Ducati Sporting Club UK > General > Idle Chat > Where would you invest £140,000 - Serious question

[chicken]

Originally posted by domski
Mum just sold her house and is gunna move in with me and Dan (my brother). We're just gunna rent a place for 12 months or so.

Mummy wants to know what is the best thing to do with her money for 12 months?

About £130,000-£150,000 ish.

So, come on you financial peeps - knock me out with your wisdom

Thanks

Dom

p.s. I've already bagged £1500 off her for DD

Isn't this just another way of saying that you are moving back in with your mum?

Seriously, stay away from anything too speculative like shares or pyramid schemes. An IFA will be able to advise her on the best mix of investments to utilise her capital gains allowance.

[domski]

She is moving in with me and Dan actually!! :P
(we'll all save money living together - which is the idea behind it)

The house is almost as big as my tent, so we'll barely bump into each other

Back to the money thing - Premium Bonds do sound pretty good (read about them earlier).

Bank/Building Society rates are crap aren't they.

I also like the buy something cheap and rent it out - which is ok if house prices don't fall and then she'd have to flog it if she needs cash, hrmm, Dunno.

Personally, if I can take the £100,000 for winning 583 next year I'll be happy.

[chicken]

Yeah - but you're still going to live with your mum! :P

What I meant was that you get an annual allowance for capital gains (things you sell for more that what you buy them for) on top of your allowance for income tax (job or interest income).

[Edited on 19-11-2005 by chicken]

[Ozz]

Dom, I would consult my client who is an IFA. Yes they get commission but these guys are genuine and have client interest first. Not a sales pitch but if you want me to ask them let me know....

[ali]

Not to put the cat amongst the pigeons.....

All IFAs need to be paid, some by lump sum from the client, and some in form of commission on any purchase (front end load) and commission on how long the client stays in the investment (trailing fees). Different investment houses pay different fees to the IFA so there's not a great deal of incentive in this system (apart from the trailing fees) to find you the best product. Not saying that IFAs are a bad thing (Ruth would cut my balls off for suggesting it! ), just that there's good and bad ones out there, and none are going to give you your money back if the investment hits the wall.

Someone better informed will hopefully come along and give you a better idea which way to jump, but assuming you don't want to risk a loss (not maybe the best idea if it's going to fund yer mum's future life) I'd be pretty bloody conservative.

If it were my cash (with the same objective) I'd diversify to reduce the risk and go for a mix of premium bonds, the highest interest bank account available, a couple of tracker funds, and a small slice of reputable but volatile funds. Try to keep those likely to earn you the most interest in tax free accounts (ISAs) so you don't pay tax on the interest. If your mum trusted you and Dan enough to open an ISA each using the money then you'd get three times the tax allowance meaning £21k could be invested tax free. (I think, may well be some issues with doing this that I don't know about).

Cheers,

Ali

[Nigel C]

Give it to me i'll look after it for you might not be much left by the time you want it back though

[domski]

Originally posted by ali
If your mum trusted you and Dan enough to open an ISA each using the money then you'd get three times the tax allowance meaning £21k could be invested tax free. (I think, may well be some issues with doing this that I don't know about).

Cheers,

Ali

Thanks Ali

I did suggest to her that we do that with Premium Bonds (£30,000 max allowed each). Statistically, people with the maximum amount of bonds will win 15 times a year (from £50 upwards), so with 3 x £30,000 she could win 45 times a year, and can get her money back at anytime with no notice.

Half of it will be mine one day anyway, may as well start with a 3rd of it now eh!

[phillc]

I've just (last 6 months or so) started investing in property in Eastern Europe. Mostly in new EU member countries. Although some of these countries have already seen their "boom" where prices rose 300-400% in a 2 year period, there are still healthy returns of around 20-30% per year to be found.

Investment can be made tailored to suit long or short term goals.

With £140k you would easily be able to invest in two brand new, possibly even off plan, apartments of around 60-70m2 without the need for a mortgage.

I'm not a financial advisor, and any investment can go up or down etc etc etc, but if you'd like to know more send me a note and I'll tell you what I can.

[berto]

buy a truck load of thai brides and pimp the muthafeckers...

[Ray]

It's not just about risk it's also about liquidity, what is the plan for the future. Will access to cash be important? Tie it up in property and you will only be able to get access to the cash when you have completed a sale. You can get into hot water with rental, it can be good but it can turn to shite with a bad tenant.

Fixed interest/fixed term investments can be good but how sure are you that you won't want access to cash for the full term?

Tax implications are also important, some investement vehicles are more tax efficient than others. Your mum may have a number alowances depending where the money is, spreading things around can reduce Gordie Browns slice. If she isn't using her current personal allowance you at least need to get that sorted by either filling in the forms so Gordie doesn't get his slice at source or get a form to claim the tax back retrospectively.

You need to ask yourself some questions before you take the plunge yourself or see an IFA. Some banks/socities offer "free" advice but they can only advise on their own products so you might not get the right product for you if they don't happen to offer it.

Get off this site and start having a look at usefull info. like the online newspapers money section, BBC site working lunch, moneysavingexpert etc,

Ray.