£40k - What to do?
Discussion
Hi guys,
First time posting in here, so please bear with me.
I'm due to receive around £40k na dmy initial thoughts were to buy myself that once in a lifetime car, as I doubt I'll get a windfall like this again. However, I'm having real trouble finding a suitable all rounder to replace my Subaru. So, thinking that sometime down the line, maybe 12 months or so, a suitable car may pop up, then I need to do something constructive with my money.
So to that end, what could I do to make it work best for me and give me a decent return? What sort of return would I be looking at and how difficult would it be to access my money once invested? There are probably other things I need to consider and I think I need a few pointers. Some folks on another website suggested property, but I'll be damned if I can find any property for £40k..! Plus, the rent and hassle involved would be a pain wouldn't it..?
Open my eyes and show me the way......!!!
Cheers,
Nige.
First time posting in here, so please bear with me.
I'm due to receive around £40k na dmy initial thoughts were to buy myself that once in a lifetime car, as I doubt I'll get a windfall like this again. However, I'm having real trouble finding a suitable all rounder to replace my Subaru. So, thinking that sometime down the line, maybe 12 months or so, a suitable car may pop up, then I need to do something constructive with my money.
So to that end, what could I do to make it work best for me and give me a decent return? What sort of return would I be looking at and how difficult would it be to access my money once invested? There are probably other things I need to consider and I think I need a few pointers. Some folks on another website suggested property, but I'll be damned if I can find any property for £40k..! Plus, the rent and hassle involved would be a pain wouldn't it..?
Open my eyes and show me the way......!!!
Cheers,
Nige.
v8voodoo said:
Hi guys,
First time posting in here, so please bear with me.
I'm due to receive around £40k na dmy initial thoughts were to buy myself that once in a lifetime car, as I doubt I'll get a windfall like this again. However, I'm having real trouble finding a suitable all rounder to replace my Subaru. So, thinking that sometime down the line, maybe 12 months or so, a suitable car may pop up, then I need to do something constructive with my money.
So to that end, what could I do to make it work best for me and give me a decent return? What sort of return would I be looking at and how difficult would it be to access my money once invested? There are probably other things I need to consider and I think I need a few pointers. Some folks on another website suggested property, but I'll be damned if I can find any property for £40k..! Plus, the rent and hassle involved would be a pain wouldn't it..?
Cheers,
Nige.
First time posting in here, so please bear with me.
I'm due to receive around £40k na dmy initial thoughts were to buy myself that once in a lifetime car, as I doubt I'll get a windfall like this again. However, I'm having real trouble finding a suitable all rounder to replace my Subaru. So, thinking that sometime down the line, maybe 12 months or so, a suitable car may pop up, then I need to do something constructive with my money.
So to that end, what could I do to make it work best for me and give me a decent return? What sort of return would I be looking at and how difficult would it be to access my money once invested? There are probably other things I need to consider and I think I need a few pointers. Some folks on another website suggested property, but I'll be damned if I can find any property for £40k..! Plus, the rent and hassle involved would be a pain wouldn't it..?
Cheers,
Nige.
£40k deposit and then say £40k on mortgage would see you in to a 2 bed in flat in certain parts of the country, the large desosit would allow you a decent chance of making money off the rental income. Infact, an interest only mortgage would be under £200 a month, rental on a 2 bed flat should be £400/month minimum so that would give you about £1500 a year after letting agent fee's and maintenance I would think. Letting agents dont give you as much profit off the rental, but they can take the pain/hassle out the equation.
Granted £40k in say an egg.com account would give you £2k interest a year, but with a property, you would probably see at least 2-3% value increase. That'd give you the £1500 rental income plus around £2k value increase.
But then a property isnt as easy to shift quick if the dream car turns up.
Theres a few IFA's on here, probably best talking to them or seeing one locally. Yes, you'd have to pay but its their job to do this kind of thing.
If you already have a mortgage it might be worth considering putting the money into an offset or bank account mortgage. Okay there are set up fees, but you have the money earning you the maximum return on your money with absolutely no ties or risk about withdrawing your £40k.
If you looking for instant access to your cash (a day or so) I can't see a better way of getting a good 8%ish return on money (mortgage rate * your tax rate) 5.75*1.22 = 7.01% basic rate tax payer or 8.05% for a higher rate tax payer. Of course it is much more complicated than my calculations make out especially around compound interest, but worth discussing with an IFA.
If you looking for instant access to your cash (a day or so) I can't see a better way of getting a good 8%ish return on money (mortgage rate * your tax rate) 5.75*1.22 = 7.01% basic rate tax payer or 8.05% for a higher rate tax payer. Of course it is much more complicated than my calculations make out especially around compound interest, but worth discussing with an IFA.
Edited by thepeoplespal on Tuesday 9th January 13:56
I cant find your Ts and Cs Ves.....hmm...wonder why?? 
My suggestion :
BBC camera equipment/lighting rig = £400/day (2 days) [£1600]
Professional cameraman = £400/day (2 days) [£1600]
really fine slutette = £300/afternoon (would suggest getting 2-3 of those) [£2400]
editing costs =~£3,000 [£3000]
DVD production = £1/film (make 1,000/go) [£1000]
costs = £9,600
average disti price reimbursement = £12
average 'film' distribution = 20,000 units
first 1,000 sold = £12,000 (minus 9,600 costs = 2,300 profit)
every subsequent thousand sold = £11,000 profit.
genius!
My suggestion :
BBC camera equipment/lighting rig = £400/day (2 days) [£1600]
Professional cameraman = £400/day (2 days) [£1600]
really fine slutette = £300/afternoon (would suggest getting 2-3 of those) [£2400]
editing costs =~£3,000 [£3000]
DVD production = £1/film (make 1,000/go) [£1000]
costs = £9,600
average disti price reimbursement = £12
average 'film' distribution = 20,000 units
first 1,000 sold = £12,000 (minus 9,600 costs = 2,300 profit)
every subsequent thousand sold = £11,000 profit.
genius!
If you want access to your money, then property is not the way forward. Property is a long term investment. An offset mortgage would allow you to save against your current mortgage, but you'd have to do the sums to make sure it was worthwhile. (Assuming you have a mortgage to offset your savings against). If you want to talk about that I'm a broker so PM me.
emicen said:
v8voodoo said:
Hi guys,
First time posting in here, so please bear with me.
I'm due to receive around £40k na dmy initial thoughts were to buy myself that once in a lifetime car, as I doubt I'll get a windfall like this again. However, I'm having real trouble finding a suitable all rounder to replace my Subaru. So, thinking that sometime down the line, maybe 12 months or so, a suitable car may pop up, then I need to do something constructive with my money.
So to that end, what could I do to make it work best for me and give me a decent return? What sort of return would I be looking at and how difficult would it be to access my money once invested? There are probably other things I need to consider and I think I need a few pointers. Some folks on another website suggested property, but I'll be damned if I can find any property for £40k..! Plus, the rent and hassle involved would be a pain wouldn't it..?
Cheers,
Nige.
First time posting in here, so please bear with me.
I'm due to receive around £40k na dmy initial thoughts were to buy myself that once in a lifetime car, as I doubt I'll get a windfall like this again. However, I'm having real trouble finding a suitable all rounder to replace my Subaru. So, thinking that sometime down the line, maybe 12 months or so, a suitable car may pop up, then I need to do something constructive with my money.
So to that end, what could I do to make it work best for me and give me a decent return? What sort of return would I be looking at and how difficult would it be to access my money once invested? There are probably other things I need to consider and I think I need a few pointers. Some folks on another website suggested property, but I'll be damned if I can find any property for £40k..! Plus, the rent and hassle involved would be a pain wouldn't it..?
Cheers,
Nige.
£40k deposit and then say £40k on mortgage would see you in to a 2 bed in flat in certain parts of the country, the large desosit would allow you a decent chance of making money off the rental income. Infact, an interest only mortgage would be under £200 a month, rental on a 2 bed flat should be £400/month minimum so that would give you about £1500 a year after letting agent fee's and maintenance I would think. Letting agents dont give you as much profit off the rental, but they can take the pain/hassle out the equation.
Granted £40k in say an egg.com account would give you £2k interest a year, but with a property, you would probably see at least 2-3% value increase. That'd give you the £1500 rental income plus around £2k value increase.
But then a property isnt as easy to shift quick if the dream car turns up.
Theres a few IFA's on here, probably best talking to them or seeing one locally. Yes, you'd have to pay but its their job to do this kind of thing.
real inflation is 5% so you need to get more than this. some cars will retain more value that GBP. buy an integrale with a few 1000s miles and store it - see AT
. Or buy precious metal. madras said:
emicen said:
v8voodoo said:
Hi guys,
First time posting in here, so please bear with me.
I'm due to receive around £40k na dmy initial thoughts were to buy myself that once in a lifetime car, as I doubt I'll get a windfall like this again. However, I'm having real trouble finding a suitable all rounder to replace my Subaru. So, thinking that sometime down the line, maybe 12 months or so, a suitable car may pop up, then I need to do something constructive with my money.
So to that end, what could I do to make it work best for me and give me a decent return? What sort of return would I be looking at and how difficult would it be to access my money once invested? There are probably other things I need to consider and I think I need a few pointers. Some folks on another website suggested property, but I'll be damned if I can find any property for £40k..! Plus, the rent and hassle involved would be a pain wouldn't it..?
Cheers,
Nige.
First time posting in here, so please bear with me.
I'm due to receive around £40k na dmy initial thoughts were to buy myself that once in a lifetime car, as I doubt I'll get a windfall like this again. However, I'm having real trouble finding a suitable all rounder to replace my Subaru. So, thinking that sometime down the line, maybe 12 months or so, a suitable car may pop up, then I need to do something constructive with my money.
So to that end, what could I do to make it work best for me and give me a decent return? What sort of return would I be looking at and how difficult would it be to access my money once invested? There are probably other things I need to consider and I think I need a few pointers. Some folks on another website suggested property, but I'll be damned if I can find any property for £40k..! Plus, the rent and hassle involved would be a pain wouldn't it..?
Cheers,
Nige.
£40k deposit and then say £40k on mortgage would see you in to a 2 bed in flat in certain parts of the country, the large desosit would allow you a decent chance of making money off the rental income. Infact, an interest only mortgage would be under £200 a month, rental on a 2 bed flat should be £400/month minimum so that would give you about £1500 a year after letting agent fee's and maintenance I would think. Letting agents dont give you as much profit off the rental, but they can take the pain/hassle out the equation.
Granted £40k in say an egg.com account would give you £2k interest a year, but with a property, you would probably see at least 2-3% value increase. That'd give you the £1500 rental income plus around £2k value increase.
But then a property isnt as easy to shift quick if the dream car turns up.
Theres a few IFA's on here, probably best talking to them or seeing one locally. Yes, you'd have to pay but its their job to do this kind of thing.
real inflation is 5% so you need to get more than this. some cars will retain more value that GBP. buy an integrale with a few 1000s miles and store it - see AT
. Or buy precious metal. My numbers were based on 2.5% increase in property value, you can easily beat that.
Interesting Integrale idea though, I have noted their values and have a plan in that respect too.
Bit wooly this one, but I'd suggest looking into whatever investment option you've got in mind in the States. Take advantage of the strong pound, and when it inevitably depreciates you take your exchange rate gain too.
If you're wanting something domestic, I'd go for blue chip equities and hedge against interest rate drops with a few long term gilts.
RBS and AG Barr seem to be reasonably reliable performers.
Bear in mind if you do go for property and you're a higher rate tax payer, then your rental income and CGT will be taxed at 40%. Dividends will be 32.5%...
If you're wanting something domestic, I'd go for blue chip equities and hedge against interest rate drops with a few long term gilts.
RBS and AG Barr seem to be reasonably reliable performers.
Bear in mind if you do go for property and you're a higher rate tax payer, then your rental income and CGT will be taxed at 40%. Dividends will be 32.5%...
BigAlinEmbra said:
Bit wooly this one, but I'd suggest looking into whatever investment option you've got in mind in the States. Take advantage of the strong pound, and when it inevitably depreciates you take your exchange rate gain too.
Dangerous... wouldn't expose myself massively to the dollar at the moment (unless betting against it!) Got all kinds of worries that might happen between now and 2008 - any major movement towards having the Iranian oil bourse established (and trading in Euros), 2nd half year of a third year of a term is generally (ok, historically INVARIABLY) pretty financially stagnant, etc.
BigAlinEmbra said:
If you're wanting something domestic, I'd go for blue chip equities and hedge against interest rate drops with a few long term gilts.
RBS and AG Barr seem to be reasonably reliable performers.
RBS and AG Barr seem to be reasonably reliable performers.
Local markets are a bit iffy at the moment - you've got the industry's top investors like Anthony Bolton (literally) hedging his bets at the moment based on a VERY strong opinion that the FTSE's currently over-valued (and he's not often wrong!) Would also worry about retail banks at the moment, too - lots more bad news around bad debt to come to light (especially given peoples awareness to PPI shenanigans, and the uptake of IVAs). Totally agree that for a relatively low risk investment over the medium term, some large cap equities aren't such a bad idea at all.
If you can lock the money up for a reasonably long period, there are some good options... Barclays will give you a 5-year FTSE tracker that'll both give you 115% of the rise in the FTSE in returns, and protect you from any drop in the FTSE (apart from REALLY drastic drops!) It's also ISA compliant, so you could slide £7k a year across into it, too, and keep a big chunk of your return away from Gordon Brown, too. Plenty of other similar funds are out there - that one just came to mind first. Based on an average monthly rise of 1.2% in the FTSE (that's what it's been over the last 20 years), would mean 15% PA. So, over 5 years with a 15% kicker would come out at £92k. (There's some tax to be paid there, mind!) Of course, we've had one of the longest stock market rallies in history over the past few years - it could all crash tomorrow.
BigAlinEmbra said:
Bear in mind if you do go for property and you're a higher rate tax payer, then your rental income and CGT will be taxed at 40%. Dividends will be 32.5%...
Spot on... that's definitely something to consider if you're looking to rent somewhere out - there's gonna be a big chunk of tax to consider if you do it above board and only have a small mortgage on it.
If it was unexpected money and you're getting by in life without it, I'd personally take a real risk with a serious chance of LARGE payback on it over the next 12-18 months. I'd either go with a generally interesting market/good fund in that market - Fidelity's China Focus Fund, possibly. Would hope for about a 30% return on that over the next 12 months. Or pick some potentially equally interesting individual stocks... I'd personally pitch Party Gaming as having a target price of 60p+ a share within 18 months. Buying a couple of weeks back when they were around the 27p mark would've been better (they're now at around 35p), but there are still plenty of options like that. Could mean losing 50%+ of your money, of course!
Edited by J_S_G on Wednesday 10th January 08:04
Most boring thing to do is:
Slap it into a high interest instant access a/c, then drip feed fixed amounts on a monthly basis into an ISA. Bit of cost price averaging will smooth out the peaks and troughts over the next couple of years.
If you have F all in your pension then you could look to drip feed into that and top it up.
Or, make a series of over payments into your mortgage and pay down your debt.
I'm a great fan of doing any investments in increments as this leaves you with much more control and tends to reduce your risk.
Slap it into a high interest instant access a/c, then drip feed fixed amounts on a monthly basis into an ISA. Bit of cost price averaging will smooth out the peaks and troughts over the next couple of years.
If you have F all in your pension then you could look to drip feed into that and top it up.
Or, make a series of over payments into your mortgage and pay down your debt.
I'm a great fan of doing any investments in increments as this leaves you with much more control and tends to reduce your risk.
Fittster said:
Do you currently have any debts (including mortgage)?
Are you prepared to risk the capital?
How quickly do you want to be able to get your hands on the cash?
Are you prepared to risk the capital?
How quickly do you want to be able to get your hands on the cash?
Yup, got a mortgage and am happy with it as it is, ie it isn't too damaging on the bank balance.
Risk, well, maybe a bit of it..? Certainly not on the 3.30 at Kempton though..!!
Access..? Need to get it out to buy a nice car as soon as the right one comes along new or used, so what's that a week or so for used, month+ for new..?
Gassing Station | Business | Top of Page | What's New | My Stuff