I've recently inherited half of my Dad's house, I had thought of buying my sisters half and renting it to cover the second mortgage we would need, but I also though about selling and investing the money (£75K) somewhere. I would be happy to lock it away for 10 years, but would like some hints and tips on where I could see a good return over that time period.
Last edited by Captainhowdy; 3rd February 2014 at 20:23.
for that sum you really need professional advice rather than listen to some well meaning amateurs............ but if it was me I'd invest the max in a stocks and share ISA and then the rest in a tracker fund or funds. For 10 years equities are the best bet but there is some risk as values can go down as well as up!
Last edited by craig1912; 3rd February 2014 at 20:29.
Second this. And I would suggest speaking to an IFA.Originally Posted by craig1912
Don't just go to a bank who will only offer their products (and their charges can be extortionate!!)
15 submariners, bnib, in a safe for 10 years.
If you'd done that ten years ago how much would that have cost, and be worth now?????
Have a word with Hargreaves Lansdown in Bristol (or their local repr.) , I am very happy with their services and performance, after using them for last 6-7 years
Goldgoldgoldgoldgold
Question is can he afford the risk.
I wouldn't sweat over 75K just spend it.
E46 M3 CSL 30k
Mk1 996 GT3 40k
Metres first 1553
You will thank me in 10 years!
Your original idea seems sound to me .
I rent out my old home and the rent covers the mortgage not mention , interest payments are tax deductible as well.
Capital gains will only hurt you if the house rises massively in value which is possible ,your allowed a certain amount before this kicks in .
At the present you could easily attract a yeild of 6% not including the long term housing shortage would suggest property will rise over the medium to long term .
If it were my money a house would be the best place to invest in .
Rick does have a good point actually.For me although buying 15 subs would be on hell of a day out I would go for bricks and mortar.My house has more than doubled in value in ten years.Doing what you suggested about renting the house out means that at any given time if you decide to sell then you pull the capital back out at any given time.
Obviously you cant guarantee that the housing prices over here will continue to rise but its looking good for the foreseeable.
Seek some professional advice from a few sources and don't be rushed into a snap decision.
Goldgoldgoldgoldgold
No... read this
I think this is the best suggestion so far.
I remember a few years ago a friend had to invest £10k in a car very quickly on the advice of his accountant. I suggested an E30 M3 Evo for sale at the time at Munich Legends and sticking it in a garage somewhere safe. He bought an Alfa Spider (the wedgey one from the 1990s). Funnily enough he lost money on it...
"A man of little significance"
I have had this sort of 'problem' for quite a while. The gains from mainstream investments tend to get eaten up by commissions and fees in my (long) experience. If I'd never let an IFA over my threshold I'd be a lot richer than I am today - and I've dealt with plenty. Bank accounts are paying next to nothing, and precious metals are a big risk. Look at the gold chart over 10-20 years for details. Your original idea is the best. There's a housing shortage, people will always need somewhere to live. You won't wake up one morning and find your investment has dipped 10% overnight because some lunatic has threatened to obliterate the West. The house will pay you a decent return in the short run, and make a capital gain over the long haul. The main risk factor is the quality of your tenant/s. Have to admit that can be problematic. For what it's worth though, it's the best combination of return and risk I've found.
No financial advice but what I would probably do in your situation:
40k deposit on a property worth 150-200k
20k in mutual funds, predominantly uk equity, and a bit of emerging market as it looks cheap at the moment
10k in premium bonds
5k on a second hand modern rolex sport
I would do all of the above very quickly to avoid the temptation to pi$$ the money away on a car or two!
£75K in AAPL 550 JAN15 Calls
You're welcome
dont do this really unless you find russian roulette a bit dull
Negotiate a good price on a mutli-buy, and squirrel them away.
As you need some liquid lolly, drip one or two onto the market.
But what do I know?
;-)
He's a rank amateur
:-) will you be following this advice yourself?
Spend the money on a campaign to get you elected an MEP. Once achieved you will never be short of money ever again as long as you live.
JoshB's got the best idea of the lot. And slaggy women dig power.
If you want to make God laugh.Make plansSpend Spend Spend.
Bricks and mortar, that'd be my answer. The house is valuable enough/will generate enough to make the possible hassle worthwhile.
What kind of ROI are you looking for? What kind of risk will suit you investment portfolio?
TQR !
-3.7% just today! Ace! How about black! No red! No black!
OP, buy your sister out if she wants it and the house will rent in its current condition (unless you live close by/ want to/ can do work to it). You're half way to owning it outright already and BTL mortgage rates are coming down now that lenders are seeing the market rise, as the risk to them falls. Put some early gains aside as a "float" in case of voids etc, don't expect to live of pf the income, but in a few years time if the market keeps rising you could be quids in if you sell, or could look to overpay the o/s loan as rents increase if your situation allows. Property is an illiquid asset but on the basis you'd have to sell to realise the cash anyway, you'd be no worse off keeping it there.
Last thing, Direct Line landlord insurance, get it.
/am no longer an IFA so don't listen to a thing I say. Which was red BTW.
Bingo. There is no one cap fits all for investment.
You need to decide what your appetite for risk is over the 10 year period and whether you want to take any income along the way. Existing investments / market exposure are important as diversification may be desirable.
Residential property generally trends upwards, but do you want to play landlord and the yields aren't great in most instances unless you rent to students or housing benefits. You can buy outright or gear up using the 75k as a deposit which magnifies value rises (and reductions)
Over 10 years most markets will appreciate. BUT most markets are cyclical and will have a roller coaster along the way, so if you cant handle seeing your investment go down in value at various points in the cycle you are going to get pretty modest returns.
Nobody here can tell you cold what you should do, but buying your sisters half and renting the house out should certainly be something to consider if it is an area of the country that has good rental demand and is forecast to have good house price growth.
This is not advice, but if I were you in this instance, well me, I'd just blow the lot on watches, I just KNOW I would.
Then there would be a 'flipping' extravagansa on SC over the next year or three. Then, well, I'd be back to square one, and I'd have lost lots of money, I just KNOW I would. So the only thing I can offer to you is; don't invest in watches (LOL).
Seriously though I'm sure you'll do the right thing Paul & good luck with whatever option you choose.
bang on the money for a F430
go out and enjoy it, you are a long time dead.
House prices will prob fall and gold has been falling for ages.
Sage advice. Don't bother with an IFA, they will likely push you towards managed funds where they get lead and trail commision. Paying costs of around 2% per annum for a managed fund creates serious drag on your returns. Better to look towards ETFs from companies like Vanguard etc. ETFs are like shares and can be bought and sold but maintain a portfolio of something like an Index like the FTSE - like trackers but most have lower costs in the region of 0.35%. Use a platform like best invest and use up ISA limit and then non share trading account, unless you want to go the SIPP route.
I read a (very simple) book here http://www.amazon.co.uk/The-Milliona.../dp/0470830069 basically it says buy a ETF tracker and offset with bonds (more stable), let the stock market average compound returns do their work. There is much sense in this simple book.
Good luck.
An IFA can't get commission but they can charge you a fee either as a percentage of the investment or a fix £ amount. Fees on funds are starting to come down and are generally less that 1%.
My post wasn't meant to be serious advice. It is a very high risk equity, which has the potential to tenfold in value, but that outcome is highly speculative and doubtful. Obviously the way between the current state and $20 will not be a straight line, it has a very high beta versus the market as a whole and will be very volatile. Given the bloodshedding expected for today, it will quite likely be down even more today.
Such are the risks of investing into high risk securities: no pain, no gain. Important is what comes out in the end.
Oh yes, before I forget: this is not advice, do you own due diligence. Start here: http://www.riotintomongolia.com/ENG/oyutolgoi/881.asp and here: http://ftalphaville.ft.com/2014/01/3...lia-turquoise/.
I'm leaning towards this, current rental value is £650 per month, the house is in Edinburgh and should grow in value year on year, seems the safest best to me.
And there you have it, never trust an amateur and do your own research.An IFA can't get commission but they can charge you a fee either as a percentage of the investment or a fix £ amount. Fees on funds are starting to come down and are generally less that 1%.
Generally disagree with comment on fund expenses generally less than 1% (except trackers) http://www.hl.co.uk/funds/wealth-150 here more TERs are between 1.5% and 2% (except bonds). Not sure where the industry got to with hidden costs too.
Add the TER to the inflation rate and it's hard to get a stellar return most places now.
I would stick with the house option, if the rent covers the extra mortgage then you will double your money in 10 years even if the house doesn't go up in value. The main reason I would do this is because the costs of acquiring and/or selling the property will not occur. Agents fees, surveys etc so it represents a cheaper way to get in to bricks and mortar. If the money was already liquid then I might do something else. Mind you that's what I would do which does not necessarily make it the best advice.
All European funds for retail distribution (UCITS) have to publish a standardised KIID (Key Investor Information Document), which has to contain information regarding the fund's "ongoing charges". Here you have the fees plus any other charges. The old way of calculating and publishing a TER (Total Expense Ratio) left many options of including certain expenses or not. The ongoing charge figure is regulated and fund promotors cannot cheat.And there you have it, never trust an amateur and do your own research.
Generally disagree with comment on fund expenses generally less than 1% (except trackers) http://www.hl.co.uk/funds/wealth-150 here more TERs are between 1.5% and 2% (except bonds). Not sure where the industry got to with hidden costs too.
Add the TER to the inflation rate and it's hard to get a stellar return most places now.
Any advisor has to hand out the KIID to their clients.
The rules on commissions/fees etc for IFA's and fund managers have been tightened up but it doesn't alter the fact that they get paid no matter what. The deductions might not look huge on paper, but when they still apply, even when the fund loses money in a year, the overall result is significant. The bottom line is that IFA's, broadly speaking, haven't got a clue (if they did, they'd have money of their own to invest) and practically every serious study shows that individual fund managers very rarely beat the market over the long haul.
Keep them coming chaps. I am looking to invest my divorce settlement soon. I don't want to buy a house to live in just yet, as I'm undecided on location. But I will probably buy to let. I will definately speak with the Hargreaves Lansdown people, thanks for the tip!
Depends on the rest of your "investments" and if you need to invest for income
If you do not own any property, (divorce), then you should start - property is a good all-round bet
Just on Hargreaves Lansdown, they are taking some questions at the moment on charges (including exit charges)
http://www.telegraph.co.uk/finance/p...investing.html
http://www.telegraph.co.uk/finance/p...-my-money.html
Worth looking around and doing the sums.
I think my sensible head would be to buy and rent. Ask if the current house is the best place for your cash, or whether a similarly priced (or even cheaper/more expensive) property would suit you and your peace of mind better.
I would be about 50:50 on buying the house and renting, or buying a nice 997 GT3 and maybe paying off some of the mortgage with what's left over :)
It's just a matter of time...
The simplest option would be to agree with your sister to rent out the property jointly and share the income until such time either of you needs the capital.
good option as if you wanted to keep the property and let it out Buy to Let mortgages are expensive - fees and rate
What you also will find is that the market levels things
low rate of (income) return usually applies to an area with good capital growth - i.e. 3% to 4% before tax income return and a 5% to 8% Capital (annual) growth seems to be the current achievable - (capital growth also is better for tax if you intend to sell) - but house prices in the "hot" areas cannot keep going up??
high rate of (income) return usually applies to an area with poor capital growth - probably double the above possible with maybe little growth.
That's what I have found anyway - I would always go for the former - buy in a good area and get a good tenant in and accept a (low) annual rental return
But others will disagree
Of course they get paid-but it doesn't have to be deducted from the fund. If I were to see an IFA I would choose to just pay a fee as I would a solicitor/accountant.
Re not havering a clue is possibly a bit harsh it was why I suggested a tracker which will go inline with the market and also cost less in charges.
Christ thats so complicated, I'll need to sit down with them to get my pea brain to understand that. thanks for the heads up though.
OP - do you have any debts? I'd consider clearing bank cards/loans/mortgage before investing in anything.
Is that serious suggestion?
10 years ago subs were less than half the price that they are now and there were waiting lists , they were rarely seen in a shop window.Nowadays if I dont see them in a window dealers say you can have one in when they get next delivery (speaking from experience twice) .Its no longer a exclusive watch , they can bought easily available on an high street (and almost zero chance of being discontinued) , there hasnt been a price rise in well over 12 months and Rolex are aware there is an artificial celling to how much they can put the price up. Factor in insurance costs and a service for each after 10 years I doubt you would manage to keep up with inflation.(then theres the whole argument of putting all your eggs in one basket)
He wants to make money not lose it. Gold rises vastly in price when there is economic turmoil (look up the prices of the past 7 years) and when the economic becomes calm again they gold price tumbles which it is currently doing , as the worldwide economy recovers gold will continue to fall , so why would he buy gold?Goldgoldgoldgoldgold
Look at economic history over the past 100 years , economy bad gold goes up as investors move their money into safe assets like gold an price goes up , economy recovers gold price tumbles as investors move out of the safe heaven of gold and into to other assets.
Start your own business - maybe you are already set up on your own, I don't know. But if I had £75k that is what I would do. I set up on my own 14 years ago with £28k redundancy money. Being on your own is a big improvement in lifestyle. My earnings are better than when I was a corporate employee and I was an IT consultant, so wasn't a bad wage.
Unless you tell us more about yourself , its hard to give the right answer.
What age are you?
When do you plan to retire? , what preparations have you made for retirement? are they adequate? , pension? what type?
Do you have any buy to lets (btls ) already?
do you invest in stocks and shares ?
Boring!!! Buy the watches
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