Saving £1k per month.. where to put it?

Zerorush

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I am in my late thirties and have been destitute up to this point in life. A new job is helping me save like crazy. What should be your priorities when saving this amount of money?
I have no long term plans such as home ownership in my lifetime - it's simply too expensive.
My pension is tiny, should it go there? I have no goal or desire of an income beyond the state pension, it's a little too late for that.
My next thought was getting an education, however again this is too expensive. And no idea what to study either.
Investing it in stocks and crypto would be an option. Wonder if there are less risky options.
There are always luxuries to buy, like devices and clothes, but they don't interest me much.
So what do you do with a spare £1k a month?
 

Sherliarty

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I am in my late thirties and have been destitute up to this point in life. A new job is helping me save like crazy. What should be your priorities when saving this amount of money?
I have no long term plans such as home ownership in my lifetime - it's simply too expensive.
My pension is tiny, should it go there? I have no goal or desire of an income beyond the state pension, it's a little too late for that.
My next thought was getting an education, however again this is too expensive. And no idea what to study either.
Investing it in stocks and crypto would be an option. Wonder if there are less risky options.
There are always luxuries to buy, like devices and clothes, but they don't interest me much.
So what do you do with a spare £1k a month?
I personally don't think it's ever too late to save towards a pension, and I think any extra income will be helpful when you retire. Personally, I would split the money and place it into:

- cheap SIPP (this would normally be invested in stocks/shares) and you also benefit from tax-free relief.
- an easy access savings account for emergencies
- an education fund. Take a look at the Open University.
- a fun money fund for other things or if you don't spend it, sweep it into the savings account at the end of the month.

The above assumes you don't have a work-based pension which is probably a better option as you also benefit from your employer contributions. Anyway, this is just what I would do, feel free to ignore it all! And good luck with it.
 

The Reverend

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£1000 a month. is £12k a year.

Put it in a Stocks & Shares ISA and purchased S&P 500 fund.

By the time you retire (around 67-ish) you'll have invested £360k and actually hold around £1.5million, all Tax free.

a private pension is tax efficient but locks your money away until retirement. An ISA can be accessed (pretty much) at any time.

I'd ignore Crypto or Forex or CFDs. I'd also ignore 'dabbling' in the stock market.

p.s. If you can save £1000 a month you *could* get a mortgage but not everyone wants one. I get that.
 
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The Reverend

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I personally don't think it's ever too late to save towards a pension, and I think any extra income will be helpful when you retire. Personally, I would split the money and place it into:

- cheap SIPP (this would normally be invested in stocks/shares) and you also benefit from tax-free relief.
- an easy access savings account for emergencies
- an education fund. Take a look at the Open University.
- a fun money fund for other things or if you don't spend it, sweep it into the savings account at the end of the month.

The above assumes you don't have a work-based pension which is probably a better option as you also benefit from your employer contributions. Anyway, this is just what I would do, feel free to ignore it all! And good luck with it.

This is a grown-up bit of 'proper' advice.

What I would say is if you have no 'drive' to be educated in a particular thing, then I'd not have a fund for it - the internet allows people to learn for free about (almost) anything.

I guess the big questions are...

1) When do you want to retire?
2) How do you intend to live during retirement?
3) Is there anything you could do 'now' that would increase your happiness?
4) Do you like 'safe' savings or are you happy with varying levels of risk?
and finally
5) You said you want to 'save' £1000 a month. What are you 'saving' for?

Not sure if you are based in the UK, but the UK state pension is tiny - the worst in Europe I think - and additional money to live off when you get older is always useful. Pensions don't have to be actual pensions. They can be property, ISAs, Money under the bed. There are lots of options out there.
 

rninja

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£1000 a month. is £12k a year.

Put it in a Stocks & Shares ISA and purchased S&P 500 fund.

By the time you retire (around 67-ish) you'll have invested £360k and actually hold around £1.5million, all Tax free.

a private pension is tax efficient but locks your money away until retirement. An ISA can be accessed (pretty much) at any time.

I'd ignore Crypto or Forex or CFDs. I'd also ignore 'dabbling' in the stock market.

p.s. If you can save £1000 a month you *could* get a mortgage but not everyone wants one. I get that.
A good pointer to open a stocks and shares ISA, but preferable to invest in a global equities tracker rather than just the S&P 500.
For example, Vanguard Global Allcap, HSBC FTSE allworld index, or similar.

This includes US equities, Europe, UK, Asia and emerging markets.

But also worth considering 'risk on' (equities) versus 'risk off' (lower risk: cash/bonds/gold) to suit your specific timeframe and goals.
 

Zerorush

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£1000 a month. is £12k a year.

Put it in a Stocks & Shares ISA and purchased S&P 500 fund.
Apologies for my financial illiteracy. I've been trying to figure out how to invest in mutual funds through an ISA for a while now due to the long-term growth of the S&P 500. There are different types of ISAs, different platforms for ISAs, different ways to manage ISAs, different funds, etc., and it is doubly confused by competing UK and US perspectives. My stocks and shares ISA is with moneybox, same with my LISA, and my plan is to invest through Vanguard ETF with a platform like eToro, but I can't work out how to do it or even if that makes literal sense. Alas my ambition is to continue my meagre attempts to educate myself.

The above assumes you don't have a work-based pension which is probably a better option as you also benefit from your employer contributions.
I have a pension through Standard Life with my employer but am only paying £75-100 a month in it and £50 into a Virgin private pension. My pensions so far total 5k. This is barely anything considering my age and I may not be saving this kind of money forever, as the industry I work in isn't exactly long-term stable. You get desperate like this and start throwing money at bitcoins but you may as well count on playing blackjack or roulette for your retirement fund at that point.


1) When do you want to retire?
2) How do you intend to live during retirement?
3) Is there anything you could do 'now' that would increase your happiness?
4) Do you like 'safe' savings or are you happy with varying levels of risk?
and finally
5) You said you want to 'save' £1000 a month. What are you 'saving' for?

1, 2: Probably late and poorly, because it's where I expect to end up. The other questions: I would like to buy things now but want cash in things that are going to grow on a long term basis, mostly in case of an emergency or if it's needed at another point. It would be great to buy a new guitar and selection of pedals for instance however my priority is to grow the cash first.
 

mcp

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Some really good advice in this thread already.

Two key points:

1 - You do not state whether you have any debts at the moment. If you do try to clear these quickly with the higher interest ones being paid off first. If you have credit card debt transfer it to another card with an interest free offer.
2 - Set aside an amount as an emergency fund. Cicrcumstances can change and in a hurry so this will give you some security in the short/mid-term. Mine is set at £10k - half in cash and half in a S&S ISA that I can access within a few days if required.

Once 1 & 2 are complete then you have lots of options. Keep some in a savings account (interest rates are awful), add more to a S&S ISA (£20k ISA investment limit per annum), explore crypto (a bit added below), invest more in your pension pot, maybe buty into something you are interested in e.g. I buy US sports memorabilia for a number of reasons - I like the sports, like the items and it grows in value over time.

Important - spend some of it if you feel like it. Remember you have to live too :)

Crypto is fine. BUT do a lot of research first into a specific coin before investing. The crypto market has been very bull-ish this year and people have 'won' big. Personally, I've never made money as quickly and consistently elsewhere.
 

Zerorush

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1 - You do not state whether you have any debts at the moment. If you do try to clear these quickly with the higher interest ones being paid off first. If you have credit card debt transfer it to another card with an interest free offer.
2 - Set aside an amount as an emergency fund. Cicrcumstances can change and in a hurry so this will give you some security in the short/mid-term. Mine is set at £10k - half in cash and half in a S&S ISA that I can access within a few days if required.
I have no high value debt, only some student loans with a very low interest rate which are slowly being paid off. They are kept under control with as little as £100 or so a year (I pay a lot more), don't count towards your credit rating, and get written off after a certain amount of time, which will happen to most people. So whether or not it counts strictly as debt is debatable - it's more like a tax.
As far as an emergency fund goes, my investments and overdraft facility can count. There is a popular trend for people to have thousands and thousands of pounds sitting in savings accounts gaining no interest for some reason, even if you have an online platform where you can sell your holdings in hours. People have been scared by the Dave Ramsey boogeyman. Btw I have already lived through several emergencies, money doesn't count half as much as your ability to make fast decisions.

Important - spend some of it if you feel like it. Remember you have to live too :)

Crypto is fine. BUT do a lot of research first into a specific coin before investing. The crypto market has been very bull-ish this year and people have 'won' big. Personally, I've never made money as quickly and consistently elsewhere.
Crypto has made me a little too, ALGO and REN have been good picks, unfortunately missed SHIB. But I don't understand it when people say "do your research" on crypto. What research or education can you do exactly haha. Either you're a skilled economic technologist with a crystal ball, or you make a rough guess based on monthly return like everyone else. Another important thing is regulation - I keep my eyes peeled for that.

Good point on actually living life. My interest is music production, so some new equipment would be great. Some new clothes too, the kind where you don't look like a permanent hobo
 

The Reverend

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A good pointer to open a stocks and shares ISA, but preferable to invest in a global equities tracker rather than just the S&P 500.
For example, Vanguard Global Allcap, HSBC FTSE allworld index, or similar.

This includes US equities, Europe, UK, Asia and emerging markets.

But also worth considering 'risk on' (equities) versus 'risk off' (lower risk: cash/bonds/gold) to suit your specific timeframe and goals.
I used S&P 500 as it has a decent history and is something that should be available from whatever S&S ISA you buy. There are other options for sure :)

The S&P return over nearly 30 years should be as 'risk off' as you can get...not super exciting but *should* perform more than well enough to give a very comfortable retirement.
 

The Reverend

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Apologies for my financial illiteracy. I've been trying to figure out how to invest in mutual funds through an ISA for a while now due to the long-term growth of the S&P 500. There are different types of ISAs, different platforms for ISAs, different ways to manage ISAs, different funds, etc., and it is doubly confused by competing UK and US perspectives. My stocks and shares ISA is with moneybox, same with my LISA, and my plan is to invest through Vanguard ETF with a platform like eToro, but I can't work out how to do it or even if that makes literal sense. Alas my ambition is to continue my meagre attempts to educate myself.
If you have a S&S ISA alreadythen make sure you are buying shares/funds from within that. Keeps it all tax free for-ever*

(*'for-ever' = until the government change the ISA rules)

I have a pension through Standard Life with my employer but am only paying £75-100 a month in it and £50 into a Virgin private pension. My pensions so far total 5k. This is barely anything considering my age and I may not be saving this kind of money forever, as the industry I work in isn't exactly long-term stable. You get desperate like this and start throwing money at bitcoins but you may as well count on playing blackjack or roulette for your retirement fund at that point.
Your employer should also be paying into your work pension. Its all good :)

If you are after a retirement fund, then S&S ISA is the way forward (IMO). You could also look into property but that (generally) requires some 'hands on' time so may be more involved.
1, 2: Probably late and poorly, because it's where I expect to end up. The other questions: I would like to buy things now but want cash in things that are going to grow on a long term basis, mostly in case of an emergency or if it's needed at another point. It would be great to buy a new guitar and selection of pedals for instance however my priority is to grow the cash first.

Based on £1000 a month, you don't need to have a 'poor' retirement. The S&S example I gave originally will see you retire at 67 with £1.5million in the bank. That would be more than enough.

The other benefit of the S&S ISA is that you can access pretty much instantly so the money is available to you for emergencies or when you see a new guitar you just must have!

Here is a bit of maths of £12k for 10 years with an 8% return

The number in the red box is what you get in Interest in year 10. You are getting more in interest than you are paying in.

If you get to year 21 then you'll get over £50k a year tax free from your ISA. At this point you'd have paid in £240k but will have £650k in ISAs

Saving for retirement is not a quick game but with a little forward planning you look like you could do quite well based on the figures you've given.
 

The Reverend

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Some really good advice in this thread already.

Two key points:

1 - You do not state whether you have any debts at the moment. If you do try to clear these quickly with the higher interest ones being paid off first. If you have credit card debt transfer it to another card with an interest free offer.
2 - Set aside an amount as an emergency fund. Cicrcumstances can change and in a hurry so this will give you some security in the short/mid-term. Mine is set at £10k - half in cash and half in a S&S ISA that I can access within a few days if required.

Once 1 & 2 are complete then you have lots of options. Keep some in a savings account (interest rates are awful), add more to a S&S ISA (£20k ISA investment limit per annum), explore crypto (a bit added below), invest more in your pension pot, maybe buty into something you are interested in e.g. I buy US sports memorabilia for a number of reasons - I like the sports, like the items and it grows in value over time.

These are good points. :)

I am quite boring so I have CC for emergencies which means I don't need much Instant-Instant access money (cash savings in a bank account). This works for me - YMMV.

Important - spend some of it if you feel like it. Remember you have to live too :)
Hell Yeah!
Living is worth living!

Crypto is fine. BUT do a lot of research first into a specific coin before investing. The crypto market has been very bull-ish this year and people have 'won' big. Personally, I've never made money as quickly and consistently elsewhere.

Chatting to the wife yesterday, we both feel we should have 'got in' on Crypto a decade ago...but didn't. And still haven't.

The key, from my basic understanding, is to invest what you can afford to lose. And spread it across all the coins you see.

and then break into Elon Musk's house and type the names of one of those coins into his twitter account and sell before he wakes up.

Otherwise, it is all just Mystic Megging!

comedy fu GIF
 
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Frugalgal

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I agree with you Reverend.....I am a relatively new Crypto investor and would recommend people look into it. I have not earnt so much either in the last year. I have though, spent many hours watching various reputable YouTubers and watched educational videos to learn more about it, as well as buying a Cryptocurrency book for dummies. At a basic level, I am now reasonably happy with my knowledge of crypto and my investments, but the whole Cryptoland thing is very complex and you need to watch out for Scams and Rugpulls. Stick to the top 5-10 Cryptos for safety like Bitcoin, Ethereum and Cardarno, and only use reputable brokers and exchanges like CoinBase Pro, Binance, Kraken, or my favourite which is Swissborg -

My Referral Link is join.swissborg.com/en/r/philipC6SO

and you can earn up to 100 Euros worth of CHSB coin ( their token coin),

A Diversified Portfolio is what people recommend to be safest. So put your money into a range of savings or asset classes.....I have ISA;s, NISA's, Bonds, Investments in property, a Savings Account,, the odd antique and now Crypto accounts. Shop around for some of the best deals.
 
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