How would you invest £100k?

moneymark · 9 August 2019 at 5:43PM

Hello,

I have around £100k doing very little in a bank account and would like to invest it.

My mortgage is fully offset with other savings so is interest-free have no plans of paying that off for now. I don't have a pension but have a BTL property which will essentially become my pension further down the line.

Personally, I'm drawn towards another property investment as I would like to have an income from it but also benefit from capital growth in the long-term.

I'm curious to know how others would invest £100k?

Look forward to hearing from you.

AlanP_2 · 9 August 2019 at 5:48PM

In a pension wrapper. Difficult to sell half a room in a BTL when you want a few £K for a special holiday or something in retirement and the tax breaks make it almost a no-brainer (depending on your earned income / tax rate etc.)

Are you employed? does your employer have a pension scheme? Are you saying NO to free money from an employer?

moneymark · 9 August 2019 at 5:57PM

I'm self-employed with my own company.

What I don't like about a pension is that once the money is paid in you can't get at it until you're retired unless I'm mistaken?

Would a pension outperform a rental income and capital growth over the next 30 years do you think?

tacpot12 · 9 August 2019 at 6:17PM

moneymark wrote: »

…
What I don't like about a pension is that once the money is paid in you can't get at it until you're retired unless I'm mistaken?

To me, this is the one of the most significant benefits of having a pension!

As well as you not being able to get at the money, your creditors can't and even your wife has to divorce you to get it (or wait for you to die).

MarkCarnage · 9 August 2019 at 6:17PM

Being 100% invested in UK residential property and cash doesn't seem like a good idea to me.

worried_jim · 9 August 2019 at 6:19PM

I'd buy US dollars and or Euros.

AlanP_2 · 9 August 2019 at 6:21PM

Is it your own Limited company? If it is I think the tax benefits of a pension are even better as the company can make the contribution for you.

I have no idea, and nor does anyone else, what equity v UK residential property investments will return over the next 30 years.

A pension doesn't "perform" btw - it is the investments made within the pension that "perform".

Given you have a good income by the sound of it and a healthy amount of cash / property would you not be better off taking professional advice from an INDEPENDENT Financial Adviser rather than relying on a random bunch of MSE users?

You'll get a lot of opinions on here but none of us know your true situation, assets / liabilities, family situation, life plans, living costs, desired retirement age and desired retirement income.

Makes sense to hear other people's ideas, but like mine above, they may not suit you dues to something we don't know.

In general a mix of asset types / income sources makes sense. If you relied totally on property for your retirement you have all your eggs in one basket - and baskets break, usually at the most inconvenient time for you.

AlanP_2 · 9 August 2019 at 6:24PM

moneymark wrote: »

What I don't like about a pension is that once the money is paid in you can't get at it until you're retired unless I'm mistaken?

Currently accessible from Age 55, but there is a stated intent to make this State Pension Age - 10 years (not enacted as yet).

tacpot12 · 9 August 2019 at 6:27PM

One of the problems with residential property investment is that few people have enough capital to buy enough properties to minimise the risk. If your pension plan is based around one rental property, you don't really have any diversification of risk. Subsidence or one bad tenant could leave you with no rental income for a long period. I also think capital appreciation on residential properties is going to be harder to achieve in the future unless the property is very well insulated and has a very low carbon-foot print.

If you invested in a global equity income fund you would be sharing your risk across many companies, and have a professional, full-time investment manager looking after your investment.

To answer your original question, if I came into £100K tomorrow, I would spend about £20K on a Porsche Cayman and invest the rest equally into the following funds:

Vanguard LifeStrategy 100% Equity A Acc (FUND:B41GX30)
LF Lindsell Train Global Equity Inc (FUND:B3NS4D2)
LF Lindsell Train UK Equity Acc (FUND:B18B9X7)

SonOf · 9 August 2019 at 6:33PM

I'm curious to know how others would invest £100k?

How would mine or other peoples scenarios help you decide what is right for you?
Surely you should do what is right for you. Not what is right for others?

I'm self-employed with my own company.

So, you are not a director of a limited company then?

Would a pension outperform a rental income and capital growth over the next 30 years do you think?

Depends on what you invest in. However, pensions get tax relief, tax free growth and are free of capital gains tax.
Property gains are subject to CGT, income is subject to income tax. Equities and property are both subject to gains or losses and both generate income.

The 30 years porior to the credit crunch saw the deregulation of lending and a credit boom that helped fuel property values. Also a massive influx of immigration that left supply short. The credit crunch saw increased regulation of lending and the Government taxing rental properties higher. And there is more to come on that. Is the future going to be like the past? No.

LobsterMemory · 9 August 2019 at 7:34PM

I would....

Top up pension to the limit - 55% UK shares, 45% UK Gilts
Top up S&S ISA - 50% US, 50% EU shares

£60k into a 1 Yr BLME fix so that I could do the above next year

Rest Into a BLME 2 Yr fix so I could do the same in 2 years

How would you invest £100k?

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