True - she probably browses 'Divorce lawyers Direct' via incognito
What do you do with your extra money?
- Thread starter Juicy Jama
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Caporegime
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I put £100 into stocks and shares, £100 into zopa and £200 towards loans and the rest into property (mortgages).
You need min £1k to start off with zopa and I think £500 for stocks and shares or maybe £1k too.
I also have some bitcoin and various altcoins. I really should sell all the alts and move them into bitcoin. I'll wait for the next wave before I do.
Basically diversify your savings. Also banks pay nothing you need to take risks to make money off money these days. Unless you buy property.
I do have at least one fancy holiday per year and I usually just pay everything cash for that when needed. Like I'll book flights first. Then 2 months later accommodation. Then when I'm about to get there rent a car on Turo. Put all spending money on clarity.
So everything is spread over 4-5 months rather than 1 lump sum. So I don't really need to save for it. I just don't have as much disposable.
You need min £1k to start off with zopa and I think £500 for stocks and shares or maybe £1k too.
I also have some bitcoin and various altcoins. I really should sell all the alts and move them into bitcoin. I'll wait for the next wave before I do.
Basically diversify your savings. Also banks pay nothing you need to take risks to make money off money these days. Unless you buy property.
I do have at least one fancy holiday per year and I usually just pay everything cash for that when needed. Like I'll book flights first. Then 2 months later accommodation. Then when I'm about to get there rent a car on Turo. Put all spending money on clarity.
So everything is spread over 4-5 months rather than 1 lump sum. So I don't really need to save for it. I just don't have as much disposable.
Unfortunately, very true - that's why we invested savings in mortgage overpayments when the banks went t*ts-up and will now be looking at other alternatives. Renting is too stressful - too many horror stories and i would be far too impatient for the judicial system to kick out deliberate squatters. Plus, I would feel bad for those that fell on hard times and couldn't afford to pay...
@Psycho Sonny - can i ask your experience with Zopa? It's something I've read articles on but never heard details from an actual investor(sic).
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Will def check out Zopa. Do you trade yourself with stocks and shares or get someone to do it for you ?
Soldato
I use most of my spare money to overpay a loan that we took out to replace the windows. Before that I started putting some into a LISA, vanguard lifestrategy 100% equity.
Caporegime
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I just invest into a high risk fund.
The returns so far are better than zopa. So I'm going to keep them both going for a while and see what happens.
You can lose money on both so I prefer property investment as its easy. But again this is just diversifying. I put a lump sum I to both then just top up £100 in each every month.
I just got a s&s isa through my bank. To make things easier. They do it through a third party anyway.
Caporegime
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The returns initially aren't great tbh. But they get better with time.
As most people default their loan within the first 4 months.
So you have a high rate of defaults which getess over time.
If you invest £1k it will be spread over say 140 people. Say you have 30 defaulters. The first 20 will be within the first year. So your returns are slow. But over time it all evens out then gains traction.
It's a long term investment and you need to reinvest repayments too. So getting money out quickly you have to pay 1% to sell. Or turn re investments off then wait up to 5 years for it to be drop fed to you. You need to manually repay it back into your account too.
I'm doing it to see it for myself. I can afford to live without the money in there.
My plan is to cash out in say 15 years time. Out of everything apart from property. So I'll see how it grows over that 15 year period.
Zopa is the only one I trust not to go bust too from all the research I've done. They actually stopped taking investors for a while which shows you that rather than take new money and loan it to anyone at better rates they would rather slow their growth and do it right. I'm sure other peer to peers didn’t care and just kept giving out cheap loans to dodgy people as they had an abundance of investors.
Zopa seem to know how to run themselves properly and for everyone's benefit.
Caporegime
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Personally I'd just remortgage the one you have now.
Ideally you want rent out a mortgage free property and if you have to live in the mortgaged one then so be it.
Also having just one property is never usually that good you need at least 3 to be safe. All it will take is one crap tenant and your screwed at least with 3 you are covered by the other 2.
3 is the safe place after that it's easy money.
I put a bit into my savings fund for yearly expenses, such as car insurance, tax, flats service charge etc, and a bit into my emergency savings (which I am trying to get to 6 months worth of wages), which just sits in a Marcus for easy access. However, this isn't the 'extra' money, this is planned savings.
Caporegime
Spend it.
Soldato
Coke and hookers
Really appreciate the comprehensive reply @Psycho Sonny - your personal experience seems to mirror the anecdotal bits of info i've picked up over the past year.
Your other replies have proved useful too - it's made me think that perhaps i'm a bit too risk averse with my savings (well, i am). As you rightly point out, if you're fortunate enough to be able to spread the risk then it alleviates the stress of some losses, that will inevitably accrue at times, and hopefully result in a slight deduction from an overall positive return.
You've given me pause for thought - although the thought of remortgaging and buying 3 houses to rent, to cover the odd rogue tenant, may require more persuasive 'spousal powers' than i actually possess. But, i can see the logic and negating stress factor if you can afford to have 3 on the go.
Thanks again.
Thanks for the advice, I'll have a think about the three property thing.
Just to clarify, when I say cash purchase I mean without a mortgage, so both properties mortgage free. Should be enough baseline income to quit full time work and give me time to work out further alternative income streams.
Caporegime
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I'd try and get 3 rented properties mortgage free.
It's where you will see decent returns. Managing 1 property is a lot of hassle for so little gain.
Three is the magic number where it becomes worth all the hassle. Obviously the more the better but with one it's a lot of hassle for so little money. Three is where you get to see real benefits of being a landlord.
Buy premium bonds with your spare cash...