Using £400k to generate c.£5k per month
Discussion
Obviously I am asking for a 'friend'.
So, just after views. Increasingly disillusioned with corporate life, so planning to bale. c. 50 yrs old, still have some responsibilities, so could do with about £5k per month to top up other entirely passive income. (Early Pension, rent on 1 property mainly). Depending on level of risk, have some funds to invest up to £400k unincumbered.
I'm thinking about developing some interests more seriously into a business and top of the list are:
- Car dealing (doing it properly, i.e. insurance, registered with DVLA / HMRC, Finance offering, Warranty, Auction account etc.) I am semi rural so could at least start from home - no problem with up to 10 cars being here. Feels like relatively low investment, but potentially high effort and not passive. And I'm not overlooking the strangers turning up at home issue - would be very selective on the cars traded.
- HMO / Professional room lets. High investment, but would 'leverage'. More passive (not fully of course). Potential capital growth and monthly cashflow.
- Property purchase and renovation. May look at this on a selective basis - I've done a few, tax and costs are an issue now, feels like this is least passive and most risk.
- Business purchase / creation. For example, looking at a self storage business...doing the diligence of course.
- I am running a few income lines from my current industry, so before someone says develop what you've always done, that's also on the cards, but won't be full time, I don't think.
Any other ideas / views welcomed and also feel free to reality check on a 15% return from £400k....Thx.
So, just after views. Increasingly disillusioned with corporate life, so planning to bale. c. 50 yrs old, still have some responsibilities, so could do with about £5k per month to top up other entirely passive income. (Early Pension, rent on 1 property mainly). Depending on level of risk, have some funds to invest up to £400k unincumbered.
I'm thinking about developing some interests more seriously into a business and top of the list are:
- Car dealing (doing it properly, i.e. insurance, registered with DVLA / HMRC, Finance offering, Warranty, Auction account etc.) I am semi rural so could at least start from home - no problem with up to 10 cars being here. Feels like relatively low investment, but potentially high effort and not passive. And I'm not overlooking the strangers turning up at home issue - would be very selective on the cars traded.
- HMO / Professional room lets. High investment, but would 'leverage'. More passive (not fully of course). Potential capital growth and monthly cashflow.
- Property purchase and renovation. May look at this on a selective basis - I've done a few, tax and costs are an issue now, feels like this is least passive and most risk.
- Business purchase / creation. For example, looking at a self storage business...doing the diligence of course.
- I am running a few income lines from my current industry, so before someone says develop what you've always done, that's also on the cards, but won't be full time, I don't think.
Any other ideas / views welcomed and also feel free to reality check on a 15% return from £400k....Thx.
Yeah 15% is going to involve some risk. HMOs at age 50 with the constant tinkering/ fixing/ f
ktards you get? No thanks. Student lets similar maybe but 15% seems challenging tbh, not forgetting the upcoming renter's rights bks and what you buy now sensibly would comply, or you'll end up selling, like so many LL's currently are.
ktards you get? No thanks. Student lets similar maybe but 15% seems challenging tbh, not forgetting the upcoming renter's rights bks and what you buy now sensibly would comply, or you'll end up selling, like so many LL's currently are. £5k/month = £60k per year. From £400k, that equates to 15% annual return.
That is ambitious if you want true passivity (as most “passive” investments return 3–8%).
15% is possible, but not without some form of leverage or running a business....unless you want to consider speculative high risk investment.
That is ambitious if you want true passivity (as most “passive” investments return 3–8%).
15% is possible, but not without some form of leverage or running a business....unless you want to consider speculative high risk investment.
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