what should I do?

ok364125247

Hello everyone,

After 40 years of hard graft, my hubby and I have finally sold our business and plan to retire to Spain.

We have £500.000 that we want to invest and are looking for the best way to do it.

We have enough money to keep us going for the next 6 years so were looking at placing the £500.000 for a duration of 5 years.

We have looked at various options such as

Option 1: Placing it in a high interest account, KRBS (Kent Reliance Building Society) offers 5% gross.

Option 2: Having it taken cared of by a wealth management company

Option 3: Buy a couple of flats in London or more in cheaper areas (Manchester for example)


From our research we feel like option 1 offers the least bother but not a great return, option 2 sounds a little risky, and option 3 seems to be the best but probably not easy to manage from Spain!

So please any advice, suggestions or comments are very welcome.

Kind regards.

Jegersmart

Option 1 = safe
Option 2 = you need someone you can trust but with a balanced portfolio should do well
Option 3 historically over a longer period property generally follows inflation so is merely an inflation hedge imho, however rental can achieve a reasonable yield but is usually taxable when not offset against mortgage etc. and there is an amount of work involved.

I guess it depends on your experience and skills - personalyl I would invest in funds and oversee it myself but I understand that others do not want to do this.

Good position to be in - I hope you enjoy your retirement!

alanq

Option 1 UNSAFE!!!!

"Placing it in a high interest account"

FSCS guarantees only £85,000 per banking group so you should be looking at saving with several different banking groups.

Jonbvn

Why does each option have to be mutually exclusive? Can't you do a bit of all of them?

expatasia

The option 1 bit:

161,900 quid in the KRBS account (for example) is safe for a couple/joint account. Allows for loss of accrued interest in case of the institution's failure. (assuming interest is paid out annually)

The other bits require more planning/thought. :cool:

atush

I agree, I would do a combination of things. Or just spread the money at 161K in a few different banks/BSs.

I like the idea of buying one flat, esp as it would give you a place to live should you come back from Spain and will follow the housing market so you don't get priced out in 5 years time. But you will need advice, as w/o a mortgage you could be paying a fair old bit of tax.

C_Mababejive

Max out on NS&I index linked investment bonds,make sure both your ISA's are topped up and earning the best rate.

Buy high yield shares such as Nat Grid and other defensive s such as utilities etc

Be aware of how inflation will nibble away at your cash if its just left lying around.

Buy a house and rent it out?

darkpool

if you fancy property have a look at commercial property.

with commercial property it is typically the tenant that pays the insurance and maintenance charges. i'd expect about a 6% annual return with a good quality tenant and about 15 years left on the lease.

allsop have frequent auctions selling property

ashaput

If I were you I would take the third option. To me property will offer almost the same advantages as gold investment. It will give the best for years later.

ok364125247

Thank you for all your comments,

I have read a lot about return on investment but it is all very confusing as you get really mixed answers.

On average what sort of return should one expect to receive????

option 1 is easy (the best so far is 5% gross over 5 years)

option 2 (for a 5 years low risk), and also (for a 5 years medium risk)

option 3 (commercial and private)

Thank you for you input!!!

Ark_Welder

If you have that amount of cash to invest, and you do not have a great deal of investment experience, then consider a fee-based professional investment advisor, i.e. an IFA. I say this as a private investor that does not work in the financial sector - although you only have my word for that!

As you have stated, on boards like these you get different answers - and no-one is answerable if things go wrong. Avoid commission-based advisors. Someone that is fee-based should rebate some or all of their commission that is received from any fund investments.

If you are considering retiring to Spain then there may be additional tax considerations, such as ISA's. There may also be currency risk considerations, i.e. Sterling vs Euro