Hey everybody, happy to be here and really hope that I could get some answers to my very basic and noobie questions!
I was thinking about investing with Monzo, and I understand that investing means that you could lose your capital (but only the capital that I’m investing, right???), and that you could choose the bold option where you risk more and you gain more, or the less bold option, but the question is:
if the capital is at risk in any case, and considering that I’m happy to keep my money untouched for 5y, does it make sense to not go bold on that?
I mean, in my head if an expert is taking care of that, the chance that I could lose everything is quite slim anyway, right?
Also, I need to pay a monthly fee for investing which is the same in both options, on the free account, does it make sense to not go bold with the investment?
How much am I actually earning, if I have to pay a fee for - let’s say - 5y?
Is it possible to actually see what is my money invested on?
If I decide to get some interests on my pot, will I have to pay the same fee on that pot too, or I will be charged once for the pot and for my investment plan?
If I want to subscribe to a paid plan with Monzo, how much can it be my earning at the end of the 5 hypothetical years, considering the fee for the investment and the subscription?
As you can see I’m a little bit overwhelmed by all these questions that I’m trying to find and answer to from weeks, probably, but I can’t get a clear answer so I keep postponing my investment.
Correct. Only the money you put into your investments is at risk.
Well, also any balance in your Monzo Current Account balance (or any Monzo Savings Pots) is only covered by the FSCS by up to £85,000.
Your FSCS Protection for your investment pot is different from your FSCS Protection for your Monzo Current Account balance (and any Monzo Savings Pots). You can find out more here:
Please see a financial advisor, or some other financial professional.
Unfortunately it’s not really possible to know how well it’s going to do. However, by looking at past trends, you can get a very rough idea about what sort of returns you might get.
Do you mean just a regular Monzo Instant Access Savings Pot. These have no fees
You can find out more here:
You have to pay for Perks, Max, or Max w/ Family to get the lower investment fees, and these plans cost between £7 and £22.
You can find out more about the reduced fees with Perks, Max, or Max w/ Family here:
It would probably be worth you going and discussing this with a financial advisor, as they will be able to advise you on the best choices for your money.
The key word there is ‘projected’. There are almost limitless influences on the markets which alter values - and no-one has any control over it. Depending on where you put your assets, values tend to increase, but they can also decrease.
By no means is this financial advice but my two cents:
1 and 2: risk appetite is a personal choice. Generally speaking, the longer you can stay invested for the more risk you could be willing to take because you can ride the ups and downs for longer. High risk = more equities, lower risk = more balanced portfolio with bonds/cash. Equities is the stock market which is volatile and based on what’s happening in the geographical areas which your fund invests in (broadly speaking). Bonds are more stable because they are usually government lending and will pay a coupon (interest) on your investment, but a value of a bond can fall as well as rise.
3 - nobody knows. The idea is simple, you are buying units of a fund. Each unit has a value. The aim is when you sell many years from now, each unit is valued more than it was when you bought it. Hence you make a profit. On the way you’ll get coupons and dividends, which if you accumulate (ie reinvest) you fuel the growth of your investment due to compounding. Now whether you will actually make a profit - nobody can answer. That’s why investments are a risk. You are gambling that your return will be better than your easy access savings account (2-4%).
4 - I’m not sure with monzo investments but you can on some platforms. If you are buying a fund, you only see the value of your portfolio and the gain/loss of the fund. If you go into the fund factsheet you should be able to see the securities making up the fund.
5 - I’m not sure what you mean by this question. To my knowledge monzo savings pots are free but money in an investment pot carries a fee which is usually a % of your investment portfolio.
6 - you’d have to work that out 5 years from now. You cannot predict how much you will earn. What you can do is say, “if my investments grew by X% per year I would make…”. Which is speculating but not guaranteed. I would say if you want to run a calculation be prudent and only assume 5% growth. I think they say the stock market returns between 5-8% ON AVERAGE, but it is possible to make a fair bit more and also it’s very very possible to LOSE money.
The NatWest investment graphs are merely possible projections on how things could go, it’s just an illustration, a projection. There are no guarantees with investing.
Just want to pop in and say 5 years is not long-term investing… If you need the money 5 years from now I would personally go low risk, or even just stick it in a high-yield savings account. Where you can likely accept a bit more risk (if you are comfortable) is 20-30+ years, i.e. retirement saving. Think about what would happen if we have a 2008-style crash the day after you invest - the S&P 500 took around five years just to get back to where it was pre-crash. But five more years on it had nearly doubled…
The absolute best way to go about it (in my personal, non-financial advisor, opinion) is setting up an automatic payment for some amount (£50, £500, £5000, etc. every month - whatever you can reasonably afford) into your index fund of choice (a lot of folks like S&P 500 trackers, I personally prefer global whole market trackers) and then literally not thinking about it at all for 20 years. Investing each month smooths out the highs and the lows, and tends to give the best long-term returns. (Again I am not a financial advisor, just a regular guy who spends way too much time thinking about this sort of thing.)
Fund Investment, such as this where you essentially chose a risk profile, and the investment manager does the rest for you, has the potential (and that’s the key word) to return more than it would in a high rate savings account.
There are three things to consider:
Do you have a reasonable start point. I don’t care what Monzo say about starting with just £1, if you have less than, say, £1000, I’d put it in a high interest savings account for now.
How long can you put it away for? If it’s likely you’ll need it before a five year period, again it might be better to put it in a high interest savings account.
How much does it cost to run the investment account. It scales, for example with HSBC £10k would cost you roughly £50 a year to service, which is not too bad. Others can be considerably higher.
None of the above is financial advice - you’re asking people on the internet who, with the best intentions, are answering, but it should be taken as friendly thoughts and nothing more.
Finally, and I cannot emphasise this enough - only invest what you can afford to lose. Past performance is absolutly not an indication of future potential. Ignore the fancy graphs, they are a selling tactic.
I know these things are all about opinions and it’s your own risk/do your own research etc. But I’d say the opposite here.
It’s easy to dip your toe in with investing at a very small amount to see it and experience it. Turn on round-ups and invest those, money you probably won’t miss, the interest elsewhere on £20 a month isn’t a big deal.
Risk that 8p you won’t get and invest it instead. You might dip, you might gain, but I personally think it’s better (when you’re unsure) to invest a takeaway a month rather than your savings that you’ve worked hard for.
In Oct 2023, I threw £100 into Monzo’s General Investment Account (I had already exhausted my ISA) as a bit of “fun speculation” to see where it went, and selected Adventurous. I have no time span on that money and rarely check up on its progress. I am very unlikely to be on this earth another 20-30 years.
In my app, this morning, it is showing as now worth £128.72
Now a 28.72% return is better than I could have achieved with it in a standard savings account.
To note though, looking at the nice graph that Monzo provide showing how my investment has behaved weekely/monthly/yearly, it has lost value over the last week, and even over the last month. With the election of Donald Trump and all his Executive Orders, opinions, and statements, that really does not surprise me.
Imagine what events can occur over the lifespan of your investment.
Past performance definitely does not give an indication of future performance, negative or positive. Influences throughout each timespan can be very different.
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Anarchist
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