[Closed] £2k to "invest" - where is good?

Your friendly local bike shop should be able to help you out, there.

Shares in Berkshire Hathaway.

Otherwise known as Warren Buffet's business....

😀

[url= http://www.sidewayscycles.co.uk/ ]Here[/url]

Easiest might be a building society savings account in her name - kids don't pay tax.

Premium bonds are rubbish:

http://www.moneysavingexpert.com/savings/premium-bonds

lol at the posters other than PC who is on the nail!

>Shares in Berkshire Hathaway.

The share price is currently 100 thousand dollars per share 🙂

(shares in BH with lesser voting rights are also available for $3,200 though 😉 )

I'd consider bunging it in a FTSE 250 tracker.

Savings rather than investment for me. Investments aren't protected in the same way as savings (banking guarantee) AFAIK, so if your shares go t*ts up it's tough. Have you opened a CTF?

child trust fund - no not yet

Investments aren't protected in the same way as savings (banking guarantee) AFAIK, so if your shares go t*ts up it's tough

That's not strictly true. If you buy shares directly and the company goes bust then yes you lose your money, if you buy into a fund and the company running the fund goes bust then there is some protection.

Given the interest rates at the moment I'd be looking at an investment fund myself.

Aaah I see, thanks for the clarification GF.

buy art, I just so happen to have one you could have for that!

I like premium bonds - but only for money that you are going to have to pay back at some time. Saving for a tax bill, or when you receive a cheque that you know was a mistake and if they find out, they'll probably ask for it back - that sort of thing.

I have an exciting investment opportunity you might be interested in. It's definitely not a pyramid scheme. Oh no. No sir.

Life membership of the National Trust. Allows entry for holder + guest (you 'till he/she/it is 18 and leaves home). Gets you free entry to all NT properties and car parks. Baby is best placed to get money's worth. Costs about £1100 I think

gonefishin - if the FTSE250 tracker you invested in made shedloads, like doubled in price, would you see double yer money or is there a limit to what you'd see?

I don't know the details of the protection scheme but I'd imagine that it would be similar to the savings protection scheme, i.e. there will be a limit and like savings the limits will be the combination of initial capital investment as well as capital growth.

N.B. I am not an IFA and I'm only repeating what I have been told by others, albeit qualified others.

I would have thought the CTF schemes would be a good bet.

Did you get the govt allocated whatever it is (£250??) to stick into one when little 'un arrived?

..or Northern Rock 😀

Investment Trust in Emerging Mkts or Far E or Natural Resources

There are a number of different types of investment vehicle but broadly when you buy a fund you are buying a fractional share of the assets owned by the fund. The management company, say L&G, M&G etc, receive fees on subscription and annually, if they go bust then the fund needs to find another manager that's it. There is no protection scheme as such but there are detailed rules about what funds offered to retail investors can and can't do to protect the investor. If the market in the asset class that the fund is invested tanks, you lose money. If it goes the other way you get the benefit.

If investing in funds other than trackers look at some like Hargreaves Lansdown as they will refund initial fees which are essentially used by fubds managers to pay IFA commissions.

Child Trust Fund would not be the best idea as there is far less choice of provider and you can't take the money out until you are 18 (i think). These are designed for (i) the state handout and (ii) gifts from parents. Outside the CTF any gift by a parent to a child is ignored and the income on the capital is still taxed as income of the parent. These rules do not apply to gifts from grandparents so no need to use the restrictive CTF.

If it's for the long term then i'd suggest a shares based option would be best (assuming the child won't get the money until around age 18-21). If you are totally risk averse then bung it in a building society account and just ensure every year that you are getting decent interest rates. Premium bonds are pretty rubbish (unless you get lucky and win a decent sized price, obviously) and CTF can be fine but automatically become the property of the child at age 18 (so if little Timmy turns out to be a crack addict then there is nowt you can do to stop him getting his windfall at 18).
You can take out a Unit Trust which is designated for your child and then add to it as and when you see fit. He doesn't need to know the investment exists and it remains in your name.
National savings also do investments for children or you could go to The Childrens Mutual website and see what they offer.

The banks are meant to be a good bet at the moment if you can afford to sit on them for a few years.

My "secret" tip to you would be to look at West China Cement, I recently tripled my money on that bad boy, realised the profits and ran, if you're not feeling that brave however FTSE tracker units would be a good bet

Someone stated Premium bonds were rubbish... only if the following doesnt apply to you Rob "They’re only worth considering as a serious place to put savings, if you’re a higher rate taxpayer, who has used up your Cash ISA allocation"

What we did was split money around (Always a good bet)
CTF for some of it, with a monthly DD, We chose the [url= http://www.familyinvestments.co.uk/childtrustfund.aspx ]Ethical Stake holder prodct[/url] with Family Investments
then some in a bank account in her name (that we can access just in case !) then some under the mattress.

EDIT: Congrats btw 😉

Simonm, you are right that premium bonds are perfectly sensible for a higher rate taxpayer, however my guess is his baby isn't one yet!

Premium bonds are rubbish period, regardless of your tax band 🙂

You'd not be saying that if you'd won a million on them. 🙂

allthepies, with where the bank's are funding themselves you are probably right at the moment, however once (and if) spreads narrow they will once again be competitive money market product. I been lucky and have had a good year with them and returned 4+% post tax with them.

>You'd not be saying that if you'd won a million on them.

Ditto the lottery or other forms of gambling 🙂

I'm not heavily into them, but I live in hope. They're nicer than scratchcards. 😉

Some years ago, i'd have said buy gold, however, perhaps not a good idea at the moment.

I'd always have a chat with an IFA or two, always nice to hear there opinion and thoughts.

Pre-things-going-tits-up-and-being-uber-skint, I had a few bottles of whisky which had increased in value since purchase, the same can be said for wine - infact, there was a bit on the tellybox where an investment into wine gave some great returns including paying the comission and fee's.

Then again, i'm far from traditional with most things, the same applies to putting money away.

I'd choose a FTSE tracker as for that length of time shares are a good option.

As for premium bonds; my Dad gave me £50 worth 18 years ago - never won anything. I sold them recently as seemed a waste of cash; in a reasonable investment would be worth £200 by now.

Intresting, So this is for me, Where else do you put your money Tax free if you've used your ISA Allowance (and a higher rate tax payer)?
Normal savings at 1% then get taxed on that ?

ING Direct gives a 40% taxpayer 1.92% post tax compared to 1.5% on premium bonds.

I'd put it in an investment trust if its not going to be needed for 18 years and you don't want to think about it too much. Something like the Witan trust run by Henderson or the Foreign & Colonial trust. They won't set the stars alight but are relativeley low cost and I'd bet my house that in 18 years they'll return more than the building society.

christ! That article on premium bonds is so dry I almost shot myself. Proper accountant wrote that. Once who folds his socks and irons his underpants.

For what it's worth.... I have a number of thousands in premium bonds. Yes, it's highly unlikely I'll ever win big, but I can get my money back with no loss if I feel like it, I've not *lost* anything and never will.

But I'm a human being, I need excitement to keep me alive. Without it I'd die, maybe become an accountant and spend the last 30 years of my life dead, pushing numbers around.

**** that, I'll invest in the premium bonds and will probably never win anything significant but every month I'll be able to check my numbers and have a little pulse of excitement to my life and think that this might be the month I could get quarter of a million...... You don't get that buzz with ISA's.

Samuri - as I said above there's an opportunity cost with premium bonds - even if you ignore that inflation erodes your stake.

yeah, and as I said, it's not about the money. 😉

I've got money in ISA's and things doing it's boring stuff (well not at the moment, obviously) adding on a bit of interest every month (before the recession we were getting enough interest a year between us to take us on holiday) but the premium bonds is a no cost lottery, there's tha tinflation loss but it's not that much really.

Ooh look, it's getting near the end of the month....getting excited....

Livin' the dream eh samuri! 😉