Author Topic: Asvice on RL360 investment (not again you say)  (Read 4085 times)

todd89

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Asvice on RL360 investment (not again you say)
« on: October 10, 2016, 12:31:58 PM »
Hi people,

I'm new to the forum and have joined to seek the advice regarding my recent plunge into the rl360 fund from Devere group. I'm currently 7 months into the plan having invested £3500. After reading a lot of threads on here it seems as though it will not be worth the investments at the end of the 10 year term I agreed on.

Any advice is welcomed.

Best wishes

Todd

DrF

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Re: Asvice on RL360 investment (not again you say)
« Reply #1 on: October 10, 2016, 03:22:22 PM »
Here is a step-by-step surefire way to solve your problem.
1) Before you go to sleep tonight, write down on a piece of paper that you "misplaced" $3500 and you will never, ever, ever, ever find it again.
2) Get a wonderful night's sleep, wake up, re-read the note, burn it, cancel your RL360, never speak of it again.
3) Find a way to invest in index funds through reputable companies.

todd89

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Re: Asvice on RL360 investment (not again you say)
« Reply #2 on: October 10, 2016, 09:45:33 PM »
Seriously?

I have definitely lost this money even if I was to invest for the full 10 year term?

I have a colleague who has invested in this thing for four years and has made quite a lot of money supposedly.

Why will I never see this money again?

Seppia

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Re: Asvice on RL360 investment (not again you say)
« Reply #3 on: October 10, 2016, 11:08:38 PM »
There's plenty of info as to why it's a terrible investment, a huge thread on this forum also.
Remember people on average cannot do math, so I wouldn't be surprised to learn the "supposedly made quite a lot of money" turned out not to be the case at all.
What kills you is the sky high fees in general.
You could also be a bit more detailed on the terms of your investment, and we could give you more precise answers

todd89

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Re: Asvice on RL360 investment (not again you say)
« Reply #4 on: October 11, 2016, 01:41:09 AM »
Thank you very much. Hindsight is a wonderful thing and I now have learnt to just use google to address my suspicions in the future.

I took out a term for 10 years. I pay £500 each month. So far I have paid 7 instalments (£3500) plus their premium incentive £750 totalling £4250. Right now it is at £4650 so taking away the £750 I think it is has matured around 10%.

They claim that by 10 years I will have the 60,000 I invested (10x12x500) plus a 50% return on this so £90,000.

However I am not sure whether the hidden fees and charges you have mentioned will affect this in terms of what I could really make with a legit investment programme.

Please help!

MDM

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Re: Asvice on RL360 investment (not again you say)
« Reply #5 on: October 11, 2016, 02:47:25 AM »
However I am not sure whether the hidden fees and charges you have mentioned will affect this in terms of what I could really make with a legit investment programme.
What makes you unsure?

Have you used the spreadsheet mentioned in http://forum.mrmoneymustache.com/investor-alley/i-dun-goofed/msg266548/#msg266548?

IIRC that is the best one available - someone more directly involved may provide a better link.

todd89

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Re: Asvice on RL360 investment (not again you say)
« Reply #6 on: October 11, 2016, 06:12:59 AM »
I'll be honest I don't really understand the spreadsheet other than seeing that there is a contract, initial unit charge plus a policy fee. Is this deducted every month?

I really could do with someone just giving me an example of why I should come out of it ASAP.


ooeei

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Re: Asvice on RL360 investment (not again you say)
« Reply #7 on: October 11, 2016, 06:30:27 AM »
I'll be honest I don't really understand the spreadsheet other than seeing that there is a contract, initial unit charge plus a policy fee. Is this deducted every month?

I really could do with someone just giving me an example of why I should come out of it ASAP.

Because there's not an option to just leave it sitting there.  As far as I know you are REQUIRED to keep contributing to it.  Putting $500/month in a crappy investment is not a good thing.  The fact that they require you to continue contributing and won't let you "let it ride" should be suspicious enough to you. 

You're talking about investing $56,500 more with them, because you already put $3500 in.  That's CRAZY talk.  I know it sucks, but the first reply was a good one.  Your instinct is going to be to find any way to make it worth mathematically so you don't feel bad and can do it without losing money, because it really really sucks to lose money. Your instinct is wrong. Having that little glimmer of "maybe I can make it work" is only making it harder for you.  Having a $3500 laptop get a spilled drink on it would be way better, because at least then you wouldn't have that voice in the back of your head saying "we can save that $3500." 

Just be glad you're not $10,000, or $20,000 into it.

Also, just read the post in the linked thread above.  They are not above lying to you about how the fees work, and what returns you'll make. 
« Last Edit: October 11, 2016, 06:36:18 AM by ooeei »

todd89

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Re: Asvice on RL360 investment (not again you say)
« Reply #8 on: October 11, 2016, 06:59:08 AM »
Thank you.

Now I'll just grit my teeth and learn from it.

Can you suggest something really simple to invest into for such a novice like myself. I only really put my savings into a UK bank account with an abysmal 1.5% return and an ISA. Would really appreciate some advice.

FIREby35

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Re: Asvice on RL360 investment (not again you say)
« Reply #9 on: October 11, 2016, 07:02:35 AM »
Be glad you learned at seven months. You lost a lot less money than others.

todd89

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Re: Asvice on RL360 investment (not again you say)
« Reply #10 on: October 11, 2016, 07:11:07 AM »
Thanks I understand but it's still a lot for my salary.

Suggestions for a beginner to beat a 3% return on my bank account? I really want to make my money go further rather than sitting.

ooeei

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Re: Asvice on RL360 investment (not again you say)
« Reply #11 on: October 11, 2016, 07:38:01 AM »
Thanks I understand but it's still a lot for my salary.

Suggestions for a beginner to beat a 3% return on my bank account? I really want to make my money go further rather than sitting.

Definitely a bummer, but you'll come back from this.  Don't worry! 

My first suggestion is to read http://jlcollinsnh.com/stock-series/ so you get an idea of some of the "why" questions on investing.  It'll also explain the risks, and the mindset you'll need to have.  This information is pretty critical before you dive into investing. 

Jack

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Re: Asvice on RL360 investment (not again you say)
« Reply #12 on: October 11, 2016, 07:55:37 AM »
Seriously?

I have definitely lost this money even if I was to invest for the full 10 year term?

Yes.

In theory, you could stay in the investment and get "this" $3500 back. But in doing so, you would lose some "other" $3500 (and a lot more, apparently!) in opportunity cost due to investing in a shitty thing instead of the good thing you could invest in otherwise. Since money is fungible, "this" $3500 and the "other" $3500 are the same, so you could equally say that "this" $3500 isn't recoverable.

Suggestions for a beginner to beat a 3% return on my bank account? I really want to make my money go further rather than sitting.

My first suggestion is to read http://jlcollinsnh.com/stock-series/ so you get an idea of some of the "why" questions on investing.

+1

Otherwise, if you want more specific advice about what to buy (and how to buy it -- brokerages and account types) we'll need to know what country you're in.

DrF

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Re: Asvice on RL360 investment (not again you say)
« Reply #13 on: October 11, 2016, 07:58:13 AM »
1st rule of investing: Never invest in something you don't understand.
If you can't tell us what fees, funds, contract specifics you signed up for, it means you don't understand your investment. Your coworker is likely being lied to. You are likely being lied to. Probably the best option for you to "lose" the least amount of money is to cancel the contract, and find a different company to invest with.

Let's think of this another way. Say you are 65 years old and have been a good saver and your investments now sit at $2,000,000. The stock market has a mild day but ends up down 0.33% for the day. This represents a loss of $6600. You have mental bias that ~3500-4500 is a lot of money. It is not. You probably spend more than that every year at restaurants.

Read your contract, do the math, go into your "adviser" and make them explain everything to you, but be careful, they will probably be lying to your face.

ooeei

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Re: Asvice on RL360 investment (not again you say)
« Reply #14 on: October 11, 2016, 08:30:20 AM »
Read your contract, do the math, go into your "adviser" and make them explain everything to you, but be careful, they will probably be lying to your face.

I would advise against this unless you're a very quick thinking, confident person who is experienced at turning down sales people. 

Their whole job is to convince people to give them money, and they are generally very good at it.  The average person instinctually avoids awkward situations, and they are good at creating them.  They'll pick apart any argument you bring up (using numbers or assumptions you can't disprove in that moment), and in the spur of the moment they'll make you agree with them.  It's only later, after you're home and signed up for another $500/month that you'll run the numbers and realize it was bullshit.  There are not many people out there who are confident enough to tell someone in person "While what you're saying seems to make total sense right now, I think you're lying to me and screwing me over, I'm out."  You'll feel like an asshole doing it, and they're counting on you not wanting to feel that way.  It's doubly difficult if you can't prove they're lying, which due to this particular company's vague fee structure and returns promises, will be nearly impossible until it's too late.

If you run the math and it looks bad, just cancel.  No need to give them a face to face or phone interaction.


edit:  And to echo the above about your colleague supposedly making money, I know people who buy a house way too big for themselves, sell it for $10k more than they bought it a year or two later, and think they made $10k.  They don't consider the transaction costs (>$10k), extra they paid compared to renting a place, or any of the numerous repairs they made during the years living there.  People want to believe they're making money, and usually don't really run the numbers. 

Your coworker may have made $3000 on this over the last 4 years.  He may think that's a lot, but investing in the s&p 500 over the same time frame would've made him $5000 (assuming $500/month for 4 years).  Then again, he's probably looking at what they tell him his return is, which may not include fees, or may include his contributions as part of the return.  There's no telling.  In any case, even a bad investor should've made money over the last 4 years.  The question is, did he make more than he would've in a lower cost option?
« Last Edit: October 11, 2016, 08:46:40 AM by ooeei »

todd89

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Re: Asvice on RL360 investment (not again you say)
« Reply #15 on: October 11, 2016, 09:58:20 AM »
Seriously?

I have definitely lost this money even if I was to invest for the full 10 year term?

Yes.

In theory, you could stay in the investment and get "this" $3500 back. But in doing so, you would lose some "other" $3500 (and a lot more, apparently!) in opportunity cost due to investing in a shitty thing instead of the good thing you could invest in otherwise. Since money is fungible, "this" $3500 and the "other" $3500 are the same, so you could equally say that "this" $3500 isn't recoverable.

Suggestions for a beginner to beat a 3% return on my bank account? I really want to make my money go further rather than sitting.

My first suggestion is to read http://jlcollinsnh.com/stock-series/ so you get an idea of some of the "why" questions on investing.

+1

Otherwise, if you want more specific advice about what to buy (and how to buy it -- brokerages and account types) we'll need to know what country you're in.

I am in Kuwait.

I will have a Kuwait bank account shortly in which my salary will be paid into. Currently I send home my salary to my Santander account in the uk which yields a return of 3% and then half of this coming November. I also put 200 each month into the help to buy scheme in which I will receive 25% of the money I put in after reaching maximum allowance of 12000 which will take 5 years - 2400 a year X 5. Any suggestions?

todd89

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Re: Asvice on RL360 investment (not again you say)
« Reply #16 on: October 11, 2016, 09:59:28 AM »
Thanks everyone I really have a made a stupid mistake but glad I realised early enough to recover from small damage.

ooeei

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Re: Asvice on RL360 investment (not again you say)
« Reply #17 on: October 11, 2016, 11:18:17 AM »
Thanks everyone I really have a made a stupid mistake but glad I realised early enough to recover from small damage.

Good thing you caught it early!  One of the guys in the linked thread above (http://forum.mrmoneymustache.com/investor-alley/i-dun-goofed/msg266548/#msg266548) lost $50,000.  Insane. 

Anyway, keep reading that thread and some of them mention what they use instead to invest while working abroad.  It might not all apply to Kuwait, but it's a start.  Perhaps make a new thread asking for how to invest while in Kuwait?  That might get more attention than this thread by people who can help you.

Also, can you elaborate on this?
I also put 200 each month into the help to buy scheme in which I will receive 25% of the money I put in after reaching maximum allowance of 12000 which will take 5 years - 2400 a year X 5. Any suggestions?

DrF

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Re: Asvice on RL360 investment (not again you say)
« Reply #18 on: October 11, 2016, 11:21:47 AM »
I also put 200 each month into the help to buy scheme in which I will receive 25% of the money I put in after reaching maximum allowance of 12000 which will take 5 years - 2400 a year X 5. Any suggestions?

What the hell is this? Is this separate from the RL360? I don't understand what you've written, you get 25% after you put in 12000? You probably don't understand it either. Just cancel everything you've been doing and start from scratch after you've researched a few things. Think of the money lost as tuition.

Jack

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Re: Asvice on RL360 investment (not again you say)
« Reply #19 on: October 11, 2016, 11:34:10 AM »
It sounds like you live in Kuwait, but "home" is the UK and you have at least a bank account there (maybe UK citizenship too?) As an American I know almost nothing about that kind of thing, but I get the impression from reading other people's threads that if you are attached "enough" to the UK to qualify, investing using UK account types (e.g. an ISA?) at UK institutions (e.g. vanguard.co.uk?) might (might!) be better than Kuwait-based investing.

This thread (found via this search) looks like it might be useful: UK Investment advice for an absolute beginner.

milb

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Re: Asvice on RL360 investment (not again you say)
« Reply #20 on: October 11, 2016, 08:12:34 PM »
I also put 200 each month into the help to buy scheme in which I will receive 25% of the money I put in after reaching maximum allowance of 12000 which will take 5 years - 2400 a year X 5. Any suggestions?

What the hell is this? Is this separate from the RL360? I don't understand what you've written, you get 25% after you put in 12000? You probably don't understand it either. Just cancel everything you've been doing and start from scratch after you've researched a few things. Think of the money lost as tuition.
This is a legit government sponsored program where the government will give you 25% up to £3,000 for the purchase of your first house. My account in the U.K. also pays 4% tax free  on this balance so it's pretty good deal.

It is also worth mentioning you can pay in up £2,880 into a Uk pension and get the government tax relief even if you do not pay any income tax in the U.K.  Along with nexts years lifetime ISA, it means you can contribute £6880 and get £8600 invested without paying a penny in tax for it in the first place. I would recommend using something like Bestinvest and contribute to a vanguard target date or life strategy mutual fund. Works pretty well when you earn dollars in the US 😬
« Last Edit: October 11, 2016, 08:18:43 PM by milb »

todd89

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Re: Asvice on RL360 investment (not again you say)
« Reply #21 on: October 13, 2016, 09:18:17 AM »
The second paragraph regarding the pension, lifetime ISA and mutual funds has confused me.

Right now I pay my kuwait salary into my uk current account and shift across money into the government ISA.

Can you explain more about the other three things and how to go about opening them. Is there a particular order? What is the gain of opening a pension scheme, the lifetime ISA over just a fund?

milb

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Re: Asvice on RL360 investment (not again you say)
« Reply #22 on: October 13, 2016, 08:57:14 PM »
When you contribute to a UK pension, instead of reducing your tax bill, the government adds money to the account. So if you add £80, the government contributes £20 tax relief (e.g. the 20% tax) this even increases if you're a higher rate tax payer to those percentages.

The key is that you can contribute £2880 to your pension or SIPP and the government will add 25% to it (which is the inverse of 20% taken originally) even without you having paid a pennny in income tax for that year.

It is the same concept for why they will give 25% bonus for HTB and the new lifetime ISA.

Order of things:

Research SIPP provider at monevator
Open SIPP and put in £2880 for this tax year
Invest in a vanguard life strategy fund
Then April 2017
Open lifetime ISA
Invest in vanguard LSF.

The gain is the tax relief (25% bonus) and tax free growth for retirement.

todd89

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Re: Asvice on RL360 investment (not again you say)
« Reply #23 on: October 14, 2016, 02:32:08 AM »
Well after researching it looks like Cavendish Online have low fees.

How does the government add 25% to the SIPP account with Cavendish should I open one?

Next year I'll convert my help to buy into the lifetime ISA.

I'm struggling to find which lifetime fund to go with and which broker to go with. There's Bestinvest, Cavendish and Charles Stanley Direct that seem to be coming up as low fees. Should I invest monthly or am I charged for every investment I make?

Thoughts? Who are you with?
« Last Edit: October 14, 2016, 02:59:06 AM by todd89 »

milb

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Re: Asvice on RL360 investment (not again you say)
« Reply #24 on: October 14, 2016, 04:44:49 PM »
I did not research brokers too much but went with Best Invest. I went with direct debit of equal monthly splits of the £2880 to meet a current account reward requirement, but lumped in the 4/5 months of £240 I missed from the April start of the tax year.

There are no fees for the trading that I do, which is automatically set to invest in Vangaurd target date 2055 but I would recommend the life strategy funds to get 90/10 mix of stocks and bonds. 50% in LifeStrategy® 100% Equity Fund - Accumulation (GBP) and 50% in LifeStrategy® 80% Equity Fund - Accumulation (GBP). Then set up some kind of auto rebalancing if possible.

The government then adds my 25% about 6 weeks later, although what is annoying about best invest is that this can not be automatically set up to purchase a fund and just comes in as cash. Also some other brokers immediately provide the tax relief for purchasing of funds.

I also had essentially no paperwork to fill out for my SIPP and they just sent a load of paperwork to my parents address, but nothing to send back, so it was very easy for me to set up and manage from across the Atlantic.

I also would not convert those ISAs and just start a new lifetime in stocks and share. I don't think you could invest the HTB in shares and it's a pretty solid interest rate. I think you can only contribute to one so my plan is to leave my HTB ISA sitting there unless something happens with the interest rate.

Let me know if you decide on a different broker that hopefully does not have the issues I mentioned above.
« Last Edit: October 14, 2016, 04:48:58 PM by milb »

todd89

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Re: Asvice on RL360 investment (not again you say)
« Reply #25 on: October 16, 2016, 05:46:18 AM »
Ok thanks for the advice. I'm waiting to hear back from Charles Stanley Direct regarding their SIPP.
 
Are the dividends that are automatically put back into the fund taxable? If so, do I need to fill in any paperwork for HMRC?