What would you do? Looking for others point of view

To start with I’m looking for other people ideas what would they do if they were in my situation. Recently started second job and I’m able to invest 300£ weekly towards deposit to buy first home would probably create LISA for that ( or maybe it’s not good idea ? ) What providers would you suggest as most cost efficient? What kind of investments would you make considering 5 years time frame? Don’t think leaving money in saving account is any good at the moment considering inflation or am I thinking incorrectly? Maybe you have any other ideas how to solve that “problem” xD anyone’s points of view highly appreciated.

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I’d probably go with cash even with a five-year horizon and inflation running wild. At least that way, you know with certainty how much you’ll have on hand. Imagine investing for four-and-a-half years, then you lose a big chunk due to a crash or correction meaning you’re unable to buy.

That said, if you do want to go the stocks route, Dodl is probably your best bet. I think it offers this all-world fund, so you’d be paying 0.28% a year which is pretty unbeatable. A happy medium might be to max your Lisa which would be about £77 a week then keep the excess in cash.

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Personally I’m not very risk averse ,so I would go stocks and shares LISA and accept the risk of a stock market crash. And I think AJ Bell DODL would be a good place to start. (Youinvest or Hargreaves Lansdown could be considered later if you want a wider range of investment options.)

If you do choose the safety of a cash ISA, Moneybox appears to be the best option at the moment according to Moneyfacts.

Remember you can only put £4000 a year in a Lisa. And I would fill that up first to maximise the benefit of growing the government topup. After that I would say the next best option is an ISA, up to an additional £16000.

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300 a week is 15600 a year x 5 is 78k plus your 5k LiSA bonus would be an excellent deposit.

I would, personally bonus bag GIA accounts as well.

InvestEngine - bonus £25 for investing £100 for a year.
MoneyFarm - bonus £50 for investing £500 a year
Wealthify - bonus £40 for investing £400 for a year.

Nutmeg used to have a £100 offer for £500 and then £100 a month but not sure it’s still on.

Ignoring Nutmeg, invest £1000 for a year and start with a £115 or 11.5% head start. After the year, move into cheapest ISA.

May as well maximise your savings.

It all depends on your risk appetite really. Inflation is high, and no one has a crystal ball to say how the markets may react. Only you could make that decision. A lifestrategy variant might be the way to go in a LIsA with some low exposure to the markets?

I have a fairly high risk appetite so would probably go with the 60/80 variant. MoneySavingExpert forums might give you some good ideas as well, but I suspect they will say that 5 years is a short time to invest.

Edit: why 5 years? Compare the cost of a mortgage vs your current(assuming you pay) rent. It might make better sense to buy sooner on a slightly worse LTV.

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It may be “stupid” but it is intended to be present for my wife’s 30th birthday… :stuck_out_tongue:

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In my situation, I have around a 5-year time frame too. However, I’m flexible with this. So I’m choosing to have a stocks and shares LISA. Cheapest is HL from what I’ve found. If you only invest in funds and not stock exchanges it’s free other than the 0.45% account fee, and FX if you buy foreign currencies.

If you’re not very flexible, here’s what could happen: You invest the money, the stock market drops 40% and in 5 years time you end up with 20% less money. Could be worse. If you say in 5 years time “ok now I have to buy a house”, you’ve screwed yourself over. But if you say, ok I’ll wait a few years for it to recover, continuing to put that £300 a month in, it’s a no brainier.

So I’m summary, I’d argue it just depends on your flexibility. I wouldn’t risk the house (literally) on trying to make your house deposit money a little bit bigger if you need in 5 years. Take the 25% bonus and run.

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I had similar situation not so long ago, in hindsight I wish I have not invested, reason, because I obsessed about the money each day like a zombie.

Worrying if I will lose it and spent hours watching tickers go up and down sweating with them.

If you are capable of doing buy and forget, well you can’t forget all together, but have to sell at opportune time.

Usually I am wrong, but personally I don’t see equities giving much returns in next 5-10 years.

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Yes, if it was £300 a month HL would be cheapest to begin with. I reached a similar conclusion for a family member. But in this case it’s actually £300 a week, which means HL is a relatively expensive option after around 2 months at which point only around a £1 could be saved compared with DODL and then DODL aren’t accepting transfers in yet so the chances are that the £1 relative gain would be lost again. I believe both HL and DODL are free to transfer out, including in specie (if the receiving scheme can support the funds selected).

Your position is still arguable though, because the range of available funds is much superior on HL and it may be possible to select funds that give a superior performance.

On the stock market drop issue, I wouldn’t rule out a realistic possibility of a 70% drop over 5 years, even with a well diversified portfolio. But if circumstances don’t otherwise change, £78000 invested over that period would still leave £23400 for a deposit and moving expenses.

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@Ashige am in a similar situation with you as per second job, however 1x permanent and 1x 6 months contract umbrella.

So my question is weather your 2 jobs are permanent roles and you anticipate holding both for the next 5 years.

Secondly your ability to invest 300 weekly does that depend on 2 jobs.

Lots of useful opinions I’ve read so far but i do feel they’ve been tailored specifically to your original post assuming the narrative remains unchanged

Both roles are permanent full time and untill I won’t loose either mental or physical health doing both of them at the same time those gons stay with me for at least five years. When it comes to second question that particular 300£ weekly depends from second work as first one is funding my pot for retirement and I would rather like it to stay that way.

Where are you putting this retirement pot?

Not using SIPPs all savings putting into ISA as planned retirement age is on my 50th birthdays

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Just remember if you plan on retiring early you don’t need all your money liquid at that age. Say you have £1,000,000 in total and you’re using the 4% rule to keep things simple. That’s £40,000 a year you will be spending. So say your money gets unlocked at 60, you need 10 years worth of that £40,000 which is £400,000 assuming no investment growth: it doesn’t matter that the other £600,000 is locked up.

Obviously this all depends on your personal circumstances, but in summary, as long as you have enough to cover you before the other funds get unlocked, I would put the rest in the account which will bring you the most returns - For example, using the LISA as a retirement account, which you can’t withdraw until 60 (without penalty). But you will get your free £1,000 every year. At 8% over 20 years that will bring about almost an extra £50,000.

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Hi , I would recommend an ISA with “Fundsmith” low charges , some 20 to 30 good quality stocks that will allow you to sleep at night, now is an good buying time but expect ups and downs Or your own stocks and shares ISA with beaten down stocks like Paypal Apple, ,Google , palantir slightly longer term, Metta (F/Book) Este Laudre. good quality steady stocks . Dont go for adventurous growth companies theride could be too disturbing and the time frame could go against you. Time in the market is better than timing the market.

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