Preserving a lump sum?

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124fan

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I appreciate the wealth of knowledge on this forum and would like to ask opinions on the above.
We're approaching early retirement and have some cash savings that are getting very little to no interest and can't decide if it's better to let it sit for another year or so and see where things take us or perhaps purchase a buy to let? It would be nice to get some extra income from it.
I'll be honest I'm very discontent with the whole system at the moment and fear that one way or another the government seem set to take all our hard earned savings.
A couple of IFAs I've spoken with all have funds to invest into, but I feel rightly or wrongly that it's not the time to be investing, even thought things are looking up on that front, I fear there's a large correction due.
I may be overly protective, but I'm not going to get another chance in this life time to save it again. Looking forward to some outside views, tia
 
I'm in exactly the same position as you I suspect.

I'm finding it increasingly hard to trust anyone or anything in financial services.
 
I'm no expert by any means but it seems bricks and mortar would still be the best bet at the moment.
 
Purchase property in london or look at lloyds bank shares with a medium term view eg 2 years minimum.
 
Events over the last few years have exposed the financial services industry for what it is. Although a necessary activity in a capitalist society it's essentially a parasitic activity that merely manipulates wealth created by others and in the process rewards itself far in excess to any value it adds to the process. This is particularly highlighted in periods of economic downturn where these organisations move heaven and earth to maintain income despite any underlying economic trends. Where once it provided financial stability through its various manifestations it now manages to contribute the very opposite through greed, incompetence and out and out dishonesty. Property--- intelligently bought = good appreciation profile/location [ very important] is probably still a good bet but also has its share of vultures circling in the shape of lawyers, surveyors, builders, factors even tenants. Which either way you go all I can advise is do your own homework!
 
Events over the last few years have exposed the financial services industry for what it is. Although a necessary activity in a capitalist society it's essentially a parasitic activity that merely manipulates wealth created by others and in the process rewards itself far in excess to any value it adds to the process. This is particularly highlighted in periods of economic downturn where these organisations move heaven and earth to maintain income despite any underlying economic trends. Where once it provided financial stability through its various manifestations it now manages to contribute the very opposite through greed, incompetence and out and out dishonesty. Property--- intelligently bought = good appreciation profile/location [ very important] is probably still a good bet but also has its share of vultures circling in the shape of lawyers, surveyors, builders, factors even tenants. Which either way you go all I can advise is do your own homework!

Precisely how I feel - well summed up!
 
I'm sure that many would agree "it would be nice" to achieve some additional interest on savings. If you are only concerned with the very near future ie: a year or so, I would remain invested as you are currently.
The Stock Market has performed well this year though the EU financial crisis has yet to be resolved and there may well be a correction or two.
With respect to a BTL, you may struggle to recover the initial costs involved in such a short time-scale. For the length of time that you are considering, I'd do nowt but sit tight!
 
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Beware on buy to let the government is looking at the whole scenario with a view to overhaul, more stealth taxes coming me thinks :dk:
 
BTL can be profitable, but very illiquid, should you need your money back.

Also, being a private rented sector landlord isn't for everyone, unless your plan includes simply giving the property to an agent and taking the month cheque. Even then, there can be significant costs to take into account.
 
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It's always easy to "spend" someone else's money, and in this case providing advice is easy as it's no risk to anyone but you.

Holding any amount of money in cash is silly. It's good that you've realised this! The only cash I would hold is my salary and a little extra should an emergency arise. For me the rest should be in some form of investment doing something.

The biggest question would be how soon would you need to be able to spend your lump sum. You can't spend an investment. It would need to be converted in to cash and then currency for you to spend.

BTL and similar vehicles are fine, but eventually you'd probably need to sell them and this may not be possible quickly. I wouldn't recommend this if you were looking to retire in the next 5 years. You could make a quick buck, but I wouldn't do this if you needed access to your lump sum soon. The rental income may be sufficient to leave your investment locked up in the BTL though.

Another option would be invest in stocks and shares or some form of investment trust.

The FTSE has grown pretty well over the past 12 months and some investment trusts have seen very good returns. My pension grew 17% in the 12 months to October and is invested in a variety of investment trusts.

It's your money, and the decision is ultimately yours to make, but I'd say an investment trust would be fairly sensible in the current climate and you'd not have any day to day worries.

I wish you all the best whatever you decide to do. :thumb:
 
Thank you for all the replies.
I don't mind holding a BTL for medium to long term, we've been looking at relatively new houses and couldn't believe how run down even some of these developments have become in a few short years! And that's houses that were mostly bought in the 200k+ bracket.
Stocks and shares we have some and they've done relatively well over the years, even recovering from losses this past few years. On reading up on what the options are many experts fail to agree, some say the stock market is waay over priced? And is false, due to all this QE which in turn could bring yet another big correction. It's all the uncertainty, like others have said there have been many that have been fleeced, I hope not to be in that group. A local IFA has just been given a two year jail sentence for his antics, but folks lost 1k's in his schemes. It's some what comforting to know that others are at least feeling like myself, hopefully we can find a way out of this to preserve, if not grow what we've worked hard for.
 
Lucky Lady in the 3 o'clock at Doncaster.

My mate knows a bloke who got chatting to a bloke who works at the stables and he reckons you can put your shirt on it.
 
Just to explain how we arrived at the possibility of a BTL, we thought perhaps if we could find something we might be able to downsize to in a few years, meantime drawing an additional income from it. Then either rent or sell our present home.... It all seems a very long winded way of protecting your savings while hopefully getting some growth and income.... And even that isn't guaranteed!
 
Lucky Lady in the 3 o'clock at Doncaster.

My mate knows a bloke who got chatting to a bloke who works at the stables and he reckons you can put your shirt on it.

I'd give you 20 years just for trying.... Lol
 
On a more serious note, you need to think long and hard before committing yourself to property investment.

Despite what various TV programmes may have you believe, it's not a case of going to an auction, buying whatever takes your fancy, giving it a lick of paint, putting some tenants in and raking in the rental income.

It has risks - particularly if you haven't done it before. And if you're buying outside of London and parts of the South East you would be unwise to rely on any sort of capital appreciation for the forseeable future.

It's expensive - legal fees, renovation costs etc. can soon undermine your margins. The property will need to be insured and any repairs not covered by the policy or any periods without tenants can ruin your whole strategy.

It's not a liquid investment. If you want to release your capital at some stage then it could easily take 6 - 12 months to sell a property and it could feasibly be stuck on the market for a lot longer.

It's a high-maintenance investment. Properties need repair and constant looking after and there may be the requirement to hunt for tenants 2 or 3 times a year. Agents can do the latter but again their costs eat into your margins.

At a time when you want to be enjoying a relaxing retirement, you need to ask yourself whether this is a risk and an overhead that you are really prepared to take on.
 
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It would be nice to get some extra income from it.

The question I'd like to ask is do you have enough cash/pension to not 'invest'?

It's taken years for me to finally convince my grandad that he doesn't need to develop his land and build two houses on because A) he's 78 and B)he should be enjoying his money and his retirement, not trying to 'invest' it for his children who are all in their fifties and are comfortable as they are. He has more than enough cash to hand to thoroughly enjoy the fruits of his many years of labour.

By the time me and the wife croak it, I fully intend to have spent all my money; coffins don't have pockets. :thumb:
 
Hargreaves Lansdown ISA and Vantage account. Invest it all in a high yield bond fund such as Kames or Investco. Should get 6 or 7 percent and it'll be pretty safe. They're cheap to get in and out of as well.
 
Diversification is what's required -

Not only in different asset classes, some will be more cautious than others, but also take advantage of tax breaks - ISA is tax free, but also do you use your Capital Gains Tax annual allowance?

Consider Investing in different tranches, for specific purposes (for instance what you know you won't need for say 5 years should be invested differently from what you will need in a year's time)
 
A financial advisor is someone who takes your hard earned money and then invests it and re invests it until it is all gone.

May sound like a cynical observation but that is my experience!!!.

In my 43yrs of employment I squirelled away a portion of my income until on my retirement I had a nice lump sum and had a a nice nest egg to see me through retirement. On advice I decided to put my money in a rock solid company that would ensure a steady return.

The company was Equitable Life!!!!!!!!!!.:dk:
 

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