Index tracker for a business?
Discussion
My business generates money based on me. It does well enough but I haven't figured out how to grow it from me yet, at least not in a direction I want to go. I need to figure that out at some point but so far have failed.
Consequently the business is sitting on some cash and the pile is growing but not earning. If it were me personally I'd shove it in a Vanguard tracker and forget about it until I needed it, but they don't seem to offer business accounts.
I've a vague recollection as well of this not being a good look - investing profits somewhere other than the business, but that sounds questionable to me.
Any suggestions?
Consequently the business is sitting on some cash and the pile is growing but not earning. If it were me personally I'd shove it in a Vanguard tracker and forget about it until I needed it, but they don't seem to offer business accounts.
I've a vague recollection as well of this not being a good look - investing profits somewhere other than the business, but that sounds questionable to me.
Any suggestions?
If you are not prepared to commit to a decent investment term then index trackers are not going to be suitable for you as shorter term volatility can mean you lose money if you need to come out before markets have recovered.
I understand that your cash is losing against inflation, but it has security in return.
A halfway house could be something that was more focused on bonds. These offer a much higher potential return than cash but with much less volatility than equities (index trackers following stockmarkets.
Give me a shout if you would like to know more.
I understand that your cash is losing against inflation, but it has security in return.
A halfway house could be something that was more focused on bonds. These offer a much higher potential return than cash but with much less volatility than equities (index trackers following stockmarkets.
Give me a shout if you would like to know more.
I'm in a similar position, but coming down on the side of investing the funds personally as tax-efficiently as possible (company pension contributions mainly) and a probable future MVL with entrepreneur's relief.
If you do want to keep the funds inside the business, this guy has some interesting ideas:
https://www.foxymonkey.com/how-to-invest-your-comp...
Having a separate company from your trading business for the investment side seems prudent.
Normal 'I am not an accountant' disclaimers apply.
If you do want to keep the funds inside the business, this guy has some interesting ideas:
https://www.foxymonkey.com/how-to-invest-your-comp...
Having a separate company from your trading business for the investment side seems prudent.
Normal 'I am not an accountant' disclaimers apply.
Sambucket said:
HL offer a biz account. I stick mine in ultra low risk funds and pay tax on gains of course
It seems they don't at the moment - temporarily suspended due to covid apparently.https://www.hl.co.uk/features/coronavirus-informat...
Repeat of a post I put on another thread that seems to be appropriate here:
I put some capital into a WiseAlpha Business Account and have spread it over as many bonds as possible in sectors I feel are safer i.e haven't bought any retail/hospitality bonds, I have bought infrastructure for example. In 3 months I'm about 7% up so far and I keep reinvesting the interest payments in bonds I don't yet own to spread the risk further. Of course it's riskier than holding cash savings, but overall I think the risk is worth it when thinly spread over many many company bonds.
They also have a robo-invest product if you want to leave it upto an algorithm to pick bonds for you.
My referral link:
https://www.wisealpha.com/?ref=RDZ1ekl5VYOgMpw
Non-referral link:
www.wisealpha.com
I put some capital into a WiseAlpha Business Account and have spread it over as many bonds as possible in sectors I feel are safer i.e haven't bought any retail/hospitality bonds, I have bought infrastructure for example. In 3 months I'm about 7% up so far and I keep reinvesting the interest payments in bonds I don't yet own to spread the risk further. Of course it's riskier than holding cash savings, but overall I think the risk is worth it when thinly spread over many many company bonds.
They also have a robo-invest product if you want to leave it upto an algorithm to pick bonds for you.
My referral link:
https://www.wisealpha.com/?ref=RDZ1ekl5VYOgMpw
Non-referral link:
www.wisealpha.com
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