Remember there is risk of loss of money, past performance does not predict future and the stock market has been high and rising fast for quite a long time now. The Vanguard ethos is time in the market beats timing it and to not worry about the short term dips. If you need your money in the short term, it may not be for you.
Mortgage Interest Rates
- Thread starter Psycho Sonny
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Remember there is risk of loss of money, past performance does not predict future and the stock market has been high and rising fast for quite a long time now. The Vanguard ethos is time in the market beats timing it and to not worry about the short term dips. If you need your money in the short term, it may not be for you.
Soldato
Personally, I'm not a risk taker. I'll stick to chipping away at my mortgage with overpayments with the ultimate aim of having our house paid for within the next ten years.
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Vanguard
Lifestrategy 100% if you believe in UK economy
VWRL to invest into the world economy
S+P 500 to invest into US economy
There is also emerging markets if you believe they will do better than the above.
Japanese and Asian funds too.
I'd say this though. Warren Buffet recommends the S+P 500 make of that what you will but if he backs it then it's not a terrible choice.
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Vs investing and having your current home paid for by the end and the next upgrade free of charge thanks to profits from said investments.
I'm currently up over 8% for the month of March alone. I don't expect to do as well in April but let's see.
For example if I had overpaid my mortgage by 100k I would have saved £2840 over the course of a year in interest. If I had that same amount in my current portfolio I would have made over £8k last month.
That's 8k in a month Vs 2800 in a year.
Overpaying the mortgage just isn't that smart a move with rates so low. My current rate is 2.84% it will be moving to 1.24% where overpaying the mortgage makes even less sense.
So it would be £8k in a month Vs £1200 in a year. I just sold 2 of my investments and put the cash elsewhere now. But there are stocks which have made 99% since the beginning of the year I have small amounts in. Finding those types of stocks isn't easy though and extremely high risk for those high rewards.
It's actually low risk if you are looking to just beat current mortgage rates. Just plough it all into VWRL on vanguard.
Soldato
Also, time in the market vs timing in the market etc.
Most people don't make 8% a month, consistently, long term. In fact, most people don't beat the markets long term.
Most people don't make 8% a month, consistently, long term. In fact, most people don't beat the markets long term.
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Not if it's in an ISA wrapper. Plus you get allowances which renew every year.
To use up an allowance all you need to do is sell your investment. Park that money for 30 days. Then on the following day re-buy it. You have to wait to the 30 days though otherwise it's not classes as selling it.
Or you can alternatively just sell it and invest into something else. Once the gain is realised is when the tax is due. So if you sell yearly and invest into something else and it's below the allowance for that year you pay nothing.
Technically you can do that within an ISA and you have an unlimited tax free allowance. So if you open a T212 ISA account and only put £20k cash into it per year then whatever you make is completely tax free.
That includes if you tripled your investment sold it and then invested in something else that doubled all within the same year. Just as a theoretical example.
So no if you are smart you can work the system to pay zero taxes.
I'd therefore personally say use your ISA for a T212 account and then use your tax free allowances up on your vanguard account which isn't in an ISA where profits are likely to be lower / less.
For example the best you can hope for with vanguard realistically is 10% a year. Whereas with T212 if you invest in the right companies at the right times you can realistically double or triple your money within a few months problem is I don't put all my eggs in one basket so I will have my investments spread out over 10-20 companies and one will hit 100% return over 3 months the others won't have hit anywhere near that bringing the average down considerably.
But if you did gamble it all on a lower number and one or two hit it big time it's a much better use of the ISA system.