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    • Yiddishkeit
    • By Yiddishkeit 11th Aug 18, 1:02 PM
    • 4Posts
    • 0Thanks
    Yiddishkeit
    Desperately need to make high-yielding investments - advice?
    • #1
    • 11th Aug 18, 1:02 PM
    Desperately need to make high-yielding investments - advice? 11th Aug 18 at 1:02 PM
    For various personal reasons I have to work less, so I need to set myself up with some kind of income.

    Because of my reduced work - and I'm also a freelancer too which makes things difficult - I'm not sure if I can do the thing most obvious to Brits - buy a house, rent it out. I'd need a mortgage to buy a house in the obvious parts of the UK.

    I have 50 000 at minimum, possibly 100 000. (50k is saved up of my own; my father could be persuaded to give me my inheritance early if the investment is in the sort of thing he understands/approves of i.e. a house or a business. The old man does not understand or really know what stocks and shares are...)

    What are my options?

    I am not really interested in growing the investment - as long as it's not reducing in value. I simply want to get the maximum yield possible in an investment that is fairly stable in its own value and not wildly risky (but I'd accept a fair amount of risk)

    Some ideas of my own -

    Buying a house in cash somewhere in the UK, up north or midlands say, for 100k and renting it out. It'd have to be a town that is not shrinking - the cheaper towns in the UK tend to be so cheap because they are in decline. And I don't want to lose the value of my investment (lack of growth is okay by me)

    Buying a house abroad that does the same - this has the advantage of property prices being cheaper. But not so sure about how to do this. I have read that Ireland has high yields but it seems the proices are still higher than what I can afford to buy in cash. In this scenario a lot of money would have to be spent on having an agent manage the property too. (In most of england I can drive up and be an active landlord, and I know how houses work physically so would be cut out for it)

    Investment funds. I know very little about these and find them hard to get my head around. Are there any you would recommend for my situtation?

    Buying garages/storage or other kinds of high yielding investments.

    I'm very new to all this and very grateful for advice. While I am an amateur I do have a head for figures and a strong understanding of the economy (just not finance/investment so much, in a practical sense)

    Very grateful for any advice.

    Thanks!
Page 1
    • OldMusicGuy
    • By OldMusicGuy 11th Aug 18, 1:55 PM
    • 653 Posts
    • 1,402 Thanks
    OldMusicGuy
    • #2
    • 11th Aug 18, 1:55 PM
    • #2
    • 11th Aug 18, 1:55 PM
    Quick response:

    - Most people think BTL is the way to go because you can "touch" property and of course property in the UK is a sure way to make money (well it always has been in the past, right?). That appears to be changing as BTL is becoming less attractive due to tax and regulatory changes. But you need to go over to the house buying, selling and renting part of the forum to talk to the people that know about it.

    - Buying abroad. Sounds like a nightmare to me unless you really know what you are doing.

    - Investment funds: there are many options. The worst thing you can do is to ask people on the internet to "recommend a fund" when you don't know enough about them. What you should do is educate yourself about the different types of funds and investing approaches that are possible. Spend time reading this forum (there are lots of threads that talk about different styles of funds) and read books like "Smarter Investing" by Tim Hale, "Investing Demystified" by Lars Kroijer and "DIY Simple Investing" by John Edwards. Then you'll be able to make better-informed choices.

    - Stay away from parking spaces, storage pods and similar schemes. Please use the search function on here to look for the many threads from unhappy investors that have found these to be worthless. And be very wary of unregulated "guaranteed" or high "fixed interest" bonds. Unless you properly understand the difference between regulated and unregulated products (again, just searching on this site will help you find that out), you could get caught out and lose all your money. You can get better returns by investing in things like corporate bonds and other unregulated products compared to regulated savings products, but you need to be very careful.

    I think the choice should probably be between investing, maybe to generate income rather than capital growth, vs becoming a landlord in the UK.
    Last edited by OldMusicGuy; 11-08-2018 at 2:12 PM.
    • dunstonh
    • By dunstonh 11th Aug 18, 2:09 PM
    • 96,058 Posts
    • 63,876 Thanks
    dunstonh
    • #3
    • 11th Aug 18, 2:09 PM
    • #3
    • 11th Aug 18, 2:09 PM
    The old man does not understand or really know what stocks and shares are...)
    And does he understand buy to lets? or running a business?

    I am not really interested in growing the investment - as long as it's not reducing in value.
    So, you are happy for the money to be worth around 65% of its value in 10 years time? That includes the income
    I am an Independent Financial Adviser (IFA). Comments are for discussion purposes only. They are not financial advice. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
    • In For A Penny
    • By In For A Penny 11th Aug 18, 2:18 PM
    • 339 Posts
    • 305 Thanks
    In For A Penny
    • #4
    • 11th Aug 18, 2:18 PM
    • #4
    • 11th Aug 18, 2:18 PM

    I am not really interested in growing the investment - as long as it's not reducing in value.
    Originally posted by Yiddishkeit
    And I don't want to lose the value of my investment (lack of growth is okay by me)
    Originally posted by Yiddishkeit
    If you don't want any risk to capital you're looking at high street banks/savers - even then you will struggle to even match inflation for anything more than a small sum.

    Buying a house abroad that does the same - this has the advantage of property prices being cheaper
    Originally posted by Yiddishkeit
    This statement is incompatible with your risk averse stance above but while we're on the subject, Turkey is looking a bargain right now.
    • kidmugsy
    • By kidmugsy 11th Aug 18, 2:21 PM
    • 12,187 Posts
    • 8,633 Thanks
    kidmugsy
    • #5
    • 11th Aug 18, 2:21 PM
    • #5
    • 11th Aug 18, 2:21 PM
    For various personal reasons I have to work less
    Originally posted by Yiddishkeit
    Will you still be working enough to need to pay income tax at the basic rate?
    Free the dunston one next time too.
    • Voyager2002
    • By Voyager2002 11th Aug 18, 2:36 PM
    • 12,593 Posts
    • 8,599 Thanks
    Voyager2002
    • #6
    • 11th Aug 18, 2:36 PM
    • #6
    • 11th Aug 18, 2:36 PM
    I think we need some of the broader picture (and apologies if you have posted about this on other parts of the forum, but everything does need to fit together):


    Do you own your home outright, or are you still paying a mortgage? If so, at what interest rate?


    If you are paying mortgage interest at (say) 5 per cent, then by paying it off you are gaining a safe 5 per cent on the money involved. If you are renting, then buying a place where you can live might be a very sensible move.


    Are you eligible for state benefits? Remember that many benefits are means-tested (so assets worth more than about 16,000 would disqualify you) but the value of your home is not taken into account. I am not advocating this path, but suggest that you explore it.


    And on the BTL idea: my experience is that houses need maintenance, and the cost and quality of work done varies greatly depending on the customer's relationship with the tradespeople who do it. That is why I employ an agent: she is an important and valued customer to several of the local tradespeople, and she can get far greater quality and value from them than I could. That is why I pay her about one seventh of the gross montly rent that I receive, and regard this as extremely good value.
    • Yiddishkeit
    • By Yiddishkeit 11th Aug 18, 2:37 PM
    • 4 Posts
    • 0 Thanks
    Yiddishkeit
    • #7
    • 11th Aug 18, 2:37 PM
    • #7
    • 11th Aug 18, 2:37 PM
    I do expect to be working enough to pay tax at the basic rate, yes.

    And obviously expect to take some risk to realise this investment. At the moment the money is just in a savings account so any decision I make is set against that comparison where my money is not only producing an insignificant yield in interest but also losing value against inflation.

    If the options are to buy a property in cash, what are people's suggestions? I think the midlands show good potential?

    I would appreciate some suggestions also in terms of investing in a fund.
    • Yiddishkeit
    • By Yiddishkeit 11th Aug 18, 2:41 PM
    • 4 Posts
    • 0 Thanks
    Yiddishkeit
    • #8
    • 11th Aug 18, 2:41 PM
    • #8
    • 11th Aug 18, 2:41 PM
    I do not have a mortgage; and I'm no longer in a position to get one. I should have done before when I was earning good money full-time but can't dwell on the past...!

    I am not interested in claiming any benefits even if I were eligible, which I doubt (don't think I should be eligible, really)

    To clarify I am also not asking anyone to suggest any particular fund: just suggestions about the kind of thing that's out there which might fit the bill for me (if anything; maybe you feel nothing would suit me)
    • Yiddishkeit
    • By Yiddishkeit 11th Aug 18, 2:43 PM
    • 4 Posts
    • 0 Thanks
    Yiddishkeit
    • #9
    • 11th Aug 18, 2:43 PM
    • #9
    • 11th Aug 18, 2:43 PM
    (I.e. I am a renter but will soon - because of these circumstances - be living with a family member at least to begin with)
    • FatherAbraham
    • By FatherAbraham 11th Aug 18, 3:17 PM
    • 914 Posts
    • 680 Thanks
    FatherAbraham
    I do expect to be working enough to pay tax at the basic rate, yes.

    And obviously expect to take some risk to realise this investment. At the moment the money is just in a savings account so any decision I make is set against that comparison where my money is not only producing an insignificant yield in interest but also losing value against inflation.

    If the options are to buy a property in cash, what are people's suggestions? I think the midlands show good potential?

    I would appreciate some suggestions also in terms of investing in a fund.
    Originally posted by Yiddishkeit
    BTL-landlord into is not particularly high yield given the risk level, not is it necessarily suitable for someone who wants to reduce his or her workload, rather than increase it.

    Asset prices may be lower in the Midlands or Turkey, but then rents may also be lower to compensate.

    I remember a nice article in the FT's personal finance pages when the BTL credit-interest tax-deductibility change was introduced - it pointed out that most people doing buy-to-let haven't really got a financial clue about what return they're making, and will only notice what's happened when the income-tax demands give them negative cash flow - at that point, mass panic will set in, and there will be a gruesome rush for the exit. I think 2019 was predicted as the time to start looking at moving into BTL, when the blood of the ignorant will well and truly be running in the streets.
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