Where to park a million pounds...
Discussion
Hi
Appreciate this is a dick post to some, but looking for some advice/pointers from those with more financial experience than myself...
Limited business currently has £1m cash in bank. Brings in about £180-200k net profit per month. I am sole director and shareholder.
Business owns property and land value circa £2m, be about £700k left on mortgage. Mortgage is on variable rate so has had a fair few jumps, cost around £7500/month.
Just wondering what to do with this money really. Pay off mortgage? But then if an investment opportunity came along I might not have enough cash to pounce.
Can't really expand current business operations much more as we are pretty maxed out. Don't have the time for any other serious business interests. No desire to buy any toys or holidays etc, no family to speak of.
Like the idea of buying land but very rarely available, return on renting it out is poor but I would expect values to increase significantly in coming years.
Buying houses might be a better bet? But nightmare tenants could be a problem?
Would be a bit worried about buying shares/financial investments, don't know enough about them?
Cheers
Appreciate this is a dick post to some, but looking for some advice/pointers from those with more financial experience than myself...
Limited business currently has £1m cash in bank. Brings in about £180-200k net profit per month. I am sole director and shareholder.
Business owns property and land value circa £2m, be about £700k left on mortgage. Mortgage is on variable rate so has had a fair few jumps, cost around £7500/month.
Just wondering what to do with this money really. Pay off mortgage? But then if an investment opportunity came along I might not have enough cash to pounce.
Can't really expand current business operations much more as we are pretty maxed out. Don't have the time for any other serious business interests. No desire to buy any toys or holidays etc, no family to speak of.
Like the idea of buying land but very rarely available, return on renting it out is poor but I would expect values to increase significantly in coming years.
Buying houses might be a better bet? But nightmare tenants could be a problem?
Would be a bit worried about buying shares/financial investments, don't know enough about them?
Cheers
Congratulations on the successful business mate.
If you're netting £180k-£200k per month, you can pay the mortgage off in 4 months without touching the £1m right? That's what I would do.
I've been in that position, and this is what I did:
1. Kept whatever monthly liquidity is needed in an instant access account.
2. Open interest-bearing 32 day notice accounts in as many different banks as poss and put £85k in each.
3. Open investment accounts with 2 or 3 fund managers, and let them do the work.
4. If/when any investment opportunities arise, give 32 days notice.
Good luck mate!
If you're netting £180k-£200k per month, you can pay the mortgage off in 4 months without touching the £1m right? That's what I would do.
I've been in that position, and this is what I did:
1. Kept whatever monthly liquidity is needed in an instant access account.
2. Open interest-bearing 32 day notice accounts in as many different banks as poss and put £85k in each.
3. Open investment accounts with 2 or 3 fund managers, and let them do the work.
4. If/when any investment opportunities arise, give 32 days notice.
Good luck mate!
Al Gorithum said:
Congratulations on the successful business mate.
If you're netting £180k-£200k per month, you can pay the mortgage off in 4 months without touching the £1m right? That's what I would do.
I've been in that position, and this is what I did:
1. Kept whatever monthly liquidity is needed in an instant access account.
2. Open interest-bearing 32 day notice accounts in as many different banks as poss and put £85k in each.
3. Open investment accounts with 2 or 3 fund managers, and let them do the work.
4. If/when any investment opportunities arise, give 32 days notice.
Good luck mate!
Caution needed with this - IIRC the 85k 'government insured' amount is per banking group, not per bank? So if Halifax and Bank of Scotland both fall under HBOS, one would only get 85k in 'insurance' if one had 85k in each bank and both failed.If you're netting £180k-£200k per month, you can pay the mortgage off in 4 months without touching the £1m right? That's what I would do.
I've been in that position, and this is what I did:
1. Kept whatever monthly liquidity is needed in an instant access account.
2. Open interest-bearing 32 day notice accounts in as many different banks as poss and put £85k in each.
3. Open investment accounts with 2 or 3 fund managers, and let them do the work.
4. If/when any investment opportunities arise, give 32 days notice.
Good luck mate!
I think...
AndyC_123 said:
Hi
Appreciate this is a dick post to some, but looking for some advice/pointers from those with more financial experience than myself...
Limited business currently has £1m cash in bank. Brings in about £180-200k net profit per month. I am sole director and shareholder.
Business owns property and land value circa £2m, be about £700k left on mortgage. Mortgage is on variable rate so has had a fair few jumps, cost around £7500/month.
Just wondering what to do with this money really. Pay off mortgage? But then if an investment opportunity came along I might not have enough cash to pounce.
Can't really expand current business operations much more as we are pretty maxed out. Don't have the time for any other serious business interests. No desire to buy any toys or holidays etc, no family to speak of.
Like the idea of buying land but very rarely available, return on renting it out is poor but I would expect values to increase significantly in coming years.
Buying houses might be a better bet? But nightmare tenants could be a problem?
Would be a bit worried about buying shares/financial investments, don't know enough about them?
Cheers
https://www.pistonheads.com/gassing/topic.asp?h=0&t=1999656&mid=44071Appreciate this is a dick post to some, but looking for some advice/pointers from those with more financial experience than myself...
Limited business currently has £1m cash in bank. Brings in about £180-200k net profit per month. I am sole director and shareholder.
Business owns property and land value circa £2m, be about £700k left on mortgage. Mortgage is on variable rate so has had a fair few jumps, cost around £7500/month.
Just wondering what to do with this money really. Pay off mortgage? But then if an investment opportunity came along I might not have enough cash to pounce.
Can't really expand current business operations much more as we are pretty maxed out. Don't have the time for any other serious business interests. No desire to buy any toys or holidays etc, no family to speak of.
Like the idea of buying land but very rarely available, return on renting it out is poor but I would expect values to increase significantly in coming years.
Buying houses might be a better bet? But nightmare tenants could be a problem?
Would be a bit worried about buying shares/financial investments, don't know enough about them?
Cheers
If you spend £1m a month isn't £1m in the bank simply operating capital?
RSTurboPaul said:
Al Gorithum said:
Congratulations on the successful business mate.
If you're netting £180k-£200k per month, you can pay the mortgage off in 4 months without touching the £1m right? That's what I would do.
I've been in that position, and this is what I did:
1. Kept whatever monthly liquidity is needed in an instant access account.
2. Open interest-bearing 32 day notice accounts in as many different banks as poss and put £85k in each.
3. Open investment accounts with 2 or 3 fund managers, and let them do the work.
4. If/when any investment opportunities arise, give 32 days notice.
Good luck mate!
Caution needed with this - IIRC the 85k 'government insured' amount is per banking group, not per bank? So if Halifax and Bank of Scotland both fall under HBOS, one would only get 85k in 'insurance' if one had 85k in each bank and both failed.If you're netting £180k-£200k per month, you can pay the mortgage off in 4 months without touching the £1m right? That's what I would do.
I've been in that position, and this is what I did:
1. Kept whatever monthly liquidity is needed in an instant access account.
2. Open interest-bearing 32 day notice accounts in as many different banks as poss and put £85k in each.
3. Open investment accounts with 2 or 3 fund managers, and let them do the work.
4. If/when any investment opportunities arise, give 32 days notice.
Good luck mate!
I think...
That said, nobody can sensibly advise the OP on strategy until they know how long he expects to be able generate that sort of income for. It has a bearing on asset allocation and whether/when to withdraw from the business.
Fwiw, if the money’s coming out, it’s hard to beat NS&I as a secure place to park money BUT it comes at a cost due to crappy interest rate. Up to £3 in there iirc.
AndyC_123 said:
Can't really expand current business operations much more as we are pretty maxed out. Don't have the time for any other serious business interests.
Is the business your life? I suppose I mean would you miss working, is it work that gives you the most purpose?I only say this as it looks like you could step back (are you crucial in it's operation now?) and it'd largely run itself especially if you have employees you trust and could promote.
Basically it would mean you foregoing some money/profits to give you time? Even if that's for new business opportunities?
Al Gorithum said:
LooneyTunes said:
Fwiw, if the money’s coming out, it’s hard to beat NS&I as a secure place to park money BUT it comes at a cost due to crappy interest rate. Up to £3 in there iirc.
Last time I looked at NS&I it wasn't available to businesses, but that may have changed.trickywoo said:
AndyC_123 said:
Hi
Appreciate this is a dick post to some, but looking for some advice/pointers from those with more financial experience than myself...
Limited business currently has £1m cash in bank. Brings in about £180-200k net profit per month. I am sole director and shareholder.
Business owns property and land value circa £2m, be about £700k left on mortgage. Mortgage is on variable rate so has had a fair few jumps, cost around £7500/month.
Just wondering what to do with this money really. Pay off mortgage? But then if an investment opportunity came along I might not have enough cash to pounce.
Can't really expand current business operations much more as we are pretty maxed out. Don't have the time for any other serious business interests. No desire to buy any toys or holidays etc, no family to speak of.
Like the idea of buying land but very rarely available, return on renting it out is poor but I would expect values to increase significantly in coming years.
Buying houses might be a better bet? But nightmare tenants could be a problem?
Would be a bit worried about buying shares/financial investments, don't know enough about them?
Cheers
https://www.pistonheads.com/gassing/topic.asp?h=0&t=1999656&mid=44071Appreciate this is a dick post to some, but looking for some advice/pointers from those with more financial experience than myself...
Limited business currently has £1m cash in bank. Brings in about £180-200k net profit per month. I am sole director and shareholder.
Business owns property and land value circa £2m, be about £700k left on mortgage. Mortgage is on variable rate so has had a fair few jumps, cost around £7500/month.
Just wondering what to do with this money really. Pay off mortgage? But then if an investment opportunity came along I might not have enough cash to pounce.
Can't really expand current business operations much more as we are pretty maxed out. Don't have the time for any other serious business interests. No desire to buy any toys or holidays etc, no family to speak of.
Like the idea of buying land but very rarely available, return on renting it out is poor but I would expect values to increase significantly in coming years.
Buying houses might be a better bet? But nightmare tenants could be a problem?
Would be a bit worried about buying shares/financial investments, don't know enough about them?
Cheers
If you spend £1m a month isn't £1m in the bank simply operating capital?
I would probably leave it as operating capital till the end of the year as the current financial outlook is not great.
Then early next year if we have had a soft landing I would then look at it by which point it should be closer to 2.5 million and I would be paying the mortgage down and moving the balance into the best account I could find that would allow multiple withdrawals.
Fill up a pension pot now no limits on size. Bit boring but good as part of an overall strategy.
To be fair I would be looking at property deals. Buying retail parks where they may be opportunity to build more commercial units / out of town housing developments etc.
All the higher end shops like gails etc are looking for sites to build their drive throughs etc.
Get a good buying agent to find you deals and have a solid planning consultant on board to explore angles.
A very very successful person told me many years ago. Buy first, think later!
As long as you can see things going on around your proposed purchase, then really it should all be an inevitability in time.
To be fair I would be looking at property deals. Buying retail parks where they may be opportunity to build more commercial units / out of town housing developments etc.
All the higher end shops like gails etc are looking for sites to build their drive throughs etc.
Get a good buying agent to find you deals and have a solid planning consultant on board to explore angles.
A very very successful person told me many years ago. Buy first, think later!
As long as you can see things going on around your proposed purchase, then really it should all be an inevitability in time.
okgo said:
Paying 2.85% at the moment on instant access income bond which not to shabby compared to a few months ago when it was paying less than 1%Gassing Station | Finance | Top of Page | What's New | My Stuff