If you have £10,000 spare cash mouldering away in a bank account somewhere, earning hardly any interest, what should you do with it? This question isn’t straightforward because the answer depends on a whole range of factors.


First of all, for how long are you willing to put the money away? The longer your time horizon, generally the more risk you can take. Second, how wealthy are you? For some, £10,000 isn’t that much; for others, it’s everything. And again, the basic rule is that the wealthier you are, the more risk you can take, because losing ten grand won’t send you to the food bank.

As an example, recently I had to go to the BBC to present Wake Up to Money on Radio 5 Live, and my taxi driver proudly told me that he had sunk his entire life savings – over £20,000 – into just one small oil exploration company in the hope that it (and he) would strike riches. I try very hard not to give investment advice to people I meet, as I am not a regulated IFA, but I was so alarmed by his extremely high-risk strategy that I broke my self-imposed rule.

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Third, what are your personal circumstances? Do you have debt, a mortgage, a pension, a secure, well-paid job? Or are you freelance, with irregular work and your own company? What is your tax situation? The tax tail should never wag the investment dog, but all are factors to consider.

And then you need to think about the overall economic and financial environment. Timing markets is a fool’s game: trying to predict the highs and lows of the stock market tends to make money only for your stockbroker or investment adviser. But these things do need careful consideration.

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Given all this, what would I do? For those with mortgages, I would advise using the £10,000 to reduce the amount owed. Interest rates are rising alarmingly, and monthly mortgage costs are getting expensive. Personally, I value highly my freedom to choose how I wish to earn a living – and a lower mortgage gives you that freedom.

As for you, you may want to go to Las Vegas.


Just don’t expect me to recommend it.

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