£400K What is realistic Income?

Glen_Clark

paul5046 wrote: »

(I'd be interested to know what you decide , if you don't mind)

so would I

YoungBusinessman

I would like to know what you decide, i would think diversifying is key.

atush

luckystrike23 wrote: »

i'm not sure there is anything close to an INDEPENDENT Financial Advisor these days - most have an agenda so take multiple opinions from a couple of them and bounce your ideas off them and see what they say.

Silly thing to say., There are plenty of really independant ones if you can be bothered to look. But seeing more than one is a good idea as well.

calypso_rhapsody

I am sure that most IFAs will advise you to create a diversified portfolio of cash, bonds and lower risk shares ... they will also get you to complete a questionnaire aimed at assessing your attitude to risk. This is all about getting the balance - you want an income but no risk ... not really possible in real terms at the moment..... so the question is how far you would be willing to trade return v risk. You do need to have a careful think about this!
You say you don't want the capital to be at risk - do you have particular plans for that money in due course? That might well affect your attitude to the risk of investing in bonds or shares.
The better informed you are at the IFA meetings the more you will get out of it - otherwise you may just get confused - so as another reply said, the more you can read the better!
Good luck and let us know what you decide ...

jimjames

GeorgeHowell wrote: »

I think a great many people actually care about the nominal value of capital. The opening thread implied that seeing this dwindle on the back of the FTSE100 or whatever was not an option. People seem to be trying to convince the OP that he should change that stance, but that's not answering the original question that he asked.

The OP can ask for all he wants but if his requests are mutually exclusive then surely it is fair for replies to explain that. Most people seem to think risk is on/off option when there are a range of other risks to consider not just the capital value.

In previous posts you have mentioned the FTSE100 but ignore other markets that have performed differently. Even the FTSE isn't down when income is taken into account.

The anomaly at the moment is that you will get a far higher income from shares or bonds that with deposit accounts which is completely different to the historic norms of accepting a lower starting income for the aim of increasing with inflation over time.

donkingkong

Glen_Clark wrote: »

You cannot avoid risking the capital.
Even in a rock solid bank (if there is such a thing) your capital is at risk from inflation.

As fact missed by many (of the gen. pop.).

atush

There are all sorts of risk, and most don't even think about shortfall or inflation risk.

and in this case, with the OP still working I am not sure that taking an income (that will be taxed) is any sort of a good idea. If you don't need it, leave it to grow. And if you want it to grow at the same rate (or better) than inflation consider investing a portion of the money.

paul5046

iNFLATION IS NOT A RISK, ITS A FACT, SO WHY DO PEOPLE LABEL IT AS SUCH

jimjames

paul5046 wrote: »

iNFLATION IS NOT A RISK, ITS A FACT, SO WHY DO PEOPLE LABEL IT AS SUCH

It may be a fact that it happens but it is a complete unknown as to how it will affect prices over the next 50 years.

The unknown is that inflation will erode your savings if they are not increasing in line with it - how is that not a risk?

grey_gym_sock

in some historical periods, there has been sustained deflation for decades.

inflation and deflation are both risks. both may or may not happen in a given future period. both will hurt some ppl financially, if they do happen.

inflation is more common than deflation.