Investment strategy £320K

atush

And you could invest in commercial property?

Anyway do recheck your maths as 800/m on a 160K flat is only 6% yield. You will pay income tax (40% if a HRTaxpayer) on any profits and capital gains tax (which can be mitigated a small amt if once you marry you transfer 50% of the property into your wife's name).

Plus having much of your money in Mitcham properties isn't very diversified so increases any risk.

Totton

Surprised no one suggests paying off the mortgage, sure it is a cheap deal at the moment but financial freedom is a sure way to retiring at 50 on your combined earnings of £75k a year.

atush

why are you surprised? That mtg rate is very low indeed. Better to invest in a pension.

Better to save/invest the money and earn some sort of return and then look to pay off mtg if rates rise?

colsten

Totton wrote: »

Surprised no one suggests paying off the mortgage, sure it is a cheap deal at the moment but financial freedom is a sure way to retiring at 50 on your combined earnings of £75k a year.

with a couple of kids that aren't even at uni age by then?

Totton

atush wrote: »

why are you surprised? That mtg rate is very low indeed. Better to invest in a pension.

Better to save/invest the money and earn some sort of return and then look to pay off mtg if rates rise?

I read the original post as he has a DB pension.

Totton

colsten wrote: »

with a couple of kids that aren't even at uni age by then?

Of course. They earn enough now to save plenty over that time plus they have pensions kicking in later.

colsten

Totton wrote: »

Of course. They earn enough now to save plenty over that time plus they have pensions kicking in later.

Not sure how little you think a couple of kids will cost to go through to uni. With the family living in the world's most expensive city.

http://www.theguardian.com/money/2014/jan/23/cost-raising-child-surges

cnu

Firstly I'm excited to have found this forum and Greetings to all!

How about buying Gold for say 5 to 10K? May be extend this to other commodities "other precious metals" or daily consumables such as onions, wheat etc.,

TheTracker

colsten wrote: »

Not sure how little you think a couple of kids will cost to go through to uni. With the family living in the world's most expensive city.

http://www.theguardian.com/money/2014/jan/23/cost-raising-child-surges

I've seen that survey referenced several times. I don't hold great faith in a survey produced by an insurance company. The numbers don't hold up. Official figures show the median gross salary for a couple with two kids with both parents working (!) is 44k. Yet apparently it costs 440k to raise them.

andrewm1981

I am tempted to invest a small amount in gold. But not onions. Or tulips.

I may be hugely mistaken, but am I correct in thinking that pension contributions reduce your taxable income? I.e if my pretax income is £45k, then I'll essentially pay 40% tax on all profits from buy-to-let. However if I contribute 25% of my salary into my workplace pension through AVCs, then my income essentially drops to around £34k, and so I would be taxed just 20% on my buy-to-let income up to £45k?

If I'm right (and haven't made this up) then this would seem to be a sensible option?

Ryan, thanks very much for the detail, I will investigate this much further :-)

Andrew