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Investing large sum for income

Discussion in 'Business Discussions' started by markb, Mar 22, 2016.

  1. dougs United Kingdom

    dougs Well-Known Member

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  2. Domain Forum

    Acorn Domains Elite Member

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  3. invincible

    invincible Well-Known Member

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    Absolutely depends on that. If one currently lives a modest lifestyle and doesn't plan to develop expenses tastes then £3m could be ample. However if one instead wants expensive property, or cars, designer clothes, business class travel, private school fees, to drink/take drugs/use prostitutes/gamble heavily then quite obviously the money won't last long. Divorce can also be expensive.

    Only you can ascertain how you're likely to spend that sort of money. Do you think the money will change you?

    Domaining is full of people who've earned plenty and squandered it. Ask the people who know you well what they think you're likely to do. :)
     
  4. humble pie United Kingdom

    humble pie Banned

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    Sounds like most of AD..
     
  5. signature

    signature Well-Known Member

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    Good Conversation guys.

    I don't think anybody should have more than 25% of their asset in cash, the way our economics work, cash value get eroded on a daily basis, also bank laws could change overnight and this could affect your cash in the bank. Government keep moving the goal post of savings guarantee as they see fit.

    £3M is a lot to retire on, although like most of the guys here already mentioned it depends on the chosen life style.

    If I have £3M to plan retirement, it will be as follows:

    Properties, Properties and more Properties.

    This is one thing that if done right, with £3M you will create income in 6 figures for many generations to come.

    You have two income stream in properties, rental income and capital growth.

    Mixture of block of flats(NOT BUYING FLATS WITHIN A BLOCK), family houses and loads of ground rents, no need to mix it with commercials.

    I will also spread it across different locations.

    If done well you could generate about £250k per year without any mortgage payment and if you introduce mortgage of around 40% of the property value, you could double the income.

    Also I don't see rate going up for another 10 years, it will probably hit negate rate before going up to 1%.

    Population is growing, especially southern part of England, all the usual factors points to properties.

    These need to be in a LTD company by the way for TAX efficiency purposes and management should be well thought of, because property portfolio not managed properly could quickly turn to liability.
     
  6. markb United States

    markb Active Member

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    The only problem with this, is you need experience. I wouldn't be sure which properties to buy, who you can trust to refurbish the property, how you go about letting it out and managing it would be very time consuming. I have thought about buying just one property to let out in the past, but it isn't just straightforward. I suppose it's a learning curve though, and you would start out small.
     
  7. ian

    ian Well-Known Member

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    Property is a smart play if you are looking to make money, but if you are looking to just live off the interest it creates, then that much money tied up in property would prevent this from a capital growth point of view. I'd say 2mil could be utilised via safe interest led options, and 1mil for more risky investments; safe either way.
     
  8. signature

    signature Well-Known Member

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    You are right it, you need to understand the industry, it won't take long if you speak with experienced property investors, there are people that do a lot of talking, some setup property investment course just because they have 10 properties, you can't learn from these the real knowledge of property investment.
    Also with this kind of portfolio you won't be managing it, there is enough income to employ professionals. ..
     
    Last edited: Mar 24, 2016
  9. bonusmedia

    bonusmedia Well-Known Member

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    Seedrs.com, Crowdcube.com, SyndicateRoom.com

    Best in my opinion is Seedrs by far, but I do have shares in them

    For lending secured against property, consider LandBay - again I have shares - which I bought through Seedrs in the first round - and based on the last round valuation have gone up about 20X.

    You have to remember that the vast majority of tech startups will fail but the few that make it will do very very well
     
  10. markb United States

    markb Active Member

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    Just had a look at landbay on seedrs, its £85 a share if you want to invest now. That could be quite risky.


     
  11. bonusmedia

    bonusmedia Well-Known Member

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    I was more saying that if you're doing peer-to-peer lending Landbay is worth a look as the risk is lower than most, rather than actually investing in Landbay themselves which is certainly much more risky.

    However they are doing very well indeed and plenty of institutional investors are happy with the valuation, I certainly am
     
  12. ian

    ian Well-Known Member

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    Bringing this thread back to life, interested in more views on p2p lending via companies like Landbay for decent returns; as well as hit and miss stories when investing in start up companies via platforms like Seedrs.
     
  13. doma1n United Kingdom

    doma1n Active Member

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    I don't think this applies if you have over 15 properties, but don't quote me!

    But with three million! I think, well I know! I'd remember the day being told I had 3 mill and I'd remember the day being told i'd spent 3 million. As for the days in the middle!!! Proberbly not!

    So i'm better off without the money!
     
    Last edited: Mar 29, 2016
  14. spiderspider

    spiderspider Active Member

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    I've been on Seedrs since the early days, but have never invested in any of the companies on there. Something about their entire setup (and similar companies) that I just don't like, so tend to avoid. You're only going by what's written on a screen, and not the people / product themselves.

    Miss story - just look at Zano Drone. Claimed it could do this and that, and looked really spectacular. However, it crashed after they couldn't do half of what they claimed it would do.
    http://www.bbc.co.uk/news/technology-35356147
     
  15. ian

    ian Well-Known Member

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    It does make you wonder how many of these campaigns are nothing more than fraud. I'd imagine quite a few are pop-up companies created overnight, put a nice glossy presentation and video together, then reap the rewards of pledges never to be delivered upon. Not saying that of the drone company you linked to, but I wonder how much thought it actually put in to it versus just an easy fund raising exercise.
     
  16. pberry4032 United Kingdom

    pberry4032 Active Member

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    It includes all portfolios, the Government changed their minds. Fancy that!!
     
    • Agree Agree x 1
  17. martin-s United Kingdom

    martin-s Well-Known Member

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    Crowdfunding tends to be pretty high risk - and paid for at a pretty high premium.

    I had my terminology wrong really - I was thinking P2P lending. Though I might go for a small bank for crowdfunding amusing and interesting projects just for fun.
     
  18. signature

    signature Well-Known Member

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    Like Pberry4032 said, it does include all type of second homes, if you structure as a limited company, you can still claim all your expenses back including interest rate.

    Remember that the 3% extra stamp duty becomes part of your outlay, so its tax deductible.

    To reduce or avoid the 3% you could build, a bit more work, but worth it.

    If you want to do little or no work at all, the best property to invest in is Ground rents, you received your income on a yearly basis or twice a year, most income is around 7%, they tend to double every 10 years or increase every 10 years in line with RPI. &5 return could be 14% in 10 years time, these are already written into the leases, no need for arguments. The only time a leaseholder comes to you for negotiation is when they want to extend the lease, this you will also charge for, there are companies that handle this for the freeholder.

    You let the leaseholders appoint a management company or you appoint one for them, that's all, if you invest £2M on Ground rents, you could be looking at around £150,000 a year without doing anything other than invoices you will sent out once a year or you can let the management company collect it for you.

    Its also the best to leave in a trust because its less work, the value do grow over a longer period of time and the income do grow periodically as well, the good thing is the income is binding and if the leaseholder choose not to pay, they could loose their flat/lease.

    Sorry I cant advice on shares/stocks, don't know enough about it.
     
  19. Avano Ltd United Kingdom

    Avano Ltd Active Member

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    I don't think house prices will be climbing much more, it should plateau out shortly.
     
  20. signature

    signature Well-Known Member

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    That's the advantage of ground rents, changes in property prices have very little effect on it.