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The £100,000 Question – what to do..
Franko43
Posts: 123 Forumite
Dear All
At a financial crossroads of late. I’m in the middle of plans to build my own house on my parents farm. I was going to sell the house I’m currently living in in order to pay for the new build. I’ve just became mortgage free on the property I live in and it should sell for around £200k this year. £100K of that is mine as my brother owns the other half. Anyhow – plan was to fire this lump sum against the new build, estimating the new build will cost 150K in total to build. But just recently I got to thinking this may not be the best long term approach. Could I use that 100K to make me more money in the long run. So I started knocking about options
1. Take the 100K and reinvest it in total long term, split between Investment Trusts and high interest bank accounts. (Not sure about property at this stage.) What % split I don’t know, need to determine my risk profile a little more carefully. Then get a 150K mortgage to build the new house and pay of the mortgage monthly from our wages. If we fall on tougher times then there is still cash in the bank accounts to relay on
2. Invest 50K as above and take out a smaller mortgage on the new build
3. Go ahead as planned and try and be mortgage free
Both myself and DW are in the 25K Gross pay bracket and not big spenders. Dunno what my best plan of action is here. All help/comments appreciated…
At a financial crossroads of late. I’m in the middle of plans to build my own house on my parents farm. I was going to sell the house I’m currently living in in order to pay for the new build. I’ve just became mortgage free on the property I live in and it should sell for around £200k this year. £100K of that is mine as my brother owns the other half. Anyhow – plan was to fire this lump sum against the new build, estimating the new build will cost 150K in total to build. But just recently I got to thinking this may not be the best long term approach. Could I use that 100K to make me more money in the long run. So I started knocking about options
1. Take the 100K and reinvest it in total long term, split between Investment Trusts and high interest bank accounts. (Not sure about property at this stage.) What % split I don’t know, need to determine my risk profile a little more carefully. Then get a 150K mortgage to build the new house and pay of the mortgage monthly from our wages. If we fall on tougher times then there is still cash in the bank accounts to relay on
2. Invest 50K as above and take out a smaller mortgage on the new build
3. Go ahead as planned and try and be mortgage free
Both myself and DW are in the 25K Gross pay bracket and not big spenders. Dunno what my best plan of action is here. All help/comments appreciated…
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Comments
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I wouldn't have though there was much point in investing 50k long term in cash.
However 50k in the property and 50k in long term investments like ITs, shares etc makes more sense to me than 100k in the property.Eggs and baskets etc.Trying to keep it simple...
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Cheers Ed
just not sure where I can acquire property at 50K. Are you on about REITS maybe???0 -
REITS, reit funds, property share unit trusts and bricks and mortar property funds are probably what are being referred to... or Bulgaria 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
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Last year getting into the property investment funds was the big one, analysts say it will continue to grow, possibly 9% or so but no where near where it was. Not sure if I'd go that way, the good times could be coming ot and end. As for Bulgaria..hmmm..:o)0
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Franko43, I suggest that you set up the chart I describe here. It should illustrate nicely some of the range of risk levels you can select when you mix funds to achiieve a target risk level. You should be able to exceed 9% after charges so the mortgage looks like a reasonable option.
7000 now and another 7000 in mid April for each of you to use two years stocks and shares ISA allowances and get 28,000 invested free of tax seems like quite a good idea to me to start. The rest can be moved later.
I don't specifically recommend the funds I used as examples - I just picked some from the top of the charts.0 -
I think she was suggesting you take option 2, but instead of saving in cash, investing in stocks and sharesEdInvestor wrote:However 50k in the propertyI'm an Investment Manager. Any comments I make on this board should be not be construed as advice, and are for general information purposes only.0 -
Maybe you need a double your money in five years solution ?
See :http://forums.moneysavingexpert.com/showthread.html?t=340310"Didn't I try to Warn them I said !"
David Essex War of the Worlds."Thats Ancient History, Been There! Done That!" Hercules0
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