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£250,000 curiosity
Odd_Job
Posts: 46 Forumite
This is just out of curiosity, rather than a real situation. It came from a chat with a friend who may be due to inherit around £250,000.
We were talking about what would be the best way to invest it in order to get a good return.
Here are our uneducated ideas:
1) Put it in a high interest account of 10% and receive £25,000 a year before tax. Would that be possible?
2) Buy two houses outright at £125,000 each and receive an income from the rent. And hope the house prices go up over the next 20 years.
3) Split the money up into 10 deposits of £25,000 and get buy to let 75% mortgages on 10 £100,000 properties. By that logic, you'd have a million pounds worth of property, but would you be able to do that?
4) Any other suggestions?
Any thoughts would be appreciated.
We were talking about what would be the best way to invest it in order to get a good return.
Here are our uneducated ideas:
1) Put it in a high interest account of 10% and receive £25,000 a year before tax. Would that be possible?
2) Buy two houses outright at £125,000 each and receive an income from the rent. And hope the house prices go up over the next 20 years.
3) Split the money up into 10 deposits of £25,000 and get buy to let 75% mortgages on 10 £100,000 properties. By that logic, you'd have a million pounds worth of property, but would you be able to do that?
4) Any other suggestions?
Any thoughts would be appreciated.
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Comments
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Number 1 isn't possible, you'd be lucky to get 5% before tax.
Or 3% before tax without ties.0 -
2) Buy two houses outright at £125,000 each and receive an income from the rent. And hope the house prices go up over the next 20 years.
and suffer income tax on the rental income and capital gains tax (which will probably be 40% soon) on the gain.3) Split the money up into 10 deposits of £25,000 and get buy to let 75% mortgages on 10 £100,000 properties. By that logic, you'd have a million pounds worth of property, but would you be able to do that?
Most bankrupt ex landlords thought the same.4) Any other suggestions?
How about more conventional investment options? Or a combination of things?I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
Option 2, structured to pay no tax. Safest in property at the moment.
N.Never be afraid to take a profit.
Keep breathing. :eek:
Just because I am surrounded by FOOLS does not make me wise. :j0 -
All of the above? Seriously - diversify!
In that situation, I would buy one property to rent out with a mortgage to offset tax, a fair amount of stocks and bonds (some in an ISA and bed & ISA over the years), 30k NS&I index linked certs and some cash savings.
Nearly forgot - paydown any debt first.In case you hadn't already worked it out - the entire global financial system is predicated on the assumption that you're an idiot:cool:0 -
Buy a forest!
Timber income is tax free and after two years of managed ownership you can pass it on free of inheritance tax. Forest land is the cheapest of all land uses and timber is grossly undervalued. Alternatively buy a poxy flat in some trumped up city and watch a grossly overvalued investment collapse!This is a system account and does not represent a real person. To contact the Forum Team email forumteam@moneysavingexpert.com0 -
Buy a forest!
Timber income is tax free and after two years of managed ownership you can pass it on free of inheritance tax. Forest land is the cheapest of all land uses and timber is grossly undervalued. Alternatively buy a poxy flat in some trumped up city and watch a grossly overvalued investment collapse!
It's different, I'll give you that!“I could see that, if not actually disgruntled, he was far from being gruntled.” - P.G. Wodehouse0 -
.... and timber is grossly undervalued.!
Why have I been getting junk emails for several years telling me this, and recommending I invest in (probably dodgy) timber investments in Brazil?In case you hadn't already worked it out - the entire global financial system is predicated on the assumption that you're an idiot:cool:0 -
According to the internet, timber is something to look into. Who would have thought?
Britney Spears has over $3 million invested in it...
And it's apparently free from income tax, capital gains tax and inheritance tax.
I'm going to google image Britney Spears to see what other wise investments she's making.0 -
I'm going to google image Britney Spears to see what other wise investments she's making.
If you had said Shakira I could have taken you seriously.:pIn case you hadn't already worked it out - the entire global financial system is predicated on the assumption that you're an idiot:cool:0 -
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