150k to invest

wally123_2

Hi everyone, :money:
this is my first post on here.

I will shortly be coming in to about £150,000 & was wondering the best way to invest/save this money to obtain maximun return.
I don't want anything to do with the stock market;:eek:
I own my own house.
Would buying a house and letting or renting it out be better than a high interest account ?
Thank-you for all advice :T
Wally.

MoneyTown

Hi. I'm new too but I'll throw my tuppence worth in.

The house or savings idea has really got to be a personal choice after you've weighed up the pros and cons of either.

This forum has a wealth of information from previous threads. Have a go with the search function and get prepared to spend a while reading !

If you go the cash route then use Martin's tips:

http://www.moneysavingexpert.com/savings/which-saving-account

Aegis

wally123 wrote: »

I don't want anything to do with the stock market;:eek:
I own my own house.
Would buying a house and letting or renting it out be better than a high interest account ?
Thank-you for all advice :T
Wally.

I must say that I'm a little confused by your risk attitude. You don't want anything to do with the stockmarket, presumably to avoid the risk of capital loss, but you suggest buying a property to let out at a point where the country is currently on the brink of a potential house market decline that could see investments drop by more than a fairly balanced stockmarket investment (not that this has the cheeriest outlook either, but reducing the overall risk through diversification simply isn't possible when you tie everything up in a single property).

Personally I'd be uncomfortable tying up my entire investment portfolio in a single property, and would instead seek to diversify by, say, investing in a property investment trust at a bare minimum, though I'd personally prefer to diversify even further and include various unit trusts and OEICs investing in companies around the world.

If you're looking to buy a property, you might check out the House Prices forum a few links up from this one.

Otherwise the general rule for savings is to get the best possible cash ISAs for you and your spouse (if applicable) each tax year, then maximising the rest of the value using high interest savings accounts, fixed rate bonds, regular saving accounts (high interest, but payments required at certain intervals and capped; good in conjunction with a high interest savings account), NS&I Index-Linked Savings Certificates and (if you are a higher rate taxpayer) some Premium Bonds.

Be aware that if you go for the savings-only route you will find that the gains you make are likely to be ravaged by inflation and tax. After, say, 10 years you might well find that a diversified low(ish) risk stock portfolio would have been much more appropriate to your financial situation than either simple cash savings or property investment.

Hope that's some food for thought, good luck with it all!

Debt_Free_Chick

As Aegis says, you don't really want "all your eggs in one basket". But something else to bear in mind about property ..... it's probably the most illiquid form of investment. You can't get at your money, when you need it and even then, you can't get at it quickly.

And, of course, it costs money to maintain a property so you need to factor that in to any potential gain in value.

Jonbvn

The FOS about all your eggs in one basket really does apply here. Property is probably not a good option ATM. Given your aversion to S&S, I would suggest you have a look at NS&I products, such as index linked savings certs and premium bonds, which offer tax-free returns.

Tax is likely to be a major issue. I would recommend seeing an IFA, but they will obviously suggest that you invest in stocks & shares (since historically they offer better returns).

dunstonh

It appears the OP is confused about risk profile. Doesnt want to consider any stockmarket (even the lower risk end) but is willing to take risks with property. There has been no mention of fixed interest funds or other investment options.

Out of a low risk investment spread that includes stockmarket amongst others and property, I would put property at higher risk than the investment spread. Property yields are low. Rental income is taxable and if you are over 65 it can reduce your age allowance. Its illiquid, eggs all in one basket and the outlook is poor.

I would recommend seeing an IFA, but they will obviously suggest that you invest in stocks & shares (since historically they offer better returns).

Yes, you would expect a small content for someone at the low risk end. The OP doesnt seem to realise that stockmarket is a range of risk levels. You dont need to jump in at the deep end (which so many inexperienced investors have in the past) but can dip your toes in at the lower risk end. Maybe a 30% equity content with the rest fixed interest and cash with a view to move back into property funds with some of it next year after the drop in property has stabilised.

The aversion to stocks and shares is not known but its probably one based on lack of understanding.

Cozworth806

I have to say that your comment about wanting "maximum return" rather nieve when you then say that you don't want to invest in the stock market. With £150k to invest and looking at property you will need to look at your potential income tax and capital gain position if you then sell, any current debts you may have.
Property may increase in capital value (but may decrease also) but you also need to be sure that you you can realise an income of over 6% (before tax) which is what you can get at present if you keep the money in cash.
If you do put the money into cash be aware that only the first £35k is secure from default.

moonrakerz

Strangely enough the SAFEST place for your money, at the moment, is Northern Rock !

jamesd

I suggest that you read Ok then - How do I choose a S&S ISA to get an idea of what a sector allocation is and how you can use that in combination with unit trusts and OEICs to select your desired level of up and down value variation. Greater variation acceptance produces the possibility of greater returns over the longer term, which is why people do accept say 10% or 20% or 30% variation year to year in capital value.

Using only property would be a bad idea, as would be using only one property. Better to wait for the market to settle down and then use mortgages to buy two or three properties of different types in different cities or at least different parts of cities. This way you're less likely to have all of your property vacant at one time and less likely to be affected by local problems or problems for one property type. Don't buy newly built or converted properties. Those carry a price premium and particularly in new developments the resale market value of the property is unknown.

Meanwhile and in any case with at least half of the money, use the unit trust and OEIC approach.

wally123_2

Thank-you all ( MoneyTown, Aegis, Debt_free_chick, jonbvn, dunstonh, cozworth806, moonrakerz, and jamesd ) very much for your replies.


Have fully read all your posts and will take on board - what you all have said and I won't be putting all my eggs in one basket now.


Forgot to say I'm 44 and live in Walsall, West Midlands.