Some direction on investing please

Sam2016

Hello

I'm a little clueless in terms of what to do. Basically I want to do something that will bring a fairly certain and sizeable return on investment. It would be medium to long term.

The idea is that I do something that will either be something to give to our children/ help with our pension fund/ university etc - whatever we see fit. Many of my friends have bought flats and rent them out, some will buy, renovate and resell. We just own the property we live in and have a sizeable mortgage.

I'm not sure that buy to let is a great option what with the costs increasing for 2016 and the likelihood of profit being quite modest is not great. Although the property value should increase over time.

What I'm wondering is how an option like this stacks up against other investment opportunities. I'm clueless so I wouldn't know where to start looking!

Superscrooge

I would avoid 'Buy to Let' especially as you appear to have no experience of it. I know several people who have had their fingers burned. Unexpected maintenance bills, difficult tenants and the cost of getting them evicted, unpaid rent, neighbour problems, periods where property is unoccupied and therefore no income, disputes with letting agents etc.

On top of all this the government is getting concerned about a 'Buy To Let' bubble and is increasing tax on landlords.

Labour, if they ever get elected, have proposals for a 'Mansion Tax'

I think a well diversified stock market investment fund would be your best option.

There is plenty of useful information on the monevator website

http://monevator.com/category/investing/passive-investing-investing/

george4064

Its difficult to recommend avenues to explore without knowing how much is available to invest..

jimjames

Awenthomas wrote: »

Hi,
According to me, Investing in Real estate is the best and profitable option, but it is important to take advice from an expert real estate adviser before investing in it. The rates of Real estate property become higher within a short period of time. So, investing in real estate will be definitely beneficial for you.

Why is it that I'm now expecting spam? Did this post actually say anything other than stringing the words real estate into a few sentences?

In the UK we don't refer to property as real estate anyway....

Broken_Biscuits

You could start by googling historical returns of....

Then after a bit of research you would probably find that any given year certain things go to the bottom of the pile returns wise and some things have periods on top.

Then you may read a bit on monevator's website or even pick up a copy of Tim Hale's smarter investing free from your library...

You are most likely then going to end up with the conclusion that you cannot predict the future so why not invest in a range of things with a balanced portfolio.

Theres a wealth of knowledge out there for free.

dunstonh

basically I want to do something that will bring a fairly certain and sizeable return on investment. It would be medium to long term.

What do you define as being fairly certain?
what do you define as a sizeable return?
what do you define as medium to long term?

Context is needed as one person's low risk is another persons high risk. One person's long term is another person's short term.

The idea is that I do something that will either be something to give to our children/ help with our pension fund/ university etc -

So, multiple objectives and unlikely to mean that one investment is suitable but multiple investment [wrappers/options]

I'm not sure that buy to let is a great option what with the costs increasing for 2016 and the likelihood of profit being quite modest is not great. Although the property value should increase over time.

And not suitable for some of the objectives you mention either.

Eco_Miser

Awenthomas wrote: »

So, investing in real estate will be definitely beneficial for you.

I know several pieces of real estate (houses) that were definitely not beneficial for their most recent investor, and probably not for the one before that.

Sam2016

What do you define as being fairly certain?

Medium risk I guess

what do you define as a sizeable return?
what do you define as medium to long term?

Context is needed as one person's low risk is another persons high risk. One person's long term is another person's short term.
“

I have no pension, a little savings for myself and some savings for the children

lets just say if I bought a property for 150k and it was worth 250k in 10 yrs then that would be enough for the kids uni fund. Ideally I would want to carry on investing in property if it worked for me and generate larger returns of possible; maybe my kids will benefit from this in their lives and when we pass

In terms of retirement I need a medium risk long term investment for maybe 30 years, my husband and I probably want to make around 500k

what do you define as medium to long term?

Context is needed as one person's low risk is another persons high risk. One person's long term is another person's short term.
“
[/QUOTE]

in terms of how much I want to invest, well I can't answer that. I would rather have an idea of what would be good amounts to invest, where and when so I have an idea on how much money I'll need to invest

Is it possible to sit down with a financial advisor/ broker and have them set out a plan for me - I appreciate the suggestions of reading books and admire how knowledgable you all are but this really isn't my forte and much of it just goes over my head to be honest!

However, even though I may not be well versed, I still wish to seek out a way to invest and make money without this being a huge obstacle

lawriejones1

The problem is, everyone wants to make the most money with the least risk. I know I do.

If someone here had a sure fire way of doubling an investment in 10 years, we'd all be borrowing at 3% and cashing in the 47% profit! Sadly, it doesn't work like that.

This may sound glib, but I've realised (in my very short timeframe of investing/saving) that there are no certainties. This year I saw Woodford Capital make a 20% leap making me feel like a God, which it then promptly lost. On the other hand, I bought a vintage guitar for £1200 and sold it for £2000 - woo! Am I investing it all in Guitars? Not at all.

I'll keep some money in assets like guitars (I used to be a guitar dealer so it's something I'm a bit of an expert in), a healthy amount in high interest cash (£3 - £4K, that's 4 months living expenses) and the rest in passive investment funds, some high and some mid risk.

I use the Telegraph investment choices article to help me choose a few for a punt. High risk, but I'm ok with it.

Good luck making your choice. I'm also saving for children's futures and it's really hard to see it losing money but the market, year-on-year at least seems to return your investment at about 5%. If I achieve that I'll be happy, it's unspectacular - which is what I'm happy with.

jimjames

Sam2016 wrote: »

I have no pension, a little savings for myself and some savings for the children

If you have no pension then that's something that you need to sort asap. Most people will now have a pension offered by their employer that the company contributes to as well. Free money is something that isn't often worth turning down. So if you have that option then it's worth looking into the matching amounts.

Sam2016 wrote: »

lets just say if I bought a property for 150k and it was worth 250k in 10 yrs then that would be enough for the kids uni fund.

Effectively what you're looking for is something where you get growth without contributing. That may have been partly possible in recent years but I'm not sure it will be the same moving forward.

You also need to look at option for uni. Say the property has increased to £250k, it's not exactly easy to sell off a bedroom to fund the fees for a year. In addition it doesn't seem like a good idea to pay for uni yourself, at least according to the info from Martin I've seen.

Unfortunately the thing you're likely to need to do is bite the bullet and free up some cash to be able to invest. S&S ISAs are a great way to do that tax free but with pension you also get tax relief which boosts the pot.

bigfreddiel

Say your property isn't worth £250k after 10 years. What would you do then.

Have you factored in CGT if you sold?

Have you figured in to the ten years ownership the cost is of letting, maintenance, tax and all other associated costs? Do you have the time to manage the property, accounts, tax returns, dodgy tenants and so on.

Finally risk, governments love fiddling. Will the extra 3% stamp duty for second homes still be there in 10 yrs time? Will it be increased. Will Jezza get in in 2020 and impose rental controls.

All in all I wouldn't go for. BTL, I would just create a nice balanced portfolio of equities in an ISA, you and your partner can invest £60k this year, and you should get 4 to 10% growth.

Cheers fj