£250,000 investment?

Question

If you hd £250,000 to invest, what is the best investment and what annual interest would it produce; would it be enough to live on? Serious answers only please....

This is money to invest for max interest...not for buying a home to live in...

Answer 1

Have to go with property.

Buying and renovating for resale - this option however relies of getting the right property at the right price and having professional workers to do over any and all brickwork, plumbing, decorating, rewiring, woodwork...
And the more contractors (NOT cowboys) you use the more it eats into your profits.

Or buy to rent:
Using the Northwest as an example, £250,000 will easily get you two, even three 2/3 bedroom terrace houses with a rental return of around £450 a month each...

450x3x12 = 16,200pa return, about a 15% a year return and you still have the original bricks and mortar to sell at a later date, should you wish.

Depending on your own needs and lifestyle, I'd say this is more than enough to live on, even without your own job/pension on top.

Really need to look into the matter in depth for the second option for legal and tax reasons, plus looking into agencies that will manage the properties... Last this you want is a couple of drug addicts taking the property, doing goodness knows what and doing a runner with unpaid rent...

Either work, the first offering - potentially - the best returns, but this is hugely dependent on your skillset, which I suspect lies in more clerical/managerial fields.

Answer 2

You could probably get between 7 - 10% on such an amount but there would be restrictions to access etc which might not suit, but although not a guaranteed income buying & selling can make a few bob too, and as others have said property is about the safest if you can get something to improve & still have enough of a profit at the end. It depends if you are doing something to 'live on' or whether you want a modest lifestyle with the money safely invested in a good bank account

Answer 3

You'd be hard pressed to make £250k pay enough to live on. Even when interest rates were at their height, 10% would only yield £25,000 before taxes. You could invest in new stocks, pharmaceuticals, IT etc., but as a rule of thumb the higher the yield, the bigger the risk. Leave it in the building society where it's safe. Or buy a house and rent it out. That's a fairly safe option.

Answer 4

you have to consider inflation. a 'safe' return on 250K will generate about 15K/year (you could make more, but the problems are still the same)

in 10 years, that 15K will only have the buying power of 11K today.
in 20 years, that 15K will only have the buying power of 8K
in 30 years, that 15K will only have the buying power of 6K

so unless you are already retired, you need to allow that money to grow before trying to live on the income. Inflation has been low for several years, but historically it is higher. It's affects are subtle and so it is often overlooked.

my standard advice is to not put too much value on what people tell you to invest in, but rather in gaining knowledge. My information is US based, but the concepts are the same.



Step 1. (if you don't already have a brokerage account)b
First decide what kind of brokerage you want to work with. You can open a brokerage account in your bank, with a large full service brokerage or an internet brokerage. I find when I get help, most people want to sell me things that are better for them…. So I use www.scottrade.com because it’s cheap and easy with low frills. I do my own research and make my own investments. But any low cost internet brokerage service is fine.

Step 2. get a subscription to Barrons or Investors Business Daily… Do this for 6 months or a year. At first, It seems a bit mysterious, but pretty soon you start to understand the terms and what investors are looking for and what they are afraid of

Step 3. If you have some money to invest, put it in 3 month CD’s right now. First the market is unstable and second you have some homework in Step 3 to do before you do any investing.

Step 3. Go out to the internet and search on the following subjects. Get familiar with the concepts.
Asset allocation
Long term investing
inflation
Roth ira vs ira
Large med small cap
Value vs growth
Indexed mutual funds
ETF
Sector funds
Bonds CD
International funds
Market cycles
Fundamental analysis
Technical analysis


Step 4 go to http://clearstation.etrade.com/ (it’s a part of e*trade which is also a low cost brokerage) and sign up for a free account. Play around there by looking at graphs and fundamentals.
I think it’s also a good idea to pretend you have $10,000 and start buying and selling on paper. Keep track of where you are each day for a month… It’s a lot easier to lose play money then real money….

Step 5. It’s always a good Idea to see a CFP (certified financial planner). Their job is to work for your benefit, not to sell you investments. They can cover subjects like employee benefits, insurance, budgeting, living trusts, 401k, taxes and real estate as well as investment types and investment types to keep away from.

Always strive to do your own research… you’ll find everyone sounds like an expert so take everything people tell you with a grain of salt. It’s not easy in the beginning but soon you will be the expert.

Don’t get involved with futures, currency, options (unless you get stock options at work), commodities, annuities and other derivative type investments at this time.

Good Luck

Answer 5

Don't even think about buying property in the UK. The prices have gone crazy and can also go into reverse.

But do look at property in the new EU member countries, e.g. Poland. The market in these countries, in my opinion, is where the UK was 10 years ago and therefore has room to grow.

Do your own research and take your time. Don't be tempted into investing your money fast.

Answer 6

I doubt that you will obtain any intelligent advice here.

Consult investment counselors.

The only advice I can offer is diversification.
Consider high risk and more secure investments. The return will vary on those.
An old adage, "Don't put all your eggs in one basket".

That amount should produce ample income, but that depends on your standard of living.

Good luck.

Answer 7

Swiss Bank no wonder millionaires use this Swiss Bank as a investment and high interest.

Answer 8

invest in properties to let,obtain mortgage on one,rents will give good return,capital value increase should be better than bank rate.when thinking of selling be aware of how to avoid tax on capital gain.

Answer 9

Id say property, buy property right at bottom of market so it can't really deprecate in price. spend about 5k-10k doing it up. sell make about 30k and begin cycle. Can easily life of it, know people who do, but need finance in beginning.

Answer 10

if u had that much of money than i will invest half of the money in mutual funds coz they yield better returns with out any risk and half of the money i will invest in property coz as the time passes the value of the property goes up like that i will invest my money