Looking for 8%pa income. Where to start?

DiggerUK

grumpycrab,
Gold has been showing more than the 8% gross you would like, but only as capital growth.
You can invest paper gold, mining stocks etc in an S&S ISA if you don't want physical gold in a box at your bank.

You say you are low/medium risk, and I assume you will have been told that even at that level of risk you could end up with paper assets worth zilch.
The advantage of physical gold is that it can be classed as no risk. There is no such thing as a worthless piece of gold, never has been, and there never will be.
Gold may not be to your liking, but should be considered. Especially as it seems you will not need the cash for a number of years.

Best of fortune.

Aegis

DiggerUK wrote: »

grumpycrab,
Gold has been showing more than the 8% gross you would like, but only as capital growth.
You can invest paper gold, mining stocks etc in an S&S ISA if you don't want physical gold in a box at your bank.

You say you are low/medium risk, and I assume you will have been told that even at that level of risk you could end up with paper assets worth zilch.
The advantage of physical gold is that it can be classed as no risk. There is no such thing as a worthless piece of gold, never has been, and there never will be.
Gold may not be to your liking, but should be considered. Especially as it seems you will not need the cash for a number of years.

Best of fortune.

Just in case the OP is unaware, this is utter falsehood. "No risk assets" simply do not exist. Gold is a commodity, and like all commodities it goes up and down according to demand, and it's quite easy to look back to see some really worrying spikes up and down in the inflation-adjusted gold price.

If you're looking for low to medium risk assets, then gold might be included as a diversifier, but investing solely in it would be high risk however you choose to define it.

cheerfulcat

Aegis wrote: »

Just in case the OP is unaware, this is utter falsehood. "No risk assets" simply do not exist. Gold is a commodity, and like all commodities it goes up and down according to demand, and it's quite easy to look back to see some really worrying spikes up and down in the inflation-adjusted gold price.

If you're looking for low to medium risk assets, then gold might be included as a diversifier, but investing solely in it would be high risk however you choose to define it.

Especially since the OP was looking for an income!

artha

Rollinghome wrote: »

I'm afraid that isn't realistic. Corporate bond values have risen for reasons that aren't likely to be repeated, most markedly the fall in interest rates. Interest rates aren't able to fall much further and if rates rise then the capital value of bonds will fall.

I would accept that the recent capital growth of corporate bonds is probably nearing its peak but with nterest of 5-8% still available and cash interest likely to be low for some time to come isn't it too soon to write off bonds?

As the underlying price of some bond funds has still not reached the price pre recession when interest rates were much higher i'm not clear as to why prices should fall until interest rates are much higher than now.

Just_landed

Hi, I'm a newbie to the game...looking to achieve an approx 8%pa income from a reasonably sized pot. I have a bit of spare time, so thinking of having a look myself. I've seen an IFA but I think my risk profile put him off (low-medium risk). And he said they were expensive.

answer =

Off Shore but dont tell Gordon.:rotfl::rotfl::rotfl:

iltisman

I think currencies like the dollar are a good bet they have plenty of natural recourses
and the health spending idea seems to be drifting away,we are just going to drift into a hung parliament and more indecision. I reckon $1.20 to the pound by the summer.

Lokolo

artha wrote: »

I would accept that the recent capital growth of corporate bonds is probably nearing its peak but with nterest of 5-8% still available and cash interest likely to be low for some time to come isn't it too soon to write off bonds?

As the underlying price of some bond funds has still not reached the price pre recession when interest rates were much higher i'm not clear as to why prices should fall until interest rates are much higher than now.

Thing is, in the past (I know you shouldn't really go by the past but it makes sense), when interest rates start to rise again, people pull money out of bonds and put some back in cash, lowering Bonds values. This could happen in a year.

luvpump

I have the Bulk of my savings in the newcastle 5yr Bond at 5% (90 day notice) it seems to me that with the world economy likely to be bumping along the bottom, at best, for the foreseable future, the only chance of getting decent returns is with high risk, I would much rather sacrifice a few extra % & have complete security, it simply isnt worth it in the uncertain current climate imo .

Gordias

To answer the OP's question on technically taking the income:

When you sign up and pay for a bond fund through the likes of a CoFunds platform fund supermarket e.g. Chartwell Direct, you tick the "Consolidated Natural Income" box and fill in your bank account details. If the fund you buy pays monthly it then gets paid into your bank account monthly automatically... really easy. Mine typically are cashing £60-70 a month for each £10K NET of tax... Have been doing so for the past 6-months.

As always there are pundits who think it'll carry on, pundits who think it will go belly up... To mix it up you can also get funds that pay out monthly from Equity, i.e. share dividends, so you don't need to put all your cash in the corporate bond market to take an income at this level, good luck.