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Relative finance noob here: I keep hearing about how basically I need to have compound interest, and without it I'll be hosed for retirement. But I don't fully grasp what investing receives it and which doesn't. Currently I put £1000/month into a Vanguard LifeStrategy 100% Equity Fund, and about £500 into a Nutmeg 10/10 risky account. Am I receiving compound interest if I leave these investments alone for 20 years? Or will I "only" be receiving interest on what I explicitly pay in? Thank you!
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Aug 13, 2023 21:59
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Does anyone have any recommendations about actually getting to talk to someone about finances, and best ways to manage them? Have spoken to 3 separate financial advisors: 2 of them were essentially just Compare the Market. When I told them my current finances they basically said, I can get you a better deal on your life insurance or car insurance. They offered nothing in terms of, you have your money in X but you should put it in Y. The third one seemed to be exactly that, but when I gave them our full financial breakdown they said, we only work with clients with more than £200000 in investments. I was like...if I had more than £200000 in investments, this would be a very different conversation! Also, any advice here would be welcome. Current situation is: £8000 in Premium Bonds ~£6000 in a Nutmeg 10/10 risk ISA ~£18000 in a Vanguard ISA, majority in a LifeStrategy 100% Equity Fund - Accumulation ~£2000 in random stocks on Revolut and eToro Combined ~£120000 in Pension, both making max employer-matched contributions each month I'm putting roughly the ISA non-tax max each month (£1666.66) into the Vanguard & Nutmeg. We have a 2% mortgage, remaining ~£250k, £1300/month & we're overpaying it by £1000 every month. Up next September. So basically, we have about £2500 each month going into either mortgage overpay or ISAs, that we could play with. Are we doing the right things here? Is the Vanguard ISA we've chosen the best bet for us? I've heard that overpaying the mortgage is a fool's errand if you can get a better return than your mortgage % elsewhere, but I'm not sure if I should trust that, especially with it likely shooting up when we renew. Thank you all!
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Oct 15, 2023 08:42
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Yargh...so, the above is why I really feel like I need to speak to a professional, but while I've been able to speak to a ton of different people here in London, not a single one is what I'm after. I keep thinking "maybe what I'm after doesn't exist", but back home in Canada my bank had a service for normal customers where they'd advise on stuff like this. Turns out, you're all correct, and I've incorrectly had two Stock & Share ISAs for the past few years. Have immediately set it up to transfer my whole Nutmeg pot over to Vanguard as they seem like the better option. Although, my Nutmeg has returns of 17.63%, whereas my Vanguard has returns of 3.2%, and that's lifetime since the account opened. I know it's a total 1st world problem, but I've got £2500 a month I could be playing with here and I feel like I'm sort of getting nothing with it currently. People say overpaying the mortgage is losing me money, but with the Vanguard's returns so low I worry about lumping all my eggs in that basket, especially as I hear that the only way to really make money is put it aside and don't touch it for years. I know I can't expect to be earning millions here, but when I see all these videos about compound interest earning you millions by the time you retire, and talk to colleagues who earn much less than me who have these huge savings pots, I feel like either they're taking on mountains of debt or I'm doing something wrong. I have so many questions, like: - Do I have the right credit card? I have an Amex that gives a 0.75% Cashback on spend up to £10,000. Got about £400 back this year which was nice, but...for my lifestyle, would there be something better? - RE the overpay mortgage, people tell me "just put your money into an account that has a greater than 2% return instead": there's literally thousands of different accounts and I have no idea which ones are good and which are poo poo. - People told me, close the Nutmeg as they're less reputable than Vanguard...but it was giving me a much higher rate of return, and I haven't seen any fees, so I'm struggling to understand why that's what I should have done. I've done it, but I don't get it. - I turned 40 in February: I believe that means an additional lifetime ISA is a no-go? Had one originally when saving for the house & cashed it out. Also, we plan to potentially move overseas: would that invalidate the ISA? And that's just the tip of the iceberg. I really just need advice on, who should I be speaking to here? I know Fidelity are advisors, are they just for stocks and bonds? It feels like my sort of "baby's first financial questions" would be a lucrative market niche for someone to be addressing. The advice in this thread is great, and I'm trying to self-educate, but the whole "having two S&S ISAs at the same time" thing has just shown me that I really don't know what I'm doing, and that mistakes now could be costing me thousands in the future. I'd much rather pay someone to point me in the right direction, with a yearly financial health check-in or something. Does nobody do this sort of thing in the UK for the relatively low amounts I'm talking about here?
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Oct 30, 2023 09:56
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Thank you Jaeluni and Naar! Oh yeah, I mean I'd be happy to pay say up to £1000/year, just to be able to speak to a specific person who would review my current situation and say, "you should really be doing more of Z", or "are you really getting any benefit from Y?" In particular, someone who'd be willing to actually look at my entire financial situation, and tell me where I'm being stupid. I'll definitely look at Unbiased. Money Saving Expert I've used, that's how I got the Vanguard, but it feels a bit too "do it yourself" for me. RE what I'm invested in: Nutmeg: just says, 10/10 risk pot (which is what I wanted). Says Assets: Equities 99.56%, predominatly (90%) Developed Market Equities, and within that there's like 30 companies it's invested in? Vanguard: all in LifeStratey 100% Equity Fun - Accumulation. Looks like that's mostly in Blended products, like Vanguard US Equity Index Fund? Long story short though, as I'm sure you can tell: I don't really understand this stuff and I don't have the time or patience to learn it. Definitely not the type of person who wants to be doing hours of research to make sure I'm doing the right thing, would much rather pay someone to manage it for me & take some sort of payment or comission to handle it. But yes, will have a look at Unbiased. THank you again!
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Nov 1, 2023 13:38
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