MONEYWEEK Magazine Wealth Creation report - "The End of Britain" !!!

IveSeenTheLight

robmatic wrote: »

It's not really a great income generator in that case then, is it?

I am getting circa 13% gross on my invested amount.
Not too bad a return.

I've also seen paper equity increase at the same time, despite the wider impact on house prices.

I'm certainly happy with that return which is ahead of my shares and bonds investments

Conrad

IveSeenTheLight wrote: »

Why own outright when you can have a BTL mortgage where the mortgage interest is tax deductable and you can then invest the remainder of your equity elsewhere?

I have been torn on this lately. I will probably settle for a cash purchase (I've sold something abroad which will release cash if it completes ok).

I am minded to just use the £90k or so to buy a flat outright. I've done the whole mortgage and b2l thang in the past and after many hours or deep thinking I think I've concluded it's reasonable to simply save the rent generated together with other out of earned income savings and just keep buying another flat every 3 or 4 years which over time accelerates as the rent mounts.

I get the whole using debt thang but this time I'm not sure I want that to go that route.

I could buy a larger place with a mortgage and make about 30% more rent per month after all costs including debt, mortgage fees, covering mortgage when in void and so on. Round here you get marginally less rent the higher the purchase price anyway.

I could do an HMO but voids are more prevalent as are repairs and what not, compared with a simple small flat. On a really good HMO I could net about £1000 p m after all costs assuming a mortgage of about £200k or so. Or I can just buy outright a studio and get £700 net rent pm with very occasional repairs (in my personal experience).
I self manage btw.

About 8 flats should be enough. Always used ISA's, bonds, pensions (for a while) and shares as Generali mentions but my own experience is they have not been all that worthwhile. Prefer rowing my own canoe.

Generali

IveSeenTheLight wrote: »

We'll it's easy to coin a phrase using eggs and baskets and of course there are instances which causes issues with the batch.

I do wonder if the negative focus draws away from the numbers of baskets with eggs that incur no negative impacts

I was trying to make a simple point which is that having all your assets in silver, a house or a single share is highly risky. There are too many things that can go wrong with a single asset.

If it comes off you are likely to do very well because of your risk concentration. If you do badly then you are likely to do very badly for the same reason.

It's a standard bit of portfolio theory.

IveSeenTheLight

Generali wrote: »

I was trying to make a simple point which is that having all your assets in silver, a house or a single share is highly risky. There are too many things that can go wrong with a single asset.

If it comes off you are likely to do very well because of your risk concentration. If you do badly then you are likely to do very badly for the same reason.

It's a standard bit of portfolio theory.

I do understand what you were meaning,
Your talking about mitigating risk by spreading accross a number of investments, which I do fully understand, but in considering risk, I wonder what percentage of BTL has shown a negative return in terms with the whole BTL market.

I have some shares, which have done badly. I've had relations which have had poor share investment returns. I've also seen a number of instances where pension investments using fund managers have seen returns far lower than expected.

We can look at the FTSE 100 and see that the value has not reached the heights of 1999. Of course fund managers would hopefully sell when high and buy when low, but for every winner these must be a loser.
Overall the value is still lower

We can look at pension annuities provide a far lower return
http://www.telegraph.co.uk/finance/personalfinance/pensions/7827237/Pensioners-hit-as-annuity-rates-tumble-to-20-year-low.html

From 2010
Someone who has saved a £100,000 pension pot through their working life would now receive an annual pension of £6,350 – down from £6,760 at the start of the year, and 16 per cent less than two years ago.


In the 1990s they could have expected £15,000 a year from the same pot.

IveSeenTheLight

Conrad wrote: »

About 8 flats should be enough. Always used ISA's, bonds, pensions (for a while) and shares as Generali mentions but my own experience is they have not been all that worthwhile. Prefer rowing my own canoe.

Same here with my experience.
I still have shares and bonds, but am seeing a far better, safer investment with property than other investments I have made.

I like your analogy about rowing your own boat. I'm of the same opinion.

Generali

Yellowsub wrote: »

I am fully diversified, because I have both gold and silver :beer:

No you're not.

robmatic

Yellowsub wrote: »

I am fully diversified in the safest possible way. Its not that I don't like paper investments or property, when they are looking undervalued I will get back in. But at the moment I do not want to be anywhere else but monetary precious metals, especially silver bullion with what is happening with solar demand and silver supply not being able to keep up.

You should really do some research that isn't on silver blogs. I suspect future demand for solar power could be met by concentrated solar power systems rather than photovoltaics.

JohnyBM

robmatic wrote: »

You should really do some research that isn't on silver blogs. I suspect future demand for solar power could be met by concentrated solar power systems rather than photovoltaics.

You would still need lots of silver though?

To be fair the silver bugs have a point, silver stockpiles have been depleting at alarming rates in recent decades, now there is almost nothing left.

robmatic

JohnyBM wrote: »

You would still need lots of silver though?

To be fair the silver bugs have a point, silver stockpiles have been depleting at alarming rates in recent decades, now there is almost nothing left.

What would you need the silver for?

According to the silverbugs, only 50% of annual silver production is used industrially. In what sense are silver stockpiles depleting if that's the case?

JohnyBM

robmatic wrote: »

What would you need the silver for?

According to the silverbugs, only 50% of annual silver production is used industrially. In what sense are silver stockpiles depleting if that's the case?

It's a good question? Where did all that silver go since the war? Decades ago world stockpiles of silver were very high, now its all been consumed in electronics and medical uses ec cetera.

What they are all saying is since the nuke disaster in Japan, the East is wanting to go mega solar power China, India and Japan and you need lots of silver to make all those solar panels. But there is not enough silver left above ground or in the ground its almost all been depleted. The answer is the price has to go up a long long way to get those silver investors to start selling. But the big fish like the billionaires Eric Sprot and Jim Rogers say they will not sell their silver bullion for fiat currency.