What to do - substantial investment?
Discussion
I've decided to log on under a different name for this one - simply because my original profile has links to my business website, and for the time being I'd rather my planning went a tad under the radar.
I am a majority shareholder (70%) in a business, and have begun my exit. The business will buy my shares, and existing other shareholders will inherit. The bank have given an understanding for the funding, and the papers have now gone before their credit team.
I have never had a substantial amount to invest before, and I am looking to set something up to see me right, provide an income, and generate a reasonable rate of return. So, I thought I'd consult you guys to see what your thoughts are.
Nitty gritty. I am 45 years old. The sums involved are anything up to £8.5m (£5.5m from immediate sale, after tax at 10% and a few quid to play with, and a further £3m due to be returned from EIS schemes in the next 3 years). I have had early discussions with a financial advisor based with our company accountant, who has suggested the bulk be placed in an offshore bond, with an investment portfolio within. In risk terms, I would say that I am middle of the road - 4-6 on a 1-10 scale. I have another income source, yielding between £100K-£120K before tax, by way of loan interest, and dividend - from a property company, that has just signed up a tenant on a 15 year lease.
So, how would you invest, if you were in my shoes? I am hopeful of release of funds this side of Christmas.
I am a majority shareholder (70%) in a business, and have begun my exit. The business will buy my shares, and existing other shareholders will inherit. The bank have given an understanding for the funding, and the papers have now gone before their credit team.
I have never had a substantial amount to invest before, and I am looking to set something up to see me right, provide an income, and generate a reasonable rate of return. So, I thought I'd consult you guys to see what your thoughts are.
Nitty gritty. I am 45 years old. The sums involved are anything up to £8.5m (£5.5m from immediate sale, after tax at 10% and a few quid to play with, and a further £3m due to be returned from EIS schemes in the next 3 years). I have had early discussions with a financial advisor based with our company accountant, who has suggested the bulk be placed in an offshore bond, with an investment portfolio within. In risk terms, I would say that I am middle of the road - 4-6 on a 1-10 scale. I have another income source, yielding between £100K-£120K before tax, by way of loan interest, and dividend - from a property company, that has just signed up a tenant on a 15 year lease.
So, how would you invest, if you were in my shoes? I am hopeful of release of funds this side of Christmas.
Hmm. What do I need the money to do for me.....
Well, I have a recently completely renovated house, without mortgage, that I am not interested in moving from. I like my cars (don't we all on here?), and currently run a couple that could do with a change - daily bigHack (5y/o), and a more sporty number (2.5y/o). Would quite like to change the bigHack every couple of years, and the sporty one - well, we all have a dream list, so once a year perhaps. Maybe swap the track car for a new one too. Very car greedy I guess.
Have a holiday home on a very nice island in the med, and a little speedboat that could do with an upgrade. Don't really feel the need for a 2nd holiday home as the one I have makes me feel I have to keep visiting - let's face it, I'd rather jet about a bit, and have someone else look after the cooking and washing!
So, aside from the odd vehicle upgrade, a comfortable annual income is all I really need it to do. Which to a large degree is taken care of by the property investment, along with the odd EIS to offset the dreaded.
Well, I have a recently completely renovated house, without mortgage, that I am not interested in moving from. I like my cars (don't we all on here?), and currently run a couple that could do with a change - daily bigHack (5y/o), and a more sporty number (2.5y/o). Would quite like to change the bigHack every couple of years, and the sporty one - well, we all have a dream list, so once a year perhaps. Maybe swap the track car for a new one too. Very car greedy I guess.
Have a holiday home on a very nice island in the med, and a little speedboat that could do with an upgrade. Don't really feel the need for a 2nd holiday home as the one I have makes me feel I have to keep visiting - let's face it, I'd rather jet about a bit, and have someone else look after the cooking and washing!
So, aside from the odd vehicle upgrade, a comfortable annual income is all I really need it to do. Which to a large degree is taken care of by the property investment, along with the odd EIS to offset the dreaded.
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.
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.
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!
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.
So many thanks to everyone who has posted. Lots of great information there, and so much to think about. I am very much leaning towards doing very little initially, and getting used to the idea. Also, the idea of friends over wealth is very much in line with my thinking.
A question to those of you who do invest - what are your fee structures like? Initial fee, with an annual maintenance charge? Charges per transaction? Percentage of the invested sum? Percentage of the growing (fingers crossed) sum? Fixed fees?
A question to those of you who do invest - what are your fee structures like? Initial fee, with an annual maintenance charge? Charges per transaction? Percentage of the invested sum? Percentage of the growing (fingers crossed) sum? Fixed fees?
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