20i Domains

Investing large sum for income

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

  1. markb United Kingdom

    markb Active Member

    Joined:
    Jul 2009
    Posts:
    828
    Likes Received:
    17
    if you had £3million, how much do you think you could get if you invested it for income? If you didn't want the hassle and risk of investing it yourself and went through a wealth management company or elsewhere, would the interest rates be much higher than standard savings and investment accounts? I'm just trying to work out if you could retire with £3m and live off the interest.

    What would you do with this amount of money?
     
  2. Domain Forum

    Acorn Domains Elite Member

    Joined:
    1999
    Messages:
    Many
    Likes Received:
    Lots
    articles.co.uk
     
  3. ian

    ian Well-Known Member

    Joined:
    Jan 2008
    Posts:
    4,042
    Likes Received:
    296
    Well, I'd imagine even on 1.5% interest, £3mil would net you a tidy £45,000 to live off. Wealth managers don't offer much better rates without investing the money in risk based options, plus your money isn't protected against loss because of the £75k limits per banking institution. Aside from money in the bank, investing in houses, rentals and classic cars is the safer route than others I guess.
     
  4. Murray

    Murray Well-Known Member

    Joined:
    Sep 2012
    Posts:
    4,222
    Likes Received:
    408
    How dare you not mention domains :p
     
  5. DomainAngel

    DomainAngel Retired Member

    Joined:
    Sep 2006
    Posts:
    1,329
    Likes Received:
    49
    I used to buy houses for investors with decent lump sums and even though the returns were not huge they were safe and regular.

    3m buys you 37 decent houses costing 80k after refurb and buyers fee.

    Letting them all out to young family with local connections and on housing benefit that gives you after letting and management fees 4K income per property.

    So almost £150k income with portfolio equal or greater than your investment.

    Income could be higher due to some areas demanding more than the 375 a week but using this figure allows for any un letted periods and extraordinary costs.

    Still lots of these properties available up north.

    Only down side is the couple of months it takes to liquidate but plenty of people out there who buy multi million pound property portfolios.

    I'm more of a minimum 2k investor but still get emails from Barclays stockbrokers offering deals like one a year or so ago. Tesco bond 2k to 2m I think. 5% guaranteed over 8.5 years it was, interest payable twice a year.

    If you could live off 150k there are lots of investments out there. Less and your laughing.

    Best of luck.
     
  6. philiporchard United Kingdom

    philiporchard Well-Known Member Acorn Supporter

    Joined:
    May 2007
    Posts:
    1,966
    Likes Received:
    125
    3% stamp duty now on second properties, and you can't offset interest against income so not quite as attractive as it used to be.
     
  7. ian

    ian Well-Known Member

    Joined:
    Jan 2008
    Posts:
    4,042
    Likes Received:
    296
    You know I flip them, not invest in them ;)
     
  8. martin-s United Kingdom

    martin-s Well-Known Member

    Joined:
    Jul 2012
    Posts:
    3,408
    Likes Received:
    239
  9. scottmccloud

    scottmccloud Well-Known Member

    Joined:
    Sep 2011
    Posts:
    1,238
    Likes Received:
    72
    60,000 Domainlore EMDs? :p
     
  10. Murray

    Murray Well-Known Member

    Joined:
    Sep 2012
    Posts:
    4,222
    Likes Received:
    408
    They might cost £60 each to get them away from Doug :(
     
  11. Edwin

    Edwin Well-Known Member

    Joined:
    Apr 2005
    Posts:
    9,971
    Likes Received:
    598
    I would have thought you could stagger your investment into tiers of different "risk levels" to secure an average return more in the 3-4% range by putting some in savings, stocks, peer to peer lending, etc. Split the money into say 30 chunks of £100,000 each and that should give you plenty of diversity.

    At 3% you'd be making £90k a year before tax which should be enough to live on quite comfortably! And doing it that way would be near zero effort after the initial investment decisions...

    Also worth bearing in mind that you could gradually eat into the capital if you don't care about eroding it... So that could be used to boost your annual take further.
     
  12. DomainAngel

    DomainAngel Retired Member

    Joined:
    Sep 2006
    Posts:
    1,329
    Likes Received:
    49

    True but you can offset that when you sell against cgt so not as bad and at low purchase levels it's only like double purchase costs.

    Oh to have 3m to worry about.
     
  13. pberry4032 United Kingdom

    pberry4032 Active Member

    Joined:
    Jul 2009
    Posts:
    213
    Likes Received:
    10

    Go Ltd. Still get Stamp Duty but believe you can still offset interest in full.
     
  14. CatchDrop United Kingdom

    CatchDrop Active Member

    Joined:
    Feb 2012
    Posts:
    864
    Likes Received:
    20
    If you bought the houses with cash there wouldnt be any interest to offset
     
  15. DLOE Spain

    DLOE Active Member

    Joined:
    Oct 2014
    Posts:
    171
    Likes Received:
    9
    Exactly what I was about to post.

    What I do with my ´spare money´ is divide it into different groups, some solid, some risky and some very risky. You just have to make sure that the potential loss of the risky ones is pretty much covered by the solid on.
     
  16. dougs United Kingdom

    dougs Well-Known Member Exclusive Member

    Joined:
    Jun 2005
    Posts:
    1,345
    Likes Received:
    85
  17. murph United Kingdom

    murph Well-Known Member

    Joined:
    Dec 2005
    Posts:
    1,075
    Likes Received:
    8
    Buy through a company to help with the latter.
     
  18. dougs United Kingdom

    dougs Well-Known Member Exclusive Member

    Joined:
    Jun 2005
    Posts:
    1,345
    Likes Received:
    85
  19. Edwin

    Edwin Well-Known Member

    Joined:
    Apr 2005
    Posts:
    9,971
    Likes Received:
    598
    For starters I would put the protected maximum into each of the 2 year and longer fixed savings accounts listed here...
    http://www.moneysavingexpert.com/savings/savings-accounts-best-interest

    That covers about £500k of the £3 million. Then put £1 million split across the top 3 peer to peer lenders, and split the rest between index tracker funds and funds specialising in high dividend stocks (you want income, after all). Should give you plenty to live on no matter what happens!
     
  20. Edwin

    Edwin Well-Known Member

    Joined:
    Apr 2005
    Posts:
    9,971
    Likes Received:
    598
    And of course if you have a partner then split everything and use their bank protection too, plus each of you will pay less tax than if one of you earned all the income.
     
  21. Edwin

    Edwin Well-Known Member

    Joined:
    Apr 2005
    Posts:
    9,971
    Likes Received:
    598
    Doug's advice is great, but it sounds too much like "work" - I assume from the original post you're effectively looking for an instant retirement solution.