40k investment options.

[DelGirl]

If you had 40 to 50k to invest but no more and no way of securing more, how would you invest it? Would you perhaps buy a property in that price range as a btl even if it was miles away? Or would you do something else? Money wouldnt be required to pay off debts btw. Would ideally like an income from it too

Bump

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I don't think you would get much of a house with that amount. Also with buy to let you have the costs of upkeep, insurance etc, and then pay tax on any income (I think). And I wouldn't want the hassle of looking after a house miles away personally.

With that amount I would probably got for stocks and shares isas (max amount for the year, rest in a fund and migrate over to isas each year over the next few years). Within the isa spread the risk (lower risk is lower return generally). You can also choose income options I think, rather than reinvesting profit.

Anything else is hard to even get near to keeping pace with inflation.

Thanks throckenholt. Banks and isa's don't have the returns do they? Admittedly they are few but there are pockets of homes at 50k or under but I guess, as you say, after expenses there would be little left but surely it is likely to be more than a bank could offer, no?

I'd use an agent to look after any property.

Agents don't work for nothing either - so that would eat into any profit too. You need to work through the costs carefully before you commit to anything.

I have never done buy to let, or stocks and shares isas come to that but my gut feeling about that amount of money also tallies with what I have read (have a similar amount to invest for my kids from an inheritance so have been looking at options).

My thoughts:

1. Set up an account with an on line shares broker like Hargreaves landsdown or etrade
2. Buy stock & shares in an Isa wrapper for you & your partner & children (delete where appropriate)
3. use the cheapest costing uk FTSE100 ETF or tracker fund.
4. Leave until ready to spend on house or something more exciting if life's too short.

Thanks, interesting you're looking to invest a similar amount too. I dont have the money yet so it's just hypothetical at the mo. Let me know if you're on to a sure thing

Hmm, food for thought, thanks saxie.

Watching with interest

I'd use it as a downpayment on property. It's the best way of growing your capital.

I mean I'd get a mortgage for the remaining value. If you don't own your own home, why wouldn't you use your money to buy one?

If you do buy to let and get a mortgage for the other 75% I.e a 200k property. Do it interest only and the rent, fees and lots of other costs can be deducted from the earning that you need to pay tax on.

As well as having a small income you will also profit if the property goes up in price (although you will also need to pay capital gains tax on any value increase above a certain amount).

Oops! Crossed posts.

Also meant mortgage interest not rent can be deducted from the amount you pay tax on. (Had a long day at work and my brain is fried!)

Thanks but I have absolutely no way of securing a mortgage, otherwise I would, trust me.

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Not all in one place, spread your money.

Maybe 10k in 4 separate things. Use index trackers rather than managed funds. Spread your index trackers in different areas, so a uk, a whole world developed, an emerging markets one and a Vanguard Life Strategy fund. Don't use managed funds, what you make will be eaten into by fund manager charges and they don't tend to out perform index trackers anyway.

It may be a good idea to drip feed your money in rather than putting lump sums in. So see about putting 1k into each fund over 10 months to make sure you lessen the risk of buying on a bad day/week.

Get what you can wrapped up in an isa every financial year.

Use a fund supermarket to lessen any set up charges, something like harper lansdown or Charles Stanley.

We just put £60k into two separate premium bond accounts (max you can have per person is £30k) . Had winnings of £150 in the first month.

I've got 10k in a unit tracks and I get £30 of dividends every month from that, its a legal and general monthly income unit tracker. I'm just about to invest another 120k in the stock market. I will put a bit more in my legal and general fund but not too much.

Remember the stock market is at a high though, it is not the best idea to buy when it's high; it can only go down

What about the peer to peer lending market? Some of them are rubbish, offering 1-2% like the banks, but some of the more innovative ones are getting great returns.

My friend has just put some money in Evolutis Lending and is getting over 8%. My partner is a lawyer and has checked them out and says what they are going is quite smart - only lending to professional services firms who can't default if they want to keep their licenses and stuff.

FundingSecured looks pretty good too, but their rates aren't quite as tempting. I liked Lendinvest but the other half reckons that if the property market takes a tumble you might loose your money.

Has anybody tried these companies? I'd be interested if anyone else who has used them would recommend them too?