Str Fund

[pablopatito]

Sorry for posting this here, perhaps its not the best place. And I'm sure its been asked before. However, I'm about to receive an STR fund of around £100k and was hoping for advice on what to do with it (other than buying gold). 12 month bonds get a slightly higher interest than instant access savings, but not much - and an increase in interest rates could easily wipe this difference out. Instant access also means I can jump ship if I'm worried about the bank. Also, am I right in thinking I can just put the entire amount in solely my wife's name (she pays less tax), without any problems? There's loads of STRers here with similar savings, what do you do? Any advice would be most appreciated.

[alexays]

How long are you planning to have this investment for? If less than 3 years then I would leave it in the bank. Yes you can put it in your wife's name and she will only pay tax on it at the basic rate. It all depends on your risk tolerance.

If more than 3 years then I would consider getting some expert advice - seach the discussion boards on www.fool.co.uk and also listen to the weekly podcasts from www.financialsense.com. And yes possibly some in gold.

I wouldn't put it in some of the more exposed UK banks. Northern Rock might be an idea.

[pablopatito]

If more than 3 years

My wife says she might divorce me if I force her to rent for more than 2 years. So I guess about 2 years. Hopefully less if the crash is quicker and shorter than most are predicting.

[AwaitingFairPrices]

My wife says she might divorce me if I force her to rent for more than 2 years. So I guess about 2 years. Hopefully less if the crash is quicker and shorter than most are predicting.

With a wife like that I wouldn't put the money in her name

AFP

[blackhole]

With a wife like that I wouldn't put the money in her name

AFP

What he said! If that's her attitude... keep it in your control just in case.

[Minos]

My wife says she might divorce me if I force her to rent for more than 2 years. So I guess about 2 years. Hopefully less if the crash is quicker and shorter than most are predicting.

Then definitely consider hiding the money.

[The Conveyancer]

It doesnt matter whose name the money is in. If it did come down to divorce it all gets put in the same "pot" for the purposes of negotiating a settlement.

[Guest X-QUORK]

My wife says she might divorce me if I force her to rent for more than 2 years.

Hopefully that was a tongue in cheek threat. If not, you should be asking yourself some serious questions about the state of your marraige.

[The Masked Tulip]

Firstly, go to moneyweek.com, click on the housing/property link and read the article why it is cleverer to rent than to buy now. Force your wife to read it - several times.

Then put your money into separate UNRELATED bank accounts - say 5 pots of 20K as an exmple.

I put some of my money into 6 month bonds last March and some in 12 month bonds, and some into easy access. I think the 6 month bonds was sensible but at the time everyone said I should put money into 12 montb fixed accounts. I ended up with on in NR until Jan on a god rate, another in a Lloyds ISA until next April and another pot in the Co-op until next April.

My gut feeling is that by January the NR will be the new base rate, the Lloyds ISA will probably stay above water because it is tax free but I imagine that from Jan to when I cash it in next April the Co-op one will be losing me money.

[pablopatito]

I'm sure she won't really divorce me! But like many on here, women seem to be less keen on renting than men. I guess that's because generally speaking, a woman sees renting as meaning you can't decorate (she sees this is a bad thing), whereas a man sees renting as meaning he doesn't have to go to B&Q on Sunday to buy stuff to repair the house (he sees this as a good thing). If our ideal home is falling in price by over ten grand a year then her head will rule her heart and we'll carry on renting - even if that means renting for five years, but I can't see that happening.

Mainly, I can't decide whether the possible extra interest you get from a 12-month bond is worth it given that interest rates are likely to rise and we're heading into uncertain times - who knows when I'll need to get hold of some of my cash. I was really wondering what everyone else is doing at the moment. A hundred grand sounds like a lot, but when you take into account tax and inflation, you don't get much for it.

[VeryMeanReversion]

I'm in the process of moving my STR fund to Northern Rock E-saver 6%. Its still 100% govt guaranteed (no £35K limit)

Since NR are basically pulling out of the mortgage market, putting your money in there rather than an actively lending mortgage institution will help reduce mortgage availability for the masses. Every little helps.

VMR.

[pablopatito]

So its safe to put the full £100k in Northern Rock? It kind of makes me nervous thinking that all my money is in one place, looked after by the government - but I know I'm not being logical.

Edited June 24, 2008 by pablopatito

[Guest X-QUORK]

So its safe to put the full £100k in Northern Rock? It kind of makes me nervous thinking that all my money is in one place, looked after by the government - but I know I'm not being logical.

Eggs...basket...ring any bells?

[R K]

I'm sure she won't really divorce me!

So was I. I was wrong. To the tune of more than your total pot.

Never underestimate what women are capable of.

[Bosh]

My wife says she might divorce me if I force her to rent for more than 2 years. So I guess about 2 years. Hopefully less if the crash is quicker and shorter than most are predicting.

pablopatito, careful with the tongue in cheek stuff, This lot will have you down relate or at worst advising you to order a hit on Mrs P.

Spread it about, 100k will not be too difficult to spread. I have considerably more and found it hard to distribute. Most is in my wifes name but I opened all the accounts and have full control and she is happy with this. I have also used both 30k allowances on the premium bonds ( You never know )

I know it`s an obvious thing but make sure you both take up your full ISA tax free allowances. Most of our fund is in 12 or 6 month bonds of which we can not touch without losing all the interest.

We are sensible but this money is for our home and it`s too important to take any stupid risks.

Basically do what you feel comfortable with, which also gives you peace of mind. I prefer an extra percentage less and avoid sleepless nights.

G`luck

Bosh

[geed]

Firstly, go to moneyweek.com, click on the housing/property link and read the article why it is cleverer to rent than to buy now. Force your wife to read it - several times.

Then put your money into separate UNRELATED bank accounts - say 5 pots of 20K as an exmple.

I put some of my money into 6 month bonds last March and some in 12 month bonds, and some into easy access. I think the 6 month bonds was sensible but at the time everyone said I should put money into 12 montb fixed accounts. I ended up with on in NR until Jan on a god rate, another in a Lloyds ISA until next April and another pot in the Co-op until next April.

My gut feeling is that by January the NR will be the new base rate, the Lloyds ISA will probably stay above water because it is tax free but I imagine that from Jan to when I cash it in next April the Co-op one will be losing me money.

I also took out (edit; transferred to) a LTSB Fixed Term ISA at 6.5% in April. A good deal with a relatively safe bank. I think it will weather the the next 10 months well although IR on savings accounts have now broken the 7% mark (albeit taxed) and will continue to rise towards the end of the year irrespective of the Base IR's. Base IR's may well rise by the end of the year also if inflation does not abate. It depends what happens to energy prices...I think oil may well rise towards $200 over the next 6-9months, but will fall back to current levels in 12-24 months time which will slow inflation.

If base IR's do rise I cant see them rising by more than 0.5% within the next 12 months as current inflation must be acting as a good pseudo 0.5%+ base IR in itself. We will hit a recession in the next 12 months and that again should be anti-inflationary. I have not invested in the stock market this year though as I am not a regular trader and cash appears to be king at the moment, also need the funds to start a business up....I know I must be bonkers in this climate.

I also hold cash in other currencies which have made me 20% in the last 12 months against sterling.

Diversify

Edited June 24, 2008 by geed

[MrPants]

First use your ISA allowance. I'm on 6.25% instant access at HSBC.

Kaupthing Edge is best internet instant access, 6.5% gross.

HBOS regular saver is 10% gross for one year fixed contributions up to £500 a month no withdrawals till end year. well worth it if you don't mind drip feeding money in.

Don't have more than 35K in one institution so you are covered by HM treasury guarantees. Very handy at the moment as generally banks offering best rates are frankly short of cash.

[The Masked Tulip]

I also took out (edit; transferred to) a LTSB Fixed Term ISA at 6.5% in April. A good deal with a relatively safe bank. I think it will weather the the next 10 months well although IR on savings accounts have now broken the 7% mark (albeit taxed) and will continue to rise towards the end of the year irrespective of the Base IR's. Base IR's may well rise by the end of the year also if inflation does not abate. It depends what happens to energy prices...I think oil may well rise towards $200 over the next 6-9months, but will fall back to current levels in 12-24 months time which will slow inflation.

If base IR's do rise I cant see them rising by more than 0.5% within the next 12 months as current inflation must be acting as a good pseudo 0.5%+ base IR in itself. We will hit a recession in the next 12 months and that again should be anti-inflationary. I have not invested in the stock market this year though as I am not a regular trader and cash appears to be king at the moment, also need the funds to start a business up....I know I must be bonkers in this climate.

I also hold cash in other currencies which have made me 20% in the last 12 months against sterling.

Diversify

If i may ask what knid of business are you thinking of starting up?

I was thinking about setting up a small local IT consultancy come white van man as there appears to be a growing market for home pc repairs now. Even considered a shop but that is pointless. Have decided to put it on hold though as I think discretionary spending on pcs will disappear in the coming recession. Then again, for many people today a working pc is important to their job. Maybe I will become a playboy. Hang on, lost the thread... what are you going to do again?

[Minos]

If i may ask what knid of business are you thinking of starting up?

I was thinking about setting up a small local IT consultancy come white van man as there appears to be a growing market for home pc repairs now. Even considered a shop but that is pointless. Have decided to put it on hold though as I think discretionary spending on pcs will disappear in the coming recession. Then again, for many people today a working pc is important to their job. Maybe I will become a playboy. Hang on, lost the thread... what are you going to do again?

I think you should open up a tea and cake shop. They were very popular during the war years.

[VeryMeanReversion]

So its safe to put the full £100k in Northern Rock? It kind of makes me nervous thinking that all my money is in one place, looked after by the government - but I know I'm not being logical.

I think its safe. I have a larger STR fund and sleep soundly at night.

If NR go bust and the guarantee is not honoured then its mad max time. No point have £'s at all in that case.

VMR.

[geed]

If i may ask what knid of business are you thinking of starting up?

I was thinking about setting up a small local IT consultancy come white van man as there appears to be a growing market for home pc repairs now. Even considered a shop but that is pointless. Have decided to put it on hold though as I think discretionary spending on pcs will disappear in the coming recession. Then again, for many people today a working pc is important to their job. Maybe I will become a playboy. Hang on, lost the thread... what are you going to do again?

I have been at a crossroads. Go back into my usual occupation (Mech Engineer) after a 12 month sabbatical or try and start my own business. Offered a job at £40K and pondered it for many months, there were many contract jobs as well for £28-£30/hr but decided to give the business thing a go. When you consider a Shell truck driver (no disrespect to any truck driver on here but I gave up 5 unpaid, debt accumulating years of my life to study engineering) can earn circa £40K, it makes you think real hard why you went to college and uni and if £40K is actually going to help you get ahead financially in life.

I/we, my long term girl, have three ideas. The first of which required buying a large property, this for obvious reasons has been put on hold for at least 2-3yrs. The second of which is a catering idea focusing in on organic produce, the third involved the motor industry (dont want to reveal too much )

So varied in the extreme. We are always thinking of business ideas and models and I have now decided to put it into practice rather than dreaming. Currently setting up the second idea with the third as a back up. I think there is a greater awareness now of food, its source, its effect on your health and its impact on the environment (been watching Ch 4 recently?!). Choosing organic or British grown is an ethical choice and one in which my business will rely on. The current tighter fiscal environment will have an effect on my business but not one in which I think will break it. Besides if I can weather the next 2-3 lean years it should put me in a great position thereafter. Now or never.

I think your idea is a good one. I dont think a computer is a discretionary item anymore, the internet is integral to everyday life and to use it you need a computer. Also parents know their children need a computer for school. Only if things get very very bad (1930's) will computers fall off the "must have" list. Go for it!

[Selling up]

Nobody's mentioned my favourite investment which I now have 6 figures in:

National Savings index-linked certificates.

Tax free, no realistic risk of capital loss or default, and guaranteed to rise higher than RPI.

[twatmangle]

My wife says she might divorce me if I force her to rent for more than 2 years. So I guess about 2 years. Hopefully less if the crash is quicker and shorter than most are predicting.

Divorce her now on the grounds that she is financially incompetent. Make something up about an affair just to make sure.

[NotMyHouse]

I think its safe. I have a larger STR fund and sleep soundly at night.

I agree. We had quite a big chunk in NS&I accounts but moved the lot to NR. So at least I'm getting back a bit of the extra tax from propping up the Crock. AFAICS, there is no difference between the Government guarantee for NR and for NS&I, apart from the bit about giving 3 months notice for withdrawing government support. But if that was to happen, there would be another run on the Rock before the government guarantee ran out, which would be political suicide for the government.

In summary, my take on it is that cash with NR is about as safe as cash in a bank can get. And the rate is better than NS&I.

[red]

You'll find more ideas on 'what to do with your STR fund' here:

http://www.housepricecrash.co.uk/forum/ind...hp?showforum=32

and here:

http://www.housepricecrash.co.uk/forum/ind...hp?showforum=49

and possibly here:

http://www.intercasino.co.uk/games/roulette.shtml