what's the best way to tie up £170,000 for 15 years

hotelmike

My father wants to invest £170,000 for his grandchildren to inherit in 15 years time. He's happy to keep the capital tied up for that period but wants it to generate income for himself. The only proviso is zero risk.
Any suggestions?

gadgetmind

Zero risk will currently generate close to zero income and the value of the capital will dwindle due to inflation inflation.

At 2.5% inflation, and assuming all interest (not much!) is withdrawn, that £170k will have the spending power of <£120k in 15 years.

Inflation is the enemy.

innovate

How many grandchildren?

blinko

innovate wrote: »

How many grandchildren?

what an odd question?:question::question:

atush

Not odd at all, the money could be split up.

In any case, there is nothing for him to do with the money that includes zero risk, as even cash has inflation risk and shortfall risk.

The only way to provide a good income, and have the balance possibly grow enough to keep pace with inflation is to invest the money in equities, probably equities that pay a good income like income funds.

WTFH

How about buying a property and renting it out.

atush

Where have you been the last 7 years? When people who bought property lost loads of money? Do you know the costs associated with letting and maintaining a property? What yield do you suppose is enough to cover costs and give a good income?

It could be an idea, but only if the person who invests the money has skills that can be used to keep costs down, and the property is bought in an area with good rental potential. But again, this would mean one or two properties max, so is again high risk (higher than some equity income funds).

theGrinch

minimal risk. there is no longer zero risk with negative real interest rates on savings

redcard

atush wrote: »

Not odd at all, the money could be split up.

Number of kids has no bearing on that.

blinko

atush wrote: »

Not odd at all, the money could be split up.

.

huh even odder, what are you talking about, please try to be a bit more helpful to the OP

bigadaj

Minimal risk in reality would mean a wide spread of investments, in the crazy economic times in which we live there seems little alternative.

Therefore splitting the money would make sense, a small amount in cash, some for a depsoit for a rental property if the risks of this are understood and the arrest sum into equities, even some go.d? this would provide some time and effort to arrange though, so either research and understanding or paying someone else to do it.