Is Investing In Stocks & Shares As Good As BTL/Property?


I have absolutely no clue! It’s probably not. But maybe.

Either way, I’ve officially dipped my crusty little Hobbit toes into the murky waters of Stocks & Shares! Here’s a breakdown of why, how and where!

Property Vs Stocks & Shares

While investing in Stocks and Shares is profoundly mystifying to me, one thing I’m certain of is that with the fate of our economy at the mercy of a bunch of unbearable, bickering, plummy dip-shits, I don’t feel safe ploughing another dime into property until the dust settles (excluding mortgage debt reduction)! Where a shrewd property investor may see opportunity, I cower in fear and take several nasty dumps in my pants!

As I’ve been saying for a while now, unless an absolute bargain comes along (which it won’t), further investment in bricks and mortar is officially off my table for the foreseeable future.

Equally as repulsive as the current property market, is the idea of stockpiling more pennies into one of my dog-shit savings accounts’, which all seem to be legalised means of euthanising my already minuscule net worth. Of course, like a meandering and senseless shit-stain, I’m still doing it. Who else is with me?

My excuse is, I’ll never know when I’ll need quick access to a butt-load of ransom money. I hear the following exploit is circulating:

Hello!

I am a representative of the Chaos hacking group.

We are aware of your intimate adventures on the Internet. We know that you love adult sites and we know about your sex addictions. You have very interesting and unique taste (do you understand what I mean?).

When browsing these pages, your device’s camera turns on automatically. What you watch is recorded and saved on our server.

At the moment, several compromising video recordings have been collected. All your contacts in this email inbox and in messengers will receive these clips.

If you do not want this, transfer 2,000.00 GBP to our unique Bitcoin wallet.

As soon as your transfer is confirmed, all your contacts and video recording will automatically delete immediately.

You decide … Pay or live in hell with shame …

That threat could be a very depleting and colossal reality for me.

To clarify, I’m not telling anyone to refrain from starting or continue investing in property (or to stop having “intimate adventures on the Internet“, just make sure you securely apply tape over your laptop’s camera lens).

For those contemplating the beautiful journey of property investment, don’t be discouraged by my petulance – I’m rebelling against the machine because I’ve already invested in property! If that wasn’t the case, hand on heart, I would be gearing up to pounce onto the property market. I don’t think anything beats property long-term.

So what am I supposed to do?

Investing in Stocks & Shares Vs Property

I’ve always been keen on diversifying investments in order to create multiple income streams (in case one stream gets clogged-up and tumbles tits-up!), and it’s a strategy all financial ‘experts’ seem to endorse. I’ve tried to diversify as much as my risk appetite will allow, which sadly means my options are woefully stark. However, the one investment type that has historically captured my interest on more than one occasion, yet scared the shit out of me at the same time, is the stock market.

I really don’t understand the nuances of how stocks and shares work, so I don’t like them. Don’t even get me started on the lingo. It’s a different world.

I don’t like things I don’t understand! Too many idiots salivate in envy when they hear the success stories of others, and they don’t care how or why, they just want ‘in’ – even if they don’t have a clue. I ain’t that particular type of idiot. But I am the type of buffoon that can easily find primitive distractions to stay clear from learning ‘investment methods’ to the point of ample understanding *yawn*

I think that’s why many of us (landlords) feel comfortable with property, because most of us are forced to get a taste, albeit a limited spoon full, when purchasing our own home. Plus, the whole property gig really isn’t that difficult to grasp. But more so, it’s a tangible asset; I can physically see where my money has been swindled, and that provides great comfort. When we invest in stocks & shares we’re essentially buying virtual numbers. It’s uninspiring. It’s bullshit.

However, there’s still an alluring charm to it’s passive and lightweight nature. Probably because it doesn’t include the risk of taking on an adult-baby that mysteriously forgets to pay rent, or thinks it’s acceptable to take a dump anywhere other than in the bog.

Perhaps that’s why, over the past several years, I’ve mildly looked into investing in stocks & shares on a few occasions, and even almost came close to pulling the trigger. Alas, I’ve always managed to scamper away, knowing that if I fired, I would be one of those idiots blindly hitting and hoping.

If I go down in flames, I don’t want any excuses.

Unfortunately, I was recently inspired to look into investing once again, thanks to a Wealthify.com advert, which has been heavily airing on LBC radio station. In the 30 second plug, those assholes’ managed to sink their filthy little fangs into my weak mind! They really have nailed the art of capturing the attention of aspiring “stock brokers” that don’t have the foggiest, by making their solution to investing sound simple and intriguing.

Fair play to them. But if this ends badly for me and my legacy, I will burn their fucking house to the ground.

Disclaimer / I’m not on the payroll!

Before going any further, let’s erect barriers to prevent any disputes and shenanigans!

Firstly, it’s imperative to understand that I’m NOT providing any financial advice, so you should not take it as such! The purpose of this blog post is to simply share the details of how and why I’ve decided to gamble and blow a portion of my savings on something other than property/BTL during the middle of the Brexit shit-storm.

Maybe I’ll inspire you, maybe I won’t.

I shouldn’t!

Secondly, I just want to state that this is NOT a sponsored blog post; none of the services/companies I mention have infiltrated my motives. I have not spoken to anyone directly or indirectly linked to any of the mentioned services. Understandably, there’s often scepticism behind the motive when a blogger/publisher shares financial services, so that’s why I wanted to make my position clear.

We good?

Back to Wealthify.com and investing in Stocks & Shares

I’ve bumped into Wealthify adverts quite a lot recently, so I think they’re on an almighty marketing spree, so you may have also received an earful of their marketing crap.

If you haven’t, rather than miserably failing at articulating their service, I’m just going to point you in the direction of a short 1.38min video-explainer I snatched from YouTube:

Wealthify aren’t offering anything new; I know that. They’re essentially a ‘mutual fund‘, which is a concept I do understand… because it’s relatively simple. However, I have historically avoided investing in mutual funds because when I previously looked into mutual fund trading platforms, like Hargreaves Lansdown, I found their fees to be intimidating. At least, it was for someone that merely wanted to throw some shit at the wall to see if it sticks. On a sidenote, a close friend of mine made a 30% return with his Hargreaves Lansdown mutual fund last year.

Yes, I’m very happy for him *grits teeth*

Anyways, here’s a breakdown of what I understand from Wealthy’s service (some of which has already been mentioned in the video):

  • Wealthify is a digital investment management company.

    Simply, you deposit your hard-earned cash into your Wealthify account, and they’ll invest your money in diversified portfolios across different industries and countries (to spread your risk), which means we, as the investor, don’t need to get pinned down with any of the pain-staking minutiae details.

  • Unlike traditional single stock investments, we don’t have to individually pick and choose stocks to invest in; the whole point is that they will do it for you, which is what makes this solution so appealing to an absolute doofus. It’s pretty much the most basic means of investing in stocks & shares.

    I know it’s not sophisticated and imagine it’s not the most lucrative way of investing. But it’s easy. And it’s a start.

  • They allow you to set the level of risk you wish to expose your investment to, from a scale of 1 – 5 (‘cautious’ to ‘adventurous’).

    From what I understand, if you’re a bonafide wuss and consequently choose ‘cautious’ (the lowest risk bracket), 90% of your investment will be invested into fixed-rate bonds (which is relatively secure), and the remaining 10% will be investment into various stocks & shares, which are proportionality volatile to your chosen risk level.

    If you’re the kinda’ person that’s ballsy enough to step into communal showers without wearing flip-flops, your stomach may entertain a risk level of 3+, in which case 70% of your capital will get invested into bonds, while the remaining will get invested into various other more volatile assets (proportionality volatile to your selected risk level).

    They’re not the exact splits, but that’s the general gist of how it works.

  • To recap: choose your risk level, handover your cheese, and they’ll invest your funds across multiple global assets.
  • Minimum investment is £1.
  • Like property, this is a long-term play!! This is NOT a get rich quick scheme. Every article and independent video/article I have read only emphasises that.

    My intention is to keep my money invested for an absolute minimum of 5 years! It will most likely be considerably longer.

  • After inputting how much you wish to invest, your desired risk level, and how long you intend to invest for, Wealthify projects your potential returns (based on past performances, I presume).
  • You can buy/sell at any time, you’re never locked in.
  • Everything can be controlled via their app (which has been praised for how intuitive it is).
  • Digital investment management companies are notorious for charging low fees compared to traditional investment platforms. I believe that’s the case because a lot of the process is computerised, as opposed to paying a wealth manager to manually pick and choose a tailored approach to investing your money.

    Wealthify charges 0.7% a year on portfolios worth £250-£14,999, 0.6% for £15,000 to £99,999 and 0.5% for £100,000 and above.

  • Wealthify is not the only digital investment management company!

Plot Twist: I gave Wealthify.com the middle finger and went with Nutmeg.com instead!

Yup, SCREW Wealthify!

No, honestly, I’m sure they’re wonderful! It just wasn’t meant to be.

During my research phase, I discovered Nutmeg.com. For all intents and purposes, they seem to offer a very similar service to Wealthify.com and is a direct competitor. There are dozens of forum threads and blog posts that compare their services head-to-head. Both are UK based, which is cool.

The only reason I grabbed Nutmeg.com instead is because I noticed enough people complaining about the lengthy duration it takes to transfer money in and out of Wealthify. Here’s one pissy comment from their Reviews.co.uk profile:

2 weeks and my money i deposited still hasnt hit my account. Never known a financial institution to take so long to deposit money.

The issue seemed to be a common gripe among users.

I personally feel more comfortable using the service offering the quickest solution to transferring my money in and out. I’m an impatient chap *shrugs shoulders*

Signing up for Nutmeg.com

I won’t dither around these parts, I just want to say that it was a piece of cake to download the Nutmeg app and set up my investment portfolios. You can also do it online via their website.

How much I invested, my expected returns, and how how much risk I’ve taken!

Even though I’ve taken the plunge, I’m still a pussy – and don’t you forget it – so I haven’t invested too much to start with (I suppose it’s relative, though).

Here’s an overview of how I invested:

Investment PortfolioRisk levelAssetsAmount investedExpected Annual Return
(after costs and charges)
Medium Risk6 / 10
  • Equities: 52.2%
  • Bonds: 47.3%
  • Other: 0.6%
£700 +4.77%
High Risk7 / 10
  • Equities: 62.9%
  • Bonds: 36.5%
  • Other: 0.6%
£550 +5.06%

I’m assuming the expected returns are based on conservative averages, and since this is a gamble, the returns could be greater. Or less.

Obviously I’m counting on a lot greater, because I don’t think it’s worth putting too much on the line for a 4-5% return. But that’s precisely why I’m gambling experimenting.

Quick explanation of what’s going on

  • Nutmeg let’s you choose between a risk level of 1 – 10:

    Nutmeg Investment Risk Levels

    I created two separate portfolios, one with a level of 6, the other with 7.

    I can create as many portfolios as I wish, and I can also change the risk levels for each existing portfolio.

  • I named my investment portfolios “Medium risk” and “High risk” for my own reference, it wasn’t anything administrated or automated by Nutmeg.
  • 1.5% seems to be the rate of return from the average 1 year fixed savings accounts currently available! My investments are expected to make a return of 4.5%+.
  • To date, I’ve invested a total of £1250 just to see what happens. I’ll either start drip-feeding my investments on a monthly basis (which is easy to setup via the app), or make random lump-sum deposits, depending on how things go in the coming months.

    Or, I may just pull my investment altogether if the situation starts to resemble a fucking calamity. At that point, the idea of being drained by a bullshit investment app may just be too much for my fragile ego, so I might just lose my God damn mind and blow what’s left on a one-night bender.

    To be determined.

The results of investing with Nutmeg.com so far!

I opened my account in mid August, and I almost immediately got screwed and consequently slung myself out the window. Three days after investing I was £24 poorer! *slaps forehead*

Sweet Mary Mother of Jesus, WHAT THE SHITTING-CHRIST HAVE I DONE?!?

Nutmeg Earnings: August 2019

One tough and demoralised month later… there is a God, and he’s shining down on me from the Heavens!

I’ll NEVER DOUBT ANYTHING EVER AGAIN!! I’m officially two sweet nuggets richer. Read it and weep, suckers!

Nutmeg Earnings: September 2019

I plan on keeping the table below updated monthly, just in case anyone is interested in seeing how disastrously this all pans out.

DateAmount investedCurrent ValueReturns
August 2019£1250£1226-£24
September 2019£1250£1252+£2
October 2019£1250£1252-£7

So, is investing in Stocks & Shares a good alternative to BTL/Property?

Like I said, probably not! The Lord only knows!

But I’m in the game now.

Gorden Gekko

I want to reiterate that I don’t know if this will be fruitful or not. I’m just trying something new, and I don’t recommend it. I do highly encourage everyone to look into different ways of diversifying in accordance to personal comfort levels, though.

What about you?

Couple of questions, if you don’t mind…

  • Do you plan on investing in property during the Brexit shit-storm? If not, what’s in store for your disposable income?
  • Are you already investing? If so, any tips/thoughts?
  • Are you using a digital investment management company like Wealthify or Nutmeg? If so, how’s it going for you?

As always, love & peace xoxo

57 Comments- Join The Conversation...

Showing 7 - 57 comments (out of 57)
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EPS501 26th September, 2019 @ 09:38

Courage to try something different, if not new, is always commendable so 2 thumbs up for you, I say! To answer your questions:
. hell no and no disposable income for the immediate future so that's that
. no, see above
. [reaches for double strength panadol]

I do my best to 'continuously assess' so will review in the coming months.
Thanks for sharing this post.

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Melinda 26th September, 2019 @ 09:45

Can you put money into a stocks and shares ISA with Nutmeg? Once investments are fenced into an ISA the gains are all tax free.

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The Landlord Avatar
The Landlord 26th September, 2019 @ 09:47

@Melinda
Absolutely!

I maxed out my cash ISA for this tax year, that's why I didn't.

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The Landlord Avatar
The Landlord 26th September, 2019 @ 09:49

@EPS501
Thanks, appreciate it :)

Agreed! I think it's crucial for everyone to 'continuously assess', even if it's only as a case of flicking through different saving accounts to squeeze out extra pennies.

Otherwise we're just watching our money die slowly.

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Not a landlord 26th September, 2019 @ 10:00

Investing in passive funds requires a whole lot less work then looking after more houses and other humans.

You should have looked at brokers that have a lower cost. Robo investors like Nutmeg charge way too much which will inevitably eat into your returns.

If you read the UK Personal Finance sub on reddit, they tend to suggest Vanguard and one of their low cost global funds.

Of course if you take a mortgage on a BTL, you have leverage to play with, so your returns may be compounded. Would you borrow £100K and invest that in the stock market?

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The Landlord Avatar
The Landlord 26th September, 2019 @ 10:07

@Not a landlord
Vanguard was actually another name that cropped up often when I was looking into alternatives to Wealthify. Very highly rated from what I saw.

The reason it was between Wealthify and Nutmeg - for me personally - is because they're both UK based. I'm so naive and new to this, I felt more comfort knowing I could call a local number.

Maybe after experience I will look into alternatives like Vanguard.

"Would you borrow £100K and invest that in the stock market?" Not on your nelly :)

Thanks for sharing, very insightful!

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Devon Leigh 26th September, 2019 @ 10:14

Ok…time to fess up, I’ve been less than honest in my first post.
I’ve had a mutual fund for about 5 years, think the return was about 3.5% after fees. I suppose it could have been more, but as stated earlier, I’m extremely conservative. I like a sure thing. (It takes one to know one. Lol) Anyway, currently I’ve got 50k in one of the aforementioned accounts similar to the nationwide thing, except I’m with NatWest. I’m expecting a little over 500 quid after a year. It’s a paltry return to be fair.
So, in short there are no easy ways to a better investment. There are more involved but quite safe investments though. Currently I’m considering investigating in an established franchise such as McDonald’s. Their people have done all the hard grafted research into location, profit margin and guarantee my investment. Margins are about 12% and Each location makes around £/$150,000 profit a year. I suppose my only issue is my aversion to owning a McDonald’s. It’s not exactly what a scientist normally does for a crust, but money is money, so I suppose I should just swallow my pride and pull the trigger. What do you guys think?

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Borrieboy 26th September, 2019 @ 10:16

When I’ve looked at current pre-tax BTL rental returns (3 flats in s.London) then around @ 4.2% is what I get. Deduct some tax then under 4% is what I get.
I’ve therefore looked at other investment vehicles, rather like yourself, Landlord.
I’ve also been invested in stocks & shares for around the same period of time as property and can say that, despite the 2008 shitshow, staying invested has proved positive & beneficial.
Again, I’m not offering financial advice as I’m not qualified to do so, however, apart from indirect stocks & shares investing, I’ve found a couple of interesting online investing “opportunities”.
The ones that I liked and which offered decent returns were “Peer to Peer” lending sites. The one I chose, because it was backed by security on “bricks n mortar” was LendInvest.
It has a decent online portal where you can manage your risk exposure and see everything else that’s relevant to your investment.
To date, I’m running at a tad over 6% return. Of course, there’s no capital appreciation as there may be with directly owned property but there’s also no dicking around with the whole BTL shebang.
I agree that a diversification strategy is key but the mood music around both me and my friends, who also own BTL, is we’re starting to look at leaving and “cashing out”.

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Benji 26th September, 2019 @ 10:18

I invest in low fee index tracker funds in an ISA, have done for about 20 years.

Mostly in the UK (60%) followed in order by US (20%), EU (7%), Asia.

Just looked up one of them that I've been using from the start and averaged 7.24% pa.

I've lost 800 quid this week.

I invest in ISA's as I already have a good pension scheme.

Not investing in property for the foreseeable and have been drip buying (pound cost averaging) around 2K per month.

Just bought 20K of premium bonds.

@Landlord, unless you are very near retirement, you're being a pussy.

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The Landlord Avatar
The Landlord 26th September, 2019 @ 10:21

@Devon Leigh
Jesus Christ, what a 180 spin haha.

You went from Joe Bloggs to Warren Buffett in a matter of seconds.

Sadly, 3.5% is actually better than any savings account, so good for you.

I honestly have no idea about franchises, but I do know that the world LOVES McDonald’s.

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Johnny Innes 26th September, 2019 @ 10:27

Hi Landlord,

Many thanks for your interesting blog post.

I started investing in Crypto’s around two years ago, for the first few months it went very well but then I made the mistake of investing a little too much when it was booming.

I then saw my amount go south pretty quickly. Now I’m not back to even but getting close.

Nowadays I’m interested in similar to what you’re doing so I think I’ll also join Nutmeg. I think it’s a good time to be looking at diversified investment. The market will only rise again in the future so it’s good to get in now while it’s cheap.

I see the same with property, it’s a good time to looking at lower prices and steady rental returns so why not invest, it at least invest wisely. Btw would you be interested in receiving good deals for a fee or perhaps a JV situation?

Cheers!

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The Landlord Avatar
The Landlord 26th September, 2019 @ 10:29

@Borrieboy,
Yup, when I crunched the numbers on further investment in property, they didn't look very promising for me either. Plus, the second-home stamp duty fees just makes it unbearable. Until they drop that shit, I'm out.

I've also looked into 'Peer to Peer' lending sites, but I got a little rattled when I read that a few of them when bust recently. Also, from what I understand (which I might be completely wrong about), there's little security for the lender.

6% isn't bad at all, good for you, man!

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The Landlord Avatar
The Landlord 26th September, 2019 @ 10:34

@Benji
Ha, Dear Lord, you really do have your grubby little fingers in a billion pies! Do you have gold bullion bars hidden in your sock drawer as well?

Averaging 7.24% pa is awesome. I'd be happy with 3%+ right now.

I'm a self-confessed pussy, no doubt. I am going to ramp it up though. I just don't want to dive in.

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The Landlord Avatar
The Landlord 26th September, 2019 @ 10:40

@Johnny Innes
Oh man, I'm staying clear from Crypto. I *almost* got sucked in.

My friend invested £5k in Crypto currencies last year and I think he's down to £1k.

That said, during the boom, another friend of mine made £120k from a 20k investment and cashed out.

Either way, it's way too volatile for my blood. I've also heard horror stories about the difficulties in withdrawing money.

Agreed! I intentionally chose to invest now because the economy is so messed up; my assumption is there's plenty of room for improvement.

I've always been sceptical of paying 3rd party companies for BMV properties. I've heard way too many horror stories.

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Borrieboy 26th September, 2019 @ 10:46

...and if BTL wasn’t enough of a p.i.t.a. just now, just wait until St.Corbs & his Merry Men get into No.10, then your metaphorical balls will be well and truly in the vice of property appropriation and you’ll likely as not become part of the social housing charitable sector!

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James 26th September, 2019 @ 11:01

I agree with your sentiment on further property investment in the current market. Having a stocks and shares ISA(or even a cash ISA) is a good hedge for those highly leveraged as the market turns, especially if they have issues at remortgage and need cash to reduce LTV. The scary alternative is to sell - but when many have been 'educated' to use remortgaging as a cash machine - they tend to forget capital gains liability and then it becomes a mess, and ultimately a crash.

Personally, I'm a fan of HSBC Stocks and Share ISA - I think it is called InvestDirect - or it was when I started with it. Tracker for the unimaginative, I've gone for strong cash-generating dividend heavy choices.

I'm concerned that so many people are so highly leveraged at such low rates and are being educated that this is the ultimate strategy. It's going to get nasty, and then I want to come through it will cash to buy the best assets at the lowest prices.

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Devon Leigh 26th September, 2019 @ 11:16

Agree with everyone so far. BTL isn’t what it used to be for investors. @The Landlord, as I said I really am in two minds about this. I save my pennies eating pot noodle and buying charity shop clothes. (To be fair I like pot noodle and think charity shops are fun) I invest in the low risk stuff because my money wasn’t easily made. That said, I also know my money is no longer working for me in the same way it used to. Why oh why didn’t I do economics at uni. :-/ And you’re right, everyone does like McDonald’s, maybe we all ought to go buy a bit of their stock.

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Joey020 26th September, 2019 @ 11:29

@ The Landlord, Good post.

I think there's still cash to be had in BTL. I stopped investing in London for now and just completed on a property in Manchester with tenants in place generating 16% ROI. The extra stamp duty etc is annoying but not crazy if the property is cheap to begin with.

I have also tried the Old Mutual about 2 years ago and doing about 5% on average per year

I did throw £800 in crypto 2 years ago and I'm currently down to about £620

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Hari Seldon 26th September, 2019 @ 15:07

The first thing is that the price of shares go up and down.. and up..then down, then up all before Lunch !
You can see the price at any time, whereas with property you can kid yourself that the price has held up when all around houses aren't selling, price reductions are coming in thick and fast from Rightmove, even when they sell unless you search after the event you won't know what a property sold for or how much someone has invested in tidying up/extending etc.

You expect 5% a year, its probably about right....over a 25 year period, in the meantime it can vary a LOT. For an average return of 5% you can expect 8 out of 10 years to be outside the range of 3% to 7% returns, that's how much it varies. I have invested over the last 30 years ( probably at a risk level of 9 on the scale above) and averaged around 11% pa but the return I can get in any one year is more likely a loss or 20% gains, you have to live with the variations.

Keep the costs down. Active funds are no good, there will be always be the odd winner until they lose `9 they all do eventually.

30 years experience , seven figure portfolio and I know what I don't know, ITS IMPOSSIBLE TO TIME THE MARKET but over time the trend is up

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Newbie 26th September, 2019 @ 15:54

I have 1 btl and it has a mortgage. Over 12 years my 17k deposit gave me a 100k return whilst my 17k Stocks and Shares only giving between 2%-4.5% annual return which is equivalent to £340-600 per annum. Based on this factor I still have faith in the property market for a long term investment.

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Claire 26th September, 2019 @ 16:09

Great post, Landlord! I hear you on being cautious about investing more money in UK property, especially as St Jezz is now threatening to confiscate landlords' houses.

I've started to buy a few S&P 500 ETFs on the Swissquote platform (I'm in France so cannot get an ISA). This platform lets you buy any sort of shares, bonds, funds etc. However, I'm always worried the stock marked could tank at any time!

I read "The Intelligent Investor" by Benjamin Graham, Warren Buffett's mentor (first edition 1949!!) and his advice seems to be that no one can predict the next crash, but that you almost certainly will make money over the long term, if you live long enough, ie. think decades! He also talks about the difference between value investing (in productive businesses over the long term) and speculating. He says it's almost impossible for Joe Soap to beat the market index, so I guess in today's terms that means investing in index funds. He also suggests dollar cost averaging, ie. invest the same amount of money every month, whatever the market conditions, and in fact he advises to rarely take any notice of what the market is doing.

Thanks for the information you shared.

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Lisab 26th September, 2019 @ 17:52

Had to laugh at'taking on an adult-baby that mysteriously forgets to pay rent, or thinks it’s acceptable to take a dump anywhere other than in the bog.' Other than that I have had a flutter with Funding Circle, they only Loan to other businesses, currently 4.7/4.9% which I just leave in so it accumulates. They split the investment across lots of loans so you end up with lots of pies but it is evenly divided. They also do a investment Isa but not worth it forme. I drip feed a few quid every so often but it is rather nice as you are able to control it yourself or allow Funding Circle to manage it.

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Grumpy 26th September, 2019 @ 18:37

Hi Landlord,

A blog no where as amusing as yours for education on all things finance And passives index tracking is this

https://monevator.com/maximise-savings-rates/

It’s an excellent blog, that only slightly went down hill post the 2016 B word issue as his postings are now often turn into brexit style complaining.
The savings rate tart post is excellent, takes a while to set up but once going is epic.

Nutmeg and such “brokers” taking 1% is WAAAAY to high. Go work out what 1% fee is on the expected return. Unless its in an ISA if you only make 4% they are taking 25% of your profit.

Simply find a cheap platform then buy a basket of the following
https://monevator.com/low-cost-index-trackers/

If you think because Nutmeg et al are “safe”..... think again
https://monevator.com/investor-compensation-scheme/

I agree with your house sentiments. THis year or so we have unloaded 4 properties. 2 left to go. Although they gross rent % on what we bought the properties for was 10%, when you work it out based on what the properties are currently worth if they are sold, then the return is more like 8% gross, then take off all the other BS compliance costs, accounting, insurance, GDPR license!! Tax rate if you are HR tax bracket then the return on rental is piss poor.

Might as well dump £200k into BP shares paying a healthy dividend or a diversified investment fund (CTY) been playing 4.5% dividend for decades.

I will keep reading your most excellent blog simply to remind me of all the fun I had as a landlord 😂

Ciao. Grumpy

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Grumpy 26th September, 2019 @ 18:53

@newbie

Your house price rise is 100% correlated to the interest rate dropping from 6% 12 years ago to nothing today. When interest rates go back to 6% see how many people can afford it then.

Landlords are currently are less popular in the UK than an ISIS training camp. And that’s under a blue government. Thanks Osborne you f*&£$%.

Wait until magic grandpa ands his business friendly cohorts make you give all tenants free housing. They will probably legislate you providing a free massage services with or without happy endings to all tenants.

Good luck👍

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Mattey 26th September, 2019 @ 21:30

Hi,

I’m not a major investor but know a few good places to begin. I use this blog, one of the best clear user friendly advise, written but a normal investor, it’s called Monevator.com.

The blog has loads of clear useful information from the beginning and break the complicated stuff down from Pensions to personal Passive investing.

I would not touch Wealthify with a barge pole! They have extortionate fee’s, which is why they can spend millions advertising.

I would recommend AJ bell the cheapest place, 0.25% ongoing fee’s and only £1.50 dealing for funds usually. They have all the funds, which you can filter and I would recommend using the Monevator page for useful guidance on choosing these funds.

Thanks

Mattey

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JJCB 26th September, 2019 @ 22:16

I have been scared of Stocks and Shares for years! always put my money in Savings account and Cash ISA but got sick of how low the interest was for so many years hence decided to try on Stocks and Shares ISA from last April with Nutmeg, MoneyFarm and eVestor. 1 year 5 months later, they all doing pretty well average at 7%-8% some is 10%! I'm not planning to sell them anytime soon and would like to keep it for 5 years at least which I think it seems to be more sensible than buy BTL property now considering all the regulation/tax changed recently and current political climate we're facing now. I already have 1 BTL hence don't think the return worth all the effort you have to put in and the worry of footing the mortgage bill when no one in the property.

I would recommend eVestor as a low cost fees, cheaper than most platform. though overall I prefer Nutmeg in term of how easy to use their website and app. all info. are there for you to check the performance on how the fund is doing. But yes this is a long game so not get rich quick same like property as well. Totally agreed with you on diversify the investment to various channels to be safe!

Thanks for your blog, I truly enjoyed reading it and got a really good advice since I became an accidental landlord few years ago :-)

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David 26th September, 2019 @ 22:53

@Landlord

I am no investment specialist, but I saw family members get stung so I will share my observations.

1. Forget all this shit about high risk slow risk or the even worse labels of slow n steady, that is all to make you feel more comfortable and give them a get out if they lose your money.

2. Never invest money you need at any sort of notice, the only way to make money on stocks is to invest long term, you get a 25 year mortgage so think in the same terms. Otherwise you open yourself up to every little to and fro that affects a share.

3. Do not try to pick shares and never invest in tips, simply follow the John Bogle strategy which is to choose say the FTSE100 and/or NASDAQ100 and spread your risk across them all. These are called Indexes, being in the top 100 they are solid corporates that give good returns over the long term and give you dividends along the way. Because there are 100 you are hedged but the nature of them is that they are at the top of the market so they rarely fail.

4. Beware of people misusing the term MUTUAL, they do this because it is essentially passing off. A truly mutual fund has extremely low rates.

5. Be ruthless about not selling, pick a term, 5, 10, 15 20, 25 years, decide to put all your dividends back into the same fund, at the end of the 5 years, either sell or carry on for 5 more years saving you sell fees.

That is it, you do not need some company with their app that teases you into thinking you should sell, instead check out books actually written by John Bogle.

https://www.amazon.co.uk/s?k=john+bogle&crid=14PY3SZG2X84N

There are other ways to invest in local companies such as direct investment or angel investing.

Some of my relatives have gone for buy2let cars which promises up to 11% they have been around for a while now.

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Mahooli2013 27th September, 2019 @ 03:54

Love your articles. They always make me laugh out loud. Will be using/stealing the flip flop/communal shower analogy in the future.

An alternative get rich not very quick but comfortably plan for you.

Have you considered lower end value commercial property. We have been investing in such freehold (not long lease) commercial units (with no resi element) for the past three years and, thus far, all is good with significantly over 6% returns.

Partly restricted by our own purse but we are buying units at the sort of values of two bed terraced houses in our area so keeping the monies used manageable. This also means that we are letting to commercial tenants who are small businesses. Risky some might say but we took the view that if you vet the tenant business type to ones not likely to be massively affected by this Brexit debacle (whatever your leaning) and you research them properly before letting to them then, unless we are unlucky and just pick a duff tenant, the letting is easy. We have a Buisiness management adviser company in one unit, a small legal firm (a niche and specifically NOT private client/conveyancing) and an artist in the other two.

The lease terms are full repairing so 90% of the procedural and potential trip ups of resi letting are avoided. We insist on monthly rent (over the more common quarterly) as it minimises default by the tenant and we employ an agent to collect the rent and ultimately be the first point of contact for our tenant. They are also great for keeping us in check and making sure that, notwithstanding our inexperience, we are good landlords. We have also kept things local so we are buying in nearby towns only so that we have actual knowledge of ‘stuff’ going on in that area before we throw our money in.

So far our investment has been smallish office buildings just off the high street. Freehold high street shops are proving to be just a tad expensive for us but if we get one I am advised by those that know (which by the way is certainly not me!) not to shun the dreaded charity shop tenant.

Stocks and shares scare the wotsits out of me because it just screams to me that I am just taking a trip to a posh William Hill and placing bets with minimal info and with someone who’ll take a fee whether I win or lose. My betting history does not merit a following by the way.

Good luck and I hope it pays off for you. This time next year Rodney.........

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The Landlord 27th September, 2019 @ 07:45

@James

Agreed! Selling right now - in a stagnant market - really is scary! Especially if the objective is to release equity and increase debt!

I know someone that faithfully invests in dividend paying stocks in solid UK companies. He says the share price is always very stable, but he's in it mainly for the dividends. The details is a bit over my head at the moment, although I think I get the gist of it.

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The Landlord 27th September, 2019 @ 07:53

@Devon Leigh
Yup, I feel exactly the same.

I'm just in the process of trying to find a balance between playing it safe, but also making my money work as hard as it can. I know keeping it in a 1.5% savings account is NOT working.

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The Landlord 27th September, 2019 @ 08:01

@Joey020
Thanks, appreciate it :)

16% ROI is amazing, congrats! And 5% on Old Mutual isn't bad at all.

You seem to be doing it right. That's inspiring.

Completely agree, still money to be made in property (that's why I wouldn't want to discourage anyone), especially when you start looking into lower cost areas. Rightly or wrongly so, I've just always preferred investing close to home, and unfortunately properties aren't particular cheap around 'ere (just on the outskirts of London).

I haven't given up on property just yet, I'm sitting on a bit of cash in case property prices plummet after Brexit (which I think could be a real possibility).

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The Landlord 27th September, 2019 @ 08:12

@Hari Seldon
Ahh, thanks for sharing your experience.

That all makes sense to me, and as said, I'be happy with 5% right now.

But yeah, you're right about Stock vs Property value. You can see the stock value in real time, whereas with property, the true value is only confirmed when you have a buyer.

Do returns in shares generally track interest rates? For example, if interest rates rise, does the return also? Or does it always usually stay between 3 - 7%, from your experience?

Because if that's the case, investing in shares seems pointless when the base rate hits about 4%, because then you can inevitably get high interest savings accounts with virtually no risk.

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The Landlord 27th September, 2019 @ 08:19

@Newbie
Me too! For sure.

I just don't think buying at this moment of time is that rewarding. At least, it's not as easy.

The property is stagnant, prices are falling, increasing red tape and costs etc. The barriers are getting higher and thicker at the moment.

But also, my objective is to diversity, not just invest in one asset class that's working.

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The Landlord 27th September, 2019 @ 08:26

@Claire
Thank you, appreciate it :)

Yup, Jezza is genuinely throwing around some crazy ideas when it comes to housing. Pretty worrying. But I'm also not a Tory, so I'm politically torn.

Dear Lord Claire, you sound like a proper veteran; you've got the investor lingo nailed ha.

I just ordered The Intelligent Investor from Amazon. Thanks for the recommendation (although, I don't think you actually recommended it, but I do want to sound like you) :)

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The Landlord 27th September, 2019 @ 08:30

@Lisab
Ahh nice Lisa. I think I've looked at Funding Circle before (years ago), I may have another gander. As said in a previous comment, I've stayed away from P2P/P2B lending because I remember hearing it's not all that secure. But I might be wrong on that, so I'll definitely take another look.

There have been so many great tips from everyone!

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The Landlord 27th September, 2019 @ 08:41

Hi @Grumpy,

I just had a quick browse through your blog recommendation, looks great. I've bookmarked it! Thank you :)

Nutmeg's fee is 0.45% - 0.75% (the higher fee applies if you want 'active portfolio management').

In regards to safety, I knew I wouldn't be protected by FSCS for the first £85,000, because they invest outside of the UK (which was actually the basis of its appeal. The UK is too risky right now, in my opinion). But I'm investing so little, that it wasn't a major concern. Also, Nutmeg was founded in 2011, so it does have some proven stability.

But it's a good point to raise.

Fossil fuel is the past. It's all about renewal energy, my friend :)

You still have 2 properties left, and in this stagnant market, you probably won't sticking around just as a bystander for a long time hah!

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The Landlord 27th September, 2019 @ 08:44

@Mattey
You're the second person to recommend Monevator.com (Grumpy also recommend, comment 29).

That blogger must be doing something right now. I'll definitely spend some time on there.

I'll also definitely check out AJ bell.

Thanks for the tips, appreciated.

The feedback to this blog post has been incredible! I hope everyone spends time reading through the comments.

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The Landlord 27th September, 2019 @ 08:50

@JJCB
Thank you, really appreciate it!

It sounds like you were in my exact same position as I was before you started investing in Stocks and Shares.

Hearing your situation sounds very familiar, which is comforting.

Out of curiosity, what risk level(s) did you choose with Nutmeg?

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The Landlord 27th September, 2019 @ 08:58

@David

Thanks for the tips, they all make sense, and I'll take them all into consideration. I think most of them revolve around good ol' fashioned common sense (although, I appreciate common sense isn't all that common, ironically).

As said, I'm really just testing the water at the moment. I could be wrong, but I think mutual funds is a good place to start for someone that has zero experience in stocks and shares. I'm only betting what I can afford to lose, and I definitely don't have the balls to make any form of investment which would require all my cash savings.

Thanks again!

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The Landlord 27th September, 2019 @ 09:16

@Mahooli2013
Ha, many thanks!

Long story short, I've thought about investing in commercial property in the past (long ago), but I've always preferred residential. So it's not for me.

Ultimately, I've come to the same conclusion as many others have: commercial properties are becoming less and less of a requirement. Everyone seems to be moving away from the high-street and single units as the world is becoming more digital. Everyone is looking to work remotely from home, or in shared office spaces. A few other factors that make it risky (or at least, riskier than residential) is that they're more difficult to occupy and they're more difficult to sell. There's currently a housing shortage, meanwhile, commercial units on the high-street are being boarded up.

However, if commercial property is working for you, that's awesome. I'm sure there will always be a need for commercial properties, but I think the demand is dwindling, and it will continue to do so.

That's just my opinion, though.

Thanks again, and good luck to you, too!

YES! Exactly. This time next year Rodney...

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Steve 27th September, 2019 @ 09:19

It's not as good, it's better. And I remember telling you this quite some time ago.
The tax advantages make it a better proposition, and if something starts to go wrong you can swiftly change.
It can also compliment property ownership.
Finding a nice big juicy yield in a company that is secure and steady and sit back and take that low hassle low tax income.

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The Landlord 27th September, 2019 @ 09:22

@Steve
So you've said so many things to me over the years, you can't expect me to remember it all! :)

"It can also compliment property ownership."

Exactly, that's the goal!

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Rebecca 27th September, 2019 @ 09:32

Dear Landlord
I have been following your blog etc. Firstly , I would like to thank you for sharing your extensive knowledge. It’s been invaluable and sometimes I feel you must know what I am thinking about, because your blog always comes through with my challenge !!

I have had a change in circumstances, namely being made redundant. So, I am looking to sell one of my properties and invest the money in stocks and shares. To be frank I have had enough of bad Tennant and it seems to only cost money.

I can reassure you as an ex bank manager that stocks and shares are an excellent option. However, you should consider sticks and shares ISA and using a fund managed by provider. Santander Isa managers have won several awards and some of the funds had seen returns consistently over 5%.

You can register for investment hub without being an account holder and see the Key Facts documents. These are updated quarterly so you can track which is best for your risk profile.
Benefits is that the Isa managers are liking after it full time and the returns are tax efficient and the withdrawal of any funds take 3 days from my personal experience. The fees are very reasonable especially considering the returns.

Anyway good for thought , wishing you well
Rebecca

P.S fewer expletives would be nice as I feel this detracts from your excellent knowledge and experience

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Steve 27th September, 2019 @ 11:30

https://jlcollinsnh.com/stock-series/

monevator.com

A couple of places to get you started.

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The Landlord 27th September, 2019 @ 14:30

@Rebecca
Thank you for your kind words, appreciated, and glad to hear my ramblings have been useful.

Certainly don't blame you or any other landlord that reaches their limit when dealing with problematic tenants. It's exhausting, especially emotionally.

You're the second person that has recommended a high-street bank for Shares & Stocks (I automatically assumed they wouldn't be great, but obviously I know nothing). Something to consider, for sure.

Wishing you well, too. Good luck with selling! Please keep us updated on what you decide to do in regards to furthering your investment with stocks & shares when the time comes.

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The Landlord 27th September, 2019 @ 14:34

Thanks @Steve!

Lordy, you're the 3rd person that has recommended monevator.com

This guy is really being rammed down my gullet. WHO THE HELL IS THIS ENIGMA?

Either way, I'm sold!

Next time I'm on the crapper (that's when I have most of my spare time), he'll be getting an extra page-view from me!

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Owen 27th September, 2019 @ 19:42

I’ve got a chunk of dollars at the moment so I think I’ll make use of the good exchange rate and buy more UK property. Not yet though. I’m expecting cheaper deals once the full mortgage interest tax kicks in next year and Brexit has finally (?) happened and really buggered up the economy. I anticipate a recession is on the way, not just in the UK, which is a good time to be cash rich. In the mean time I’m dropping those $ into £ and putting them in premium bonds. I want low risk for now. But over time the cash flow from rentals will be going into a vanguard mutual fund until it makes a big enough pile to invest in the next property. Rinse and repeat.

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The Landlord 27th September, 2019 @ 20:12

@Owen
Oh man, couldn't be better time to have US dollars! I remember when I frequently used to go to America early 2000's, the exchange rate was something ridiculous like $1.83 to the pound!

I think a lot of people are sitting on cash right now, also anticipating the economic meltdown, before investing. If things get bad enough, they may even revoke the second home stamp duty fees. That would be nice :)

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JK2447 28th September, 2019 @ 12:32

Max out premium bonds mate, at least you can win money. I do agree, there's no where good to put money anymore. ISAs are a joke but if the rates go up you might be laughing and it's easy access at least

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The Landlord 28th September, 2019 @ 16:29

@JK2447
Funny enough, I did look into Premium Bonds, but after reading an article on MSE, I'm reluctant to do it. Apparently the odds are stacked against you of winning big, and you're "average lucky" if you get a return of 1.4% (most people get a lower return apparently):

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

Quite an interesting article for anyone interested in PB's.

Out of curiosity, have you invested in them, and if so, how have you got on?

Agreed, ISA's are a joke. But I'm still maxing out my cash ISA every year for that reason - I'll be laughing if they eventually go up!

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andrewa 30th September, 2019 @ 20:58

It is harder to manipulate the property market than the market for a particular share, stock or bond and remember "NEVER SELL SHELL" :)

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