What to do - substantial investment?
Discussion
Re Holiday homes thousands of miles away, having fairly recently sold our large villa in Mellieha, Malta, I do think unless you use them a lot, at least three months a year they are a bit of a white elephant.
Fortunately we did quite well out of the capital appreciation, with inflation, but as we could only get out there for about six weeks a year, we found it a bit tying.
Better to use some of the money to stay in top rate hotels.
Just my 2p.
Fortunately we did quite well out of the capital appreciation, with inflation, but as we could only get out there for about six weeks a year, we found it a bit tying.
Better to use some of the money to stay in top rate hotels.
Just my 2p.
Firstly great position to be in, well done and congratulations.
Dont blame you for staying under the radar.
As mentioned you haven't really eluded to your family situation as i think to me this would make the biggest difference to anything you are considering
If you are married with kids then depending on ages etc you will need to plan and make provisions within your planning for potential expenses relating to education, schools, uni etc To me this would be something you want invested in a different area / place, maybe even depending on ages of the kids purchasing property for them etc?
With regards to your current expenditure again this is difficult to gauge, i think you may find the income that you are relying on will not be sufficient if you are no longer going to work everyday.
Suddenly you are available and free to explore and travel, flights, holidays, hotels, weekend breaks, experiences etc all take money and it soon adds up?
You've already alluded that you are going to want to upgrade the toys etc. You need to add this all up and see what it comes to.
With regards to advice you definitely need to speak to professionals and not the company accountant or local mate. Investing at this level is significantly different to what IFA's do day to day. It needs to be someone that really understands you and what you, your family and what you intend to do long term. I wouldn't worry about investments being offshore etc there is no problem with this as long as you understand the costs and charges for moving the money back to the UK come settlement time etc
Last thing i would say is have you considered you may get bored and start looking round for new investments or businesses to get involved in, therefore you may want to leave certain funds in a more accessible investment vehicle that won't penalise you if you need access to them
Whatever you do enjoy it and make sure you enjoy the toys!!!
Dont blame you for staying under the radar.
As mentioned you haven't really eluded to your family situation as i think to me this would make the biggest difference to anything you are considering
If you are married with kids then depending on ages etc you will need to plan and make provisions within your planning for potential expenses relating to education, schools, uni etc To me this would be something you want invested in a different area / place, maybe even depending on ages of the kids purchasing property for them etc?
With regards to your current expenditure again this is difficult to gauge, i think you may find the income that you are relying on will not be sufficient if you are no longer going to work everyday.
Suddenly you are available and free to explore and travel, flights, holidays, hotels, weekend breaks, experiences etc all take money and it soon adds up?
You've already alluded that you are going to want to upgrade the toys etc. You need to add this all up and see what it comes to.
With regards to advice you definitely need to speak to professionals and not the company accountant or local mate. Investing at this level is significantly different to what IFA's do day to day. It needs to be someone that really understands you and what you, your family and what you intend to do long term. I wouldn't worry about investments being offshore etc there is no problem with this as long as you understand the costs and charges for moving the money back to the UK come settlement time etc
Last thing i would say is have you considered you may get bored and start looking round for new investments or businesses to get involved in, therefore you may want to leave certain funds in a more accessible investment vehicle that won't penalise you if you need access to them
Whatever you do enjoy it and make sure you enjoy the toys!!!
To begin with, I'd like to say a big thanks to everyone who has posted. Very much appreciated from this end.
All your suggestions will be taken on board, without doubt. Perhaps not the offer to lend you cash though TLJ!
A little more information, without giving myself away....(makes me look like I'm positioning myself in a rather grand way, but there are customers and staff that I know use this site also).
I am single, without children. In the future, I would like to settle down and have kids, but many say I may have left that one too late - not settling down with a g/f long enough is to blame here.
I have been living with a fairly decent level of income for the last 5 or 6 years (c. £250K), hence no mortgage, house renovation, holiday home etc, and owning my current toys outright.
I agree fully on the holiday home side of things - don't think I will be reaching for another anytime soon, for the very reasons mentioned.
On the work front, for the last three years, I have been actively withdrawing from the business (elevating management in the process) - so replacing the time spent there is mostly already known. Hobbies and tinkerings take up a lot of time. At some stage I will want to do something a little more stimulating, but have plenty of projects on the go to keep me occupied for at least another twelve months.
The accountant is quite a large one (72 countries, 13800 staff globally), and the financial planning partner who has offered initial advice already looks after several people on their books in similar or more grand positions than I find myself. Not to say I won't be looking at the alternatives already suggested. His thoughts behind the offshore bond wrapper (IOM, Jersey etc) are mainly to allow the release of up to 5% pa (cumulative) of original investment whilst allowing the funds within to benefit from gross roll up. The actual investments within have yet to be discussed. Sensible move, or a stay clear?
Which I guess brings me neatly to my aims - preservation, modest growth to cover inflation, tax and income withdrawal, and a regular income to go alongside my other income stream. The figure mentioned of around £4K per week from the investment sounds about spot on at this stage to me.
All your suggestions will be taken on board, without doubt. Perhaps not the offer to lend you cash though TLJ!
A little more information, without giving myself away....(makes me look like I'm positioning myself in a rather grand way, but there are customers and staff that I know use this site also).
I am single, without children. In the future, I would like to settle down and have kids, but many say I may have left that one too late - not settling down with a g/f long enough is to blame here.
I have been living with a fairly decent level of income for the last 5 or 6 years (c. £250K), hence no mortgage, house renovation, holiday home etc, and owning my current toys outright.
I agree fully on the holiday home side of things - don't think I will be reaching for another anytime soon, for the very reasons mentioned.
On the work front, for the last three years, I have been actively withdrawing from the business (elevating management in the process) - so replacing the time spent there is mostly already known. Hobbies and tinkerings take up a lot of time. At some stage I will want to do something a little more stimulating, but have plenty of projects on the go to keep me occupied for at least another twelve months.
The accountant is quite a large one (72 countries, 13800 staff globally), and the financial planning partner who has offered initial advice already looks after several people on their books in similar or more grand positions than I find myself. Not to say I won't be looking at the alternatives already suggested. His thoughts behind the offshore bond wrapper (IOM, Jersey etc) are mainly to allow the release of up to 5% pa (cumulative) of original investment whilst allowing the funds within to benefit from gross roll up. The actual investments within have yet to be discussed. Sensible move, or a stay clear?
Which I guess brings me neatly to my aims - preservation, modest growth to cover inflation, tax and income withdrawal, and a regular income to go alongside my other income stream. The figure mentioned of around £4K per week from the investment sounds about spot on at this stage to me.
I am in no way a financial adviser but is he recommending sticking it all in one investment vehicle?
All I would say is make sure you speak to several people, even if you have to pay for a few hours of their time.
If it was me I would also make sure you have a nice liquid pot. That way you can strike when the iron is hot.
There are lots of motoring and property bargains to be had if you can act quickly. You can always refinance after the event.
All I would say is make sure you speak to several people, even if you have to pay for a few hours of their time.
If it was me I would also make sure you have a nice liquid pot. That way you can strike when the iron is hot.
There are lots of motoring and property bargains to be had if you can act quickly. You can always refinance after the event.
desolate said:
I am in no way a financial adviser but is he recommending sticking it all in one investment vehicle?
All I would say is make sure you speak to several people, even if you have to pay for a few hours of their time.
If it was me I would also make sure you have a nice liquid pot. That way you can strike when the iron is hot.
There are lots of motoring and property bargains to be had if you can act quickly. You can always refinance after the event.
Thanks. My understanding is that it's a wrapper, not one investment vehicle. Inside which many investments can be made. More than happy to be corrected on this though.All I would say is make sure you speak to several people, even if you have to pay for a few hours of their time.
If it was me I would also make sure you have a nice liquid pot. That way you can strike when the iron is hot.
There are lots of motoring and property bargains to be had if you can act quickly. You can always refinance after the event.
Agree fully about the liquid pot too - that will be in place separately also.
BigInvestor said:
Thanks. My understanding is that it's a wrapper, not one investment vehicle. Inside which many investments can be made. More than happy to be corrected on this though.
Agree fully about the liquid pot too - that will be in place separately also.
Ensure that the Adviser make clear the benefits/charges/risks to you of this type of structure (and the investments held within).Agree fully about the liquid pot too - that will be in place separately also.
I've dealt with lots of clients that have been recommended overly complicated & expensive solutions to pretty simple problems.
The offshore bond option is a very sensible one to consider given the amounts you alude to.
Something we do for our clients a lot. It gives you great flexibility and tax control.
Assume after you've made use of the usual on shore tax breaks, pensions, CGT, ISA, EIS etc etc
The wrapper gives you the longer term tax control and is fairly standard for UK based investors at the levels you are talking, its the underlying approach that will be the more important factor in the shorter term.
Remember, there's no rule that says you have to go with one provider or adviser in these matters. Plenty of HNW clients will dual or triple bank to spread their personal risk and get a flavour for what's being offered, at least in the early years.
Something we do for our clients a lot. It gives you great flexibility and tax control.
Assume after you've made use of the usual on shore tax breaks, pensions, CGT, ISA, EIS etc etc
The wrapper gives you the longer term tax control and is fairly standard for UK based investors at the levels you are talking, its the underlying approach that will be the more important factor in the shorter term.
Remember, there's no rule that says you have to go with one provider or adviser in these matters. Plenty of HNW clients will dual or triple bank to spread their personal risk and get a flavour for what's being offered, at least in the early years.
BI,
If you do anticipate starting a family, your accountant should be able to discuss with you the merits or otherwise, of creating a Family Investment Company (FIC). Without getting into the pros and cons and the rights and wrongs of them, or the subsequent rights and wrongs of which wrappers and the which underlying investments, strategies and tactics you choose, they're worth at least considering (before potentially, then) dismissing.
I suppose the starting point for a FIC is somewhere in the region of £5m, so you're certainly there or thereabouts. The FIC is not much more than a private investment company, the directors and shareholders of which are individual family members or trusts - hence my earlier comments about fusing closely with your team. They're intended to replace and/or supplement the existing Trust legislation and offset regulatory and/or legislation risk, they're quite a new development and can be a flexible option allowing any new family (and Trust) to define how benefits may be accessed.
The offshore bond is tax deferred, it doesn't offer tax free benefits as I am sure has been explained to you. It can be right for you and wrong for the next guy so it's impossible to state whether it's a good idea or not and it certainly isn't anyone's place here to pass judgement.
On Friday, George Osborne announced that we are about to become the first government to issue a bond in China's currency, the Renminbi. I'm not suggesting that you should swoon in delirious pleasure and/or then leap at it, but many packaged bond providers tend to stick to their own in-house offerings, limiting possibilities. A moot point maybe, I think bonds certainly have a place in your armoury, but only a place in perspective. My worry about Offshore Bonds is that the costs, structure, terms, complexity and limitations *can* offset quite dramatically, any benefits.
That in itself doesn't make them an orphan choice, but nonetheless, all factors to bear in mind.
If you do anticipate starting a family, your accountant should be able to discuss with you the merits or otherwise, of creating a Family Investment Company (FIC). Without getting into the pros and cons and the rights and wrongs of them, or the subsequent rights and wrongs of which wrappers and the which underlying investments, strategies and tactics you choose, they're worth at least considering (before potentially, then) dismissing.
I suppose the starting point for a FIC is somewhere in the region of £5m, so you're certainly there or thereabouts. The FIC is not much more than a private investment company, the directors and shareholders of which are individual family members or trusts - hence my earlier comments about fusing closely with your team. They're intended to replace and/or supplement the existing Trust legislation and offset regulatory and/or legislation risk, they're quite a new development and can be a flexible option allowing any new family (and Trust) to define how benefits may be accessed.
The offshore bond is tax deferred, it doesn't offer tax free benefits as I am sure has been explained to you. It can be right for you and wrong for the next guy so it's impossible to state whether it's a good idea or not and it certainly isn't anyone's place here to pass judgement.
On Friday, George Osborne announced that we are about to become the first government to issue a bond in China's currency, the Renminbi. I'm not suggesting that you should swoon in delirious pleasure and/or then leap at it, but many packaged bond providers tend to stick to their own in-house offerings, limiting possibilities. A moot point maybe, I think bonds certainly have a place in your armoury, but only a place in perspective. My worry about Offshore Bonds is that the costs, structure, terms, complexity and limitations *can* offset quite dramatically, any benefits.
That in itself doesn't make them an orphan choice, but nonetheless, all factors to bear in mind.
OP, you have clearly done very well.
There is lots of good advice here already.
I would add succinctly that you should try to:
1) split the fund into fixed income (Corporate Bonds) and global equities (ideally paying dividends in a range of currencies)
2) don't let the tail of tax treatment wag the dog of investment performance
3) use your experience to enhance returns from investments into new/smaller companies, perhaps as a business angel.
With that last point in mind, you have mail!
There is lots of good advice here already.
I would add succinctly that you should try to:
1) split the fund into fixed income (Corporate Bonds) and global equities (ideally paying dividends in a range of currencies)
2) don't let the tail of tax treatment wag the dog of investment performance
3) use your experience to enhance returns from investments into new/smaller companies, perhaps as a business angel.
With that last point in mind, you have mail!
Once again, thanks to all for helping.
Ellroy - yes, I will be making the most of the on shore tax breaks as part of my planning, all done outside the capital to be invested in the OP.
Intrigued by the FIC idea Ginge R. Also the RMB bond - have spent most of my working life linked to China and its near neighbours, so that really intrigues me. Another clue to those that know me, perhaps!
Nothing received on the PM front yet Sideways Sid! That said, I think I'm due a well earned rest, so becoming an angel may have to wait a while!
Ellroy - yes, I will be making the most of the on shore tax breaks as part of my planning, all done outside the capital to be invested in the OP.
Intrigued by the FIC idea Ginge R. Also the RMB bond - have spent most of my working life linked to China and its near neighbours, so that really intrigues me. Another clue to those that know me, perhaps!
Nothing received on the PM front yet Sideways Sid! That said, I think I'm due a well earned rest, so becoming an angel may have to wait a while!
BigInvestor said:
Once again, thanks to all for helping.
Ellroy - yes, I will be making the most of the on shore tax breaks as part of my planning, all done outside the capital to be invested in the OP.
Intrigued by the FIC idea Ginge R. Also the RMB bond - have spent most of my working life linked to China and its near neighbours, so that really intrigues me. Another clue to those that know me, perhaps!
Nothing received on the PM front yet Sideways Sid! That said, I think I'm due a well earned rest, so becoming an angel may have to wait a while!
Can't blame a man for trying. Ellroy - yes, I will be making the most of the on shore tax breaks as part of my planning, all done outside the capital to be invested in the OP.
Intrigued by the FIC idea Ginge R. Also the RMB bond - have spent most of my working life linked to China and its near neighbours, so that really intrigues me. Another clue to those that know me, perhaps!
Nothing received on the PM front yet Sideways Sid! That said, I think I'm due a well earned rest, so becoming an angel may have to wait a while!
Anyway, what did you do for the £250k a year, and what was the business you built in?
Thanks, Stuart.
BigInvestor said:
Once again, thanks to all for helping.
Ellroy - yes, I will be making the most of the on shore tax breaks as part of my planning, all done outside the capital to be invested in the OP.
Intrigued by the FIC idea Ginge R. Also the RMB bond - have spent most of my working life linked to China and its near neighbours, so that really intrigues me. Another clue to those that know me, perhaps!
Nothing received on the PM front yet Sideways Sid! That said, I think I'm due a well earned rest, so becoming an angel may have to wait a while!
Can't blame a man for trying. Ellroy - yes, I will be making the most of the on shore tax breaks as part of my planning, all done outside the capital to be invested in the OP.
Intrigued by the FIC idea Ginge R. Also the RMB bond - have spent most of my working life linked to China and its near neighbours, so that really intrigues me. Another clue to those that know me, perhaps!
Nothing received on the PM front yet Sideways Sid! That said, I think I'm due a well earned rest, so becoming an angel may have to wait a while!
Anyway, what did you do for the £250k a year, and what was the business you built in?
Thanks, Stuart.
Hi BigInvestor.
OK, so similar numbers, 10m, but I guess a little older, as kids now on their way.
Offshore Bond - 5% draw, etc seems to work, but tax laws are changing constantly, so be aware that this may not solve tax wrapper in long term. Contents of the bond can be limiting....funds only, so any equities should be held outside.
You will also need to have one eye on far distant, IHT....although I see not yet married / kids...but re-aligning structures can be expensive, so get intel on this now, so at least you are aware.
My focus would also be on running burn costs of fees. Very easy to lose 2, 3....5% / year in variety of fees and charges. I had 1.81% 'bleeding' fee rate for a year or two, plus additional EUR 50k fee, before I reigned them in, and now total fees 0.58% for portfolio and adviser. Transparency is the key.
Also decide if you want to participate in some degree to decisions about the investments...you can get the asset allocation settled, but then set-aside a 'Speculation' pool of cash for your own ideas, holdings, etc if you choose to 'play' a little.
Depends also what your future employment, business activities, etc entail. For me, I dabble, so the Portfolio and real estate are the backbone now of future wealth, and therefore need to preserve and gentle grow it, net of fees. Just watch the fees.
Happy to help if I can. Probably 3-5 years ahead of you in owning the responsibility of looking after the 'pot'.
BA
OK, so similar numbers, 10m, but I guess a little older, as kids now on their way.
Offshore Bond - 5% draw, etc seems to work, but tax laws are changing constantly, so be aware that this may not solve tax wrapper in long term. Contents of the bond can be limiting....funds only, so any equities should be held outside.
You will also need to have one eye on far distant, IHT....although I see not yet married / kids...but re-aligning structures can be expensive, so get intel on this now, so at least you are aware.
My focus would also be on running burn costs of fees. Very easy to lose 2, 3....5% / year in variety of fees and charges. I had 1.81% 'bleeding' fee rate for a year or two, plus additional EUR 50k fee, before I reigned them in, and now total fees 0.58% for portfolio and adviser. Transparency is the key.
Also decide if you want to participate in some degree to decisions about the investments...you can get the asset allocation settled, but then set-aside a 'Speculation' pool of cash for your own ideas, holdings, etc if you choose to 'play' a little.
Depends also what your future employment, business activities, etc entail. For me, I dabble, so the Portfolio and real estate are the backbone now of future wealth, and therefore need to preserve and gentle grow it, net of fees. Just watch the fees.
Happy to help if I can. Probably 3-5 years ahead of you in owning the responsibility of looking after the 'pot'.
BA
TheLordJohn said:
Can't blame a man for trying.
Anyway, what did you do for the £250k a year, and what was the business you built in?
Thanks, Stuart.
Certainly not - if you don't ask, and all that!Anyway, what did you do for the £250k a year, and what was the business you built in?
Thanks, Stuart.
I saw an opportunity, around 20 years ago, that promised to link the skills of my recent degree, with a fledgling business under a year old. Time and place, mixed with asking and taking opportunity where it arose, way too many hours and sleepless nights, and the odd re-mortgage of my house when the need came - and sadly, the destruction of many a relationship (both personal and friendship) by being too work focused! Would rather not put any more flesh on it than that right now - happy to do so once I'm away with the loot! It's been earned, I would say, and took five years longer than I had planned.
BigInvestor said:
Certainly not - if you don't ask, and all that!
I saw an opportunity, around 20 years ago, that promised to link the skills of my recent degree, with a fledgling business under a year old. Time and place, mixed with asking and taking opportunity where it arose, way too many hours and sleepless nights, and the odd re-mortgage of my house when the need came - and sadly, the destruction of many a relationship (both personal and friendship) by being too work focused! Would rather not put any more flesh on it than that right now - happy to do so once I'm away with the loot! It's been earned, I would say, and took five years longer than I had planned.
That's great to read. Every nugget wants to be a millionaire but few are willing to put the REAL work in to achieve it. I saw an opportunity, around 20 years ago, that promised to link the skills of my recent degree, with a fledgling business under a year old. Time and place, mixed with asking and taking opportunity where it arose, way too many hours and sleepless nights, and the odd re-mortgage of my house when the need came - and sadly, the destruction of many a relationship (both personal and friendship) by being too work focused! Would rather not put any more flesh on it than that right now - happy to do so once I'm away with the loot! It's been earned, I would say, and took five years longer than I had planned.
The amount of money that comes from risks, a bit of nouse and some bloody hard work isn't to be sniffed at.
I give myself until 45 before I'm worth £3+ million. I'm 26 now and won't stop until I get financially free.
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