Moving to France - Investment Assistance Required!

cavalcade

Hello,

I currently live in Scotland, but myself and family will shortly be moving to France. Our house here, we are hoping, should shortly sell for around the 800,000 mark. Our new house in France bought cash, plus the outstanding mortgage on the Scottish house, plus other costs for moving/fees etc... should total around £400,000. Which leaves £400,000 or thereabouts, as "cash".

A proportion of that we will need to spend on the house in France to do it up + buy a left hand drive car etc.... Ultimately, somewhere between £250 and 300K will be left, and we would like to invest this to provide an income. The French house should, once we've upgraded it with renawable tech be energy self-sufficient, and we won't have a mortgage so our outgoings per month should be fairly low - e.g. council tax (French equivalent - cheaper than UK, fuel for car, insurance, food (above what we will grow ourselves), occasional travel to UKetc...). We will probably work again at some point (I'm 30, my partner 41), just not for a couple of years while we settle in, so this isn't an income for life per se required from the 250K, just enough to live on fairly comfortably for the first couple of years or so. We can also supplement with the occasional rent of our French house as a holiday cottage. My gut feel is somewhere around the £1000 mark per month should be enough to be comfortable on. £800 minimum, £1250 above nice.

My questions are as follows:

The Euro/Sterling exchange rate seems fairly stable. Interest rates are higher in the UK as well. But this does introduce risk if the Euro strengthens against Sterling a lot. Would we be best investing in the UK, or transferring the money to France? Sarkosy seems to belive the Euro is too strong, but I'm finding it hard to find anywhere with any analyst predictions on currency exchange fluctuations.... any ideas?

What is the best way to approach investing this sort of sum of money - I'm aware I want to plough back cash into the fund to negate the affect of inflation, and I'm willing to take a yearly lump sum rather than monthly income to maximise interest. My current assumption is a fair aim would be a return of about 5% net with a fairly low risk investment strategy, after fees. I just can't think of the best way to go about investing, and who to contact, or even do it myself.... I would see things working as we take a lump sum of around 100K to cover the first year costs and then leave the remaining 300Kish invested over the year, and then as the interest is paid in 2008, take the interest, and use that for the next year (hopefully leaving a residual which can be ploughed back in to the main fund again to offset inflation), leaving the 300K to grow again... Does this seem reasonable? Is there anything I'm missing, or haven't considered?

My idea for the actual investment split would be (there are two of us and two kids) to exploit anything we can for the family in terms of tax free savings vehicles with guaranteed high rates of interest. Max our ISA allowance on 1 year bonus rate ISAs, that sort of thing. And then stick a big lump of the rest of the capital in gilts (or some other low risk investment), with a small proportion in equities?

Would I be best trying to find someone to manage the cash for me, or would I be best avoiding charges and the like, and just manage via a fund supermarket or something? With a low risk portfolio is there much point in someone managing it?

Any other thoughts gladly received - I'm curious to hear any suggestions on how you would invest this cash, as I'm still undecided. And also any pitfalls I might not have thought of yet!

EdInvestor

http://boards.fool.co.uk/Message.asp?mid=10159106&sort=whole

Some useful info.