Buy To Let, Worth The Risk?

firsttimetom

If you're interested in investing money, buy a copy of a book called "A Random Walk Down Wall Street". It's excellent and explains a lot about the pitfalls for the unwary.

Sounds good, I was given six books ofr christmas, but once Im through them I'll have a look at this one.

Personally I wouldn't invest in currency or gold anyway, I was just throwing up suggestions for an easier form of alternative investment. I'm too low risk to be investing in such things. I currently have my Savings account, and ISA account and my Stocks and Shares ISA.

What do you mean by Goverment Bonds Generali, is it these? http://www.nsandi.com/products/ib/index.jsp

m00m00

buy a new build BTL flat in a city centre location like manchester, nottingham, leeds etc

and you'll kiss goodbye to your 18k and a lot more within 12 months.

CarUser_2

Just been on a couple of Money website and they are all saying the same thing, house price's are going to drop. One website even claimed there going to be an overall 30% drop in the next 3 years which is somthing i dont want to see happen to my money. A reply to one the earlier post, no the money i am investing is not saved up, its a policy my grandad brought for me which has must matured.

Generali

firsttimetom wrote: »

What do you mean by Goverment Bonds Generali, is it these? http://www.nsandi.com/products/ib/index.jsp

Nope. I mean Gilts. Link

The advantage that gilts have over NS and I if interest rates are falling is that they are tradable and so as the interest rate available in the market falls, the value of the bonds go up.

To take a simplified example. You buy a £100 bond that pays a coupon (interest rate) of 10% at face value. You get £10 a year in interest.

Now interest rates are cut to 5%. Your bond is still paying £10 a year and that £10 a year in income is worth paying £200 for (as the new investor requires a return of only 5% now).

It's not quite as easy as that as the above assumes that the bond will never be repaid when in reality they have a maturity date when you get your £100 back.

Generali

CarUser wrote: »

Just been on a couple of Money website and they are all saying the same thing, house price's are going to drop. One website even claimed there going to be an overall 30% drop in the next 3 years which is somthing i dont want to see happen to my money. A reply to one the earlier post, no the money i am investing is not saved up, its a policy my grandad brought for me which has must matured.

You're 25 and just been given £18k.

My advice is to put £9k into an ISA invested in a bond index tracker. Then in April put another £9k into an equity index tracker. For both tick the box on the form marked 'Dividends Reinvested'. Then forget about the money until you retire.


You should be able to make a return after inflation of about 5% pa over that time. 40 years compounded interest at 5% turns that money into the equivalent of £125,000. Not enough to live high on the hog forever but a good start.

That is with no hassle, nobody ringing you up to fix the boiler. Just sit there and watch the money roll in.