Investing a lump sum to generate an income

johnnyredgate

Also meant to mention that the hotel room fractions are being sold by the IFA that I spoke with, he was very impressed with the product, but obviously not as secure as guaranteed bonds

gadgetmind

johnnyredgate wrote: »

IFA has recommended longterm guaranteed investment bonds

Yes, they tend to do that.

My view is that the income generating Investment Trust recommendation was pretty solid. There is no more tax on dividend income for a basic rate tax payer and you can also sell enough each year to fund a S&S ISA so slowly get everything hidden from the tax man. The money in the S&S ISA can also be in ITs but you can also buy bonds and gilts in an ISA to balance the portfolio.

Note that unlike interest on cash in a savings account, the income from equities will tend to rise with (or even above) inflation.

johnnyredgate

gadgetmind wrote: »

Yes, they tend to do that.

My view is that the income generating Investment Trust recommendation was pretty solid. There is no more tax on dividend income for a basic rate tax payer and you can also sell enough each year to fund a S&S ISA so slowly get everything hidden from the tax man. The money in the S&S ISA can also be in ITs but you can also buy bonds and gilts in an ISA to balance the portfolio.

Thank you for your reply gadgetmind, do you know if these trusts can only be accessed via an IFA the 3% of investment charge seems quite high to invest?

grey_gym_sock

you don't need an IFA to access investment trusts. they are companies listed on the stock market, just like trading companies. you can access them via any low-cost (or high-cost!) stock broker. alternatively, some of them run their own schemes for investing in their shares, and these schemes are sometimes good value.

johnnyredgate

grey_gym_sock wrote: »

you don't need an IFA to access investment trusts. they are companies listed on the stock market, just like trading companies. you can access them via any low-cost (or high-cost!) stock broker. alternatively, some of them run their own schemes for investing in their shares, and these schemes are sometimes good value.

Thanks greygymsock, would like to look into the guaranteed trusts, understand you get a guaranteed minimum of 4% return. Lots to learn, but if it seems this is the safest way to invest the majority of money then seems pointless to be paying high % fees if they are unnecessary. Do you have any suggestions of brokers/companies running their own schemes that are worth looking into please?

grey_gym_sock

there might be some confusion here ... investment trusts and guaranteed investment bonds are 2 different beasts.

investment trusts don't have guaranteed returns. they invest your money across a very broad range of investments, and pay you some income (called "dividends") with no guarantee of the amount, and also no guarantee about what your capital will then be worth (it can go up or down). that may not sound appealing ... however, there are investment trusts which have raised their dividend every year for a few decades, and if you buy in now and the same happens next year, you'll be getting about 4% income. if you're looking for an income of 4% which will rise to keep up with inflation, this can be a good approach.

kidmugsy

21Twinkle wrote: »

What is the general feeling about Cheviot Asset Management ?

Maybe sheepish?

atush

http://en.wikipedia.org/wiki/Cheviot_sheep

mgdavid

21Twinkle wrote: »

I thought that this was supposed to be a serious discussion ?

seriousness is all relative on the internet

Ark_Welder

http://loissykesfineart.com/dataviewer.asp?keyvalue=17559&subkeyvalue=650541&page=WorksZoom