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  • FIRST POST
    • Jonobo92
    • By Jonobo92 14th Jun 17, 1:31 PM
    • 8Posts
    • 1Thanks
    Jonobo92
    c. £100k funds, Investment Advice
    • #1
    • 14th Jun 17, 1:31 PM
    c. £100k funds, Investment Advice 14th Jun 17 at 1:31 PM
    Hi there,

    I recently posted in the 'Property' section of the forum (unable to link as I'm a new member), and was essentially advised to come here to ask for more general investment advice.

    Basically, I'm graduating university in July and have £90,000 to invest, I'll be living with my brother all expenses paid and, fortunately, am also in a situation where I don't need a regular job. Also, buying my own property outright isn't necessary or needed right now, I'd really like to invest all £90k in a bid to return as much as possible, with minimal risk (naturally!).

    My question, then, is really quite general: how should I invest this £90k to see the best returns?

    Initially, I thought property would make sense as my brother currently owns two properties he lets out, however having had my wild price estimations (see in the original thread) debunked by those who know what they're talking about, I've begun to think more broadly about where to invest.

    I'm really not very educated in business, finance and investment, and so I apologise if what I say/suggest is blatantly wrong, or if my figures are wildly inaccurate, but I'm keen to make this money grow.

    I have read briefly about REITs, and with them being in the property sector, I thought they could be quite good?

    All advice welcome, thanks.
Page 1
    • londonlydia
    • By londonlydia 14th Jun 17, 1:47 PM
    • 422 Posts
    • 477 Thanks
    londonlydia
    • #2
    • 14th Jun 17, 1:47 PM
    • #2
    • 14th Jun 17, 1:47 PM
    I'm no expert, and I'm sure people who are on these pages will chip in on fuller details, but I have a similar amount invested. My personal advice would be to have a diverse set of investment and saving types, so you spread the risk. Think about savings accounts, ISAs, bonds, funds, stocks & shares, P2P, asset investments (so goods), and yes, property.

    On a personal note, I've chosen to avoid property invesment myself for a couple of reasons. Firstly, I'm convinced that we will either see a property bubble burst, or a stagnation in the next ten years as Brexit occurs. Secondly, if you ever want to get hold of your cash, you have to sell your property which can take months (if at all) and the selling costs are a fair amount. So I guess I see it as too risky for my own money, even if others disagree.
    • Jonobo92
    • By Jonobo92 14th Jun 17, 2:21 PM
    • 8 Posts
    • 1 Thanks
    Jonobo92
    • #3
    • 14th Jun 17, 2:21 PM
    • #3
    • 14th Jun 17, 2:21 PM
    Hey, thanks for the personal insight, as my brother already owns two houses perhaps it would make sense to broaden our scope a bit.

    I have it in my head (however misinformed it may be) that property is the best market to see returns; are there any articles/facts etc. in particular that anyone can share to persuade me otherwise?

    Also, you mentioned asset investments, I'll google it myself, but can you share any examples of good ones/what they fully are?

    Thanks again
    • eskbanker
    • By eskbanker 14th Jun 17, 2:25 PM
    • 5,466 Posts
    • 5,269 Thanks
    eskbanker
    • #4
    • 14th Jun 17, 2:25 PM
    • #4
    • 14th Jun 17, 2:25 PM
    You'll need to think about when you might need the money, as the answers will be very different between, say, keeping a large sum available for the near future versus keeping it back for retirement.

    Starting off in adult life with no need for a job or a property is quite unusual and you should consider how long that's likely to last, what happens if you fall out with your brother for example?

    In general, the usual advice on here is to retain an emergency fund of 3-6 months worth of outgoings in readily-accessible cash form (i.e. savings accounts) and that getting a pension started is worthwhile (may be difficult to see that at your age!). Starting a Help To Buy or Lifetime ISA is likely to give a decent return for if/when you buy a home.

    Investing is worth considering for other money and diversification is key to minimise risk, so sticking it all in property is quite a gamble. Many starting out on the investment journey will use global multi-asset funds to benefit from the number of different baskets your eggs are thereby in. Typical examples include the Vanguard LifeStrategy, L&G Multi-Index, HSBC Global Strategy and Blackrock Consensus.
    • dunstonh
    • By dunstonh 14th Jun 17, 2:37 PM
    • 89,436 Posts
    • 54,899 Thanks
    dunstonh
    • #5
    • 14th Jun 17, 2:37 PM
    • #5
    • 14th Jun 17, 2:37 PM
    I have it in my head (however misinformed it may be) that property is the best market to see returns; are there any articles/facts etc. in particular that anyone can share to persuade me otherwise?
    In some periods it is but historically it is not.

    Borrowing money started to be deregulated back in the 70s. Very slowly but that is when it began. In the 90s deregulation was almost non-existent and money started to become easy and in the 2000s it went totally crazy until the credit crunch.

    Property prices boomed for two reasons. Easy money and supply and demand. Easy money has gone. Supply and demand is expected to fall if free movement ends with Brexit.

    The Govt has been targeting landlords with multiple tax changes as they are harming the ratio of rented to owned and are pushing house prices up quicker than is desirable. Expect that tax trend to continue.

    I have read briefly about REITs, and with them being in the property sector, I thought they could be quite good?
    For up to around 10% of a balanced portfolio using single sector investments and run professionally or by an experienced investor, then yes. They can be viable for that segment. However, this is jumping in at the deep end without knowing if you can swim territory.
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. Different people have different needs and what is right for one person may not be for another. If you feel an area discussed may be relevant to you, then please seek advice from a Financial Adviser local to you.
    • Jonobo92
    • By Jonobo92 14th Jun 17, 7:08 PM
    • 8 Posts
    • 1 Thanks
    Jonobo92
    • #6
    • 14th Jun 17, 7:08 PM
    • #6
    • 14th Jun 17, 7:08 PM
    The rainy day/emergency money is away in another account, this £90k is entirely for investment however we see best.

    I've been looking at the Vanguard and BlackRock asset funds, would it be wise to pick a few of these low cost options and put say £10k into each, or pick one and put all £90k in?

    Also, I've been seeing all these Google adverts for 'Guaranteed 8% returns each year', are they actually as good as they seem, or is there genuine risk I won't get the returns? I'm not as interested in these as they seem fake, but out of curiosity alone I would like to know how viable/trusted they are.
    • bostonerimus
    • By bostonerimus 14th Jun 17, 7:12 PM
    • 844 Posts
    • 424 Thanks
    bostonerimus
    • #7
    • 14th Jun 17, 7:12 PM
    • #7
    • 14th Jun 17, 7:12 PM
    Firstly I would offer your brother a little towards the rent or pay some utilities bills.
    Put enough in the bank to cover 6 months spending as an emergency fund. Then decide what you want to do with your money. If you are going to need it in a couple of years for a mortgage down payment put that in a help to buy cash ISA. Put the rest in a low cost multi-asset fund......maybe 100% to 80% equities as you are so young.
    Misanthrope in search of similar for mutual loathing
    • bostonerimus
    • By bostonerimus 14th Jun 17, 7:20 PM
    • 844 Posts
    • 424 Thanks
    bostonerimus
    • #8
    • 14th Jun 17, 7:20 PM
    • #8
    • 14th Jun 17, 7:20 PM
    The rainy day/emergency money is away in another account, this £90k is entirely for investment however we see best.

    I've been looking at the Vanguard and BlackRock asset funds, would it be wise to pick a few of these low cost options and put say £10k into each, or pick one and put all £90k in?
    Originally posted by Jonobo92
    There's no point duplicating an asset mix in two funds, I'd start with a single low cost multiasset fund from either Vanguard, Blackrock, HSBC etc to keep things simple. If you feel you want a different allocation at some time buy other funds to adjust it. Obviously use an ISA as much as possible.

    Also, I've been seeing all these Google adverts for 'Guaranteed 8% returns each year', are they actually as good as they seem, or is there genuine risk I won't get the returns? I'm not as interested in these as they seem fake, but out of curiosity alone I would like to know how viable/trusted they are.
    If anyone guarantees you 8% return just walk away.......no one can guarantee that.
    Misanthrope in search of similar for mutual loathing
    • ViolaLass
    • By ViolaLass 14th Jun 17, 7:36 PM
    • 5,015 Posts
    • 6,936 Thanks
    ViolaLass
    • #9
    • 14th Jun 17, 7:36 PM
    • #9
    • 14th Jun 17, 7:36 PM
    OP, how would you feel if you invested in something and the value went down by 5%? 10%? 25%?

    All the options you've mentioned pose some risk to capital but you've talked about wanting 'minimal' risk.
    • bigadaj
    • By bigadaj 14th Jun 17, 7:48 PM
    • 9,907 Posts
    • 6,326 Thanks
    bigadaj
    The rainy day/emergency money is away in another account, this £90k is entirely for investment however we see best.

    I've been looking at the Vanguard and BlackRock asset funds, would it be wise to pick a few of these low cost options and put say £10k into each, or pick one and put all £90k in?

    Also, I've been seeing all these Google adverts for 'Guaranteed 8% returns each year', are they actually as good as they seem, or is there genuine risk I won't get the returns? I'm not as interested in these as they seem fake, but out of curiosity alone I would like to know how viable/trusted they are.
    Originally posted by Jonobo92
    Ignore teh 8% return ads, they are targeted at a high but not unfeasible return. The irony is that 10-12% is achievable with risk in p2p and many equity heavy portfolios will have returned 25-30% over the last year or eighteen months. That doesn't mean that those assets will continue to return that, and may well fall over the next period.

    Probably best if you do some reading to gain understanding, the monevator website and smarter investing by Tim hale are often referenced as good starting points. Both are passively biased but guve a good summary of the principles behind investing.
    • Audaxer
    • By Audaxer 14th Jun 17, 8:59 PM
    • 404 Posts
    • 166 Thanks
    Audaxer
    There's no point duplicating an asset mix in two funds, I'd start with a single low cost multiasset fund from either Vanguard, Blackrock, HSBC etc to keep things simple.
    Originally posted by bostonerimus
    I don't see a problem in splitting an investment between 2 different passive multi asset funds. Forinstance Vanguard LifeStrategy and HSBC Global Strategy have a different mix of funds and weightings. In my opinion its better not to put it all, especially a large investment like £90k, into the one fund.
    • darkidoe
    • By darkidoe 14th Jun 17, 11:17 PM
    • 860 Posts
    • 974 Thanks
    darkidoe
    Hi there,

    I recently posted in the 'Property' section of the forum (unable to link as I'm a new member), and was essentially advised to come here to ask for more general investment advice.

    Basically, I'm graduating university in July and have £90,000 to invest, I'll be living with my brother all expenses paid and, fortunately, am also in a situation where I don't need a regular job. Also, buying my own property outright isn't necessary or needed right now, I'd really like to invest all £90k in a bid to return as much as possible, with minimal risk (naturally!).

    My question, then, is really quite general: how should I invest this £90k to see the best returns?

    Initially, I thought property would make sense as my brother currently owns two properties he lets out, however having had my wild price estimations (see in the original thread) debunked by those who know what they're talking about, I've begun to think more broadly about where to invest.

    I'm really not very educated in business, finance and investment, and so I apologise if what I say/suggest is blatantly wrong, or if my figures are wildly inaccurate, but I'm keen to make this money grow.

    I have read briefly about REITs, and with them being in the property sector, I thought they could be quite good?

    All advice welcome, thanks.
    Originally posted by Jonobo92
    The other way to approach the question is what is the goal of investing/saving??

    If you are just getting out of Uni and not needing a regular job urgently, that's pretty lucky and might indicate some reliance of family members. It might be you might be finding your way around for sometime. How long can you do that before you might have to dip into your own savings??

    An emergency fund will be a start to self insure yourself in the short term.

    Then if consider if you need to use it to provide an income for yourself now or for the future and how far into the future you need it? Most investment tend to grow in value over longer terms (>5 years) and if you are planning for more the future (retirement, house etc), it would be worth considering more risky investments appropriate for the period of time you want to invest.

    If you want the 'best' returns, starting a business, investing in yourself or providing some value that you can sell to others is potentially the better way to achieve a 'best' return.

    If not, average returns via index trackers might just be good enough and sometimes good enough is good enough.

    Save 12K in 2017 # 9 £7 616.65/15 000 (50.78%)
    Save 12K in 2016 # 8 £19 721.58/12 000 (164.35%) Achieved!
    • bostonerimus
    • By bostonerimus 15th Jun 17, 12:31 AM
    • 844 Posts
    • 424 Thanks
    bostonerimus
    I don't see a problem in splitting an investment between 2 different passive multi asset funds. Forinstance Vanguard LifeStrategy and HSBC Global Strategy have a different mix of funds and weightings. In my opinion its better not to put it all, especially a large investment like £90k, into the one fund.
    Originally posted by Audaxer
    If the OP wants to get a specific asset allocation that can be done with 2, 3, 4 etc funds. But if they are ok with the asset mix of say VLS80 there's no problem with putting £90k in that single fund. For less volatility (but more interest rate risk) then go with a higher percentage of bonds or add some bond index funds. The play pen is very large, but £90k in something like VLS80 is very diversified already.......
    Misanthrope in search of similar for mutual loathing
    • Audaxer
    • By Audaxer 15th Jun 17, 11:32 AM
    • 404 Posts
    • 166 Thanks
    Audaxer
    If the OP wants to get a specific asset allocation that can be done with 2, 3, 4 etc funds. But if they are ok with the asset mix of say VLS80 there's no problem with putting £90k in that single fund. For less volatility (but more interest rate risk) then go with a higher percentage of bonds or add some bond index funds. The play pen is very large, but £90k in something like VLS80 is very diversified already.......
    Originally posted by bostonerimus
    I like the VLS products and agree they are very diversified. I just don't like having all my eggs in the one basket, especially when the FSCS limit for individual fund houses is £50k.
    • bostonerimus
    • By bostonerimus 15th Jun 17, 12:20 PM
    • 844 Posts
    • 424 Thanks
    bostonerimus
    I like the VLS products and agree they are very diversified. I just don't like having all my eggs in the one basket, especially when the FSCS limit for individual fund houses is £50k.
    Originally posted by Audaxer
    Vanguard's structure means that it can't go bust. It's a "mutual company" where the company is owned by the funds.....which are owned by the shareholders.
    Misanthrope in search of similar for mutual loathing
    • Linton
    • By Linton 15th Jun 17, 1:32 PM
    • 8,174 Posts
    • 8,028 Thanks
    Linton
    Vanguard's structure means that it can't go bust. It's a "mutual company" where the company is owned by the funds.....which are owned by the shareholders.
    Originally posted by bostonerimus
    Why cant a "mutual company" go bust? Mutual building societies in the UK have gone bust. In any case you are talking about the US company. According to Companies House, Vanguard Investments UK limited is a private limited company.

    A better answer is the investments arent owned by the company and so cant be used to pay its debts. The investments remain the property of the unit holders no matter what happens to the company.
    • Audaxer
    • By Audaxer 15th Jun 17, 2:24 PM
    • 404 Posts
    • 166 Thanks
    Audaxer
    Why cant a "mutual company" go bust? Mutual building societies in the UK have gone bust. In any case you are talking about the US company. According to Companies House, Vanguard Investments UK limited is a private limited company.

    A better answer is the investments arent owned by the company and so cant be used to pay its debts. The investments remain the property of the unit holders no matter what happens to the company.
    Originally posted by Linton
    Thanks Linton. Although I appreciate it is very unlikely, I thought there was a slight possibility of losing your investment and having to claim through the FSCS if there was a major fraud in a fund house?

    Do you think there is any downside to someone splitting their investment between 2 passive multi asset passive funds like VLS and HSBC Global Strategy?
    • ColdIron
    • By ColdIron 15th Jun 17, 2:52 PM
    • 3,374 Posts
    • 3,948 Thanks
    ColdIron
    Surely the question is - what is the upside?
    If someone marketed a fund that was some sort of coincidental blend of VLS/HSBC would you say - that's exactly the fund I want in preference to either of those other two? I doubt it
    • Audaxer
    • By Audaxer 15th Jun 17, 4:03 PM
    • 404 Posts
    • 166 Thanks
    Audaxer
    Surely the question is - what is the upside?
    If someone marketed a fund that was some sort of coincidental blend of VLS/HSBC would you say - that's exactly the fund I want in preference to either of those other two? I doubt it
    Originally posted by ColdIron
    The upsides to me seem to be:
    • Not all eggs are in the one basket - if someone had forinstance £200k to invest it seems a lot to put into one fund/fundhouse.
    • As some different indexes (e.g. HSBC Global Strategy includes a property index) it maybe makes the overall investment a bit more diverse, or does it - that is what I'm trying to establish from you and other more experienced investors than me.
    • The HSBC fund has some active management in that asset allocations are not so rigid as I understand it, so as to keep within the risk profile. This may be a good thing in a falling global market - I think that is the intention.
    That it why is seems to make sense to me to split a big investment between two multi asset funds. But I'm just trying to establish if there is a downside that I can't think of?
    • ColdIron
    • By ColdIron 15th Jun 17, 4:20 PM
    • 3,374 Posts
    • 3,948 Thanks
    ColdIron
    If you think about it most working people have their pension, perhaps several hundreds of thousands of pounds, with a single provider. Do you think you are suffering from paralysis by analysis?
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