£75000 to invest.

macca1974

The problem that you have of course is that you need to be able to select something that is going to produce 10.5% over the next however many years. Its fairly straightforward to see what has done well over the past few years but a bit more difficult...to see what is going to produce that over coming years. But you can't get 10.5% pa without taking a big risk to capital.

As you are looking for a finger in the air guess about what might do well over the next few years, how about oil? Find yourself an Oil ETF, invest the lot into it (maybe keep back £16K for a couple of years expenses). If you're lucky and the Saudi's stop messing around with the oil price, then in a few years time the price of a barrel will be back up to $100, you'll have doubled your money and jobs a good un. Of course it might go the other way and you lose your shut, but thats the risk. Wouldn't do it myself and its probably terrible advice, but it wouldn't surprise me at all (from a position of limited knowledge / zero experience in investing in this sector) if in 3-5 years time, the price of oil is back up around $100.

ColdIron

davethom wrote: »

Appreciate all the comments so far... any more ideas??

Lower your expectations from £8,000 pa

Eat rice, drink water, walk most places, buy a fan
Drink Lao Khao instead of beer
Don't fly twice a year Thailand/Bali
Figure out how to make your 30/60 day visa on arrival last several months without flying

HTH

Sam_J12

macca1974 wrote: »

The problem that you have of course is that you need to be able to select something that is going to produce 10.5% over the next however many years. Its fairly straightforward to see what has done well over the past few years but a bit more difficult...to see what is going to produce that over coming years. But you can't get 10.5% pa without taking a big risk to capital.

Disagree with this. Like I was saying earlier in the thread, the S&P 500 has returned an annualised rate of over 10% (10.7% I think) since its inception. If you invest for the long term, say a 20 year period, then based on the historical evidence you have a great chance of receiving 10% or more annualised return - 63% of the 20 year periods since the S&P 500 began have returned over 10%, and since 1931 never less than 6.5%.

Of course, you can never guarantee that past performance will continue into the future, but this is true of literally every investment. Historic evidence suggests that a 10% return is very achievable, with little to no risk to your capital.

Here is a nice table illustrating this: http://allfinancialmatters.com/wp-content/uploads/2013/01/SP-500-Rolling-Period-Returns-2013-Edition.pdf

musehead

You could get £4500 before tax for lowish risk on one of the Peer to Peer lending platforms.

You could read the matched betting forum and supplement that income with another £3500 for not a huge amount of time invested (some of your money would need to be tied up doing this rather than in the P2P account, but not much).

Malthusian

@Macca: Why not just walk into a casino and bet it on red or black? Then you don't have to wait three to five years.

Or if you balk at the risk of 100% capital loss, you could bet half the money on a column (a 2-1 bet). Less chance of a win, but the win still doubles your total fund, and if you lose you still have half left. That brings the range of possible outcomes much closer to that of investing all your money in a single commodity, albeit with a much starker distribution.

Less flippantly, the strategy doesn't do the OP a lot of good because (apart from the risk that the oil price never goes up), assuming he really is looking to fund staying in South East Asia indefinitely, the question is: what does he invest in (and live on) once the oil price has gone up to $100?

Malthusian

Sam_J12 wrote:

Here is a nice table illustrating this: http://allfinancialmatters.com/wp-content/uploads/2013/01/SP-500-Rolling-Period-Returns-2013-Edition.pdf

While the benefits of genuine long term investment should not be undersold, what your table shows is that the best chance of getting double digit returns from investment in the stockmarket is to either a) invest during a period of double-digit inflation or b) invest after a devastating World War ;-)

As inflation is virtually zero and there hasn't been a World War recently, we can say with certainty that someone investing today, especially with the aim of generating income to live on now, should not count on getting double-digit returns from the stockmarket.

mattyprice4004

I use Nutmeg on a risk profile of 10 (maximum risk) - previous performance has been good, and the returns are something like 7-8% per year.
Very easy way of doing it, if you just want to bung it somewhere and skim whatever it makes.

Sam_J12

Malthusian wrote: »

While the benefits of genuine long term investment should not be undersold, what your table shows is that the best chance of getting double digit returns from investment in the stockmarket is to either a) invest during a period of double-digit inflation or b) invest after a devastating World War ;-)

As inflation is virtually zero and there hasn't been a World War recently, we can say with certainty that someone investing today, especially with the aim of generating income to live on now, should not count on getting double-digit returns from the stockmarket.

Not really. The majority (63%) of 20 years periods give 10%+ returns, many way in excess of this. The average return is 10.7%. So double digit returns are most definitely achievable with minimal capital risk in the long term. Obviously inflation adjusted returns are lower, but I'm not really sure what your point is here? When talking about investing, people don't usually talk about inflation adjusted returns, since inflation is completely out of control of the investor. I would say 99% of the times people talk about return on investments they are talking about non-inflation adjusted - like the OP was.

Malthusian

Don't just look at the average. Look at those 20 year periods that returned double digits. Now look at the number of them that include the decade after 1945, or included the 1970s and had considerably less impressive inflation-adjusted returns.

If the question is "how likely is it that I will see double-digit returns now", it makes little sense to include post-war booms and periods of high inflation when we know there hasn't just been a war and we know inflation is not in double-digits. Any idiot can generate double-digit returns when inflation is in double-digits.

Plus, from what we've been told the OP is investing for income. That means that even if over the next 20 years the stockmarket generates annualised returns above 10%, it does him a fat lot of good if the stockmarket is flat over the next five, because it gives him nothing to live on.

Sam_J12

Malthusian wrote: »

Don't just look at the average. Look at those 20 year periods that returned double digits. Now look at the number of them that include the decade after 1945, or included the 1970s and had considerably less impressive inflation-adjusted returns.

If the question is "how likely is it that I will see double-digit returns now", it makes little sense to include post-war booms and periods of high inflation when we know there hasn't just been a war and we know inflation is not in double-digits. Any idiot can generate double-digit returns when inflation is in double-digits.

Plus, from what we've been told the OP is investing for income. That means that even if over the next 20 years the stockmarket generates annualised returns above 10%, it does him a fat lot of good if the stockmarket is flat over the next five, because it gives him nothing to live on.

The S&P 500 has returned over 12% over the last 40 years, so what you are saying is not true. OP doesn't say he needs to live off the money - all he says is he wants a holiday in Thailand and Bali, which he can easily afford already.