Investing for the first time.

seven-day-weekend

Much to think about and certain things we hadn't thought about (as I expected).

I thought that as we had (or will have in a week's time) one investment property, we ought to look at other options.

I think I will still have the chat with the IFA. He is recommended by a friend, whose family have used him for a long time, so I do trust him.

grey_gym_sock

there are investments where you can literally lose it all. but an IFA will not be advising you to try anything like that. for the kind of investments an IFA might suggest, high risk means that there will be periods when the investment's value can drop by some large percentage (e.g. 60%), but it will still be worth something, and it is then likely to recover again (perhaps over a few years). lower risk means that the drops will be a smaller percentage (e.g. 20%). generally, if you want lower drops, the likely overall returns will be lower, too, so it is a trade-off.

you do need to accept there will be some kind of drop in value from time to time, or it is difficult to generate any return. but then property can also drop in value, and it is a similar principle: if you stick with the investment, it will probably bounce back eventually.

the kind of income you mention - almost 5%, with the capital value also growing by some (unspecified) amount - is perhaps pushing it a bit when it comes to investments. i would (and i'm not an IFA) be pretty confident that i could generate 3% from investments, and still expect the capital value to grow at least in line with inflation on average. you certainly could push for a bit more income than that, but it's not certain to work out.

(almost 5% from property also seems rather high, if that is with no mortgage and net of all expenses & voids. though clearly that's dependent on property type & location.)

Eco_Miser

seven-day-weekend wrote: »

He thinks it's not enough to make any money from. He says it won't get us £575 gross a month plus capital appreciation like the investment property. Also you always have your property even if house prices slump, whereas you could lose your investment.

No, it won't, but that £575 isn't guaranteed either, and I daily see the results of buying to let without due diligence. It's quite pleasant since the L.A. got a demolition order on the lot.

seven-day-weekend wrote: »

Could you give me a rough idea of the amount of income it might generate (obviously I don't wish to know your private affairs, so I will understand if you can't comment further).

Total return about 6.6% p.a. I've been taking the natural income, so it's not compounded.
Quite a varied portfolio, built up over time and not properly rebalanced. Returns on individual funds vary from 13%pa to a disappointing 3% pa and one fund with a 4% loss - but that was only bought last April.

seven-day-weekend wrote: »

I've not seen the film but will google it now

There are several versions. Brewster has to dispose of $1,000,000 by bad investments, in order to gain multi-millions.

jimjames

roy62 wrote: »

You have enough money why take a gamble with it ?

Investing isn't gambling.

I put this example together a few months ago. It's for £10k but multiply up and you'll get the idea for £143k

https://forums.moneysavingexpert.com/discussion/5336097