investing your finances to make more

[mjkukin2]

as a student i have been saving my student loan and have saved a considerable amount.i wonder if anyone could advise me where i can invest this money which gives a good return and no tax...this is all for my ATPL training after my degree so it will be invested for at least 2-3 years

appreciate any advice

[chrishowley]

I don't think there is anywhere which will give a good return on your money at the moment. You probably need to speak to a good financial advisor.

The only safe thing to do would be to put the money into a savings account - an ISA will ensure tax free status if you can keep within the rules.

Any other form of investment (e.g. market based) I would expect to be too risky for your needs.

I suggest you find the best savings account possible for the amount you have saved which will unfortunatley still give a miserly rate of return.

[tacpot]

At the tacpot "Bank of Amazing Risk" of course!

The tacpot BAR pays 4.54% interest (in your dreams) and there is a cast-iron gaurantee that your cash will not be refunded in full at the end of the term (the minimum term is 1 year, just long enough for Bank's long serving, highly respected, and distinguished Board of Directors to have left the country to enrol on an Ab-inito ?AA ATPL.)

But seriously.

You need the advice of an Independantfinancial advisor. The Independant bit is sooo important. You should expect to pay for good advice. They can identify suitable investment vehicles to meet you needs, e.g. suitable levels of risk, access when you need it, potential for tax efficiency.

Help your advisor by thinking about when you'll need the money, whether you'll need it in stages or as a single lump-sum, how much risk you are prepared to take, and ensure that you have all your financial details, including income to hand.

Basic Investment Rules:

1. Don't let the Tax 'tail' wag the Investment 'dog'. . .2. Spread your risk. (e.g. understand the workings of the Building Societies Investor Protection Scheme - if you had 40,000 GBP to invest <img src="eek.gif" border="0"> , you should open two B.Soc Accounts.) . .3. Research any products or type of investment recommended to you until you understand exactly how the product works. Try to look at the product from the vendor's point of view - if you can understand how the product makes them money, you are well on your way to understanding the product. Your advisor is there to help you understand what products are available and what are the potentially good and bad points of each. Ask lots of questions.. .4. Ask a trustworthy friend/relative to review your investment decision(s), before you purchase any investment product.

Good luck with the studies, the investing and the ATPL.

You have already made a good start by saving hard.

(By the way, I am not an IFA, and I do not work for any company that sells a financial product.)

[ 21 January 2002: Message edited by: tacpot ]</p>

[Fast jet]

As said above investing in the stock market at the mo is very risky . Most ISA 's are in negative values now along with your unit trusts investment trust and ociks or what ever there calling them now. IFA will probably recommend one of the above ! as thats about all they can do . a stockboker will play chase the index with your money so you'll get ****** all there . the US is in resesion but recovering , the uk will hit resession within 6 -9 months gaurenteed ! - the us however is expected to recover soon . abbey national i think are doing a bond linked to the DOW jones which is a lot better than the FTSE . their quoting performance returns of around 38 % compounded growth over 5 yrs i think . if u want the info email me i've got it somewhere ! 38 % is achievable on the dow .

your best bet would be premium bonds if u invest say 20 grand all the little wins soon add up . and u never lose any money which is always a good thing .

otherwise buy a copy of the penny share guide divide you money by 'x' get a broker and invest your self . you'll do a damm sight better than any of the above .

hope thats helped ! . .sorry for crap spelling etc i'm a busy man . . .neil . . .i'm not an IFA but :. .' offshore hedge fund european director'. .bit like a stock broker but more advanced.

[tacpot]

Good advice from Fast Jet. I'm afraid I have rather too rosy a view of the integrity of IFAs. I think I must have worked for the SFA in a previous life!

Have a look on the <a href="http://www.nationalsavings.co.uk" target="_blank">National Savings </a> website. I have read elsewhere that the average return on Premium Bonds is 5%pa, but you might win a big prize (ATPL here we come!) or you might have to wait a couple of years to reach that level of return.

[Wrong Stuff]

As another director of a hedge fund (more of us here than pilots) I should expand on what Fast jet's said. FJ didn't have time to be too specific, so I'm reading between the lines a bit here.

Firstly the 38% will be over five years and it's compounded. That means the annual equivalent rate is 6.65%. You'll probably achieve a much lower rate if the US markets don't perform.

Premium bonds are a safe bet, but they have a published yield which I believe is below that for ordinary gilts (ie government bonds). If you're investing more than a few grand your yield will tend towards this lower annual return, although there's always the tiny chance of a big windfall payout which could pay for all your training, a car and a house!! For higher rate taxpayers I believe they have tax advantages, but if pie's got a student loan I doubt that applies.

With almost any investment, the more the potential rewards the greater the risk. Over the long term equity investments have historically done much better than sticking the money in the bank, but bear in mind you're not looking long term. I'd imagine you're looking to invest for a year or two. I'd also imagine you wouldn't want to take a big hit if stock markets do take a dive.

As others have said, get some proper advice - don't invest based just on the barroom chatter you hear on pprune. Above all, be very, very sceptical - if something's offering a higher return there's always a reason.

[flyingwelshman]

AS a student you will not have to pay tax on your savings anyway.

FW

[Lucifer]

You will if your tax year income exceeds the personal allowance, even if you are a student, except if you win by premium bonds, as this is tax free.

[londonlad]

WWW-you are wrong there. As a student you DO have to pay tax if your investments yied more than a certain amonut depending on your investment. If it's in stocks and shares you'll have to pay Capital Gains tax, regarless of whether you're a student or not if you profit more that about £7,500 approx. And if your net earnings amount to more than approx £5,000 you'll have to pay income tax- regardless if you're a student or not. I work for an investment bank and my advice to you would be to invest in the stock market, but definatly not for short term gain. Look to the longer term-say 3 years. Look at some of the big FTSE 100 stocks. They've just taken a tumble. But are solid stocks. For a 3 year return I'd say stock market is attractive. It's very low at the moment. But if you want to be even safer, invest in Bonds. The high street banks will be able to sell you them and you'll get a guaranteed % return on your cash in a coupon payment every year (or 6 monthly-whatever the terms are). Or even just buy a mini isa or an isa with your money. You can decide what stocks/bonds you want in your portfolio with a few isa providers and then watch your money grow (fingers crossed!) and the good bit is that, even if your money grows by 5000000%! you won't have to pay ANY tax, and they're tax exempt! There's food for thought huh?! I did the same I took out all my student loans and stuck them in ISA's......a few years later, a mini start with which I started my passion for flying. Look into it and my advice is to look to an ISA...you'll have professionals looking after your money, and it's in their interest that your money grows....oh yeah, make sure you mix up your ISA with about 66% stock and 34% bonds (or there abouts). It hedges you against any mishaps. Should the stockmarket take a tumble, the bonds market will florish. But be bld, confident, do your reading and invest. Good luck matey!

[mjkukin2]

thanks a lot for all the replies guys ill look into it and have started allready, have an appointment with "my financial advisor" on jan 28