| FORUMS > The Sin Bin > Financial Advice |
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Hi everyone,
I've been thinking and looking into different ways of saving for the future (I'm 27) and really confused as to which is best, seeing as there are quite a few intelligent posters on here I thought I'd ask on here.
Do I start my own pension? Shares? Buy gold? 2nd home to rent out?
Any help will be welcome, thanks in advance.
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Be wary is the best advice.
Be wary of "professional" financial advisors who are required by law to declare an interest in any product they recommend, that law is there for a reason, its not your profit they are necessarily interested in.
Be wary of anyone who promises any get-rich quick investments, there is no such thing.
Be wary of banks who promise you the world with their investment products and while not breaking the law may not be totally demonstrative about the level of fees they charge either as a "management" fee or as a penalty if you change your mind.
My only advice would be the same advice that I gave my eldest, DO save something even if you don't know where to put it yet, she has a simple deposit account that pays a small amount of interest with no costs attached (or none that are taken after they've calculated the declared interest rate) and she's now in the habit of saving a decent sum of money every month towards a property deposit in the next few years - its a start.
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If you have half a brain, I would say do it yourself. Sign up with the excellent Hargreaves Lansdowne site, and you can set up and manage your own SIP, ISA, etc., with a choice of literally thousands of investments.
Read up as much as you can about the investments (the site has more info than you could shake a stick at) and then make your own choice. You can't do any worse than the so-called financial advisers who would pretty much all have ended up with you doing your bo11ocks in big style over the past few decades, and they aren't really interested in anyone without huge wedges anyway. Whereas the beauty of the HL website is you can invest as much or as little as often or as infrequently as you like, (well, most unit trusts etc do have a min. of £1K, but you know what I mean) and deal to please yourself whenever you like. Start in a modest way and have a go, get the hang, and go from there.
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I feel strangely obliged to point out that RLFans is not registered with, nor regulated by, the FSA and is not qualified to offer financial advice
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I'd be inclined to invest in the cheapest tracker fund(s). Just need to decide which index you wish to track. I have used a deicretionary fund manager for years. All that happens is that they deduct value - as costs are a huge drag on performance. In good times their fees are hidden but in bad times they take a few thousand a year and you get no return. The whole investment management industry is pointless and deducts value from its customers. I just can't be bothered doing it myself but its expensive!
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The same applies to most, if not all, of our posters.
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| Buy a house in a student area. Rent it out to 3 or 4 students at £300 pcm each.
You will pay your mortgage and generate a reasonable profit. Just remember that any income from this should be declared to the tax man.  I know loads of people who rent houses out and don't declare the income! |
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| Quote: The Video Ref "Buy a house in a student area. Rent it out to 3 or 4 students at £300 pcm each.
You will pay your mortgage and generate a reasonable profit. Just remember that any income from this should be declared to the tax man. ![]()
Dont forget to factor in changing the carpets, beds and kitchen cabinets once every year, at this time of year the streets of Headingley are rammed full of skips full of junked furniture as landlords try and get the premises ready for the autumn term. 
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| Quote: tb "I feel strangely obliged to point out that RLFans is not registered with, nor regulated by, the FSA and is not qualified to offer financial advice'"
Damn... I was just about to refer the site to our Enforcement Division lol |
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If you have the money to buy a 2nd property, then do so to rent out. bricks and mortar is the future, majority of people cannot afford to buy.
Stocks and shares, then you are gambling on something ( I presume) you know little or nothing about. Apologies if you do.
Pension schemes..avoid like the plague. You've got 40 years until retirement, though no doubt it will be 50 when your terms. A bloke who you don't know from Adam, will give you a load of bull as to how much you will get if you pay in x amount/ month. Don't believe him. I've lost count of the number of people I know who have been told, " the schemes have not performed as expected." and end up getting a lower figure every month. Pension schemes are as big a con trick as the pyramid scheme.
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Walnuts!!!! Get it all on Walnuts!
uk.finance.yahoo.com/news/status ... ector.html
Being serious for moment. One's hobbies and interests depending upon what they are, can be fantastic investment opportunities. You'll be more knowledgeable on the investments you've made if they are a hobby of yours. A friend of mine has always had a large interest in military history. And has over the last few years turned that into a way to store his life savings. With great success. To use management speak, people are looking outside the box, outside traditional investments for way's to store and generate funds.
You only have to look at my avatar to tell you what I've got all my life savings invested in. Being able to enjoy my savings knowing that I can cash them in at the the drop of a hat. Suits me and my lifestyle perfectly.
The day's are gone when large sums of money can be left in an account to generate a healthy interest. Hell! If the bank goes under you won't get back the amount they were holding (£8k maximum iirc).
Still as others have said a second home is the route to go down. 
Just how lucrative that is, when unless you've got the time you'll have to use a lettings agency, plus the reasonable chance that the place may well require some maintenance now and again. We all know what student's are like, most of us were one at sometime. Or am I just condemning my former rowdy self. |
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Walnuts!!!! Get it all on Walnuts!
uk.finance.yahoo.com/news/status ... ector.html
Being serious for moment. One's hobbies and interests depending upon what they are, can be fantastic investment opportunities. You'll be more knowledgeable on the investments you've made if they are a hobby of yours. A friend of mine has always had a large interest in military history. And has over the last few years turned that into a way to store his life savings. With great success. To use management speak, people are looking outside the box, outside traditional investments for way's to store and generate funds.
You only have to look at my avatar to tell you what I've got all my life savings invested in. Being able to enjoy my savings knowing that I can cash them in at the the drop of a hat. Suits me and my lifestyle perfectly.
The day's are gone when large sums of money can be left in an account to generate a healthy interest. Hell! If the bank goes under you won't get back the amount they were holding (£8k maximum iirc).
Still as others have said a second home is the route to go down.
Just how lucrative that is, when unless you've got the time you'll have to use a lettings agency, plus the reasonable chance that the place may well require some maintenance now and again. We all know what student's are like, most of us were one at sometime. Or am I just condemning my former rowdy self. | |
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| Quote: Live Wired "If you have the money to buy a 2nd property, then do so to rent out. bricks and mortar is the future, majority of people cannot afford to buy.
Stocks and shares, then you are gambling on something ( I presume) you know little or nothing about. Apologies if you do.
Pension schemes..avoid like the plague. You've got 40 years until retirement, though no doubt it will be 50 when your terms. A bloke who you don't know from Adam, will give you a load of bull as to how much you will get if you pay in x amount/ month. Don't believe him. I've lost count of the number of people I know who have been told, " the schemes have not performed as expected." and end up getting a lower figure every month. Pension schemes are as big a con trick as the pyramid scheme.'"
Not a great time to buy property, IMO. Rental yields of just 5% with the likelihood of capital depreciation over the next decade. When my mate bought his last house he was getting 15% and rampant capital appreciation. Those days have gone for the forseeable. Having said that, you can do well in certain areas with local knowledge.
The stock market has also gone nowhere for quite some years. However, longer term it should, logically speaking, provide the best returns (IMO). My reasoning, is that that companies and businesses drive the economy and large companies are by definition successful companies.
The only good thing about pension schemes is the fact that if you are a higher rate tax payer it only costs you £60 to save each £100. But, the big problem and complete con is that the insurance companies take all of your capital, which you never get back (unless you die before taking benefits and have a return of fund scheme, when the capital can go to your dependents - still not you!). |
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| Quote: Live Wired "If you have the money to buy a 2nd property, then do so to rent out. bricks and mortar is the future, majority of people cannot afford to buy.
'"
IMO this is terrible advice - house prices are being kept artificially inflated by the current ultra low interest rates and other help being afforded to mortgage holders atm.
If/when the Euro pops there will be another huge financial crisis which should see huge falls in house prices as people default on mortgages and get their homes reposessed.
Personally I'd be looking to buy PHYSICAL Gold or Silver if I had any savings. However you then have the problem of where to store it safely. It's a tough question in the current economic climate. |
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| Quote: LeighGionaire "
Personally I'd be looking to buy PHYSICAL Gold or Silver if I had any savings. However you then have the problem of where to store it safely. It's a tough question in the current economic climate.'"
Problem is gold and silver are very volatile price-wise. They will at some point drop suddenly and dramatically. If you think we are heading for financial Armageddon the best investment (probably the only investment) to make would be farmland (plus a gun to protect you / it with). |
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| Quote: Dally "The only good thing about pension schemes is the fact that if you are a higher rate tax payer it only costs you £60 to save each £100.'"
If you pay into your pension via salary sacrifice you can get £120 added to your pension for every £60 reduction in your net pay (the additional £60 comes from income tax + employers NI). It's roughly similar for basic rate tax payers: income tax + employees NI contributions + employers NI contributions add up to around the same amount. |
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