on things.

Well as J.M. Keynes famously said, in the long run we are all dead. By the way, your Economics lecturer was wrong. The greatest stock market crash of all, i.e. the Wall Street Crash of 1929, resulted in a long term fall in stock market values lasting over 22 years. In other words, share prices in the US did not return to their September 1929 values until the early 1950s. Indeed, three years after the crash they were almost 90% down on pre-crash levels (although on the positive side, the stories about investors leaping from high buildings is 1929 is a myth - the dreadful depression and poverty which ensued though is anything but a myth).

Moreover, stock market values depend of course not only when you invest but also what you invest in. For example, many investors in the recent dot.com bubble period will never get their money back because the shares were grossly over-valued when they bought them. Because stock markets fluctuate, there will always be money to be made (and lost) in shares. Most ordinary punters though don't have the information or expertise required to choose shares which are likely to appreciate over the long term. Relying on financial advisors is usually no cast iron solution either (in many cases you would do better by picking your shares with a pin). For most people, investing in shares is just a boring way of risking (and frequently losing) money.

It all depends on how much risk you are willing to take.

Just about every piece of investment advice I have ever seen says you should look to use up your maximum ISA allowance before you even think about anything else.

Obviously if you have mortgages and other debts the situation can become a bit more complex but I don't think you can go far wrong with that piece of advice.

if our serious about investing and not just saving then pm me.
we can provide free financial advice - which u can take or leave.

Originally posted by LordChaverly
Well as J.M. Keynes famously said, in the long run we are all dead. By the way, your Economics lecturer was wrong. The greatest stock market crash of all, i.e. the Wall Street Crash of 1929, resulted in a long term fall in stock market values lasting over 22 years. In other words, share prices in the US did not return to their September 1929 values until the early 1950s. Indeed, three years after the crash they were almost 90% down on pre-crash levels (although on the positive side, the stories about investors leaping from high buildings is 1929 is a myth - the dreadful depression and poverty which ensued though is anything but a myth).

Moreover, stock market values depend of course not only when you invest but also what you invest in. For example, many investors in the recent dot.com bubble period will never get their money back because the shares were grossly over-valued when they bought them. Because stock markets fluctuate, there will always be money to be made (and lost) in shares. Most ordinary punters though don't have the information or expertise required to choose shares which are likely to appreciate over the long term. Relying on financial advisors is usually no cast iron solution either (in many cases you would do better by picking your shares with a pin). For most people, investing in shares is just a boring way of risking (and frequently losing) money.

it was the ftse100 tracker that was being considered though, not an investment in a specific company. And it could well have been 22 years that was the figure, it was 7 or 8 years ago, I expect I just rounded it to 20 in my memory.

Haven't recent studies shown that picking stocks at random would make just as much money as your average market trader on the stock exchange floor. Which just goes to show how at prediction they really are.

:clap: :clap: I love how everyone is an expert on money subjects :clap: :clap:

My advice would be to read a couple of books so you can find a methoed that suits your character and circumstance.

I could recommend some books if you want to PM me.

Either way, hope you make the right choice.

Originally posted by Skatiechik
But it will return you an investment much higher that the interest of an ISA year on year, assuming we don't have a world economic disaster.

Don't forget that, to confuse things, you can also invest in stocks and shares within an ISA.

The best thing to do depends on the amount and your personal circumstances - but it's worth using your ISA allowance up :)

Originally posted by Andy
Don't forget that, to confuse things, you can also invest in stocks and shares within an ISA.

The best thing to do depends on the amount and your personal circumstances - but it's worth using your ISA allowance up :)

I think many investors in shares ISAs over the last few years will disagree. The tax free aspect is of course attrative. But its only beneficial if the shares perform well. Many investors who bought shares wrapped in ISAs in the lat few years are still sitting on losses (or if they have made money, the returns are no better than they would have achieved through far less risky investments).

but either way, shares or just savings, it makes sense to use your isa allowance up.
So decide in advance which method you prefer and whichever it is, use up your tax free allowance.

thanks everyone im even more confused,lol
i think an isa or premium bonds would be probably the best as i cant take any risks with the money,
iv got a couple of weeks till i get it so ill prob have changed my mind by then,who knows,lol

Originally posted by LordChaverly
I think many investors in shares ISAs over the last few years will disagree. The tax free aspect is of course attrative. But its only beneficial if the shares perform well. Many investors who bought shares wrapped in ISAs in the lat few years are still sitting on losses (or if they have made money, the returns are no better than they would have achieved through far less risky investments).

Don't forget that most Share Isa's are funds and therefore are subject to fund management costs...

Originally posted by Deavon
Don't forget that most Share Isa's are funds and therefore are subject to fund management costs...

Indeed they are. The fund managers take an annual percentage of your investment (usually around 5%) regardless of how well the fund performs. Even when the performance has been absolutely abysmal and you have lost most of your money, the fund managers will still take their annual cut of your money. This is why the car parks of the investment houses are full of Porsches and BMWs. Moreover, the companies owning the funds won't be keen on telling you when a talented fund manager has left the firm - which is one of many reasons why past performance is no guide to future performance.

i no the banks interest rates are rubbish,a friend has suggested i buy premium bonds,i dont want to touch the money for a while,
anyone got any suggestions????????????
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