£120k to Invest - I get to keep the Interest...

crvs

If I was given £120k then I would buy a house/flat near university area and rent it out. Ofcourse there are risk but you will get some good return after paying tax.

Vids

atush

Jegersmart wrote: »

That was my first thought. Secondly, why does everyone presume to give advice around the effects of inflation?

J

My first thought is to give all good advice. And not everyone says the value of everything. I agree the above possibly means no IHT, but the DOA ruiles would surely apply?

Second, amny don't think about all categories of risk, only investment risk. I can see form your comment you are one. Well, sorry but it is pertinent. Stick your head int he sand if you like, but I won't

ChesterDog

Inflation is important because, while all forms of saving or investment are subject to it, some have no hope of beating it while others do.

Jegersmart

xylophone wrote: »

I haven't seen anybody "giving advice" - this is not allowed on the boards. I have seen comments.

/

Pedantic is as pedantic does?

If I had £1 for each time someone came back with one of these futile *comments* when making an argument or stating a position I would be 4 years closer to retirement now.

J

Jegersmart

atush wrote: »

My first thought is to give all good advice. And not everyone says the value of everything. I agree the above possibly means no IHT, but the DOA ruiles would surely apply?

Second, amny don't think about all categories of risk, only investment risk. I can see form your comment you are one. Well, sorry but it is pertinent. Stick your head int he sand if you like, but I won't

You have misunderstood, and your post doesn't make sense.

I am merely pointing out the fact that on MSE a lot of people cannot answer a simple question without relating back to themselves or sounding (in this case) jealous. I am not pointing at you, I am just explaining the reason for my post.

Thanks also for having misunderstood my post then making a ridiculous assumption about my views on risk.

J

Jegersmart

ChesterDog wrote: »

Inflation is important because, while all forms of saving or investment are subject to it, some have no hope of beating it while others do.

I don't understand your point. Inflation affects all fiat currency - not just savings and investments. It is important to understand why inflation occurs and what the consequences are. To say inflation is important because some have a hope of beating and others don't, doesn't seem to make sense. What are you trying to say?

J

ChesterDog

I am pointing out that while we sometimes see comments dismissing inflation as almost not worthy of consideration when assessing different modes or classes of saving or investing (because it affects them all), at its most basic level it is actually of paramount importance because a vehicle, instrument or product that cannot even match inflation can only ever cause a loss of value for the money held in it.

Someone (you, I think) seemed to criticise people for noting the importance of inflation.

Doshwaster

CLAPTON wrote: »

no it doesn't really make sense.

how old is your mum?

inflation varies but assume say 3%

in 10 years her money, if held in a savings account will have the purchasing power reduced by 30%
in 20 years her purchasing power will be reduced by 60%
is that acceptable to her?

so giving away the 'interest' is the same as giving away the capital.

It's even worse than that as you are not compounding the interest. 3% over 10 years is actually 34% and a whopping 80% over 20 years.

Jegersmart

ChesterDog wrote: »

Someone (you, I think) seemed to criticise people for noting the importance of inflation.

Inflation is a factor, I was criticising the people who criticised the OP's mum's decision to let her son have any "profits" gained. One thing is to point it out, another to criticise someone else's decision based on on one's own view (and lack of any detailed information about someone else's circumstances) - saying that it doesn't make sense, in a dismissive way. This just doesn't have anything to do with us and sets a negative tone for the thread.

Hope that clarifies what I was criticising.

J

nonnatus

Hmmm, thanks again all!


To clarify, Mum is 65 and in very good health. Her assets don't push her over the £325 threshold.
We live together because it suits us very well! It was her suggestion initially, we trialled it in a rented property before taking the full plunge and both now agree it's a great lifestyle.
There is no forcing her to do anything and she is not avoiding care home fees!


It was seen by Mum as a nice "gesture" for me to get the profit from the investing. There are no suspicious motives anywhere I promise.


What I HAVE taken on board is the point about the Capital becoming less valuable as the years go by. That money will be mine entirely one day, according to our Wills, so maybe that's a consideration?


We BOTH like the idea of using the money to buy a small property somewhere to rent out. Not something we had EVER considered but I'll go and find out about all the risks involved in sinking money into property and becoming a Landlord. In my head, it makes more sense than all the complications of Investing!


Thanks again - I'm learning loads!