How would you invest £100,000

passthewineandchocolate

So, if you had a house with mortgage, adequate income for your lifestyle, no other debt and no other savings or pensions but found yourself with £100,000 to invest, what would you invest it in?

Our initial thought is to buy a couple of rental properties but we want to explore our options. We don't need income from the investment immediately, we are more interested in capital growth and it giving us an income in our old age. Any suggestions?

colsten

Are you both employed, does your employer offer a pension scheme?

What are your ages, what tax rates?

How much of your mortgage is outstanding, what is the rate, what are the terms for overpayments?

Whatever the answer to the above, you should have some 6-12 months of living costs in an emergency cash fund. BTL sounds a lot easier than it is, and £100K minus emergency cash fund isn't really a lot to enter the market. Also, you are already invested in property (the one you live in), and it is generally not a good idea to have all your eggs in one basket.

passthewineandchocolate

We are in our early 30s, married with kids. My husband is a self employed contractor so no pension, I work for a small company with not a very good pension and won't be eligible for a year.

I can't remember our interest rate, around 4% I think. We owe £260,000 and the property is worth £430,000 ish. Due to remortgage in 15 months. We can make 20% overpayments per year.

We've owned a BTL before which is why we have the £100,000 as we've just sold it. Had to sell it due problems in the area.

xylophone

My husband is a self employed contractor so no pension,

Being self employed doesn't mean he needs to be without a pension.
https://www.moneyadviceservice.org.uk/en/articles/pensions-for-the-self-employed

http://www.unbiased.co.uk/

I work for a small company with not a very good pension and won't be eligible for a year.

Make some provision of your own?

Do you have an emergency fund?

Do you use your ISA allowances?

Totton

I would pay the mortgage off but that's because I wouldn't want to live with such debt even though mortgage rates are so favourable, times can change. So, I would overpay or clear it if I could.

If that's not an option, then I would stick the money into an investment that I was happy with, in my case that would be some Investment Trusts, perhaps 10 x £10k to spread the risk a little although John Baron offers a good selection for growth and he prefers 20 - 25 in his Summer portfolio (aka Growth Portfolio in Investors Chronicle) http://www.johnbaronportfolios.co.uk

kidmugsy

passthewineandchocolate wrote: »

I can't remember our interest rate, around 4% I think. We owe £260,000 and the property is worth £430,000 ish. Due to remortgage in 15 months. We can make 20% overpayments per year.

Overpaying the mortgage is the equivalent of earning a secure 4% p.a. tax-free. Irresistible. Then when you remortgage, you can presumably take some of that money back out if you want to. (Overpaying a cheaper mortgage rate is less attractive.) Don't forget to ensure that you have a decent cash emergency fund. (Six months outgoings?) Interest-bearing current accounts are a good place to keep those. If either of you is a higher rate taxpayer, then pensions move up the priority ladder.

Anthorn

Personally, I'm 63 years old so I make old-guy financial decisions which means I'm paranoid about being able to get hold of some of my money at short notice.

If I had £100,000? £25,000 in an instant access savings account or indeed an interest-bearing reward current account such as Santander 123, £20,000 in allocated gold, both a cash ISA and a Stocks and Shares ISA and the rest in Scottish Mortgage Investment Trust shares.

Feel free to disagree lol

Conrad

Invest in 2 properties with 5 year fixed mortgages.
I do also put into stocks and shares ISA's


I often encounter clients retiring early due to them having a property portfolio. I personally try and find a property with best all round combination of income yield and capital growth. At first I only went for income yield.


Good growers enable the release of further funds later for a deposit on a further property. I recently was able to do this after just 1 years capital growth and the £30k I released only cost £90 pm.


My number one tip is to always let to nerdy sensible types. This is roughly the ideal profile for lenders too. So many LL's come unstuck not applying this simple rule.

cjking

You're less likely to do something you regret if you make many small decisions as opposed to one big one. So put the money in the mortgage, and decide each month how to spend/invest that months reduction in the mortgage payment.

27yearoldmale

I'd buy an Audi R8.

veryintrigued

I'd put the majority of that into paying off the mortgage.

In your position and risk averse as I am , it would terrify me (part) buying even more property (as others have suggested) and being even further in debt and exposed.

Good luck