Investing a large amount of money

[silverfoxcc]

OK please note this is written before tonights lottery,so entirely a hypothetical question. However you never know!

Lets say i got tonights Euro millions

Mentally i have allocated family and charities a few bob, and with the new house and pipe dream theres another 15m gone
so i will be left with about 75m

What is the best rate of interest that i could get , and know my money is 100% safe ( or as good as)

Will accept overseas banks. Switzerland/CI spring to mind AND i have no problems in paying the 40%? unearned income tax

Realistically how much, after tax,would be the annual income?

Over to the bankers

[Simpo Two]

You have £75,000,000 and you want interest as well?!

It is amusing, though, to wonder what the counter staff at your local branch of Nat Barcoyds would make of it when you hand the cheque over.

[Doofus]

Probably gilts or something.

Unless you behaved like a complete tool (which is perhaps what a lottery win is for), you could live on the £75m, with no growth, and still have a stload left over when you died.

I'd be worrying about securing my capital rather than trying to earn from it. If you have that kind of money, and you got it for free, essentially, why waste any of your time worrying about getting the best return on it? Sounds like a fool's paradise to me.

[droopsnoot]

I have a mindset where, if I had that much cash suddenly turn up, I don't think I'd be able to forget about trying to make the most out of it - having worked from no savings and a small credit card debt, it's really difficult to suddenly start thinking a different way.

[DonkeyApple]

At that level you aren’t focused on returns but more on security as the primary objective. It’s why land and what’s on that land in stable, well legally constructed locations is the typical go to solution. In simple terms, you want physical assets which are extremely secure. If that means zero yield then that is a very cheap price to pay. Once you’ve secured your foundations then you can use a smaller percentage to generate your living income. Or you just Mickey Carrol the situation.

[Testaburger]

DonkeyApple said:

At that level you aren’t focused on returns but more on security as the primary objective. It’s why land and what’s on that land in stable, well legally constructed locations is the typical go to solution. In simple terms, you want physical assets which are extremely secure. If that means zero yield then that is a very cheap price to pay. Once you’ve secured your foundations then you can use a smaller percentage to generate your living income. Or you just Mickey Carrol the situation.

That’s all well and good, but if you haven’t earned it, I doubt I’d be using a small percentage of it to generate living income with 75m in your pocket.

I’d be able to spank a million a year and if I died at 90, there would still be 20m left to heirs.

[DonkeyApple]

True. OP seemed to be planning to invest. You would still need to store it in secure assets though and convert to cash as needed. Probably a blue chip equity and bond portfolio.

[silverfoxcc]

Looking how prices have risen..
50 years ago a pools win ,considered a fortune was in the region of 250-300k
nowadays that would just buy you a house

So yes ,for the grandchldren who will want a house in 25 years time, a decent house could be 3-4m

Remember to quote Mark Twain 'they stopped building land years ago.

So i would think a minimun of 25m each .

And YES if i could keep that 75m safe, and i live on the interest, at the moment a current account will give 1.4% which would give me an after tax income of 600k pa that is more than enough. So lets half that even 300k should pay the bills so i can squirrel the other 35m 'offshore' so HMRC are as unaware as possible it exists, BUT that could involve some risk The thought of HMRC collecting 40% of whats left sticks in the craw somewhat

Again it needs to be risk free...

It makes for a nice evening thinking out possible ways



The other thing is being 'prudent' about

[emicen]

£75,000,000 at 0.5% would be £375,000 a year.

Bonds low risk equities probably aren’t going to return much better than 0.5% over inflation which you need to take in to account if you don’t want to lose out in real terms.

I’d be inclined to up the risk a bit but not massively, properties and medium risk equities and try and get it to more like 2.5% over inflation.

[sidicks]

emicen said:

£75,000,000 at 0.5% would be £375,000 a year.

Bonds low risk equities probably aren’t going to return much better than 0.5% over inflation which you need to take in to account if you don’t want to lose out in real terms.

I’d be inclined to up the risk a bit but not massively, properties and medium risk equities and try and get it to more like 2.5% over inflation.

That’s 0.5% not 0.5% over inflation.

He wants low / zero risk.

[silverfoxcc]

Yorkshire Bank are offering 1.4% on current accounts

[Doofus]

silverfoxcc said:

Yorkshire Bank are offering 1.4% on current accounts

And only 85k of your 75m is protected

[sidicks]

Doofus said:

silverfoxcc said:

Yorkshire Bank are offering 1.4% on current accounts

And only 85k of your 75m is protected

Pretty sure they won't be allowing you to deposit £75m @ 1.4% !!

[DonkeyApple]

Plus, interest in cash is wholly irrelevant as you wouldn’t sit on cash at this level as it is not secure.

[Revisitph]

silverfoxcc said:

And YES if i could keep that 75m safe, and i live on the interest, at the moment a current account will give 1.4% which would give me an after tax income of 600k pa that is more than enough. So lets half that even 300k should pay the bills so i can squirrel the other 35m 'offshore' so HMRC are as unaware as possible it exists, BUT that could involve some risk The thought of HMRC collecting 40% of whats left sticks in the craw somewhat

Although I note the offshore suggestion but if one was UK domiciled and the money on bank deposit I assume you would be paying the additional rate of 45% rather than 40% tax on nearly all the income and on deposit you would be losing ?3% to inflation - (interest - 45% tax) so -2,250,000 inflation offset by interest 1,050,000 minus tax 472500

So 577,500 net income with 1,672,500 lost to inflation and 472,500 to tax = 2,145,000 overall "loss"

Although high end wealth managers' fees might also induce craw-sticking feelings I would not want either to stick it in a bank account to shrivel away with inflation nor to devote large amounts of time and energy to looking after the £75m and would get them to do so. They would diversify, generate sufficient income, advise on tax and ensure that offspring and their offspring had plenty but couldn't burn through it. At only £75m your trust wouldn't warrant employing an in-house team (like, say the Rothschild's or Caledonia or, presumably the Westminster family) but you could find a team to place it with.

I used to buy tickets but another way of "winning" the lottery which I have found effective is not to play it (+£5200 over the last decade).

[bmwmike]

Is an interesting problem. A nice problem to have I'm sure. I was thinking equity / stocks but you'd still lose the protection.

[Doofus]

Revisitph said:

Although I note the offshore suggestion but if one was UK domiciled and the money on bank deposit I assume you would be paying the additional rate of 45% rather than 40% tax on nearly all the income and on deposit you would be losing ?3% to inflation - (interest - 45% tax) so -2,250,000 inflation offset by interest 1,050,000 minus tax 472500

So 577,500 net income with 1,672,500 lost to inflation and 472,500 to tax = 2,145,000 overall "loss"

What?

The 577,500 is already net of the 472,500 tax. You can't take it off again. That tax comes out of the gain made through intersst, not off the capital sum, so it can't be part of your loss. In your scenario, the only loss is the theoretical inflation figire.

[BoRED S2upid]

silverfoxcc said:

Yorkshire Bank are offering 1.4% on current accounts

Yorkshire bank? You could buy Yorkshire never mind their bank!

With that much you surely have private banks that are reserved for the super rich only. I imagine these have better perks than the Yorkos.

[The Mad Monk]

silverfoxcc said:

OK please note this is written before tonights lottery,so entirely a hypothetical question. However you never know!

Lets say i got tonights Euro millions

Mentally i have allocated family and charities a few bob, and with the new house and pipe dream theres another 15m gone
so i will be left with about 75m

What is the best rate of interest that i could get , and know my money is 100% safe ( or as good as)

Will accept overseas banks. Switzerland/CI spring to mind AND i have no problems in paying the 40%? unearned income tax

Realistically how much, after tax,would be the annual income?

Over to the bankers

https://en.wikipedia.org/wiki/John_Bingham,_7th_Earl_of_Lucan

What did these sort of people do? They hardly worked. The family money was invested - where? Gilts @ 2%?

£75,000,000 @ 2% will give you £1,500,000 a year that should be enough, shouldn't it? The capital is untouched, to pass on to the wastrels down the line.

[DonkeyApple]

bmwmike said:

Is an interesting problem. A nice problem to have I'm sure. I was thinking equity / stocks but you'd still lose the protection.

You wouldn’t be using a highstreet retail broker though