What to Do with £5k or what to invest it in

Stinky · 21 Feb 2011 at 23:13

I'm crap with money usually so I'm on a job at the moment that's finally going to give me a fair amount to save / invest!

I don't want to lose it on a high risk thing, it will be saved toward a deposit! But any ideas on what I should do with it?

Or should I just stick it in a bank for a few years adding to it?

Strife212 · 21 Feb 2011 at 23:14

Bank, Gold

flibbage0 · 21 Feb 2011 at 23:14

If nothing comes to mind, save it, especially in this climate.

Energize · 21 Feb 2011 at 23:15

Bear in mind that any savings account is going to be paying below the Zimbabwe-esque rate of inflation we have now so you'll lose money if you don't invest it in something riskier.

Aedus · 21 Feb 2011 at 23:15

ISA account?

shine · 21 Feb 2011 at 23:22

With the current rate of inflation you're better off paying any debt rather than saving it, otherwise an ISA is a good idea as you won't pay tax on any interest you earn.

"andy" · 21 Feb 2011 at 23:26

spend it on something you will enjoy or save it for something that you would enjoy more

Energize · 21 Feb 2011 at 23:27

"andy" said:
spend it on something you will enjoy or save it for something that you would enjoy more

Didn't read the op then?

Electronic Dave · 21 Feb 2011 at 23:32

Seeing as your saving for a deposit then saving would be your best choice. Investing should be for the longer term and does involve higher risk and I'm assuming you have no other savings.

Best to pay off debt first, then save for that deposit and perhaps later invest - once you have more money.

Some inflation linked product may be available or just open up a Cash ISA (around 3%) but inflation will eat into that. Alternatively you could drip feed money from a high interest current account into a regular savings account (e.g. save fixed amount from wages like £250 a month)

teaboy5 · 21 Feb 2011 at 23:34

Energize said:
Bear in mind that any savings account is going to be paying below the Zimbabwe-esque rate of inflation we have now so you'll lose money if you don't invest it in something riskier.

Please can you give it a rest with comparing us to Zimbabwe, as it's getting a little old.

If we were in the state Zimbabwe was in you would know all about it.

Energize · 21 Feb 2011 at 23:34

teaboy5 said:
Please can you give it a rest with comparing us to Zimbabwe, as it's getting a little old.

If we were in the state Zimbabwe was in you would know all about it.

Have anything useful to add to the thread?

[TW]Fox · 21 Feb 2011 at 23:35

Energize said:
the Zimbabwe-esque rate of inflation we have now

Oh do give it a rest, our inflation rate is a whole 4% not 4000%. I think it's doing the people of Zimbabwe a dis-service to try and compare our situation to the situation they faced. It's nothing like the same.

[FnG]magnolia · 21 Feb 2011 at 23:36

Guns, girls and drugs.

Or you could save it I suppose.

teaboy5 · 21 Feb 2011 at 23:37

Energize said:
Have anything useful to add to the thread?

Do you? Because as soon as someone talks about the interest rate you come into the thread and start babbling like a 1 year old trying to talk to its mother.

Energize · 21 Feb 2011 at 23:39

teaboy5 said:
Do you?

Are you blind? I advised investment over savings due to the inflation rate, all you could do was whine about a tongue in cheek comment along with fox.

teaboy5 · 21 Feb 2011 at 23:41

Energize said:
Are you blind? I advised investment over savings due to the interest rate, all you could do was whine about a tongue in cheek comment.

Yeah it would have been funny as well if you hadn't already said the same thing about 20 times this past week.

And its 5k if you have to ask what to do with it, you are just safer sticking it in a high interest ISA and forgetting about it.

Freefaller · 21 Feb 2011 at 23:41

Now now children, behave please.

muon · 21 Feb 2011 at 23:47

Energize said:
Are you blind? I advised investment over savings due to the inflation rate, all you could do was whine about a tongue in cheek comment along with fox.

Except its not as easy as that.

Inflation erodes the nominal value of everything.

Yes, savings accounts pay close to zero. However, other asset prices have been similarly affected.

Its simple CAPM finance.

[TW]Fox · 21 Feb 2011 at 23:50

Exactly, plus he is misleading the OP by saying he WILL 'lose' money unless he invests in something riskier. He won't actually lose any money at all - he'll get out what he put in, plus a bit of interest, the key factor though is that in real terms the money he gets back will be worth less than it was when he invested it. But he hasnt LOST physical money.

Whereas investing in risky investments means he could lose money - and REALLY lose money, as in, put £5k in, get £2.5k out.

Energize · 21 Feb 2011 at 23:52

ghost101 said:
Except its not as easy as that.

Inflation erodes the nominal value of everything.

Yes, savings accounts pay close to zero. However, other asset prices have been similarly affected.

Its simple CAPM finance.

Of course it's not as simple as that, but with investments you can beat inflation whereas all savings account currently pay less than inflation.

[TW]Fox;18520194 said:
Exactly, plus he is misleading the OP by saying he WILL 'lose' money unless he invests in something riskier. He won't actually lose any money at all - he'll get out what he put in, plus a bit of interest, the key factor though is that in real terms the money he gets back will be worth less than it was when he invested it. But he hasnt LOST physical money.

Lost money in real terms is what I meant, and arguably is the most important factor.