£150,000 Investment - Investment Bond maybe?

EdInvestor

I'm sure Moneysavers can do the sums.

It's quite simple. If you can get 5.5% interest on your savings account, then to get the same money back from an investment, it has to make 8.3%, because 2.8% (or more) will come off the top in charges before you see a penny.

That's why it's only worth investing in funds which you are pretty certain will deliver a double digit return every year - and that's of course why it's not worth bothering with most endowments,for which even 5 or 6 % is a far off dream

The way to avoid this problem is to cut out all these middlemen feeding off your hard earned and buy your shares directly.If you use a very cheap broker like Halifax Sharebuilder with no annual fee and very low buying charges, it will make a huge difference to your wealth particularly over the long term.

As the Pensions Commission says on its front page (see link above) 30% of your fund goes in the charges they actually tell you about - that's before we even get to the secret ones.

There are really big savings to be made.

whiteflag_3

Tiggs wrote:

as i recall one of them was the Inv Pep High Inc. fund run by Neil Woodford.....which is handy as i have just set up £500k bond for a client using that fund for some of the holdings - nice to know Ed would agree its a great fund to have used!

A nice little earner Tiggs!;)

Tiggs_2

whiteflag wrote:

A nice little earner Tiggs!;)

I'll tell you what it is!

Its a great investment with huge IHT saving potential for a client that loves the simplicity and security the whole package offers, understands the charges and the renumeration to me, benifits from a simple income stream with little or no impact on age related allowance or means tested benifits AND gets to benifit from the sort of fund management that even the most anti collective investment members here still agree is "excellent"

Now if thats a bad deal for the client then i'm Marry Popins!

oh.....and i get paid well, as you point out

ReportInvestor

Can you explain how you have achieved the huge potential IHT saving?

Written £285K of the bond in trust for children?

Tiggs_2

ReportInvestor wrote:

Can you explain how you have achieved the huge potential IHT saving?

Yes, but there is no need to in this thread - so i wont.

EdInvestor

whiteflag wrote:

A nice little earner Tiggs!;)

Tiggs wrote:

oh.....and i get paid well, as you point out

You can just see the $$$$$$ signs, can't you?

You have been warned.

Tiggs_2

Who is being warned? The tax man that he will loose some IHT? The client...in case she has a heart attack when she gets over excited at the growth on her bond?

ohh, and i'm paid in pounds not dollars.

dunstonh

It's quite simple. If you can get 5.5% interest on your savings account, then to get the same money back from an investment, it has to make 8.3%, because 2.8% (or more) will come off the top in charges before you see a penny.

Doesnt make any sense and you are not comparing like for like.

This is Ed plucking figures out of thin air. Where has this 2.8% come from? Where is the tax on the savings account? You want to include implicit charges (as you mentioned earlier on the thread) so why not include them on the savings account?

That's why it's only worth investing in funds which you are pretty certain will deliver a double digit return every year - and that's of course why it's not worth bothering with most endowments,for which even 5 or 6 % is a far off dream

What have endowments got to do with this thread? (cant ignore the bait, there are loads of funds which are exceeding 6% average p.a.)

The way to avoid this problem is to cut out all these middlemen feeding off your hard earned and buy your shares directly.If you use a very cheap broker like Halifax Sharebuilder with no annual fee and very low buying charges, it will make a huge difference to your wealth particularly over the long term.

Go buy your Marconi, Polly Peck and Railtrack and save those charges. They certainly would have made a huge difference to your wealth. But dont worry, the charges wouldnt have been as much even though you lost virtually all your money.

As the Pensions Commission says on its front page (see link above) 30% of your fund goes in the charges they actually tell you about - that's before we even get to the secret ones.

There are charges because of the service provided. If you lose 1.5-2% a year in charges but obtain 10% a year after tax and charges, are you really going to care? Charges on unit linked funds are explicit. They are declared. Charges on savings accounts, for example, are implicit. They are not declared and they are variable. Do you think that Cash ISAs and savings accounts arent earning the providers any money?

Poor old Cannon Fodder has asked some questions and as per usual, Ed comes out with a bunch of misinformation and outright lies to confuse everyone.

Chrismaths

Don't feed the troll.

Cannon_Fodder

Trying to determine the wheat from the chaff in some of the contradictions...

"these bonds, which are subject to life assurance company tax and CGT"

is this true or not for IB?
how much impact will this have - 20% off the tiny Life portion or the whole bond performance? CGT - bearing in mind two people, so two allowances - does the bond allow the joint aspect, or do we have to have a bond each??

"withdrawls come from capital"

so, the investment returns just sit there, never available? Of course not, but what/where/when do they do/go...???

Think I found the post with those two "recommended" funds, the other was Nowich Property, which is promising as I have that already in my ISA.
Shame my M&S High Income wasn't up to scratch with Invesco... ;-( - now the judgement call will be, is it worth switching at the moment, or has Invesco done a bit TOO well for a couple of years, and a correction is near at hand...

Thanks for ALL your replies. If things were 100% black and white, it would seem too good to be true. :-)