What to do with 500k for best monthly return.

Pauladvive

Hi all, would like advice on investing 500k to get a good monthly return to live off. I am considering a property purchase for holiday letting and have come out of the student let market as it is saturated. At present Can't find a suitable property/properties at right price. I have researched a little in to a stocks and shares portfolio but not confident in this area. Any advice? Sorry to be so general.

xylophone

For the moment, you might hold it safely in Income Bonds with NS&I.

https://www.nsandi.com/income-bonds

If you have no experience at all with investing you might wish to consider taking the advice of an independent financial adviser.

https://adviserbook.co.uk/ Tick "confirmed independent" and such other specialisms as are required when the menu comes up.

Audaxer

It depends how old you are and your income needs as to how long £500k will last if invested to provide income for life. If invested in a medium risk portfolio, which would mean roughly 60% in equities, the advice of many commentators is that a 'safe' withdrawal rate is estimated to be 3.5% to 4% a year, increasing with inflation, for a retirement of 30 years or so. If your income needs are greater than that and/or your time horizon is longer than that, there is a chance that your money will run out.

Eco_Miser

£500k at 3% will give an income of £15k per year forever. So if you can live on that, doesn't matter how long your time horizon is, the aforementioned medium risk portfolio will last as long as the assumptions in the 'safe' withdrawal rate hold.

Albermarle

£500k at 3% will give an income of £15k per year forever

To be clear to the OP , this means £15K in the first year , then £15K + inflation in the second year , and same again in each year .
So an income of £15kpa in real terms , not being eroded by inflation.

to consider taking the advice of an independent financial adviser.

To go from investing zero to £500K then this would seem a good idea.

[Deleted User]

Eco_Miser wrote: »

£500k at 3% will give an income of £15k per year forever.

Who offers this deal?

Linton

newbinvestor wrote: »

Who offers this deal?

You or your IFA do. From historical experience 3% of initial value, inflation linked is a very reasonable sustainable expectation from investing a lump sum. Of course it depends on how it is invested which is why the responnsibility lies with you or your IFA. And it is always possible that the future does not match history.

Clive_Woody

newbinvestor wrote: »

Who offers this deal?

Balanced investment returns (assuming a reasonable investment selection).

[Deleted User]

Linton wrote: »

You or your IFA do. From historical experience 3% of initial value, inflation linked is a very reasonable sustainable expectation from investing a lump sum. Of course it depends on how it is invested which is why the responnsibility lies with you or your IFA. And it is always possible that the future does not match history.

I thought it was some sort of guaranteed 3% product.

Sailtheworld

newbinvestor wrote: »

I thought it was some sort of guaranteed 3% product.

You'd see Savings and Investment board posters throwing grandchildren and great-grandchildren behind themselves to get at 3% guaranteed.

Should such an offer become available I'd advise standing well clear so you don't get trampled.

Pauladvive

Many thanks for the advice.