Looking for some advice on a savings plan. Here's the sketch.
I moved back to Blighty last year after 10 years in Bangers. The long term plan is to return to Bangers when retire, if not before. I'm squirreling money away in various schemes in England, trying to max out on my Isa allowance each year, a couple of tracker funs and a pension scheme.
Before I left Bangers I set up an "off shore" investment fund with Friends Provident. As I was uncertain at that point when I would be returning to England I chose dollars as the currency I would pay into the fund with.Once you start paying with one currency you can't later switch to another.
Fast forward a couple of years Im in England, earning sterling, I'm buying 300 dollars a month to put into this fund. Up til a couple of months ago this was costing me 150 quid. Now its costing me 200quid!!!
Now, bear in mind I'm a complete novice in financial matters. Would I be better to close this account and set up a new one in Sterling? The plan was to hold this plan for 20 - to 25 years and then use it to part fund my retirement in Thailand. If I was paying in sterling rather than dollars I would know exactly what I'm paying out each month. But over 20 years might I be better taking a gamble on the dollar and what that might be worth against the baht then? Or are there too many variables to consider . I keep going round in circles in my head with this one due to my lack of knowledge in financial/investing/exchange rate matters.
Any pearls of wisdom would be greatly appreciated
Pearls of wisdom come with a crystal ball, or a mind like Warren Buffett. I was deep in thought about these things recently in the face of the economic crisis. My savings were all wrapped up in ISA's which are linked to the stock market and I could see the inevitable happening. So I sold them and converted the cash to one year fixed interest bonds with two building societies and the Post Office. They pay about 5.5% net. (after tax deduction) Of course, if you are very young it's not such a problem because you have the long term in your favour. In fact this is a good time to buy market shares because they are so low. Sit on them for 10 or so years and you are laughing. I am knocking on a bit now so I don't have that luxury. As the great Warren Buffett said - "Be fearful when others are greedy, be greedy when others are fearful". I think the time is right to be greedy (as long as you have the long-term in your favour)
Thanks for that MartyBoy, Was 43 when I set up that plan, 45 now so yeah no spring chicken but I'm hoping 20 years should be enough time to put some funds aside. You refer to your ISA investments, I was planning to max out on mine and my wife's cash isa allowance every year (about 6000 pounds per year at present I think) til I retire.(assuming ISA's or their equivelent are around that long) But you seem to suggest this may not be a good strategy.
I'm invested in 2 tracker funds, 50 quid a month linked to the FTSE and another 50 quid amonth into an Asia pacific tracker, both with Legal and general. Again the plan would be to contine with these schemes for the next 20 years, increasing the amount as my salary goes up (hopefully!).
You are right about the crystal ball and all that. I just wondered whether it was high risk investing in dollars which I buy with sterling and will eventualy convert into Baht ( The Friends Provident fund I have).