Where is the best option to invest my lump sum.

chainsawman

Where is the best option to invest my lump sum. Over €100,000. I don't want a high or medium risk investment, a guaranteed return is what i am looking for. I want a good return after 10 years or any better than that. I was looking at An Post 10 year saving bonds, 41.70 % is very tempting offer. Say i invest €120,000 for 10 years, i get €50,040. Marvellous return !!!. I would like to leave my money to my kids when my time is up. I could use €50,000 every ten years to enjoy and leave the €120,000 there til i die. What do you think or what advice would you give me, i am prepared to listen. Thanks in advance.

Scortho

If it was me, I couldn't stomach having 100k in savings locked for 10 years, especially when investment opportunities come up.
I prefer high interest instant access accounts such as Kbc's which pays 2.6%

That said if you are looking for a fairly risk free investment for the next 10 years, the an post one would suit you the best.

Personally I'd rather put my money in sticks and shares when the right ones pop up....boi up 140% this year from its 12 month low!:)

Nino Brown

I'm not a financial expert by any stretch of the imagination, but IMO with all the money printing going on right now there is still a considerable risk of inflation, some would argue by definition we are already seeing inflation (ie. and expansion of the money supply). So one thing I'd be worried about with these long term fixed return investments is, if we see any kind of significant inflation, say 3-4%. You essentially make nothing over 10 years, yes you will have 41.70% more money in your account but it could be worth 40% less than it is now making you essentially break even after 10 years.
I have some savings I'd like to invest too, so what I'm thinking is buy property, maybe an apartment or something. You could take a steady return from the rental income (no stress when apt is unoccupied with no mortgage), and leave the apartment to your kids when you pass. If inflation goes up, you can adjust the rent accordingly. Obviously there is downside risk in that investment too, so it really all comes down to what way you think the economy/monetary policy is going to go. The truth is, even the experts don't know, so it's kind of down to yourself.
If you're expecting inflation buy property, or other tangible assets
If you're expecting deflation, or no inflation, I guess fixed income is a good idea.

Again, what I don't know about investing could fill a warehouse, but that's my 2 cents.

chainsawman

Scortho wrote: »

If it was me, I couldn't stomach having 100k in savings locked for 10 years, especially when investment opportunities come up.
I prefer high interest instant access accounts such as Kbc's which pays 2.6%

That said if you are looking for a fairly risk free investment for the next 10 years, the an post one would suit you the best.

Personally I'd rather put my money in sticks and shares when the right ones pop up....boi up 140% this year from its 12 month low!:)

Interesting Point !!! Is that shares !!! If i wanted to buy shares or any other investment, whom should i go to ? I bought shares years ago on one company alone, €20,000, when the company went out of business. Those shares i bought was worthless. That is why i am wary of those shares. I know i should have bought shares from several different companies instead of one. Lesson learned. Still i am fearful of those shares.

Nino Brown

chainsawman wrote: »

Interesting Point !!! Is that shares !!! If i wanted to buy shares or any other investment, whom should i go to ? I bought shares years ago on one company alone, €20,000, when the company went out of business. Those shares i bought was worthless. That is why i am wary of those shares. I know i should have bought shares from several different companies instead of one. Lesson learned. Still i am fearful of those shares.

I'm actually in process of opening an account with TD investing, they seem good, I had a TD ameritrade account before.
But I would STRONGLY recommend against investing your nest egg yourself when you don't know what you are doing. I promise you a lot more people like us lose money on stocks than make money, when you don't know what you're doing it's more like backing a horse than investing. Even when you do your DD we just don't have the experience in covering our positions. If you want to invest maybe take a bit of your lump sum for investment, and put the rest somewhere safe, Yes BOI is up, I could point you to a lot more who are down.

halkar

Buy a property and rent. It will return more than 50k in 10 years and probably value of the property will also increase.

chainsawman

Nino Brown wrote: »

I'm actually in process of opening an account with TD investing, they seem good, I had a TD ameritrade account before.
But I would STRONGLY recommend against investing your nest egg yourself when you don't know what you are doing. I promise you a lot more people like us lose money on stocks than make money, when you don't know what you're doing it's more like backing a horse than investing. Even when you do your DD we just don't have the experience in covering our positions. If you want to invest maybe take a bit of your lump sum for investment, and put the rest somewhere safe, Yes BOI is up, I could point you to a lot more who are down.

TD seems a good choice, I have a Rabo bank account in Ireland too, in their website they also have "My Rabo Regular investor Plan " and " Buy Managed Fund" (total of 65 different funds to choose from ) But dont have a clue how to invest into them. Will probably need an advisor to show me the ropes. Not a finance expert myself, Just an ordinary Factory worker.

IK09

halkar wrote: »

Buy a property and rent. It will return more than 50k in 10 years and probably value of the property will also increase.

The rental income is chargeable to tax under the provisions of Case V Schedule D Taxes Consolidation Act (TCA) 1997.

If this is what you go for make sure you factor in the rate of tax you will pay and subtract it from your gain

Nino Brown

chainsawman wrote: »

TD seems a good choice, I have a Rabo bank account in Ireland too, in their website they also have "My Rabo Regular investor Plan " and " Buy Managed Fund" (total of 65 different funds to choose from ) But dont have a clue how to invest into them. Will probably need an advisor to show me the ropes. Not a finance expert myself, Just an ordinary Factory worker.

Funds are different to buying stocks yourself. With funds you're basically paying somebody to manage your stocks. A fund manager decides what shares to buy for each fund. Different funds will have different risk/return ratios. And people can put money into his fund for a small fee. It's a lot safer than buying yourself which is what TD Investing is for. I'd stay clear of TD if you're unsure of what you're doing.
Rabo have some low risk, low return funds which would be similar to you're an post savings scheme. And you can adjust your appetite for risk/reward accordingly, they seem like a pretty good option, I was looking at them myself just yesterday.

Nino Brown

IK09 wrote: »

The rental income is chargeable to tax under the provisions of Case V Schedule D Taxes Consolidation Act (TCA) 1997.

If this is what you go for make sure you factor in the rate of tax you will pay and subtract it from your gain

True, but you can offset a lot of costs against tax. And if you're retiring or taking redundancy, and not getting another job you'd probably be on the lower rate of tax, which wouldn't be all that bad, but definitely a consideration.

IK09

Nino Brown wrote: »

True, but you can offset a lot of costs against tax. And if you're retiring or taking redundancy, and not getting another job you'd probably be on the lower rate of tax, which wouldn't be all that bad, but definitely a consideration.

True, i could be wrong here but if you earn over €10k per year from rental income arent you taxed on the full amount?

Come to think of it, if this was an option you are seriously considering you should contact both a financial adviser and the tenancies board, they would have alot of the info required to make an educated decision

chainsawman

Nino Brown wrote: »

Funds are different to buying stocks yourself. With funds you're basically paying somebody to manage your stocks. A fund manager decides what shares to buy for each fund. Different funds will have different risk/return ratios. And people can put money into his fund for a small fee. It's a lot safer than buying yourself which is what TD Investing is for. I'd stay clear of TD if you're unsure of what you're doing.
Rabo have some low risk, low return funds which would be similar to you're an post savings scheme. And you can adjust your appetite for risk/reward accordingly, they seem like a pretty good option, I was looking at them myself just yesterday.

That is true, i will probably use few grand to buy a few different funds in Rabo Direct.ie and maybe i will learn more after that. Many thanks to all above who is trying to advice which is the best option to invest. I think property is not for me, too many baggage to carry, repairs, tax charges, Property tax, soon coming water rates, problems with tenants and Etc.

Scortho

chainsawman wrote: »

Interesting Point !!! Is that shares !!! If i wanted to buy shares or any other investment, whom should i go to ? I bought shares years ago on one company alone, €20,000, when the company went out of business. Those shares i bought was worthless. That is why i am wary of those shares. I know i should have bought shares from several different companies instead of one. Lesson learned. Still i am fearful of those shares.

I used td.
I've been in on then twice. Once from 10-14c and now from 10c onwards.
I've got most of the money I put in back out as its not normally what I invest in.
To me it was a bet on the irish economy and I had the money to spare. If they'd gone down to 0 I'd be annoyed with myself, but was an amount I could stomach.

Generally I avoid buying specific shares in companies on the basis that one year it'll out perform, the next it could underperform.
I like exchange traded funds that track major indices, and decide what to invest based on the long term movement of indices using moving averages. It's worked well for me in the past, but haven't been doing it recently due to 3rd year in college.

As others have said property is probably the best bet. Buy for yield, and don't worry that it may be worth 5% next year. It's a long term investment so potential falls wouldn't worry me so much, once the yield was good.
Buy in an area that has a high rental demand. City centres would be where I'd advise or suburbs, but I'd want a higher yield for the suburbs.
Look for yields over 10%. They are out there. Currently 1 bed apartments offer the best yields.