Turning 500k to 1 mil
Discussion
Speedy1995 said:
Ok being purely hypothetical what is the fastest way to double your money. Don't say the daft or obvious "500k pound coins in a fruit machine" or "Do up houses" .
Can anyone think of a really interesting way to make a killing by just investing carefully etc. No manual labour ;-)
Naturally, it is easy and fun. For just £12,500 I'll tell you how.Can anyone think of a really interesting way to make a killing by just investing carefully etc. No manual labour ;-)
Mattt said:
What risk profile and timescale?
This. If you are risk averse then I'd say your chances are slim. Otherwise it's possibly very easy to double your money; or lose it all.Also, a big piece of luck (timing, for example) comes in very handy too.
Been there, done that, got the t-shirt - there are no guarantees.
If you want something low risk, then ratesetter is currently offering 5.6% on your investment for 5 year commitments. This means in 5 years you'd get a little over £661k from £500k. It's also repaid back monthly, so you can reinvest it as it comes in (you can lend it out monthly and get it back at 1.9%).
Assuming you don't reinvest when you get it, but do after those 5 years are up. Then investing £661k at 5.6% (an assumption on being able to get that return again), you'd get a return of £874k over the next 5 years. Investing that £874k for another 5 years at 5.6% and you'd be over your £1mil mark at £1,155k.
It will take 15 years, but that's a pretty safe way. You can lend out what you're paid back monthly (including the monthly paid interest) to speed it up too.
I don't have £500k to invest, far from it, but what I can currently spare is there. The URL is ratesetter.com, but if anyone signs up through this link then you (and I) get a £25 bonus after you lend out your first £1k too, which helps in getting to that magic million mark.
Alternatively, I prefer red on a roulette table for an instant £1million at a huge gamble.
Or if you have lots of free time, consider buying a income making business, or pick wisely on the housing market (doesn't even need to be in the UK), you can rent it out for income and then sell it if its value ever rises to what you want (- rent earned).
Assuming you don't reinvest when you get it, but do after those 5 years are up. Then investing £661k at 5.6% (an assumption on being able to get that return again), you'd get a return of £874k over the next 5 years. Investing that £874k for another 5 years at 5.6% and you'd be over your £1mil mark at £1,155k.
It will take 15 years, but that's a pretty safe way. You can lend out what you're paid back monthly (including the monthly paid interest) to speed it up too.
I don't have £500k to invest, far from it, but what I can currently spare is there. The URL is ratesetter.com, but if anyone signs up through this link then you (and I) get a £25 bonus after you lend out your first £1k too, which helps in getting to that magic million mark.
Alternatively, I prefer red on a roulette table for an instant £1million at a huge gamble.
Or if you have lots of free time, consider buying a income making business, or pick wisely on the housing market (doesn't even need to be in the UK), you can rent it out for income and then sell it if its value ever rises to what you want (- rent earned).
Xaero said:
If you want something low risk, then ratesetter is currently offering 5.6% on your investment for 5 year commitments. This means in 5 years you'd get a little over £661k from £500k. It's also repaid back monthly, so you can reinvest it as it comes in (you can lend it out monthly and get it back at 1.9%).
Assuming you don't reinvest when you get it, but do after those 5 years are up. Then investing £661k at 5.6% (an assumption on being able to get that return again), you'd get a return of £874k over the next 5 years. Investing that £874k for another 5 years at 5.6% and you'd be over your £1mil mark at £1,155k.
It will take 15 years, but that's a pretty safe way. You can lend out what you're paid back monthly (including the monthly paid interest) to speed it up too.
I don't have £500k to invest, far from it, but what I can currently spare is there. The URL is ratesetter.com, but if anyone signs up through this link then you (and I) get a £25 bonus after you lend out your first £1k too, which helps in getting to that magic million mark.
Which is fine, but there is inflation to contend with over a 15 year period. Using the BOE calculator and a period of low inflation (1997-2012) of 2.9% £500k would have to grow to £771k over that period to keep up, so your £1M would be worth the equivalent of £648k.Assuming you don't reinvest when you get it, but do after those 5 years are up. Then investing £661k at 5.6% (an assumption on being able to get that return again), you'd get a return of £874k over the next 5 years. Investing that £874k for another 5 years at 5.6% and you'd be over your £1mil mark at £1,155k.
It will take 15 years, but that's a pretty safe way. You can lend out what you're paid back monthly (including the monthly paid interest) to speed it up too.
I don't have £500k to invest, far from it, but what I can currently spare is there. The URL is ratesetter.com, but if anyone signs up through this link then you (and I) get a £25 bonus after you lend out your first £1k too, which helps in getting to that magic million mark.
Looking at a 15 year period with higher inflation (1970-85, inflation 11.4%), your £500k would have to grow to £2,552,667 to keep up with inflation, so your £1M would be worth £392k.
Of course high inflation tends to be accompanied by higher interest rates, but generally interest rates are lower than inflation - as a comparison between conventional savings account rates and the current RPI of 2.8% demonstrates. Using a P2P method to get an inflation-busting rate is fine so long as 1) you are happy with the risk - I understand that Ratesetter has a Provision fund for defaults, which helps with that, and 2) so long as you don't want to be able to access your money quickly (and are happy to fix your interest rate for the period of the loan). Looking at Ratesetter's website just now, the current lender rates are 1.9% (p.a.) for a 1 month loan, 3.0% for a 1 year loan, 4.4% for a 3 year loan and 5.8% for a 4-5 year loan. After tax, even at the lowest rate, the 1 month and 1 year loans will not keep up with the current RPI, and you'd have to be sure that we're going to be in a very low interest rate and low inflation environment for the next 3 - 5 years for those periods to guarantee to beat other rates / inflation (remember RPI was over 5% a couple of years ago and hit 26.5% in June 1975).
More risky (but less than roulette) would be a range of low cost index equity tracker accumulation funds.
Speedy1995 said:
Risk wise I wouldnt want to be gambling. I was just thinking of things to invest in that are safe like houses however are there any faster appreciating investment Ideas other than houses. Good shout on the lego. Never thought it would be worth that much.
Investing = gamblingAre houses really safe to invest in? I guess that depends on what you mean by safe, but they can definitely go down in value.
The 'easiest' investment route is to leverage up via a derivative. You could have a significant notional value with 0.5m that if you bought something with a nicely volatile underlying could quickly double your money.
The joy of this kind of position is that it can just as quickly and easily wipe you out too. And if you pick the wrong product, you could even end up owing money.
But here's an anecdote for you on quick returns. I was going to lunch with an acquaintance. He lives in a city with a river through the middle, and he was that morning completing a purchase, for $20m, of a commercial building on one side of the river near his office. This is a regular sort of transaction for him, that's his line of business. I met him at his office as he finished up the deal paperwork, we hopped in his car, went over the river for a very nice lunch, and as we were driving back over the bridge his phone rang. It was an offer for the same building, for $22m. He took it.
He paid for lunch.
The joy of this kind of position is that it can just as quickly and easily wipe you out too. And if you pick the wrong product, you could even end up owing money.
But here's an anecdote for you on quick returns. I was going to lunch with an acquaintance. He lives in a city with a river through the middle, and he was that morning completing a purchase, for $20m, of a commercial building on one side of the river near his office. This is a regular sort of transaction for him, that's his line of business. I met him at his office as he finished up the deal paperwork, we hopped in his car, went over the river for a very nice lunch, and as we were driving back over the bridge his phone rang. It was an offer for the same building, for $22m. He took it.
He paid for lunch.
A conservative balanced fund will get you there in around seven years.
Less if you continue to contribute.
It does of course depend on when you start, many get the urge to look at equities when the market is high and will not be rewarded in the same way as someone who started in say 09.
Less if you continue to contribute.
It does of course depend on when you start, many get the urge to look at equities when the market is high and will not be rewarded in the same way as someone who started in say 09.
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