£150,000 to invest

romany

What is the best way to invest £150,000? We are mid to late 50's. Want to semi-retire. Travelling around europe in motorhome. Want some income around £10,000 year max as will be doing a bit of work as we travel to keep spending to a minimum. PremiumBonds? BTL mortgage? Buy a property abroad to rent out? Don't want anything risky? Any advice greatfully received.
R

Skiduck

propety is always a good investment, however I think property abroad can be a gamble - it may be a hot spot one year, then be devoid of tourists the next. For a nice 10 year yield, property in bulgaria may be worth looking into - I'm no expert but I think it will become a big tourist destination, it's already on the up.

dunstonh

Don't want anything risky?

If you dont want anything risky, why are you considering BTL mortgage or property rentals? You could easily argue that premium bonds run the risk of inflation erosion as well. Mortgage buy to lets being higher risk than stockmarket investments.

Everything has a risk. Investment risk, currency risk, political risk, inflation risk. Its a case of finding an acceptable level of risk that you can sleep with. You also need to understand the levels of risk with various transactions.

Mortgage_&_debt_free

I totally agree with dunstonh (for he is wise).

Incidentally £10,000 income from £150,000 is 6.7% interest per year.

You will not get this amount without a degree of risk, although it's certainly doable without huge risk, it all depends on the sort of investment(s) you put the money into.

ReportInvestor

There is currently a lot of risk if you try to get 6.7% income. Were interest rates to climb your capital could get murdered.

Even dunstonh's favourite investment bonds will only let you have 5% pa (albeit counting as capital).

romany

Thanks for advice - will take it all on board.

EdInvestor

This thread has some ideas on investing a lump sum for income

baldbloke_2

ReportInvestor wrote:

There is currently a lot of risk if you try to get 6.7% income. Were interest rates to climb your capital could get murdered.

Even dunstonh's favourite investment bonds will only let you have 5% pa (albeit counting as capital).

What is the thinking behind the second sentence -

'Were interest rates to climb your capital could get murdered.'

It's probably just me having a 'don't-know-what-this-means' moment!

ReportInvestor

To get 6.7% you would have to invest in, say, some dodgyish corporate bonds.

If interest rates rose, that could lead to some defaults.
Notwithstanding any defaults the capital value of the bonds would fall as the gap between their yield and gilts or cash narrowed.

A not dissimilar situation - with added complications - could apply re a buy to let (if you could find one yielding 6.7% after costs).

IMHO you're better off going for a much lower income, with the prospect of growing that income.

dunstonh

Even dunstonh's favourite investment bonds will only let you have 5% pa (albeit counting as capital).

They are not my favourite. I just dont like they way they are reported on unfairly. I do far more ISAs and OEICs than bonds but bonds do have their place. (lets not go there on this thread).

You can actually get providers going to upto 10% p.a. with no penalty on some bonds. However, you have to remember that you could easily run the risk of drawing more than you make if that happens.

IMHO you're better off going for a much lower income, with the prospect of growing that income.

I agree. Invest for a 7.5%-10% average with low volatility and take 5% as income.

If you lived off the income with no capital growth, then your capital will have lost around 30% over 10 years in spending power. A disaster for someone in their 50s.