Should You Use a Cash ISA?

[@DamienTalksMoney]

Here is the link to the weird taxes: financialinterest.com/weird-tax-rules/

[@lawrencehooper4341]

Don't forget to pin your comment, Damo, or it will languish with all the others and not be seen.

[@DamienTalksMoney]

@@lawrencehooper4341 thanks!

[@Patrick-mh2ml]

My only regret is that there was no ‘Damien’ helping make sense of personal finance when I was in my 20’s. The man has every right to be smug, yet retains a humility and a genuine desire to try and educate and help others, in an entertaining way too. This is the best of KZbin.

[@jordanramsayclements]

I’m in my 20s now, and I’ve started to take more care about my finances as I find myself getting better jobs. I have to say that most of my money is in Cash ISAs at the moment. I feel like to truly be comfortable with stocks and shares isa I need financial advice on how to diversify. And Damien (for legal reasons) can’t do that. 😢

[@hypnoticmonkee]

Third that

[@joe_invests]

@@jordanramsayclements Out of curiosity, what is the blocker from investing in an index fund like the S&P 500? I am 29 and have invested in that for the last 4 years, almost blindly. It did bad/okay then ballooned. My blocker was not understanding the stock market, but as someone who follows Damien's KZbin channel, I wouldn't expect that to be the same for you? Just curious not hating btw!

[@jordanramsayclements]

@@joe_invests I guess there shouldn’t be, I just thought it would be a bad idea just to invest in one market. Many videos pointing towards a vastly overvalued US market as well. There’s a lot to learn I guess and worried I’m not starting in the right way.

[@joe_invests]

@@jordanramsayclements Yes, you could always invest in Vanguard All World or similar. If you dont risk anything, you risk everything. I get more anxious about spending time out of the market (i.e uninvested) than I do about picking which index fund to invest in. You sound clued up enough to make the jump - just do it! Your future self will thank you for it :)

[@IAmebAdger]

I see cash ISAs as somewhere to park your emergency savings if you are not able to fully use your ISA allowance on Stocks & Shares.

[@badgasaurus4211]

Agreed on that front

[@richardmunday2608]

But only if you are using your personal allowance or an additional rate taxpayer

[@gemma8611]

I don't get the hype with s&s ISAs. Mine just goes up a few quid, then goes down a few quid. I would have been better off putting it in a savings account.

[@intenzityd3181]

Or more sensibly, somewhere to park a little money while you DCA everything else into bitcoin. It's terrifying that people think giving the likes of Blackrock control over national economies is a good thing.

[@AdamSheldonFilm]

@@gemma8611Only in the short term but over the longer term (5 years and more) you’re so much better off with a S&S ISA. I’m pretty sure Damien’s done a video about this that you should watch. Also worth mentioning it depends what stocks and funds you’re invested in within the S&S ISA.

[@jimipet]

My luck is such that as soon as I convert my cash ISAs to stock and shares ISAs, the markets will plummet.

[@bigboldbicycle]

If you're scared that would happen then just do it bit by bit over time. However, in theory, since the stock market has been hitting new highs every few years, even if you invested at this year's high before it plumets, it's more than likely the market will recover within 5 years and beat this year's high. The trick is to hold on to the investment while it's down, and not sell "to cut your loses". Selling is how you will lock in the loses and make it permanent. Of course, that's easier said than done. So the more practical way for us mere mortals is to invest over time, which while isn't the most profitable way to invest, is arguably much safer given our emotions tend to get in the way of logic.

[@MrGeopap]

it means that you will enter and everything will be on discounts. that's a good thing

[@garybarnes9254]

you'll be even unluckier if you never invest!

[@yohomiedude]

@@bigboldbicycle this is the theory behind dollar cost averaging, so you end up investing during the highs or the lows and the risk of losing value on your investments is averaged over time. Investing won’t get you rich quick too, you should consider investing over a 5+ year timeframe.

[@scottm6018]

Its called dollar cost average. Hold back forever and youll make nothing.

[@mcgamer4474]

Currently 24 and for the past year I've learned a lot about finances and made big changes in my life for a long term improvement. I wasn't taught about finances at school, only when I moved out where I had started to struggle especially during covid where I had to become more savvy with my spending where I learned to appreciate every pound. Your videos has had a massive contribution to my financial goals and plans

[@Loundsify]

Hi Damien, i think the main reason for cash isa popularity is mainly due to younger people saving for a deposit for a house and having a safe place for that money so it doesn't just disappear over night.

[@Timmy51m]

The less you know the more likely you are to get burnt. I remember well to this day walking into Barclays with a grand in 1992, didn't know what to do with it, so I asked advice from the bank. They sorted me out with a nice investment which proceeded to lose over 60% of its value in short order, took more than a decade to get back to its original deposit amount. so I see why so many people don't trust banks when it comes to stocks and shares accounts, for a very long time I didn't after that experience. You can get scared off quite easily by the warning that you may get back less than you put in as well. I think what you don't mention here is a lot of ordinary people have a pension in some form, and so they do have some exposure to risk assets, and the cash isa is their savings not an investment.

[@MrDuncl]

Agreed. Do you realise that today is the anniversary of Black Wednesday back in 1992 ? Damien didn't mention Pound cost averaging. I wonder how your investment would have done had you paid in £100 a month over the next ten months ?

[@noggintube]

The final comment is very misleading. Yes, no millionaires have been made by investing in savings accounts, but the fact is over 70% of people lose money when trading on the stock market (a figure easily checked) Ok we're not talking about "trading" as such, but it's a valid point. You mentioned it briefly near the end but it was more glossed over of the benefits of cash ISA's and I think you should have put more emphasis on people's age being a major factor. Talking about your Nan and the cost of things when she was a child isn't as relevant to someone nearing retirement for example as that time scale is not really going to happen. Someone just getting their first job however will of course be better suited to avoid a cash ISA for the reasons you mention, so it's entirely dependent on circumstance. Also, as you get into retirement, short term stock market dips can be a major problem if you need to release money. At an age when funding every year to the full matters a lot, waiting another 3 or so years for it to recover (for example) may not be very desirable. It's about spreading the savings across various investments and I think cash ISAs have a good role to play in that.

[@LeeThomas-1]

For older people you should also add that if you keep your income or pension under 12.5k a year you can have up to 6k a year in interest from savings before paying tax. Then max out the premium bonds & ISA's. I retired a year ago aged 60 & plan to live the next 7 years without paying any tax on my income.

[@SteveMoore1969]

Why is this possible? If every young working person is paying tax on SAVINGS exceeding £19k as well as there salary. I understand for rich pensioners this is good but it looks like a loop-hole created by accountants/millionaires

[@seamus7054]

@@SteveMoore1969 The 12.5K is the tax allowance (tax code) that you are given when working. This is the amount you can earn before paying any tax. It stays the same when you retire. It isn't a loop hole or a tax scheme invented by millionaires for millionaires.

[@LeeThomas-1]

@@SteveMoore1969 If your earn under 12.5k you can have a total of 6k in savings interest before paying tax. If you earn over 12.5k your only allowed 1k in interest before paying tax. That applies to everyone.

[@SteveMoore1969]

The rules sound so simple but millionaires and accounts know them backwards. This suggests to me you can get paid £12.5+£6k interest. I could be wrong but it seems like a loop hole to me. When someone has a salary's £15k and get £1000.in interest. community.hmrc.gov.uk/customerforums/pt/5e24e9cb-5961-ee11-a81c-6045bd0c7b9d

[@SteveMoore1969]

@@LeeThomas-1 Why does rent paying minimum wage full time worker with a monthly salary of £1050 only get £85 interest free in a bank. Whereas every retired-home-owning-couple can both drawdown £1040 plus they're bank account is interest free with £500 (£3040 a month for couple!) Is this right? Should these loop holes exist?

[@disneyrm1037]

I genuinely can’t wait to start properly utilising a S&S ISA but, for now my Cash ISA is my ‘investment’ as the timeframe is only 3 years. I highlight the word ‘investment’ as the funds are for ‘investing’ in myself (my business) to level up, that will then enable me to be in a position to start a S&S ISA properly. Keep up the good work Damien. Absolutely love your work.

[@mxmus08]

💯. I use cash isas as an easy access emergency savings fund. These accounts offer better rates than your current account, but I've never viewed them as an investment vehicle.

[@Baud2Bits]

Time frame is very important. If your savings/investment timeframe is five years or less then I would suggest that 5% ISA is a good safe bet.

[@wingtsun1]

i only learned about investing a few years ago, I had been just leaving my money in the bank for 10 years. If i'd invested it, i would have more than double what i have today.

[@jonathangodfrey3950]

How do you know. OK saying that in hindsight.

[@MrLasty12]

As always a well constructed, educational video. If only the majority of the population took the time to watch your content!

[@liam2161]

I dumped every penny of my savings into a stocks ISA. Haven't regretted it at all.

[@algray9966]

What did you invest in please?

[@liam2161]

@@algray9966 what works for me might not work for you. I use trading 212, so I can choose the stocks I wish to invest in. My pie is built of many companies that share my views, such as renewable energy etc. A safe bet is the S&P 500 but I prefer to look at that portfolio's investments to cherry pick the ones I want my money going towards and add them manually.

[@1hd3szfgrdm13]

Spot on mate, I'm still fuming about my £2000 I put in cash in 1204. Worthless!

[@DamienTalksMoney]

🤣

[@MrDuncl]

I wonder how much gold you could have bought with that back then.

[@Travel_Day_Dreams]

The most important points you made, (i) most have nothing or very little saved, certainly much less than would be recommended as an emergency fund, anyone suggesting that this group should invest in S&S would be profoundly wrong. (ii) time horizons for many savers are between 12 months & 5 years, therefore the need for liquidity is primary and again suggesting investments in S&S would not be suitable. The only conclusion one can sensibly reach is that for all savers cash ISA's serve a very useful function & their flexibility as a tax shelter, & that they can be transferred to S&S whilst maintaining that tax shelter status, is a valuable benefit (which hopefully Rachel Reeves will maintain). Building wealth starts first by saving small amounts, education & time are what matter most so congratulations on adding to the pool of available knowledge for those looking to improve their situation.

[@tomhuntley]

Would love a video on the proposed changes to ISA (and other changes, e.g. inheritance). Seems crazy for people trying there best to build wealth. Fees like a kick in the shin.

[@Ingsta6603]

I plan on using the investment strategy you’ve talked about in one of your recent videos Damien. Everything in equities except for 3 years of expenses (probably in a cash isa) to fall back on during a bad sequence of returns. Another great, informative video.

[@guanafd]

What about the Japanese stock market? 3 years is gonna take you 3 meters in the direction you want to go.

[@Ingsta6603]

@@guanafd I’m not sure I fully understand your comments, but 80% of my investments currently are vusa and vwrl. There’s very little Japanese exposure.

[@faticokaj7104]

I agree with everything you say and yet im doing everything you say you shouldn't do. Make it make sense 🙈🙈🙈 Great vid buddy 👍👍

[@adamp6320]

The only significant "cash" I have is Premium bonds, which isn't even cash but is very liquid and safe. As an additional rate payer it's the only way to get some tax free return on safe money without wasting pension/ISA room.

[@Itsmejabs]

How do I cash in those bonds?

[@TheJPHarvey]

Its pretty liquid, but still can take a week to get your money out. I wouldn't call that "very liquid" personally. If your boiler explodes going a week without hot water or heating would be very shit. I only found that out myself last week when i withdrew some to pay for a holiday!

[@obvious-troll]

@@TheJPHarvey my credit card is for instant access in an emergency

[@richardw2646]

@@TheJPHarveyAny plumber that demands pay,ent up front isn’t worth employing. We use premium bonds for our emergency fund and keep a credit card with £10k limit for ‘on the day’ emergency use

[@bigboldbicycle]

@@TheJPHarvey creditcard limits are generally enough to cover low level emergencies like boiler repairs. Saying that, I'm not a fan of premium bonds, and since I'm nowhere near additional rate tax band (£125k income), there's no reason for it.

[@SkintLivingUK]

I use my cash ISA for my emergency fund as it gives a some interest. I also use my local credit union for loans. I get a little loan every year to fix or do up parts of the house. Only the US seems to mention credit unions virtually not mentioned in the UK. I really don't know why as they are better than certain pawn broker shops or door step loans. When you're skint your choices are really limited.

[@gixxer0506]

Glad you covered this. More awareness needed. Slightly embarrassed to admit this but I've just turned 36 and it was only a couple of years ago I started taking finances seriously. I actually used to think cash isa was a must to avoid tax. I didn't even know about the personal savings allowance and so thought I was being clever. Meanwhile my cash was being eroded and banks took the p paying me 1.45% for years. My kids won't make the same mistakes I did as I'm much more savvy now and they will be educated by me if the system let's them down too.

[@johnristheanswer]

We were similar but had a light bulb moment when our first child arrived. We invested the family allowance from day one. 26 years later , both kids have massive savings in a range of funds , all paid for by that 18 years of ' free money '. Didn't cost us a penny.

[@mrmeldrew693]

The education system teaches nothing about finances on purpose. They need as many of us paying off debt and without investments as possible.

[@tridau]

I too started only at the age of 36. Now 40 I can tell you it’s amazing what you can achieve in just 4 years if you put your mind to it. Having a kid was also the kick up the arse I needed. Good luck and well done for grasping the nettle.

[@Itsmejabs]

Ah mate - I am in the same situation

[@gavjlewis]

My parents have been squirreling money into cash ISAs for as long as I can remember. It was just somewhere to park spare cash they had. They were both in well paid jobs with a very good DB pension to look forward to. They have everything there really want. Now they are in there early 70's it's slowly being erroded by nice holidays.

[@hachimaru295]

i think stocks and shares were always for the suits and us plebs stuck with cash accounts Thank god Damo is on a mission to bring wealth creation to the masses

[@MrDuncl]

Go back to 2009 and you could only put £3600 a year into a cash ISA.

[@gavjlewis]

@@MrDuncl Go back to 1999 where it was only £3000 and was stuck at that figure for 8 years. The large numbers are a relatively new thing. It wasn't until 2014/15 where it jumped up to £15k per person.

[@mhoward181]

We need to be thankful of Damien all I was told years ago at 23 by my dad was that I should be saving into a pension. Then he told me to start a stakeholder pension. That was 22 years ago now. I never saw the point at the time. It wasn’t enough to motivate me. If I knew about stock n share ISA and had the benefits of compounding explained I may have had a lot more now. But sad fact is when ur told at 23 that I will need £300,000+ in a pension it just makes you think what’s the point. I’m never going to climb that hill.

[@ncksmmrs]

Most people are desperately trying to save enough to buy a home. Many aspire to have a deposit ready in 3-5 years. This is why so many people use cash ISAs (in conjunction with a LISA, etc.) The 3-5 year time horizon doesn’t make much sense for a S&S ISA.

[@DreamClean]

I gave up on this goal because of the opportunity cost of not having a S&S ISA. Very happy with my decision.

[@MyMednas]

Most people own their home outright or have a mortgage. only 35% of homes in the UK are rented.

[@AM2K2]

I read a teacher say they do teach personal finance in lessons but the teens aren't interested and if I'm being honest...I can picture 15-16 year old me nodding off at a discussion on credit cards/investments

[@bigboldbicycle]

I did A-Level business studies in the 90s, and the teacher would slip in random finance tips during the lessons. In hindsight, his tips did more harm to my finances than good. That's the problem with teaching personal finance in school - the teachers just do not know any better.

[@richard.featherstone]

Damien would engage them and get them enthused and inspired.

[@dockeyboy]

Everything changes when you start earning decent money, then you’ve got decisions to make.

[@MrDuncl]

@@dockeyboy I find the articles saying "If you invested £1000 in the stock market back in 1980 you would now have xxxx megabucks" annoying. In 1980 I was earning £35 a week.

[@MrDuncl]

Regarding the school comments I still remember a 1970s maths lesson in which our young trendy maths teacher effectively described "Deal or No deal" Her attitude to risk was completely different to us kids. Probably because what would have been a fortnights wages for her was several years pocket money to us.

[@cianog]

People have looked to property as a way to create wealth. This thinking has screwed people and made it incredibly difficult to buy a house.

[@MrDuncl]

Mainly because of the gearing available. In 1999 when I sold my second house I had never heard of a Buy to Let mortgage. Anyone who wanted two mortgages had to pay expensive bridging loan interest rates,

[@minimad8793]

Well done for all the research you doing dude. I use cash isa's for emergency funds only. Stocks and shares isa is the ahead for growth in wealth

[@cyberlord64]

yeah, because most people are not trying to maximize their gains. They are trying to minimize the depreciation of their hard earned money. A stocks and shares isa comes with a warning. "Do not invest more than you can afford to lose". A cash ISA comes with a guarantee that you will get your money back (until a certain limit at least).

[@TheOrdinaryInvestor_]

Shockingly good video, just like 99.9% of all your others

[@DamienTalksMoney]

Thank you so much

[@colinthornton8060]

Brilliant message, brilliantly communicated, in a brilliant lace shirt!

[@edli323]

I am a very bad investor for 30 years no matter what index fund, mutual fund, bonds or individual blue chip stock, i always bought and sold at the wrong time it end up not better off putting money into cash ISA, with all the stress and frustration on investment that's why I only invest in cash ISA and houses now.

[@AlisonWonderland999]

The penny dropped while watching this that one key reason I so appreciate your videos, apart from them being so clever, entertaining and informative, is that you always treat money as a very fluid, subjective means to an end, not an end in itself. You talk about it as though its value can only be measured in terms of achieving personal happiness, and I am not sure this is typical of other financial commentators. 🤑You're like the Zen master of £££! And you do it all without ever sounding like a wanker!!!!!! 😁 Re ISAs, I'm an idiot. I favoured SIPP investments, because you seem to get more for your money, but it never occurred to me to have an emergency fund. So I ended up accessing my pension savings early, thus triggering the MPAA, which is a disaaaaaaster dahling 😳 and can never be reversed. I'm kind of envious of the generation that are taught this sort of thing in school, although obviously whether I'd have paid attention at the time is another matter🤪

[@paulfarr7]

Mars bar cost/size cut me deep .. **Remembers better times**

[@markkitchen4916]

I feel the same about Wagon Wheels, which used to be about the size of my head but now resemble a digestive biscuit!

[@OH2023-cj9if]

And Wagon Wheels, they used to be enormous.

[@tomw34]

I use mine as a cash ISA due to trying to get on the housing ladder in the next year or so. For my pension, and other accounts I also invest in S&S though.

[@Glowy888]

Damien went all Ren @ 8:49😂

[@Codeofhorrors]

Then that’s just a bonus 😂

[@triumphman]

I started a S&S ISA account 4 years ago. It’s just about getting back to the amount I put in. That’s without factoring in inflation so I’m still behind. ……They can go DOWN as well as up

[@hachimaru295]

that sounds a very poor return for what ever is in ur fund over the same time frame mine went up 1000s so maybe it was too safe as the bond market crashed too

[@ryachi9357]

What did you invest in?

[@RayYong-l3e]

Great video mate, lower income are more likely to ber isk adverse especially if they're parking their emergency funds, saving up for a deposit and etc in a tax free wrapper. Like you said trying to get someone to move from cash to equities may not tolerate the risk especially if they're living on a month to month basis.

[@kabulsuperman]

Thanks for creating quality content

[@NS-pt9rr]

As 2024/25 seems uncertain, to balance i have decided to invest my allowance into an ETF S&S Isa & the Wife's parked into a Cash isa at 5.05%, hoping to invest if there is a big market correction.. worst case scenario, i get the current 5.05% best case scenario, S&P drops & the cash is dipped into it, lets see.. happy investing people

[@solverf2714]

With 8% return on cash savings accounts, it's hard not to take full advantage for the time being 😊

[@OH2023-cj9if]

Where? If you mean regular savers, take the total amount you add in a year and half the advertised interest rate to calculate you will get 4%!

[@bernardo.daSilva]

Imagine if every politician in UK was a Damien, wanting the best for everyone in UK, for everyone to be financially stable. I say Damien for PM. Also, 200k subs. My man's an absolute God sent legend! Single handedly making people's lives better.

[@blondebadger9455]

Maxing out the ISA allowance every year is just an insane amount of spare cash to have a year. How much do you need to be earning a year to be banking £20k a year every year. I've managed to max the LISA every year for the past 4 years and felt like I was doing well

[@OH2023-cj9if]

I have 3x Cash ISA in parallel, all full for 2 years and added to, (before that I had one for years), premium bonds maxed which has given 4% tax free so far in 8 months, stocks and shares ISA for only a year and General Investment Account, plus 5 savings accounts and a NS&I Bond that was 6.2% last year. The problem is the money not tax free gives me a tax bill and HMRC keep contacting my employer to get what they're owed over the PTA. It's going to take a few years to get more in to ISAs. I'm sitting back watching dividends roll in, a few monthly at 10%, so reinvesting it. I wish I had been properly advised by Halifax years ago. All they did was opened a cash ISA, 1year bond and give me a savings account. Nothing about Investments.

[@XORTION]

Cash in isa vs stocks are much safer when wars are looming

[@jonathonfreelove5321]

So appreciate this channel,

[@houghtie14]

Edgbaston getting a shout out, B15 🙌😆

[@Darren66860]

Great content as always Damien. My fear is that Labour will end the personal savings allowance. I've noticed that on my interest payments it now shows Tax £0.00, it never used too.

[@jamesdaw131]

Graphics have certainly improved recently!

[@mortelski5814]

I have to admit being partially responsible for the total in cash ISA's. I have about 20% of my assets held in them, due to being a lousy investor. (I mostly missed America!). The plan is that if everything else goes bad for a while, I will still be able to spend (or transfer into S&S if I am brave enough). But Damien and his fellows are absolutely right, the returns over the last 20 years have been miniscule compared with the returns on S&S. 😖

[@tancreddehauteville764]

Cash ISA are extremely useful as a medium term savings tool, and they will remain so. The Shares ISA is a much more long term vehicle, like a SIPP. The two are like chalk and cheese, they are used for different purposes and should not be compared.

[@kavehsamani]

10:05 Bingo! Great content as always. Hope all is well.

[@bigboldbicycle]

I had a recent chat with my daughter who thought it wouldn't matter if she saved in an ISA or in an ordinary bank account, because she isn't going to exceed the £1k interest limit. She didn't know higher rate earners only get £500 allowance, and when she gets to that point, she will end up panic transfer all her cash into an ISA, using up that year's ISA allowance. So the only sensible thing to do is to drip feed money into an ISA over time.

[@H.I.T.E.N.]

Hairs looking sharp brother! That Manual treatment you're on is doing the business.

[@DamienTalksMoney]

Haha thank you! I don’t know what to do with it all

[@H.I.T.E.N.]

@@DamienTalksMoney Bust out the ole Kim Jong Un!! You would go down as a legend if you did. No pressure lad. 😂

[@markcoomber8222]

Cash isn't an investment. It is a temporary store of value before it is exchanged for goods or services. Neither can it appreciate in value (locally); it does have a yield (deposit interest) but a #31 does not appreciate...it's stilll £1)

[@kevinu.k.7042]

Great stuff as always Damien. Any chance at some future date of covering Gilts? I've read up online about coupons and yield and got myself thoroughly confused. An economics channel was referring to annual dividend payouts as well as the coupon at the end. And then the different ways of calculating yield. I got lost! Thanks for your work as always. Cheers

[@adib3897]

Wouldn't this present a very good opportunity for the UK government to encourage investment into British companies (going ahead with the British ISA)? Returns on investing in UK companies may not be as high as returns on US ones but this must be a good chance for the UK to drum up some much needed growth within the country and avoid money sitting idly in various accounts

[@johnB11ify]

Well I locked in for five years and although there was a low for about two years I've still made the same as the stock market comparing your stat of £1000 making £1300 odd over 9 years.

[@Hong_Kongdom]

Alternatives that would be good are precious metals. They need to remove vat from investment silver platinum etc though

[@loc4725]

Nope. Precious metals are one potential _speculative_ asset but not a long term investment.

[@Dynamodalia]

Hay man, can you do a video on EIS schemes?

[@AA4PJM]

Barclays are starting to drop their interest rates on their every day savings, cash ISA and Blue rewards accounts (not the fixed rate ones). I expect other banks will follow, so it's probably a good time to see if you can do better moving money from these old accounts.

[@manwithaplan6224]

Normal are great as a float, Cash isas are useful to park an emgerncey fund at best intrest rate you can get or saving for a property or building cash for the short term but needs to be balanced with s&s isa for the long run.

[@MalavitaOfBB]

While the interest rate is higher than inflation, post tax you are probably still loosing purchasing power especially if you are a higher rate tax payer

[@ThrowBackZone]

I can't believe how much the personal savings allowance has changed the game for cash ISAs! But is it just me, or are they still not as sexy as stocks and shares? 😈 vs 😇

[@MrDuncl]

I wish I had heard Warren Buffet's advice about trackers when I started investing in equities. Picking stock market winners is easy. It is knowing when to bail out that is the difficult part. I wonder how many people bought Tesla stock at close to its peak and are still holding it ?

[@philipjamesparsons]

Most people simply cannot get their heads around market volatility being normal. Therefore, investing in markets is never going to work for them. Certainly mainstream media does not help. Whenever there is a downtown, there are always stories of how billions have been "lost" from pensions. Upturns are never mentioned.

[@Mysteriouscreationsolved]

hi damien im a uni student and i have put about 15k in cash while investing 610 pounds in stocks and shares 4k in premium bonds and 3k in a saving account even though this isnt the best way to invest i decided to do it as later in the line i wanna get more money and in my personal opinion with trading 212 it and your videos it has taught me a lot about the benefits of investing in stocks in the long run as recently i sold a share for 40 quid which would take me roughly 20 days to earn if sat in a cash isa

[@algray9966]

Where would you invest in stocks & shares isa? S&P 500?

[@Abdul_Rahman86]

My money is safe in the stock market than in my bank. 1) I’ll be tempted to spend it 2) inflation just like Damien said will erode its value.

[@metro1361]

I hope the Government don't reduce or get rid of ISAs.

[@fslinteriors7889]

My single greatest regret is building my savings pot of the past decade in a cash ISA. Was saving for a house, still can't afford a house, just have 80k in crap accounts that were offering 2% interest until recently

[@hachimaru295]

u may be able to txfr it to a stocks and shares one part or whole

[@mrmeldrew693]

£80k and can't afford a deposit? Really?! I doubt the vast majority of our population will ever have that much sat in an account. Not being funny - prices must be crazy where you live.

[@adamp6320]

we bought a £700k beautiful house commutable distance from London with 15% down, wasn't much more than your savings. Stamp duty is a bitch

[@loc4725]

Could be worse. I had a 10 year "with profits" product with Scottish Friendly and as the payout date approached they started making noises about 'market under perfromance'. In the end they missed the baseline market return by a considerable amount; I would have made much more if I'd just invested directly.

[@DrDre999]

Meanwhile, while I was a student I used whatever I had remaining of my student loan and stuck it in ISAs (I did medicine so this was over 6 years, ended up with a fair few thousand built up in ISAs). Then, the savings rates started going up and ISA rates dropped to

[@squibys2262]

The great investor Warren buffet is holding 270bn$ in cash... So there must be a play appearing soon.

[@loc4725]

Damien: you're making the classic mistake regarding the purpose of schools. School isn't there to turn out good citizens, it's there to turn out good *workers.* If you want your kids to do well at the personal level then that's up to you as a parent. Good parents tend to create good adults; bad parents do the opposite and then blame others.

[@Phil_AKA_ThundyUK]

Cash ISAs are fine at the moment if you're preparred to actively manage them and you might need to money in the next 2 to 3 years for something. I'm in that position atm. I have high yield bonds as well for the samw reason. BUT it's only good for now and for those circs. Soon as interest rates drop sub 4% I think the cash ISA is gonna be crap again.

[@rhaea]

I have a Trading 212 account which I love as I can have both my cash ISA at 5% (was 5.25% initially) and stocks and shares ISA in the same place. My stocks and shares ISA is mainly S&P500 plus some ‘lottery position’ stocks (Come on Lucid 😅). We’re currently going through a house move/purchase so I use the cash ISA in case we need to dip into it for initial repairs/furnishings but once that’s all good I’m going to move more into S&P500. I like the cash ISA atm for easy access savings like you say (though waiting up to 3 days for a withdrawal is annoying (but clever)), with the 5% but when it gets to below 4% I’ll move it over regardless.

[@markcoomber8222]

In the immortal words of Delboy Trotter: “ He who dares Rodney….”

[@RM_3D]

I had around 20k that was lying in a bank account just plummeting in value over many years xD because I had no financial intelligence and was always just taught to but money in the bank. I've decided to put 10k into ETFs but i'm wondering what to do with the other half? Should i put more into the ETFs or keep it as cash? what isa should i use?

[@FootyAccaQueen]

I put £10k in a cash ISA at 5.70% for one year whilst I was depositing into a portfolio of 8 ETFs. I didn't feel comfortable putting the whole lump sum into a Stocks & Shares ISA until I had managed my portfolio for a while. Now when that fixed term Cash ISA account has matured I've moved everything to my Stocks & Shares ISA. If you don't feel comfortable putting it all in your portfolio whilst learning I don't see a problem putting it in a Cash ISA in the meantime...

[@fjrxj1134]

I understand what you are saying but certain stocks have gone through the roof (Mega overvalued) due to the comical electric cars etc. I don't consider this a true valuation of the SP 500 over previous years to your comments. Could you post previous SP500 average gains before the electric car and AI boom and bust stocks you quote?

[@Cassp0nk]

People who don’t earn well are often less sophisticated and scared of equities. It isn’t just risk appetite. In fact smarter people tend to have better job opportunities.

[@SuPpOsEdLyThIsIsCoOl]

UK hasn’t had a great outlook during its managed decline these past 14 years. I think this is a factor why so many people use cash ISAs.

[@shireling6336]

Damien, you legend!

[@Laxton_Himself]

Speaking of growth, Bro is rocking wild hair and didn’t even do the Manual ad 😢

[@jeremyhares979]

I’d love to know where you got 6.5 percent from !

[@jonathanclarkewater]

So should I then or not 🤷🏻‍♀️

[@bennyw7337]

I bet most of these cash ISAs are held by the over 70s. As power of attorney for my father (who has dementia) it is easy to open a cash ISA with existing bank. Trying to open a stocks and shares ISA as power of attorney is nearly impossible, no matter what anyone says. Until you've tried doing it for someone elderly and reduced mental capacity you won't realise how many hurdles there are. The system is built to give limited choices, and so cash ISAs with the existing bank is the only option. I know its not MEANT to be like this, but trust me, as a POA the hurdles of getting S&S ISAs and other investments setup just puts people off and forces them to revert to the simple cash ISA option. Even when IFAs "say" then can get it setup, in reality it's still too complicated (due to the fact that bank info has POA address on it now, so IDs don't match addresses)

[@allanh6076]

Is the savings volume due to all the different schemes of the 80s 90s, I vaguely remember a red book and £1 a week from my childhood.

[@ice4142]

This video highlights a disparity i saw with my parents after they split up. My mother could never afford to make good financial decisions. As said in this video for people with little money the risk of not having enough money is much higher than reward of getting more money. People who cannot afford to save are hit again when they have to take out expensive finance when people who can save use their savings. It's a vicious cycle and i don't really see a way out.

[@loc4725]

Being poor is expensive. For example I recently brought some oil for the car; I brought 2x what I need because it was cheaper buying in bulk and I could afford it. That extra that I brought will end up as a future saving, but a poorer person wouldn't be able to do this and would pay the full single unit rate again.

[@dan3885]

Damo, You can thank me later! Search The Knife (bubble love remix) Ross from friends 😬

[@headhunter2k146]

Hi Damien what do you think of rent to social housing investments?

[@queenofreallifeexperiences8252]

6% interest for 2024 to 2025 is on par with estimated stock market returns for the same period. So for this year yes am in an ISA. Will re-evaluate in 2025 due to age would put it in my pension not a stock ISA due to tax relief

[@Ryhm14]

Lots of people were saying the same in 2023/24 and missed out on returns of 20%+. Trying to predict it is a fool's errand.

[@geoffharris9396]

Many cash ISA accounts hold retirement funds for people over 70 who don't have the time left to wait for their money to ''grow'' in the stock market, let alone take the risk ! At this age, you spend it. If you don't, the care home will take it, along with any property you have...Die broke if you can... Imagine if by the time you died, you did everything you were told to. You worked hard, saved your money, and looked forward to financial freedom when you retired. The only thing you wasted along the way was . . . your life. !!

[@seyiagboola]

If you were planning on buying a house in the next 2-3 years and would you split between cash and s&s?

[@DamienTalksMoney]

I would be using a LISA if it was my first home and I was under 40. I personally wouldn’t be investing any money I needed in 2/3 years in the stock market

[@islamhome6360]

I am going for that 3 bed in Edgbaston 😂

[@KatharineMoira-h6s]

Pollich Field

[@FlorenciaCrenwelge-j1k]

Lockman Greens

[@gothenburg83]

Great vid as always Damo!

[@gothenburg83]

Left the comment...I will now watch the video 😈

[@DamienTalksMoney]

Hahah you legend

[@dreamingwide]

What about using cash isas to save money to buy a house?

[@tiborsipos1174]

Cash savings are "introduction" savings. Its like people learn about what saving is, and its good, but you really don't need to know anything else. You put money in -> balance goes up, maybe available any time You don't think about inflation, money worth, FX market, returns, capital-mortgage ratio, market cap, reading fundamental news, technical charts or whatever. And low income people don't worry about watching/reading about finance, savings or investments. Since they don't have anything to save either. Yeah... its a paradox, because to save money you need to understand your households cashflow and your own job market worth. Still... lets say you have a few penny that you decide to save. A cash saving account will be more likely to be chosen, because you only aim for "saving money" not a long term retirement... My guess is that once people decide they save some money they suddenly realize the other options. Explains why more cash ISA is opened yet suddenly stock and share have much more money in it...

[@kap144]

Can you put your capital gains from Bitcoin in a cash isa?