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Where would you put your cash in 2019 if you needed to invest, say £1,000,000 (I don't btw) to either create an income stream, safe investment with gains or both?Would any still go into creating a property portfolio given the current climate & changes to the sector? Just curious to see what your strategy would be if you had that cash come to you (inheritance, shares, Nigerian email etc) today.
I would spread the cash around put it in all sorts of assets
You have come to a Landlord forum so I would imagine you have an interest in property
But I would not only pick property as the only option
You could leverage up but you need a strategy ...
Learn Change and Adapt ?????
All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.
I would recommend following this strategy presented by investment expert Graham Rowan. It is a blue-print for creating sustainable wealth:Monday - Taking responsibility for your financial future and how to do thatTuesday - Get educated!Wednesday - Create your "income engine" and then turbo charge it!Thursday - Build your "wealth pyramid" to future-proof your wealth.Friday - Protect your assets within a "wealth fortress". I would always recommend starting out with a bog standard single occupancy BTL - a terraced house in a good area close to a good transport links and a good school. These houses are the foundation stones of a solid portfolio.If you can buy below market value, force the appreciation through reburbishment/development, then that would help you re-cycle your cash faster, and help you grow quicker.Start off with the boring, safe, bread and butter terraces and then raise your game as you become more experience and build you knowledge and contacts.
Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**
I haven't read this one, thanks for posting Vanessa.
Watched 4/5 so far, and they are all very insightful; some amazing great info here! I especially liked the wealth pyramid episode; did you ever get the link to the webinar Graham mentioned?
Thanks for linking to this Vanessa.
I'd spread it across about 20 index tracker funds, 10 in the UK and Europe, 5 in the USA, and 5 in Japan and the far east. These would be all share funds across the whole index, so that the risk is spread.
You would be investing in companies like Apple and google and facebook and Sony and BP and Shell and the major utility companies and tobacco and booze.
That should bring in about 8% per annum. Reinvest the dividends and you will have made £260k by year 3, £470k by year 5, and you will have doubled your money in year 9.
Better still there is not a leaking pipe, broken boiler, council official, moaning tenant, blown down fence panel, money grabbing Chancellor or over flowing HMO maggot infested trolley bin in site.
If you hit it lucky and get some big returns on a couple of trust funds, say 12% on average, you could make your second million by about year 6.
What's more, you will be viewed as a clever investor, and not a parasitic evil landlord,.living off the slave labour of your poor downtrodden tenants.
It's a funny old world.
I can see where your coming from
8% a year inc dividends is around 80K a year with out hassle
it all depends if someone wants a business in BTL or not using leverage
for an easy life I would use funds
While I diasgree with the specifics, I don't disagree with the idea itself. There's a case for buy UK property in general, after brexit. This may happen this year or it may get kicked down the road. In the meantime, a portfolio of about 25 shares in large cap companies that pay steady dividends, away from areas seeing trouble structurally. You should be able to get dividends in the region of 5%, plus there is the possibility of capital gains. A typical portfolio like that is already up around 13% ytd inclusive of dividends paid out. In an ideal world, you reinvest the dividends so next year that initial capital base is even higher. If you need the income to replace the rent then its still a great solution to ride out a couple of years waiting for your ideal situation in property to arise.
It quite funny how things change so quick in the world
Before Osborne ect I would have said anyone with a million pounds
go out and buy BTL property use it to create deposits borrow cash and build a BTL Business
I would say yes use some of the cash to buy maybe 5 properties with cash and then invest the rest elsewhere ie shares or funds
I think having all your eggs in one basket today is unwise
I used a ytd to date figure as thats usually a benchmark when looking at things intra-year. As for a rebound after a fall, most of these shares don't really move that much given they are mature businesses with single or low double digit profit growth expectations. So they tend to be quite low beta, in that they move less than the market in general, up or down.. Having said that, the 13% is an actual figure from a real portfolio and includes some dogs such as Imperial Tobacco which is down probably more than 20% ytd (without counting dividend), although as part of a carefully selected yield portfolio, the results are still 13% ytd. And I dare say an expert in the field could achieve better.
The key to enhanced long term returns is reinvesting dividends, this cannot be stressed enough. This method smooths out poor market timing. However, its not suitable for everyone if their requirement is deriving an income. An alternative is to leave half of the dividends reinvested. With these things you do need to be honest with yourself in terms of income required and income that is realistically achieveable. You can easily select a 10-15% yielder but its questionable as to how long that payout will last. Currently the FT100 yields around 4%. Removing some of the higher beta gets you to 5-6%, that's something that not too demanding (and will still allow for a bit of capital growth over time). If that's not more than enough to cover your income needs, you need to be honest and look elsewhere.