income from investments

[pushions]

Hello all,

I often see posters taking about X amount of income via investments that they use for things like holidays & school fees etc.

But what investments give such returns & over what timescale & initial investment.

Is it mainly BTLs? I don't really think that's for me plus for someone my age who is new to it it's not got the returns of the past.

I have S&S ISAs but they have lost money & they don't give dividends. How do you get dividends from stocks, surely you need to put a lot of money down initially?

Well, it depends on how much you want to get in income. In order to get a lot, you have to put in a lot, and take a risk that the asset price will go down.

Different stocks have different profiles. Some have a decent dividend yield, but are unlikely to give a lot of capital growth (so make your investment worth more). Others may give lower income, but be more likely to appreciate.

This year has generally been bad for stocks overall, so not surprising that yours haven't done well.

You would need a huge amount invested to generate enough to cover school fees and holidays.

Could you post links please?

We have a mix of investments that don’t include property.

For example, we have stocks that give a dividend return but don’t grow in value by much.

Other stock is bought low and sold high so makes a profit. Both options are managed for us, we don’t do it ourselves.

We’ve also invested capital in 2 restaurants as silent partners and we get a % of the profits.

@FiveShelties this is over the last 4/5 yrs of using mns where Ive noticed comments of such ilk.

@CatherinedeBourgh I have only been paying into my ISAs for the last 2 yrs as didn't have the savings spare before then.

Different stocks have different profiles. Some have a decent dividend yield, but are unlikely to give a lot of capital growth (so make your investment worth more). Others may give lower income, but be more likely to appreciate.

How do you "get" money out of them though, sorry if that's a stupid question.

@LadyCampanulaTottington where do I identify & buy this stocks? I assume you need large holdings.

It may all be BS as certainly lots of posters have talked about making loads on crypto but considering how that's doing currently there is very little chat about it.

A client of mine has £5m invested in a variety of shares and ISAs. They get about £100,000 per year of investment income in the form of dividends and interest.

If you've got a decent sum to invest you can just leave it in the hands of a broker who deals with it all for you based on the level of risk you want to take.

I don't have millions 😆

more like 20k

😂 I'm afraid you won't be able to pay school fees on that! 😊

I'm not interested in paying school fees I don't have dc, it was more about what investment gave such returns

The "general advice" is that if you look at the long-term, the stock market gives about 10% return. Trouble is, that's a long-term average (say 10 years) and individual years can be much higher or negative. Crypto is another story!

I'm trying to understand this all a bit better too. The book 'How To Own The World' by Andrew Craig has been helpful - very clear and makes sense to me

So if I invested 20k per yr for the next 10 years in theory I get an additional 20k?

@EATmum thank you. Yes admittedly I find it confusing, DH & I have overpaid the mortgage & it's small now, done all the key renovations, built up an emergency fund, pay AVCs into pension & because we decided not to have dc have spare earnings that we want to save for comfortable/early retirement.

In theory, you'd get even more, because the first 20k grows to 22k before you add the next batch, and so on! If you do it through a stocks-and-shares ISA then there's no tax to worry about, either. BUT of course you might end up with less than you started. I am looking after my elderly dad's financial affairs and sometimes it's been a bit hair-raising checking his balance these days.

I've just had a look, and 10% p.a. seems to be about the average for the last 10, 30, and 50 years.

Paying into a pension is usually tax effective plus a well managed fund should ensure a good return.

@PhotoDad thank you

We already pay the max we can into our workplace pensions. Can I do a separate pension & is that better than s&s?

This is where it would really be worth paying a little to sit down with an independent financial adviser.

My (non-professional!) take is that neither is better than the other, otherwise one produce would disappear! They're just... different. S&S give you a better return in the long run, but it's awful if there's a stock market crash just when you retire. Pensions spread the risk. My own plan is to maximise pension and then to hope that S&S will have enough "good" years in my retirement to top that up now and again. I have a good public-sector pension (unless the rules change in the next 10 years) so your situation might be very different.

How do you "get" money out of them though, sorry if that's a stupid question.

I'm not sure if anyone answered this question?

If you invest in funds then you usually have the option of an 'Income' (Inc) or 'Accumulation' (Acc) version of the fund to choose from.
If you are building your investment pot it's wise to go for Acc funds as any dividends will then be reinvested in more units and help your total pot of units to grow (which will then hopefully also show market growth).

If you have a sizeable pot already, or are in retirement/ need to take an income from your funds then choosing the Inc option means that dividends are paid out (usually quarterly) into another nominated account, creating an 'income' for you.
However the dividend % isn't huge, so as others say, you'll need a big pot to generate an income you can live off!

This is all absolutely right, but for small(ish) amounts in ISAs etc it's also common just to withdraw money every now and again by selling some of the shares! I do this manually (checking the account regularly and selling from time to time) but it's entirely possible to get this done for you (for a fee, of course...)

You don’t need a huge amount to start.

We kicked off our DD trading on Revolut. You can buy stock there. She’s recently bought stock in Netflix, Virgin Galactic and Polestar. I think she spent €200!