Saturday, 10 January 2009

Money Ideas Please!

I don't know what to do, and want suggestions.

I have a reasonable amount of cash set aside, but have run out of ideas as to what to do with it. Instinct says use it to reduce my mortgage, but mine is a +.5% tracker with no collar, so money putt there is effectively on deposit at 2%. With CPI inflation at 4% (and real inflation probably higher) that is not tempting.

Leaving it on deposit is not tempting either. 4% inflation plus higher rate tax is over 6.5% and I don't see that on offer anywhere.

Gold is an obvious choice but has been rising strongly, and I don't especially like buying at the peak.

Some form of stable asset would be a good bet, but which? There isn't enough to invest in property. Common sense says to buy something that you understand and know about - for me that suggests classic (or, rather, future classic) Porsches. I suggested that to Mrs P but recieved a very stern telling-off.

So, at the moment, the money is sitting in a bank losing value slowly, until the bank collapses of course.


  1. i am in no way a financial wizard...however, i do enjoy security in having the mortgage almost paid off...within the next year...with the mortgage i have, i am not penalized for paying it off sooner as some i would check first about that prior to making extra payments but, in such an insecure financial society, it is nice to have that extra security in case you need it for something...

  2. Very hard decisions to be made. Is there something "obvious" that will hold its value in the longer term? Gold does over time, as does property but one never knows where the peaks and troughs are until too late. Luxury cars are likely to fall in value in the short term are they not? Wait until they are a bit cheaper before "investing"...

  3. An acre or two of land, preferably with a natural spring on it?

  4. You can get a Porsche for £15,000.
    CU has predictions for oil companies and silver.{not financial advice..usual disclaimers..value may go down as well as up..etc}
    I have medicine stocks, but I'm not that convinced by them, and that Audi Q7 does look tempting with £6,000 off.
    I'm waiting for them to fall by another 10k then they can be converted to LPG with the savings and avoid all those nasty taxes and lousy MPG stats.

  5. Thanks all - some good thoughts there.

    Daisy - 100% in agreement with you, in normal circumstances. Our mortgage deal is very flexible and lets us put in whatever we want, whenever we want - and take it out later. But with very low rates and (by recent terms) very high inflation, that loses its attraction.

    Don't fancy a QE2+5 - not my style of car. My preference is for low, sleek and fast. And whilst there are good deals on Q7s, I suspect there is a reason for that. Even with something off, they have a long way to go down!

    Porsche prices have been dropping like a stone for the last 18 months but, have levelled off recently. With very few selling, dealers should be willing to negotiate, too. I have my eye on a specific model which is, I think, about to move from a "somewhat out of date" stage to the "desirable classic" phase. But Mrs P says no.. :(

    Lilith's idea of an acre is tempting, but how to find one?

  6. What about buying say for instance a limited edition Ferrari in good nick and storing it away in a garage. In a few years it will be a classic car and worth a fortune.

  7. If you're not likely to need it any time soon you could put it in a SIPP. You can leave it in as cash and Gordy will top it up for you with tax relief.

  8. Platinum metal or coin looks good at present, since it is used mostly now as a catalyst in car exhausts, and in fuel cells. The price of late has plummeted to a 10-year low, so should at worst hold its value over the next few years, and at best will possibly double in value.

    The downside is that the metal is extremely hard, very dense and very expensive, so very few coins have been minted out of it (Australia and China, mostly) and our wonderful Government wants to charge you VAT on purchases of it (gold is free of such taxation, strangely enough).

    So, to use platinum you'd either have to smuggle it in from somewhere like Guernsey or Switzerland, or buy it and store it there.

    However, this is not a reason not to use it; most pundits reckon that Gordon is going to descend into Socialist Fuckwit mode pretty soon, and start printing money in the terminal phase of this disease; the clue will be when gold blips upwards in price as people use soon-to-be worthless Sterling to buy something more credible as currency.