Where tp invest £100k ish now?

[barchetta_boy]

Hi all,

Looking for some investment advice / guidance.

I have circa £100k to invest. Looking for a low risk profile overall and an inflation beating return. Happy to balance some riskier investments with cash. I haven't used my ISA allowance yet this year.

Am thinking of a Hargreaves Lansdown account as a starting point but don't really have much experience of using ETFs etc and would welcome advice and pointers, even if just toother online resources for reading up.

Cheers.

[S6PNJ]

As everyone else seems to have missed this question, I thought I'd take a stab at answering it.

Buy 2 properties circa 140-150k each. Your borrowing will be at 65% LTV so you can get a 'reasonable' rate for the mortgage.
Rent them out at circa 650-750 (or better) per month which will be over twice your mortgage payments (assuming interest only).
Overpay the mortgages with your rental income, ensuring you keep sufficient slush fund for unforeseen maintenance issues on the houses. Don't forget insurance, gas safety, letting agent fees etc.
For any 'empty' periods, simply return to the interest only payment and dig into your slush fund to cover these.

Your mortgage will be paid off after circa 12-15 years at which time your assets will hopefully have appreciated (the market still has room to fall - see other property threads, but also has lots of potential to climb over that period). Suck up the capital gains tax as a 'cost' of the investment.

Enjoy the gains by selling the properties or simply keep renting them out and enjoy the income.

You can turn 100k into 300k in 12-15 years.

My thoughts only - anyone else? Or pick holes in this one please!

[Kudos]

S6PNJ said:

Or pick holes in this one please!

a rise in interest rates? Tenants wrekcing the place? Mortgage fees

Am playing devils advocate, I have a few myself. It's not as easy as it's made out to be

[R11ysf]

Are you still employed and have an income tax bill each year? If so look at VCT's and EIS's and then use your investment in these to offset your income tax bill. These receive 30% tax back from HMRC and so you should aim to get rid of the investment as soon after the 3 year minimum period as possible. All being well you should then be looking at a 50% return after about 3 1/2 years.

To be honest without knowing all your financial info it is hard to give any advice. I'm not an IFA by the way, but if you are 18 and have 100k inheritance it is very different to if you have just retired and taken 100k out your pension pot.

[S6PNJ]

Kudos said:

S6PNJ said:

Or pick holes in this one please!

a rise in interest rates? Tenants wrekcing the place? Mortgage fees

Am playing devils advocate, I have a few myself. It's not as easy as it's made out to be

Rise in interest rates is covered initially by the excess in rent, long term the market will react (hopefully) buy rental prices going up as fewer people can afford the mortgages and therefore look to the rental market.

Tenants wrecking the place is partially covered by deposit and insurance. It will always be a risk but if you advertise carefully (ie not Gumtree) or through an agent, you can hopefully weed out the poor risks (I've been caught with poor tenants in the past as well!)

Mortgage fees - not that great an issue. There are suitable products out there that let you overpay without penalty whilst also not crucifying you with initial fees.

[barchetta_boy]

Good thoughts, thanks. Im 35 with a salary of 120k and likely dividend income of 200k annually over and above, so plenty of tax to pay.

I think the main problem with the buy to let strategy is the time required to manage the properties. I have one flat let at the moment.

Any tips on where to get started with EISs?

[Mr Trophy]

Put it in a Unit Trust or a Bond.

[F458]

Buy a nice Ferrari 512 and use the change to buy some fine wine - I'm serious by the way.

[fandango_c]

How long do you wish to hold the investment for?
Are you likely to need to withdraw some/all of the investment before you expect to?

[cerberaperv]

You could always be a business angel??

Would you like to earn 8%+ pa net?

The invested funds would have full security too, so low risk.

If your interested, email me at [e-mail] and I`ll give you full info.

[fandango_c]

cerberaperv said:

You could always be a business angel??

Would you like to earn 8%+ pa net?

The invested funds would have full security too, so low risk.

If your interested, email me at [e-mail] and I`ll give you full info.

8% pa and low risk.

[rand hobart]

I have most of my life savings in NS&I premium bonds (yes , I know, atrocious return)
My question is, in the event of the worlds economies going tits up and banks going to the wall left right and centre, would the 100% safety guarantee the gov gives be worth anything? Should I spend it while I can.
Proprty, cars etc.

[cerberaperv]

fandango_c said:

8% pa and low risk.

The funds would be secured by way of 1st charge on a property.

[sidicks]

cerberaperv said:

The funds would be secured by way of 1st charge on a property.

And properties never go down in value...

Sidicks

[cerberaperv]

sidicks said:

And properties never go down in value...

Sidicks

Not by the 25-40% off today's Market value that I buy them at, and not within the 6mths the charge would be on the property for (max term).

[johnfm]

Bearing in mind you seem to have good earnings and don't need instant returns, I would buy a reasonably mint old Ferrari or pre-1976 911 (or two), and stick them in a secure garage.

Failing that, stocks & shares - build a diverse portfolio of blue chip stocks.

[barchetta_boy]

Hmm, bearing in mind that the car I want next is a pre73 911 you may have a good point. They are rare enough and good enough to be as blue-chip as sub 100k classics get. look at whats happened to the value of all rare aircooled cars. Mint 3.2s and 964s are creeping up too, although they are still in the hinterland where there are plenty of terrible ones around for peanuts.

Wine is a good one, but harder to trade, although that is becoming easier.

[J__D]

I've got good experience and work very closely with http://www.lavauxcapital.com/For_investors.html

About 10% p.a., and it works as a debt (loan) rather than investment, therefore no risk of capital value fluctuations (initial capital will not increase, and more importantly decrease). It's purely interest based. (Either compounding or as a paid out income)

So lend / invest £100k, get £10k year 1, then if compounding, £11k next year and so on. Therefore, if I'm not mistaken, by the 7th year, you'll have basically doubled your initial investment (£195kish)- not a 'get rich quick' scheme, but has the safety element.

[R11ysf]

J__D said:

I've got good experience and work very closely with http://www.lavauxcapital.com/For_investors.html

About 10% p.a., and it works as a debt (loan) rather than investment, therefore no risk of capital value fluctuations (initial capital will not increase, and more importantly decrease). It's purely interest based. (Either compounding or as a paid out income)

So lend / invest £100k, get £10k year 1, then if compounding, £11k next year and so on. Therefore, if I'm not mistaken, by the 7th year, you'll have basically doubled your initial investment (£195kish)- not a 'get rich quick' scheme, but has the safety element.

What do they do with your money though? Their website is very vague.

[J__D]

It's essentially a business finance firm, (invoice discounting / factoring etc) so they work with a close network of businesses, generally manufacturing style businesses (FMG's) who need / want short term funding. So the Company gives a short term loan to the above example, for say 90days (most commonly) for a given percentage. This is then paid back, and in all their current clients, another loan is taken up. They seem to get rolling contracts with these companies, which seem to last years.

So it's a simple circle, investor/lender lends to company, company lend to FMG's, FMG's pay interest to company, company pays interest to individual investor.

Edited by J__D on Wednesday 12th October 10:24