Investment Advice Please

BACKTOBACK

So i own a bungalow without a mortgage value around £220 - £230. The bungalow was an inheritance a few years ago. I had tenants in but that didnt work out and i have now lived here for one year.
The past year has been the worst year of my life, i have suffered severe mental health problems worsened by isolation in this area.
I really cant go through another year in this place.
My dream is to retire in Thailand. I am over 50 and could get the retirement visa. I have visited Thailand many times which have been the best days of my life. I am not thinking of living in the tourist areas or going for the bargirls, i am too old for that. I just really like the weather, the food is amazing and cheap in the restaurants, the people are really friendly and the whole Buddhist culture is much better than what we have in the UK. For Thai people the family is the most important thing and respect for the older people.
Anyway i am looking for a way to sell the bungalow and invest the money to generate an income towards living expenses.
I know if rented it could obtain around £1000 a month plus the increase in property value over the longer term.
I dont want the responsibility of being a landlord and the risks involved for breakages etc.
Is there a low risk investment that could obtain a similar amount of income? (£1000 plus)
I know nothing about investments, dividends etc if this would be a possibility then please explain in easy terms.
I also have to consider that i would be renting a cheap condominium in Thailand on a one year lease so if on the off chance i didnt like living there i would be looking to return
 

Linton

You could not achieve a secure £12K inflation linked income purely from investing a lump sum of £220K without depleting the lump sum. You would have the high risk that you will run out of money before you die or have insufficient money to return to the UK.

Do you have any other assets? What about employers or personal pensions? How much State Pension have you accrued and when will you reach SP age?

tacpot12

You also need to be aware that your state pension will not increase if you move to Thailand. See here: State Pension if you retire abroad: How your pension is affected - GOV.UK (www.gov.uk)

Eyeful

Lets go Back to Basics:

1. SAVINGS: Money is in a safe place & not at risk. You expect to at least take out what you put in.

2. INVESTING: Putting your money at risk where there is the potential loss of all your money.

3. LOW RISK SAVINGS BONDS (also savings accounts): are regulated. You only them from:-

(a) NS&I (which is a loan to the UK government).

( b) Bank/Building Society covered by the FSCS protection (at present up to £85K).

4. OTHER TYPES of BOND: are unregulated investments, where there is the potential loss of all your money.

They are not covered by the FSCS protection & somewhere there should be a warning about risk to your money.

These are INVESTMENTS PRODUCTS (not Low risk savings bonds). They are IOU’s & are only as good the issuer.

5. Bond Scams:- Occur in are unregulated investments. Be careful when buying “Other types of Bonds”

6. You are saying you can get (£12k/220k) x 100% = 5.45%

The Best 5 year fixed safe Low Risk Bond is now paying =  4.40%.

The FTSE 100 yield at the moment is = 3.84% 

Just using the above it looks like at the moment you are not going to do better.

7. Do you have a pension, if so what type? How large is your "Rainy" Day Fund?

8. Watch this before going into investing:   https://www.kroijer.com/

Tucosalamanca

Selling your property and putting the proceeds into a pension might get you somewhere close to where you need to be (£1,000pm income)?

A lot would depend on your age and your income (how soon can you access the money and how much you are permitted to put in).

My very rough thoughts (I'm just a layman rather than an expert).

Sell house and receive £220,000.

£60,000 into savings accounts, which you can withdraw £1,000 per month for around five years (you will earn interest as well)

Set aside £160,000 to go into pensions (likely to happen over a few years as you couldn't pay it all in immediately)

The £160,000 will turn into £200k after tax relief (this should grow each year and doesn't need to be 'risky')

When you are eligible (55 or 57), start drawing the pension (drawdown or annuity purchase or a mix).

This should comfortably last until you're entitled to state pension, at which point you would need to take less from the private pension. Hopefully enough left in there to see you out...

As I've said, this is all back of a fag packet and I'm sure there's some faults/difficulty in the plan.
If I was in your situation, this plan would be what I'd suggest to my financial adviser and see what they come up with?

I'm sure more knowledgeable people will be along to advise. Good luck with it, I think you're making a good call!

Eyeful

Tucosalamanca:  The OP does not have an knowledge of investing. Can you please answer these questions.

1. What exactly does the £160,000 into the pension contain, which ensures it doesn't need to be risky?
2. You say it should grow. What does the OP do, if the investment stays the same or goes down instead?
3. Where do you think he needs to put the money, until it has gone into the pension?

 "You state that:
"This should comfortably last until you're entitled to state pension". & " this is all back of a fag packet"

4. Its not clear if you have run the numbers through some form of analysis (say a spread sheet) or you just think it should comfortably last to when they draw state pension. Which of the two is it?

BACKTOBACK

I think realistically i would need £1500 - £2000 a month to live on in Thailand which would include health insurance etc. I do have other income of around £400 a month but looks like it will stay a dream until i can earn more money to invest for later in life. Thank you everyone. The rental would always be a problem with tenants wanting various repairs or potentially having to pay a management company 10%  

Eyeful

If you do think of going into investing after looking at https://www.kroijer.com/ then some thing to think of:
1. Have a "Rainy ay account" for emergencies (say 6 months of out goings).
2. Use tax shelters where you can (Pensions, ISA's)
3. Consider a low cost passive Global Multi Asset Fund with a Share/Bond split that you are comfortable with.
Examples:
https://www.hsbc.co.uk/investments/products/hsbc-global-strategy-portfolios/#balanced
https://www.vanguardinvestor.co.uk/investing-explained/what-are-lifestrategy-funds?intcmpgn=lifestrategyfunds_learnmore_link
https://www.vanguardinvestor.co.uk/investing-explained/what-are-target-retirement-funds

Tucosalamanca

Eyeful said:

Tucosalamanca:  The OP does not have an knowledge of investing. Can you please answer these questions.

1. What exactly does the £160,000 into the pension contain, which ensures it doesn't need to be risky?
2. You say it should grow. What does the OP do, if the investment stays the same or goes down instead?
3. Where do you think he needs to put the money, until it has gone into the pension?

 "You state that:
"This should comfortably last until you're entitled to state pension". & " this is all back of a fag packet"

4. Its not clear if you have run the numbers through some form of analysis (say a spread sheet) or you just think it should comfortably last to when they draw state pension. Which of the two is it?

Which is precisely why I made clear that I'm a layman and not a professional.

1. I'm holding cash in a SIPP, earning between 3-4%, no risk at all (other options are available)
2. No need for the investment to fall, should they stay in cash (other than erosion by inflation)
3. Savings account? Again, no need to take risk if not comfortable with it.

4. We don't know OPs age or other circumstance, so can't accurately say.
Let's assume they draw pension aged 57, they need £1,000 per month.
They have ten years until state pension, so require £120,000.
If they started with £160,000, before any tax uplift or growth, they would have a minimum of £40k remaining to provide over and above state pension for the rest of their days.

LHW99

2. Use tax shelters where you can (Pensions, ISA's)

I'm not sure you can use ISA's if you live abroad. You certainly can't open a new one if you are not resident in the UK, and while they are tax-free as far as the UK is concerned, I suspect that won't be true for every country in the world.

Eyeful

What you write is correct. However if you read about 4 posts back, the OP seems to have given up the idea of going there now. That's why I wrote the post you mentioned.