£400k cash but no home or job....?

solidpro

Also, you are certainly NOT protected if the stock market "tanks" anyway. Where did you get the idea that you are protected to £50k ??

http://www.morningstar.co.uk/uk/news/107927/how-safe-is-your-money-in-an-isa-or-brokerage-account.aspx

"Stocks and shares ISAs would come under investments, so 100% of the first £50,000 would be protected per banking authorisation."

solidpro

Mrs_Z wrote: »

£200k into a roof over your head with spare bedroom to be rented out under the tax free lodge scheme (=additional income)

What percentage of the £200k you'd put in would be equity in the property?

I'm always torn between my head "mortgage is the lowest interest loan and highest return on 25 years you'll get" as my dad told me as a child and my heart which says if I buy a £200k property outright and live in it, it's the same as getting a £200k return on investment over interest payments I never made over 25 years...

Bravepants

solidpro wrote: »

http://www.morningstar.co.uk/uk/news/107927/how-safe-is-your-money-in-an-isa-or-brokerage-account.aspx

"Stocks and shares ISAs would come under investments, so 100% of the first £50,000 would be protected per banking authorisation."

Only if the platform fails, for example Vanguard or Fidelity, due to fraud or bankruptcy. Your holdings would be ring-fenced. If all the shares in the world plummeted to £0 you would have no grounds for compensation! You said "the stockmarket tanks" not the platform.

Malthusian

solidpro wrote: »

http://www.morningstar.co.uk/uk/news/107927/how-safe-is-your-money-in-an-isa-or-brokerage-account.aspx

"Stocks and shares ISAs would come under investments, so 100% of the first £50,000 would be protected per banking authorisation."

That's for losses due to fraud or similar failures. What gave you the idea that the FSCS covers losses due to market falls? Why do you think everyone isn't investing all their money in penny shares and claiming from the FSCS if they make a loss?

badger09

solidpro wrote: »

http://www.morningstar.co.uk/uk/news/107927/how-safe-is-your-money-in-an-isa-or-brokerage-account.aspx

"Stocks and shares ISAs would come under investments, so 100% of the first £50,000 would be protected per banking authorisation."

That's a poorly written article.

The FSCS cover for investments applies to platform or fund provider failure or fraud. It doesn't cover investment loss if 'the stockmarket tanks'.

Mrs_Z

solidpro wrote: »

What percentage of the £200k you'd put in would be equity in the property?

I'm always torn between my head "mortgage is the lowest interest loan and highest return on 25 years you'll get" as my dad told me as a child and my heart which says if I buy a £200k property outright and live in it, it's the same as getting a £200k return on investment over interest payments I never made over 25 years...

I'd be looking to buy a property outright with £200k to live in and then having a lodger for extra income.

Dorian1958

Is this a real or hypothetical situation?


Option 1. With £400K I cannot see how you could buy 3 properties outright for £133K with a view to renting out, AND buy a mortgaged property worth £300K - where is the deposit for that mortgaged property coming from, and the means to repay the mortgage? Without employment income I doubt you would get a mortgage. Also, rental income of 6-8% is very optimistic. You might get 4-5% after expenses but before tax. Looking at 1 bed flats in Bournemouth buying 3 outright is doable, and you might get £1800 gross rent p.m (before tax and expenses), but without a job you wont have much left to live on once you have paid your own rent/living costs.
Option 2. Without any prior landlord experience this is a non starter and you will not be able to find a lender.
Option 3. Without employment you will only be able to contribute £2880 p.a. into a pension. You could put some money into NS&I and stock market (S&S isa?) but you will need a chunk of money to run the house and live for X months until you get a job.
Option 4. You will not get a mortgage without employment income.


How about moving to an area where there are employment opportunities, get a job and start contributing to a pension matching employers contributions, initially renting a property until you are settled and know the area prior to buying a mortgaged property? In the meantime you could feed a S&S ISA, retaining an emergency fund in cash?

solidpro

Dorian1958 wrote: »

Is this a real or hypothetical situation?

It is real but I tried to eliminate much of the specifics to try and make it simple to digest and respond without moving on..

I do have an income from my 'job' but it's extremely flexible and doesn't require much time.

You're right, option 1 has the flaw of not having a deposit for an personal mortgage.

Thanks!

ValiantSon

solidpro wrote: »

If the stock market tanks, you're only protected to the first £50k?

No you aren't. The £50,000 FSCS protection has nothing to do with loss in value of investments due to movements in the market. It is a protection provided for instances of corporate fraud or gross negligence on the part of the platform that you use. If you lose even 100% of your investment on the stock market the FSCS will give you diddly squat.

solidpro wrote: »

http://www.morningstar.co.uk/uk/news/107927/how-safe-is-your-money-in-an-isa-or-brokerage-account.aspx

"Stocks and shares ISAs would come under investments, so 100% of the first £50,000 would be protected per banking authorisation."

You've misunderstood.

dealer_wins

Live on a cruise ship for the next 20 years!!