Discussion
foxsasha said:
cymtriks said:
The MIL was in a similar situation four years ago. Her money is in unit trusts, managed by an IFA that was recommended to us. Over the last four years it has made over six percent every year.
On a 100K investment that's 115 quid a week.
6% after IFA fees?On a 100K investment that's 115 quid a week.
Note that the FTSE All Share is up around 30% in the last 4 years.
I wouldn't rule out property.
I bought a lovely 2 bed flat last year for this amount and rent it out at 650/month. Yes the money's not liquid as such but the additional income would be excellent for her. Also, by buying outright, you do then have the ability to borrow against it should you need the money in a hurry (obv not your mother but maybe you if you planned the purchase well?).
I bought a lovely 2 bed flat last year for this amount and rent it out at 650/month. Yes the money's not liquid as such but the additional income would be excellent for her. Also, by buying outright, you do then have the ability to borrow against it should you need the money in a hurry (obv not your mother but maybe you if you planned the purchase well?).
pchmlk said:
I wouldn't rule out property.
I bought a lovely 2 bed flat last year for this amount and rent it out at 650/month. Yes the money's not liquid as such but the additional income would be excellent for her. Also, by buying outright, you do then have the ability to borrow against it should you need the money in a hurry (obv not your mother but maybe you if you planned the purchase well?).
The OP could borrow money against a property he doesn't own?I bought a lovely 2 bed flat last year for this amount and rent it out at 650/month. Yes the money's not liquid as such but the additional income would be excellent for her. Also, by buying outright, you do then have the ability to borrow against it should you need the money in a hurry (obv not your mother but maybe you if you planned the purchase well?).
Please explain how that works?
Edited by sidicks on Sunday 28th August 10:16
sidicks said:
pchmlk said:
I wouldn't rule out property.
I bought a lovely 2 bed flat last year for this amount and rent it out at 650/month. Yes the money's not liquid as such but the additional income would be excellent for her. Also, by buying outright, you do then have the ability to borrow against it should you need the money in a hurry (obv not your mother but maybe you if you planned the purchase well?).
The OP could borrow money against a property he doesn't own?I bought a lovely 2 bed flat last year for this amount and rent it out at 650/month. Yes the money's not liquid as such but the additional income would be excellent for her. Also, by buying outright, you do then have the ability to borrow against it should you need the money in a hurry (obv not your mother but maybe you if you planned the purchase well?).
Please explain how that works?
Edited by sidicks on Sunday 28th August 10:16
drainbrain said:
sidicks said:
And if the property value fell 20% in year one, you'd still claim a 'profit' would you?
If that's your target, I'm sure I can find loads of assets that provide you with high income but a capital loss!
My my. How did you know I need exactly that right now! Do you know why?? If that's your target, I'm sure I can find loads of assets that provide you with high income but a capital loss!
Edited by sidicks on Friday 26th August 22:15
And you've still not answered….why might you plan a loss? Especially (tho not exclusively) in property?
This has the potential to wipe-out months / years of Profit (not income), in one fell swoop, surely a risk to be considered, or merely 'Theoretical'?
Either forcing you to sell the property at a value that reflects the outstanding work or lose the rental income during the renovation period, neither, based on the OP's criteria would lead property to be the best choice, appreciate even a brand new house will need something major in the (hopefully) 20-30 year window we are looking at here.
Nothing much to add other than
1. Agree with BrainDrain.
There are entrepreneur types and then there are bean counter types, BD is the former and i love his posts and share a similar line of thinking.
Back to the OPs post - i'd buy 2 x 50k properties outright in any major northern city (leeds, liverpool, manchester) close as possible to good fundamentals (hospitals, transport links etc). Rent them out using a good agent.
If you really want to maximise income, get your agent to rent them by the room.
Pretty solid income stream. Yes not as liquid, but you can always stick tenanted property in an auction and realise cash pretty quickly if needed.
IFA types don't tend to like BTL, they over egg the downsides as there are no fees in it for them!
1. Agree with BrainDrain.
There are entrepreneur types and then there are bean counter types, BD is the former and i love his posts and share a similar line of thinking.
Back to the OPs post - i'd buy 2 x 50k properties outright in any major northern city (leeds, liverpool, manchester) close as possible to good fundamentals (hospitals, transport links etc). Rent them out using a good agent.
If you really want to maximise income, get your agent to rent them by the room.
Pretty solid income stream. Yes not as liquid, but you can always stick tenanted property in an auction and realise cash pretty quickly if needed.
IFA types don't tend to like BTL, they over egg the downsides as there are no fees in it for them!
Thinking back to the OP's question what's wrong with drawing down on the £100k. I'm not sure what the point is of having large sums when nearing/over pension age and the desire to make more when you might have enough. Assuming you took £5k pa from the pot that is at 20+yrs additional money on top of index linked pension income. As you get older your spending profile reduces.
I don't subscribe to leaving behind a load of money, trouble is nobody knows when the 'end date' is.
I don't subscribe to leaving behind a load of money, trouble is nobody knows when the 'end date' is.
trowelhead said:
There are entrepreneur types.....
People who take huge risks and happen to get lucky like to think of themselves as "entrepreneurs". Few of them manage to stay lucky and even fewer manage to get lucky over and over again.There is no specific word for a "failed entrepreneur". Why is this? I see two possible explanations,
- Entrepreneurs are brilliant people who never fail, or
- The word "loser" defines the concept without need for embellishment.
trowelhead said:
and then there are bean counter types,
Maybe.Crucially there is a middle category of "successful businessman" who takes sensibly calculated risks and is sufficiently disciplined to recognise that unless the numbers make sense, no amount of inventiveness and flair will deliver a successful outcome. Many businesses go bust simply because they run out of cash through poor planning or over-ambitious expansion. I get the impression that quite a few of the regular contributors on this Finance Forum would be counted in this middle category.
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