Investment options

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Lowbankclaret
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Investment options

Post by Lowbankclaret » Sat Mar 23, 2019 8:44 pm

So basically I have been debating options with a friend of mine who owns Four buy to let houses.

As many might know I used to buy and sell shares before my divorce.

I had shares and managed funds and made a good profit.

With the wisdom of age I have been exploring going back into the market now I have crawled out of divorce debt.

What we have learnt is to look at index link funds.

Never looked at them before.
if your young what an option.
The S and P 500 has done 100%every 5 years

Low charges and almost low risk results in the long term.

Lowbankclaret
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Re: Investment options

Post by Lowbankclaret » Sat Mar 23, 2019 9:03 pm

There is an article on Hargreaves Lansdown today about investment vs property.

Personally the benefits are so close I think do both.

Buy to let is just so much more hassle.

You can make the same gains without it.

Lowbankclaret
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Re: Investment options

Post by Lowbankclaret » Sat Mar 23, 2019 9:07 pm

For the nuby.
At 20 you can put 10 k in a S & P 500 tracker and at 60 have 1 million.

Wish I knew this when I was 20.

Claret Toni
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Re: Investment options

Post by Claret Toni » Sat Mar 23, 2019 9:14 pm

Ah but 10k was 1m when I was 20:

Salary £500 was 1/20th of 10k
Salary £50k is 1/20th of £1m.

Just saying

cricketfieldclarets
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Re: Investment options

Post by cricketfieldclarets » Sat Mar 23, 2019 9:52 pm

I have an account with hargreaves lansdowne but dont use it as dont have the time, patience or knowledge to do it myself. But if you do I believe theyre great.

People have told me a few times an index tracker is great.

ISAs are **** these days. I do have them. But youre basically losing money as the interest is less than inflation.

Work share schemes are the best ones. As most of them you cant lose. I went to see an independent financial advisor based in Burnley. Seem a good outfit. Honest amd knowledgeble. And he said that nothing he could offer would be as compelling as what you can get on a good work scheme.

That said have opened up one with them so as to have eggs in multiple baskets. They are also looking at my old pensions but going to get a second and third opinion if anyone can recommend anyone.

Always considered property. But just seems like if you have ten houses you have ten headaches. Cant be arsed with the aggrevation. Especially with all the taxes and rules etc.

Billy Balfour
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Re: Investment options

Post by Billy Balfour » Sat Mar 23, 2019 10:33 pm

Taxes and legislation are the easy part because you know what to expect.

South West Claret.
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Re: Investment options

Post by South West Claret. » Sat Mar 23, 2019 10:51 pm

cricketfieldclarets wrote:I have an account with hargreaves lansdowne but dont use it as dont have the time, patience or knowledge to do it myself. But if you do I believe theyre great.

People have told me a few times an index tracker is great.

ISAs are **** these days. I do have them. But youre basically losing money as the interest is less than inflation.

Work share schemes are the best ones. As most of them you cant lose. I went to see an independent financial advisor based in Burnley. Seem a good outfit. Honest amd knowledgeble. And he said that nothing he could offer would be as compelling as what you can get on a good work scheme.

That said have opened up one with them so as to have eggs in multiple baskets. They are also looking at my old pensions but going to get a second and third opinion if anyone can recommend anyone.

Always considered property. But just seems like if you have ten houses you have ten headaches. Cant be arsed with the aggrevation. Especially with all the taxes and rules etc.
Like a lot of things there’s no easy options, if your going to invest your hard earned money and you want a higher return than it being on deposit then your going to have to spend time doing so. If you’re working that means giving up some of your leisure time if you’re not then you have to learn the best way to “beat the market” as is said then you have to have the right temperament to do that.

Property again you have to be very canny at buying the right property in the right area at the right time, you can take some of the hassle of dealing with tenants by employing a reliable and good agent to manage your property for you at a price say 10-20%. This will eat into your profits then you have the maintenance of the property to consider.

Lots of ifs buts and maybes I’m afraid, you get out what you put in usually if what you put in is right. But even then it can all go tits up if a world event happens like a market crash or property crash as unlikely as that might seem with the growing population.

Good luck.
This user liked this post: cricketfieldclarets

cricketfieldclarets
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Re: Investment options

Post by cricketfieldclarets » Sun Mar 24, 2019 8:56 am

South West Claret. wrote:Like a lot of things there’s no easy options, if your going to invest your hard earned money and you want a higher return than it being on deposit then your going to have to spend time doing so. If you’re working that means giving up some of your leisure time if you’re not then you have to learn the best way to “beat the market” as is said then you have to have the right temperament to do that.

Property again you have to be very canny at buying the right property in the right area at the right time, you can take some of the hassle of dealing with tenants by employing a reliable and good agent to manage your property for you at a price say 10-20%. This will eat into your profits then you have the maintenance of the property to consider.

Lots of ifs buts and maybes I’m afraid, you get out what you put in usually if what you put in is right. But even then it can all go tits up if a world event happens like a market crash or property crash as unlikely as that might seem with the growing population.

Good luck.
Very sound advice.

I think with the property thing, people genuinely go into it thinking they can easily double their money on a renovation. Or renting a house out for 500 quid a month means theyre makuig 500 quid profit.

Lowbankclaret
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Re: Investment options

Post by Lowbankclaret » Sun Mar 24, 2019 10:53 am

Claret Toni wrote:Ah but 10k was 1m when I was 20:

Salary £500 was 1/20th of 10k
Salary £50k is 1/20th of £1m.

Just saying

You are correct, the value of money halves every twenty years.

So 1 million will have the spending power equivalent to £250,000.

You would normally be adding contributions through your working life, for instance, my pension contributions are about £7500 a year.

Adding money at that rate, would give you a very large sum of money by 60.

Lowbankclaret
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Re: Investment options

Post by Lowbankclaret » Sun Mar 24, 2019 11:05 am

There’s a good article on the Hargreaves Lansdown site comparing property ownership and investments.

My mates strategy was to put down 25% and borrow the rest. After all costs he works on 7.5% profit per year on money invested.

So for every £100,000 he makes £7,500 a year.

Spike
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Re: Investment options

Post by Spike » Sun Mar 24, 2019 3:13 pm

If you want something Cautious go for Prufund Cautios in an investment bond paying 3% with a smoothed return

pushpinpussy
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Re: Investment options

Post by pushpinpussy » Sun Mar 24, 2019 4:04 pm

Whanganui District Court

clarethomer
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Re: Investment options

Post by clarethomer » Sun Mar 24, 2019 7:07 pm

Lowbankclaret wrote:There’s a good article on the Hargreaves Lansdown site comparing property ownership and investments.

My mates strategy was to put down 25% and borrow the rest. After all costs he works on 7.5% profit per year on money invested.

So for every £100,000 he makes £7,500 a year.

Which if you get the wrong tenant could be wiped out very easily. Vacant periods, trashed properties. The taxation for landlords is unfavourable (both from an income tax and stamp duty perspective), laws are now becoming more balanced for the tenant and the rights they have.

Would never touch property personally - too much hassle because of the reward no longer matches the risk imo.

Bigvince
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Re: Investment options

Post by Bigvince » Sun Mar 24, 2019 7:10 pm

Spike wrote:If you want something Cautious go for Prufund Cautios in an investment bond paying 3% with a smoothed return
The pru cautious fund has averaged 4.5% over the last 5 yrs
Here’s a link to the fact sheet
https://www.pruadviser.co.uk/pdf/INVS11397.pdf" onclick="window.open(this.href);return false;

Lowbankclaret
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Re: Investment options

Post by Lowbankclaret » Mon Mar 25, 2019 4:43 pm

clarethomer wrote:Which if you get the wrong tenant could be wiped out very easily. Vacant periods, trashed properties. The taxation for landlords is unfavourable (both from an income tax and stamp duty perspective), laws are now becoming more balanced for the tenant and the rights they have.

Would never touch property personally - too much hassle because of the reward no longer matches the risk imo.
I agree with your comments, however the things you have pointed out are factored into his calculations.

He has had several different tenants and some bad ones who did damage.

I also agree it’s a load of hassle.

I started the thread to point out index trackers are capable of better returns if you select something like the S&P 500 trackers. As these are not actively managed funds the costs are a lot lower than active managed funds. A point I have not seen in our previous discusions.

Lowbankclaret
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Re: Investment options

Post by Lowbankclaret » Mon Mar 25, 2019 4:48 pm

09CE8298-C84F-4CA1-BEED-559D1AB87207.png
09CE8298-C84F-4CA1-BEED-559D1AB87207.png (292.59 KiB) Viewed 1625 times
Hope this works

aggi
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Re: Investment options

Post by aggi » Mon Mar 25, 2019 5:07 pm

Lowbankclaret wrote:For the nuby.
At 20 you can put 10 k in a S & P 500 tracker and at 60 have 1 million.

Wish I knew this when I was 20.
I'm almost certain this is wrong (by a lot). Have you got a source?

Lowbankclaret
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Re: Investment options

Post by Lowbankclaret » Mon Mar 25, 2019 5:13 pm

See above tracker graph

aggi
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Re: Investment options

Post by aggi » Mon Mar 25, 2019 5:28 pm

Lowbankclaret wrote:See above tracker graph
In post 16? That's only 5 years and tracking a different thing.

Lowbankclaret
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Re: Investment options

Post by Lowbankclaret » Mon Mar 25, 2019 6:21 pm

These S & P index funds are set up to track the S & P 500.

It’s been fairly consistent over time in its growth.

Obviously it can go down as well as up, but when considering it over many years it tends to perform consistently.

I invested in some managed funds that outperformed what is shown in the graph and doubled my money in 3 years, but they were much more risky.

Lowbankclaret
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Re: Investment options

Post by Lowbankclaret » Mon Mar 25, 2019 6:35 pm

5113F95C-A9DB-4FAE-A4A3-43118DF8C5AE.png
5113F95C-A9DB-4FAE-A4A3-43118DF8C5AE.png (205.49 KiB) Viewed 1523 times
An example of a high risk fund over 10 years. This fund has grown your £1000 to around £7000 having dropped back from a high of around £8000.

Significantly out stripping the performance of an index tracking fund.

£10k in this fund should it continue to perform at that rate would If my mental maths is correct take twenty five years to turn your money in to a very large sum.

Unfortunately I would 80 and unable to enjoy the money.

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