What's the best way to invest £40,000.?

Question

I want to invest in property and other things but after researching various options am still unsure and really indecisive. Finance is far from my forte so any guidance wold be appreciated. Even if somebody knows a really great impartial financial advisor and not one that is just pushing their own agenda!!!

Answer 1

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Answer 2

After reading through the other answers, I would do the following:

Split the money between 4 investment areas:
Property - Real Estate
Investments - Stocks and Shares, Mutual bonds
Online Business
Savings

How much you invest in each will depend on how quickly you want to yield your returns and how much risk you're prepared to take.

Although I don't have 40k I'm doing all three but I invest primarily in property and have a flexible high intest savings and investment plans with my bank. Why my bank? Well I don't know much about stocks and shares just yet and I want to invest in a high risk strategy with some assistance. As I get to understand this method, then I'll move my money (or profits) elsewhere to benefit.

Property is my favourite because generally you can't lose and now with Property clubs springing up all over the place you do have to be very careful about who you go to. The UK is low risk, Eastern Europe and the Middle East is higher risk, primarily because the systems and safeguards for foreign investment are not really in place yet but if you're willing to take the risk you'll benefit.

Also the US is a good place especially Florida - it's one of the few places that's growing faster than the entire US - it has it's own economy. And with the strength of the pound against the dollar you get more than double your money's worth.

As for an online business, definitely something that's automated and a cash (not invoice) generator. Also bear in mind that the internet runs on trends so the latest fad may be old hat within a few months, so it's worthwhile having something else up your sleeve.

Good luck!

Answer 3

Well judging by most of the answers its perfectly obvious why house prices have become over inflated to the extend that young people can no longer afford to get on the ladder. It's because too many people are treating a home as an investment and extracting extortionate amounts of money out of those who are forced to rent.
At the end of the 1990's everyone was saying the same thing about investing in the UK stock market, but look what happened to those who didn't sell-up before it bottomed out.
Early 1990's those who were the last to jump on the property ladder had the furthest to fall when 100's of thousands of people found themselves with a negative equity investment.
Still, lightening doesn't strike twice??

Answer 4

All financial advisers have their own agenda to a certain extent - there are thousands of investments out there and they can't possibly follow them all. Property is a good place to have some of your money, but if you already own a home or have a mortgage you will be putting all your eggs into one basket. 40k is too little for an inexperienced investor to put into individual shares.
It all depends on how long you want to invest for. If it's under 7 years or so, I'd recommend ISAs and National savings products (you can even put 30k into premium bonds and the winnings are tax free). If it's longer than that, index trackers or mutual funds (which have higher charges). See a few professionals and make up your mind. Good luck!
I trained as a stockbroker/financial adviser, but am out of the industry now.

Answer 5

I am not sure that any proper answer here is even legal in view of the control exerted by the FSA, but as a retired IFA of 30 yrs standing perhaps my advice might now be seen as impartial?

First of all your question is too vague. How old are you? Are you investing short or long term? What is your risk profile? Again £40,000 is a sizeable sum but in property terms it will perhaps buy you a croft on Stornaway so your only way in would be a unit trust or other collective investment vehicle. Stocks & shares? Always perceived as risky but research the life story of Berkeley Hathaway - he is one of the richest men in the world through careful investing.

If you are seeking an IFA then I suggest you check through IFAP who will provide you with a list in your area, and then you can phone and discuss in general, see if they charge fees or commission, and so on. I would not recommend that you go to your bank since most have their own tie ups - Lloyds own Scottish Widows for instance.

I won't go into matters further since it is a virtually inexhaustable subject and the answers depend on how long the piece of string was in the first place. However, get your own thoughts in order first and try and decide your level of risk acceptance - a casino being 10 and cash being 1. Best of luck.

Answer 6

My friend is a Jamaican photographer who worked with the legendary Jamaican singer, Bob Marley.

By visiting his website at: http://untitledelement.com/ you will see a small selection of the 10,000 images that he has photographed over the past 25 years.
Marley's images are priceless and the work on display are all original and hand printed.

If you are really serious, and there are many crazy bald heads out there, you should contact his site and invest in something that you will be collecting off for a long time to come. Not just you, but anyone out there with wisdom.

I made my own investment from the beginning.

As you are aware, giving your £40,000 to a top investor in the City does not necessarily guarantee that you will recoup your investment. An investment at base level, is simply a gamble, just the same way as if you went to the bookies and placed your £40,000 on Bluebell, in the three-fifteen at Kempton Park to win.

Oops, the bugger ran third.

I hope you will understand my investing friend, that nothing in life is certain, except taxes and a visit to the cemetery.

All that is left for you to decide is whether you are the joker in the pack or the REAL DEAL and take the plunge, one way or the other.

Answer 7

With £40k to invest, I would not suggest buy to let as you will be very highly geared at a time when interest rates are rising. Only go down this road if you have significant surplus income that could be used as a buffer if required.
Personally, I would find the best safe return from a building society, going for no more than a three months notice account. See how interest rates move and how property prices are effected before making a decision.
Other options;
I stay away from the stock market, smarter people than me have lost fortunes.
For long term, investigation of agricultural land and woodland may give possibilities but in the current climate, I would avoid more than minimal gearing in any investment - wait for the interest rates to rise more.

Answer 8

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It’s absolutely true that penny stock investors can make very quick gains. Synutra International, Inc. (NASDAQ: SYUT) is a great example of a penny stock. This dairy-based, nutritional-products company has jumped from a little Bulletin Board operation to a billion dollar corporation. The company finally graduated from Over-the-Counter status to the NASDAQ Stock Market bringing with it 113% gains in less than two months.

This happens all the time and it’s how some of the best investors in the world became the richest investors in the world. Buying some shares for pennies on the dollar and selling at $10 or $20 is possibly the fastest way from being a hobby investor to a super investor

Answer 9

I have 5 rental properties, have been doing it for almost 10 years now. A common misconception is that you buy a property, do it up, get tenants in, sit back and watch the money roll in. There is more to it than that.

First I would find a good letting agent in your area. Try to buy your first property in your area, so you can pop round easily and check up on the progress of work, to see tenants, whatever. By buying miles away, you are factoring lots of travel into your workload, or you have to pay someone else.

Rule of thumb, never buy somewhere you would not be happy to live in yourself or a family member. Horrible properties are hard to let, and are often empty, making them a bad investment. Find 2 or 3 properties which you think you could let, and tell the letting agent (don't bother with estate agents, use a letting agent who is a member of ARLA - Assoc of Registered Letting Agents) that you want to buy a property and let it through him, and ask him to come and look at those on your short list. He will do so gladly (if he doesn't, drop him) and he'll advise you which is the best bet (easiest to let) what improvements you'll need to make and what rent you should ask.

If you're happy with his advice, go ahead and buy - no doubt you'll need a mortgage (you don't get much for 40k, sadly) so make sure the rent you'll get will at least pay off whatever you need to repay. Sounds simple, but few people do this important sum.

Buy the best place you can afford, do it up nicely (not expensive, just decent) ensure the letting agent takes up references of prospective tenants, charge a fair rent and treat your tenants as you would wish to be treated. Do repairs promptly, do the annual gas and electricity checks the law requires (the agent will advise you on all this)

If you get good tenants (and most tenants are good, despite horror stories) try to hang on to them, it is less trouble and expense than changing them every six months. Don't raise their rent every time the contract comes up for renewal. We've had one set of tenants since 1999 - lovely people.

In other words, take care, get advice, put a bit of work in, obey the law and treat your customers (which is after all what your tenants are) decently. Get an accountant who will explain the 10% thing about furniture (I understand it but can't explain it - that's why I pay him!)

Good luck

Answer 10

If you want to invest in property, £40k alone won't buy you much but it would cover fees and deposit for you to take out a mortgage.

If you are buying property as an investment (in other words you already have a home) then you should investigate a buy-to-let mortgage, where the rental payments cover the mortgage. If you are a landlord, some of the expenditure on the property is tax-deductible, so with rising property prices, property is an excellent investment.

If you want to hedge your bets, you could put £20k into property and the other £20k into a unit trust (contact an independent financial advisor to see which unit trust would suit you best).

Answer 11

Dear Doctor,

Never buy property at these moment. You have to remember Issac Newton Law of Gravity. It must come down. There are many emerging market funds that are doing quite well this year. It should be suitable for an investment of £40,000. But dont look at the fund price when you see your patients!

Investment expert