Stock market, property or both?

Sorcerer2018

Diplodicus said:

I would say the opposite - anyone fortunate enough to live in a free country where superior/intelligence etc allows a good income
- in this case x7 average wage - should dutifully pay the full tax of the country that facilitates him imho.

So what you are saying is don't use ISA/SIPP or work pension, because this way you are avoiding giving extra tax to the government, great advice .... not.

csgohan4

Sorcerer2018 said:

Diplodicus said:

I would say the opposite - anyone fortunate enough to live in a free country where superior/intelligence etc allows a good income
- in this case x7 average wage - should dutifully pay the full tax of the country that facilitates him imho.

So what you are saying is don't use ISA/SIPP or work pension, because this way you are avoiding giving extra tax to the government, great advice .... not.

Their probably sarcastic and just jealous that someone has worked hard, not including the many sacrifices one has made to get that far. As far as I am aware,, not many people are born into a 6 figure sum job, last I heard, you need to work for it and earn it

MaxiRobriguez

Not sure why you're not maxing out pension on your earnings. £3k a month not £800 to avoid the 40% tax. Then max your ISA contributions. Then maybe consider a couple of BTL's.

Do that for ten years and you'll be ready to retire comfortably if you wanted to. 

dunroving

I agree with others re: BTL not being very hands-off. Plus, if you get the wrong tenants, and/or the wrong agents, and/or the wrong neighbourhood, there is potentially a lot of downside.

MEM62

Sorcerer2018 said:

Diplodicus said:

My advice: 
Live the best years of your life -at least 20 more- before thinking about money consumes you.  
You are well set.

So what you saying is forget about money until he is about 48 ish, and then worry about, great advice. .. not.Sorcerer2018 said:

Diplodicus said:

I would say the opposite - anyone fortunate enough to live in a free country where superior/intelligence etc allows a good income
- in this case x7 average wage - should dutifully pay the full tax of the country that facilitates him imho.

So what you are saying is don't use ISA/SIPP or work pension, because this way you are avoiding giving extra tax to the government, great advice .... not.

Gentlemen, 
There is a reason that the diplodicus is extinct  :-)

unkle

BTL can be hands off and reasonably tax efficient.
Explore what councils take 3/5 year leases, set up a company, buy a couple, lease to the council, forget about it for 3/5 years other than the money coming in.

csgohan4

unkle said:

BTL can be hands off and reasonably tax efficient.
Explore what councils take 3/5 year leases, set up a company, buy a couple, lease to the council, forget about it for 3/5 years other than the money coming in.

Please enlighten us how it can be tax efficient in a company? How can OP release money from the company without being heavily taxed. Or are you suggesting to leave it in the company until they need it? Having an illiquid asset/s isn't great either if they are your main portfolio and you nothing liquid to get cash easily. 

steampowered

unkle said:

BTL can be hands off and reasonably tax efficient.
Explore what councils take 3/5 year leases, set up a company, buy a couple, lease to the council, forget about it for 3/5 years other than the money coming in.

It's not tax efficient when compared to the other options: 
- As the Op is a higher rate tax payer, 45% tax relief is available on pension contributions. The Op can't get that with BTL.

- Higher rate stamp duty will apply. Many years of profit would be required to cover that ! 

- The Op will have to pay corporation tax on the profits left in the company (with no deduction for mortgage interest), and income tax when they take dividends out of the company. Admittedly the Op could leave the rent until such time as he is in a lower income tax band, but that could be years, and begs the question what to do with that money in the meantime.

- If the Op wants to sell the property and liquidate the company, he will have to pay capital gains tax on his gain all at once. Compare that with stocks & shares investments where you can sell down over time, thus using the capital gains tax free allowance from multiple years (or indeed with a stocks & shares ISA where there is no capital gains tax or income tax at all).

wjr4

1) maximise both ISAs - use Stocks & Shares ISAs
2) maximise your pension contributions (up to the tapered annual allowance) 
3) make sure you have sufficient cash savings left for an emergency fund before investing 
4) make sure you have income protection and life assurance - preferably not via your company unless you plan to be there forever. 

d_barratt

Hi all,
Thanks for the comments - super useful.
In summary, it seems that my best options are as follows:

• Increase pension contributions
• Max out ISA's
• Invest in relevant funds
• Be careful about BTL - not the best investment for my circumstances

I have a few grand in an HL account - specifically in a Lindsell Train Global Equity fund. Moving forward, typically are mutual funds, index funds or ETF's a more effective vehicle for capital growth and a steadily increasing income?
Thanks again