Where to get 5% return on £80k long term?

economic

Pincher wrote: »

Have you considered getting a lodger who pays £4,000 a year?

It's tax free, as it's under the £7,500 Rent-a-Room Allowance.

When I had lodgers, I never had break-ins when I go on holiday.

A dog costs money to keep, and can't leave it alone for a week when I'm away. A tenant is a guard dog that pays you rent.

good idea. been doing this a while and it pays for my mortgage and also good company too. win-win. make sure you get the right lodger and take your time doing so.

Cogs44

3%-4% would be more realistic without much risk.

With some risk you could split it between different investments, e.g:

40% best bank accounts paying 2% pa
30% P2P paying 6% pa (e.g. RateSetter 5 year, Zopa plus, Assetz Capital GBBA)
30% low cost stocks and shares ETF/fund averaging 7% v.long term via low cost broker or robo advisor
=4.7%

Then throw in some of the new customer cashback offers, things like £170 via topcashback/quidco for robo advisors, the £50 P2P bonuses and the bank switching to bring it up to above 5%.

AnotherJoe

teddysmum wrote: »

I'm referring to the big risk of big interest at the cost of possibly losing the original investment. As you get older you don't have the time left for investments that will give an over all gain but needing considerable time to do so.


There is the much lower risk of taking 5 year bonds (no loss of money put in) at a poor rate (where rates could go up), but for such a poor return, I don't think it's worth locking your money away.

1. With most funds you are never at risk of losing your whole investment. For example if you invested Ina fund that tracked the global stock market, or even the U.K. if either went to zero there would be a lot more problems than you losing your money since money would be worthless as well.

2. A bond at say 2% pa over 5years is likely losing you 5-10% overall due to inflation.