How to invest 50k other than buy property?

How to invest 50k other than buy property?

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Discussion

FlatToTheMat

Original Poster:

1,426 posts

164 months

Saturday 10th June 2017
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Hello all,

I very rarely venture in this part of PH but wondered if anyone fancied sharing what they would do with 50k other than buy property.

My wife and I had saved to buy but due to unforeseen oversight we were declined by the banks and told to return in 5 years (long story short)

We have 0 debts and are renting. We live well within our means and can very comfortably save 1-2k per month going forward but we do have a lump sum resting in the savings account not doing anything.

We are cautious people so have no interest in a great deal of risk and the objective would be to as securely as possible, add to the capital in preparation of a future house purchase.

Ideas welcome and thanks in advance.

bogie

16,407 posts

273 months

Saturday 10th June 2017
quotequote all
Depends on circumstances, I would just put it in my pension as then I can get 40% tax relief on it, stick it in a low cost Vanguard fund and forget about it for 10-20 years.

FlatToTheMat

Original Poster:

1,426 posts

164 months

Saturday 10th June 2017
quotequote all
Thanks bogie, I will look into vanguard.

We aren't looking at our pensions just yet (perhaps foolishly) as we are 30. As we are without property, we want to keep the money liquid for use in 5 or so years

PurpleMoonlight

22,362 posts

158 months

Saturday 10th June 2017
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Investments, Premium Bonds, ISA's?


98elise

26,724 posts

162 months

Saturday 10th June 2017
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I would invest in a variety of funds using your ISA allowances. Some funds have returned 100% over the course of a few years. I've just started investing via SIPP and ISA and my funds are up about 10% in about 3 months.

Looking back at how those funds performed over the a past few years, I wish I'd started much earlier.

limpsfield

5,896 posts

254 months

Saturday 10th June 2017
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FlatToTheMat said:
We are cautious people so have no interest in a great deal of risk and the objective would be to as securely as possible, add to the capital in preparation of a future house purchase.

Ideas welcome and thanks in advance.
What do you view as a great deal of risk ? If you want zero risk then it has to be premium bonds or a savings account. Another option with more risk would be to dribble it into some sort of market tracker every month e.g. Buy £1,500 a month of a FTSE or S&P tracker. Still risk but monthly payments smooth out the bumps of just dumping £50k in on day one.

And then cash out at the end when you want the money.

Jon39

12,873 posts

144 months

Saturday 10th June 2017
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bogie said:
Depends on circumstances, I would just put it in my pension as then I can get 40% tax relief on it, stick it in a low cost Vanguard fund and forget about it for 10-20 years.

I think OP states the money will be needed as deposit for first house purchase, in maybe 5 years time.

Having begun with a tiny stake in equities 30 years ago, and now ..... , I would usually recommend doing the same.
However, not in the case of the OPs circumstances, because it breaks one of my golden investment rules.
IE. If a portfolio needs to be liquidated to use the money for a transaction such as house purchase, there is always a chance that a stock market decline occurs at just the wrong time. Equity investment works best when there is absolutely no reason ever to sell.




Nano2nd

3,426 posts

257 months

Saturday 10th June 2017
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help to buy ISA?

Jockman

17,917 posts

161 months

Saturday 10th June 2017
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Nano2nd said:
help to buy ISA?
Is the lifetime ISA better? Both can be used for the same purpose IIRC.

Genuine question as I no longer have ISAs but I do still take an interest in them.

Croutons

9,928 posts

167 months

Saturday 10th June 2017
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98elise said:
my funds are up about 10% in about 3 months.
Out of interest, have you told us all what they are on any thread?

neilski

2,563 posts

236 months

Saturday 10th June 2017
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Air cooled 911?

FlatToTheMat

Original Poster:

1,426 posts

164 months

Saturday 10th June 2017
quotequote all
Thanks all for your time, didn't expect such a response.

Lots to look at with regards to bonds and ISAs it seems. Skim reading over a few pages on google so far and it seems straight forward enough, if not as 'available' to us here in Ireland.

The air cooled 911 ship has sailed I fear and besides, inner city street parking and an appreciating classic can't mix well!

BoRED S2upid

19,731 posts

241 months

Saturday 10th June 2017
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Jon39 said:

I think OP states the money will be needed as deposit for first house purchase, in maybe 5 years time.

Having begun with a tiny stake in equities 30 years ago, and now ..... , I would usually recommend doing the same.
However, not in the case of the OPs circumstances, because it breaks one of my golden investment rules.
IE. If a portfolio needs to be liquidated to use the money for a transaction such as house purchase, there is always a chance that a stock market decline occurs at just the wrong time. Equity investment works best when there is absolutely no reason ever to sell.
Sensible advice for an S&S ISA it needs to be long term and money you can afford to loose. Therefore these help to buy Isas seem like the correct answer to the OP's question. Or premium bonds. How's your luck OP? You could hit it big or win £25!

FlatToTheMat

Original Poster:

1,426 posts

164 months

Saturday 10th June 2017
quotequote all
BoRED S2upid said:
Jon39 said:

I think OP states the money will be needed as deposit for first house purchase, in maybe 5 years time.

Having begun with a tiny stake in equities 30 years ago, and now ..... , I would usually recommend doing the same.
However, not in the case of the OPs circumstances, because it breaks one of my golden investment rules.
IE. If a portfolio needs to be liquidated to use the money for a transaction such as house purchase, there is always a chance that a stock market decline occurs at just the wrong time. Equity investment works best when there is absolutely no reason ever to sell.
Sensible advice for an S&S ISA it needs to be long term and money you can afford to loose. Therefore these help to buy Isas seem like the correct answer to the OP's question. Or premium bonds. How's your luck OP? You could hit it big or win £25!
Thanks again for the advice. Help tyou buy ISA is on my to research list for tomorrow.

Sadly, I don't have much luck and I have won so much as an argument in years so wouldn't hold my breath for €25!

NickCQ

5,392 posts

97 months

Saturday 10th June 2017
quotequote all
OP could try to get exposure to indices correlated to the UK residential property market. Then you are hedged to changes in value of the property you ultimately are trying to buy with this cash in 5 years time.


Edited by NickCQ on Saturday 10th June 23:42

98elise

26,724 posts

162 months

Sunday 11th June 2017
quotequote all
Croutons said:
98elise said:
my funds are up about 10% in about 3 months.
Out of interest, have you told us all what they are on any thread?
It sounds like you think I keep posting it but don't have any evidence?

The main fund is lindsell train global equity. It's growth in the past year has been 37% and I've got over 10% since I invested.

http://www.hl.co.uk/funds/fund-discounts,-prices--...

There are other funds with similar growth. Just look through the HL wealth 150 and you can find others will similar levels of growth (some more).

I started a thread on here about a month ago about diversifying and the consensus was that I should which I'm now doing. Lindsell Train is still over 50% of my portfolio, but I've not finished yet.


Croutons

9,928 posts

167 months

Sunday 11th June 2017
quotequote all
98elise said:
It sounds like you think I keep posting it but don't have any evidence?
No, no, not at all! I'm not on here often enough to keep up with things and am genuinely interested as I'm moving a crap pension to a SIPP so am nosing at other people's fund choices!

ETA, the change of mobile "skin" enforced on this site has killed much of my interest as it's much more time consuming to navigate, such a school boy error from the owners...


Edited by Croutons on Sunday 11th June 09:09

Bikesalot

1,836 posts

159 months

Wednesday 14th June 2017
quotequote all
Without knowing all the circumstances, have you tried all the banks to get a mortgage, have you tried using a broker and talking your circumstances through with them?

Depending on the size of property you want to buy that's a fairly chunky deposit.

FlatToTheMat

Original Poster:

1,426 posts

164 months

Wednesday 14th June 2017
quotequote all
Bikesalot said:
Without knowing all the circumstances, have you tried all the banks to get a mortgage, have you tried using a broker and talking your circumstances through with them?

Depending on the size of property you want to buy that's a fairly chunky deposit.
Thanks for your reply. We went through a broker who tried all the banks with a letter of explanation etc

It was due to an unpaid and forgotten credit card that I had €600 on but was ultimately forgotten about for 2 years (we had emigrated)

50k was a 20% deposit, we are both on decent salarys too, my wife especially. We have been told to try again in 3-5 years. According to the broker we used, Irish banks are far more cautious than uk banks after the Celtic Tiger fiasco, and no one is willing to stick there heads above the parapet. Even with her father offering to stick a further 20k in a gaurentee type account attached to the mortgage for 2 years.

No one to blame but myself

Bikesalot

1,836 posts

159 months

Wednesday 14th June 2017
quotequote all
Ah I see!

These things happen...

Can't offer any advice on where to stick 50k though.