Poor Returns on Savings
 

Now that dividend yields on stocks are coming down (plenty of good companies could be bought with yields above of 5% in 2010), where are people putting their money?

I was shocked when looking through funds yesterday to find that most of the highest yielding ones at 5 or 6% specialised in 'sub-investment grade bonds'. 5 or 6% for sub-investment grade in what is surely a bubble in the bond market!

That leaves us with very few options.

I think most of us are putting what little we have into food and fuel..... to live! :thumb:

What are you doing with the other £50k a year spare... as a bare minimum?!! A la Mr Lewis. :D

Peer-to-peer lending is of interest to me, I have a small amount in Zopa (current rate is ~4.6% before tax) which is relatively safe as they have a safeguard mechanism to protect against borrowers defaulting on you. Plus there's FundingCircle, and RateSetters.

I wouldn't put your life savings in it, but it's a good way of diversifying and getting a reasonable rate relatively speaking.

london property is a good bet


"The average asking price of a property in London has increased by more than £30,000 since the start of 2013, according to figures from property website Rightmove, and is now comfortably through the half-a-million pound mark, at £515,243. It sounds a lot, but in some parts of the capital it is small change."

http://www.guardian.co.uk/money/2013...roperty-bubble

I've thought about that, but as you say, probably not something you would put a large percentage of your savings into.

That's good if you're in or around London, have the money and know what you're doing. None of those really apply to me. I am reluctant to BTL with a mortgage, and even with cash the yields aren't attractive enough up here to warrant the risk of capital loss.

buy a house and open a BB/Hotel in Abderdeen, as whenever I go for businees I can never find accomodation

I once had to hire a car and stay in Peterhead - OMFG - what a sh1thole

Ha ha. You're firmly into hillbilly territory up there. Aberdeen's nice though.

For smaller investments, I'm well happy with the returns I'm getting from my ISA held with L&G.

I've had good returns on equity based ISA, at one point I was getting 35% just over a year ago. Cashed it in last month with a return of 10%. :mad: Now just piling money into the mortgage to bring repayments down.......just incase the rates start rising, can't stay at 0.5% forever and market rates have been rising along with inflation.

Preservation of frank capital loss followed by protection against capital loss from inflation would be happy to achieve for me even without any real growth. This is why I am up to my neck in property now. I am about 90% mortgaged at an average of 2% interest with a rent before expenses of 9% of present value on a commercial property. Working hard to pay off the house before interest rates rise in future, as it is I have to take money out of offset mortgage to pay tax bills and fund building work but that is nearly finished. I sleep at night with property but it did me a lot of good to have very little of it from 2006-2011.

35% or even 10%, Wow!

Don't know the exact figures as my statement is at home, but mine has increased by about 35%. Can't really complain at that.

I must be doing something wrong. I need help! :)

Well mine was a Stocks and Shares ISA was made up of 4 different funds, Emerging Markets, UK Mid 250, China and Gilts funds. It's more of a risky portfolio but not speculative, the gilts add a bit of stability which took up about 25% of the portfolio, UK mid 250 had the biggest gains, then Emerging markets, but China, whilst showed massive gains early on, nose dived! But looking at my virtual portfolio (www.iii.co.uk) they're all in the red, so I got out what the going was still good. I've found that whatever was happening in the stock market, the funds market was about 3-4 months behind.

Main thing, is always do some research before investing. There's loads of info and tools out there.

The moderate pile I want to use for a house deposit either late next year or 2015 is about 60/40 split between a cash bond and FTSE 100 tracker ETF. The cash bond isn't very much, I can't remember actually, might be 2.25% gross. Main thing for me is to have that house deposit ready if I want it. I might liquidate the ETF at some point, but it wouldn't be a deal breaker for my house if it lost 10 or 20 % over the next year or two, more just annoying. I don't expect it to.

Bring back the good old days
When I started work on£25 a week % rates were 10% and if I had
100k in the bank I could retire and live off the 10k %

Now you need 840k in the bank to give you a living 24k wage with rates a
Poor2.5-2.8%

Even rental income is netting 5% then you have the worry of dodgy tenants
With just a few years to I retire its Cebu for me
I can live like a king on £100 a week :D
The boys ok as he is living the dream in Aussie but I worry
How the rest will survive in the UK on failing pensions and rising costs

Unless you are a Doctor in the UK of course your standard of living is only falling to its 'natural' level. Nobody owes you a living, etc. You are just useless flesh that is lucky to even have a job.

This is SN. Nobody on here nets less than 100k.

Thanks for that! :thumb: More research needed on my part.

the interesting thing is that the markets react badly to positive noises from the FED

they are addicted to cheap money – and don’t want it to stop, who can blame them


the amount of money pumped into the financial system in the last 5 years must be in the 10's of trillions of pounds

somebodys getting quite rich

It's a paradoxical situation where good economic news might be bad for the economy, at least in the short to medium term.

We just bought another house but it was driven by wife's need for downstairs facilities and paid for by an illness policy. Our old house will be rented but that will go towards mortgage on new house.

I've got a bit in ISAs but haven't made a contribution this year. I did stop using all active managed funds and have put q high proportion into a passive risk target fund. Not very exciting but very cheap. Vanguard Lifestrategy funds

I took out NSI bonds a good few years back that have been paying RPI +1.8% tax free, that equates to circa 10% gross sometimes. These are no longer available for new applicants though.

However I agree with Hodgy in that London property is the place to be. Official figures say it is 5% above the pre crash high however my own experience is that in many postcodes it is far higher. I'm also pretty sure it will continue to rise until at least the next election

My NHS income has been frozen for over three years, my private practice income down by at least 10% and pension contributions up. So in many ways my income is also falling to what might be termed 'its natural level' and nobody owes me a living. In terms of my occupational income I am definitely poorer than I was four years ago.

I won't cry or b7tch about it and try and blame immigrants and muslims though. I'd rather use the energy to find other opportunities to bridge the gap (or just readjust my expectations)

Your inherent weakness of character explains your different attitude to adversity and a changing world.

Ok, sure, you stride the world like some Nietzschian superman.

No, I just don't cry like a small girl about everything

shares in the company i work for have gone from £0.70pence in 2009 and are now £3.16 each this morning, finished the day on £3.63 glad i bought 3000 at 0.89pence :thumb:

Bunch of cry babies, if you have money make something of it rather than expect someone else to do it and give you a bit back! Are you all Labour voters by any chance?

Interest rates are low for a reason, trying to sort the crap out that the country has been landed in.

I blow every penny. Could be dead tomorrow. - there is a flaw in this if I live past 60