What kind of investment would yield £20k p.a.?

jem16

EdInvestor wrote: »

A return of 5% on your capital is a good rule of thumb for low-medium risk investing. So 15k on the 300k total before tax:

The OP is only getting £60k of the £300k though - so only around £3k possible and not the £20k that was hoped for.

alba37

I am no expert in any way, but my friend is doing property developing and making more than £20k, with a much much smaller investment, than £60,000 pa. I would have thought with that amount of capital there is money to be made with careful research and little effort!

jem16 wrote: »

The OP is only getting £60k of the £300k though - so only around £3k possible and not the £20k that was hoped for.

I assume OP is looking to make £20k on total amount?

brasso

As has been said, you can get 30%+ by investing in funds and equities but -- and here is the very big but -- none of us knows in advance which investments will yield that!! It's pot luck, and no guarantees.

A fairly widespread feeling amongst the financial pundits is that investing in emerging market funds (e.g. China, South America, Russia etc) are likely to be a good bet over the next year or so but I used that word deliberately -- "bet". It's a gamble. Last week's blip was a good reminder of the downside.

Personally I like a bit of risk, and have quite a bit of my pension pot invested in these sorts of funds but there are no guarantees whatsoever.

As Ed says, you would be wise to stick £7K in a maxi-ISA this month, i.e. this tax year, and another £7k in from next month i.e. next tax year. Anything you earn (within reason) will be tax-free.

You can get expect to get about 6 or 7% from a high interest bank account.

brasso

alba37 wrote: »

I am no expert in any way, but my friend is doing property developing and making more than £20k, with a much much smaller investment, than £60,000 pa. I would have thought with that amount of capital there is money to be made with careful research and little effort!

I wouldn't call property development "little effort". Doing up houses is very hard work!

If you just mean buying and reselling the same property to take advantage of HPI, well OK but that bubble must start to deflate pretty soon. It's risky.

This week's news about HPI being 10% sounded good but really, compared with the stock market, it's not that great and has a lot of risk and bureaucracy attached. I'd stay away from property as an investment unless you're a professional builder who knows what s/he's doing.

jem16

alba37 wrote: »

I am no expert in any way, but my friend is doing property developing and making more than £20k, with a much much smaller investment, than £60,000 pa. I would have thought with that amount of capital there is money to be made with careful research and little effort!



I assume OP is looking to make £20k on total amount?

Nope. OP said £20k each.

NightNurse wrote:

The total investment after deductions is circa £300k but if we split it amongst us we would have £60k each. Could we yield 20k each per annum?

missile

OP needs to get a reality check, no way to get that kind of return other than a really risky, very fortunate investment.

Property development is not easy. There are numerous TV shows where many struggle to cover their costs, 10% return (before tax) is about the average and very few make 33 1/3%

"7% from a high interest bank account." Yeah right, can I have one of those please :-)

NightNurse

Initially I was thinking of 20k on the whole amount but then I thought there just might be an opportunity for 20k each.

All replies gratefully received.

EdInvestor

Have a look at some of the information on here for returns on equity funds:.

https://www.h-l.co.uk

It's not impossible to get high returns, but don't expect them every year - some years you may well make losses.

tyllwyd

Have you thought about when you want to generate this income - if you are working and living comfortably enough now, do you want to invest the money and receive the income when you retire? If you are thinking long-term, getting an income of £20K in 20 years time or more might be a lot more realistic. And depending on what your current income is and your projected pension income, taking the income now might push you into paying higher rate tax, whereas that might not apply when you take retirement. Obviously it all depends on your circumstances, but is it something worth thinking about?

brasso

missile wrote: »

"7% from a high interest bank account." Yeah right, can I have one of those please :-)

Well to be fair, I said "You can get expect to get about 6 or 7% from a high interest bank account". I've seen rates advertised over 6% and presumed (perhaps wrongly) that if you're interested in this sort of account you could find even better somewhere if you looked hard. Also, in a period of slowly rising interest rates, you'd expect to see the rates for these savings accounts edge upwards, and I did get the impression that the OP is talking long-term.

Have I back-pedalled enough yet :rolleyes: ?? It was a throwaway remark, and just meant to give the OP a very rough figure for comparison with his/her 33% hope.