€100k where would you invest?

Zipppy

If one had say €100k where would one invest it, safely, in this day and age?

DIRT gone to 41%; Savings bonds/certs paying feck all interest.

Options with no risk to capital ?

eire_sai

Property cant go much lower and you would pick something up for €100K.

mickman

housing in dublin city

gordongekko

There is a lot of costs involved with property.

property tax
Future water tax
Estate charges
income tax
Vacant periods
Troublesome tenants
Damages to property
Property upkeep
And so on. If you want a passive investment this may not be for you.

Sonnenblumen

gordongekko wrote: »

There is a lot of costs involved with property.

property tax
Future water tax
Estate charges
income tax
Vacant periods
Troublesome tenants
Damages to property
Property upkeep
And so on. If you want a passive investment this may not be for you.

I'd also add lots of headaches and burglaries to the list:mad:

Zipppy

So just spend it?

Cute Hoor

gordongekko wrote: »

There is a lot of costs involved with property.

property tax
Future water tax
Estate charges
income tax
Vacant periods
Troublesome tenants
Damages to property
Property upkeep
And so on. If you want a passive investment this may not be for you.

Heard someone on the wireless a couple of years ago saying that it's a quarter of a job roughly to manage your to let property, so passive it sure ain't. Added to your list above are auctioneers and legal fees. 100k isn't going to get you a property in Dublin (or probably anywhere in Ireland), so you are going to have mortgage worries as well.

ixtlan

Zipppy wrote: »

Options with no risk to capital ?

If you are serious about that, then really a deposit account of some type may be be the only option. An Post have tax free deposits, but they aren't really that attractive... just more attractive than a bank.

Personally I'd consider setting up a stock broker account, and investing broadly in dividend yielding shares of large companies, oil,pharma,food,telecoms. However this is quite a bit of work and not passive. I note with interest that following the DIRT increases in the budget there's now the same tax liability on interest as on dividends. In fact... if you have very little income and are paying 20% marginal tax you'd only pay that plus USC/PRSI for dividends whereas for interest you'll pay 41% plus USC/PRSI.

Or invest in a stock index tracker fund. However that will not be risk free. There used to be some index trackers with guaranteed capital return (and then capped gains) but I'm not sure if anyone does it any more?

Ix.

gordongekko

Cute Hoor wrote: »

Heard someone on the wireless a couple of years ago saying that it's a quarter of a job roughly to manage your to let property, so passive it sure ain't. Added to your list above are auctioneers and legal fees. 100k isn't going to get you a property in Dublin (or probably anywhere in Ireland), so you are going to have mortgage worries as well.

spending my weekends cutting grass is my own personal pet hate when owning a btl portfolio.

mickman

gordongekko wrote: »

spending my weekends cutting grass is my own personal pet hate when owning a btl portfolio.

Knock a few quid off the rent so the tenants will do it man. life is too short

gordongekko

mickman wrote: »

Knock a few quid off the rent so the tenants will do it man. life is too short

tried that but its just does not get done. I like to keep the properties well and avoid the rented look. Paid a few kids to do it this year and even then I found myself doing it the odd week to maintain the standard I wanted.

handlemaster

Property Dublin. Returns are good now. Prices showing signs of going up.some people here say lots of issue s with btl. Low risk low reward. Sit on the fence too long your cash dewindles anyway. Dirt 41% inflation etc.

IK09

Solar 21

Farmer Pudsey

ixtlan wrote: »

If you are serious about that, then really a deposit account of some type may be be the only option. An Post have tax free deposits, but they aren't really that attractive... just more attractive than a bank.

Personally I'd consider setting up a stock broker account, and investing broadly in dividend yielding shares of large companies, oil,pharma,food,telecoms. However this is quite a bit of work and not passive. I note with interest that following the DIRT increases in the budget there's now the same tax liability on interest as on dividends. In fact... if you have very little income and are paying 20% marginal tax you'd only pay that plus USC/PRSI for dividends whereas for interest you'll pay 41% plus USC/PRSI.

Or invest in a stock index tracker fund. However that will not be risk free. There used to be some index trackers with guaranteed capital return (and then capped gains) but I'm not sure if anyone does it any more?

Ix.

Would not ignore Post office returns however to get a decent return you you have to leave longterm. Solidarity bond returns an effective rate of nearly 3% after DIRT, installment savings a return of 2.41% and sanings certificates over 2%. You also can withdraw you money at any stage however you will not recieve the bonus's.

Share may well out preform everything over the next few years however can dip and dive if you wish to access money suddenly. Hind sight being 20/20 vision if you had invested in AIB last week you be on nearly a 50% return.

A little tip BOI has not preformed as well as AIB over last few weeks in reality it is more finiancially sound. It requirement to rise money through a right issue may well be holding it back could out preform the market in the next year however you need to be able to fund the right issue as well to really score.

I will however caution you that shares can rise as well as fall.

Houses in area's that tourism will have an effect on along the west coast could be value at present however copsts such as property tax and water rates and managment fees could mean that after renting you will be dependant on rise in value to make a decent return. However if you but as part of a plan to use as a retirement home it could be a good investment.

A lot about making a return is about thinking outside the box nobody is going to give you a 5% return for nothing. If you are over 50 and will not need the money until you are retiring then try to channell savings into some sort of a PRSA where while you accept very low garaunteed returns 2-3% the tax relief at 41% will mean a effective return of around 8%/year.

Sonnenblumen

Farmer Pudsey wrote: »

Would not ignore Post office returns however to get a decent return you you have to leave longterm. Solidarity bond returns an effective rate of nearly 3% after DIRT, installment savings a return of 2.41% and sanings certificates over 2%. You also can withdraw you money at any stage however you will not recieve the bonus's.

Share may well out preform everything over the next few years however can dip and dive if you wish to access money suddenly. Hind sight being 20/20 vision if you had invested in AIB last week you be on nearly a 50% return.

A little tip BOI has not preformed as well as AIB over last few weeks in reality it is more finiancially sound. It requirement to rise money through a right issue may well be holding it back could out preform the market in the next year however you need to be able to fund the right issue as well to really score.

I will however caution you that shares can rise as well as fall.

Houses in area's that tourism will have an effect on along the west coast could be value at present however copsts such as property tax and water rates and managment fees could mean that after renting you will be dependant on rise in value to make a decent return. However if you but as part of a plan to use as a retirement home it could be a good investment.

A lot about making a return is about thinking outside the box nobody is going to give you a 5% return for nothing. If you are over 50 and will not need the money until you are retiring then try to channell savings into some sort of a PRSA where while you accept very low garaunteed returns 2-3% the tax relief at 41% will mean a effective return of around 8%/year.

Bank of Irl SP +3.5% today, doesn't take much balls to make money on current market. There's at least 10 shares on ISEQ/LSE which are delivering double digit returns (and excluding divis) within 12 months.

In light of DIRT + PRSI = 45% tax, savings rates are a waste of time, you'll be lucky to beat inflation.

lucky john

[quote="Sonnenblumen In light of DIRT + PRSI = 45% tax, savings rates are a waste of time, you'll be lucky to beat inflation.[/quote]

Ye and there's a good chance this could change peoples sentiment to shares. You would be lucky to come away with 1.5% on any savings account now. For most people the property crash is still fresh in the memory and anyway banks won't lend. Its only a matter of time before the " financial experts" start pushing people towards stocks and shares. Maybe an iseq etf might be worth looking at.

gordongekko

Sonnenblumen wrote: »

Bank of Irl SP +3.5% today, doesn't take much balls to make money on current market. There's at least 10 shares on ISEQ/LSE which are delivering double digit returns (and excluding divis) within 12 months.

In light of DIRT + PRSI = 45% tax, savings rates are a waste of time, you'll be lucky to beat inflation.

IBM had poor results today. If we have many more results like that its possible the market will turn to a bear phase. Add that to tapering by the fed and markets close to all time highs im not sure I would be risking investing 100k in the market today. I would be happier to have some cash or bonds atm.

Sonnenblumen

gordongekko wrote: »

IBM had poor results today. If we have many more results like that its possible the market will turn to a bear phase. Add that to tapering by the fed and markets close to all time highs im not sure I would be risking investing 100k in the market today. I would be happier to have some cash or bonds atm.

I hear what you're saying and yes it would be unwise to put all of your eggs into one basket. A ultra cautious approach would be to put €90k into a secure savings account and speculate with the other € 10k on stocks. It would be incredibly unlucky not to show a greater (real) return for the € 10k than the € 90k year on year. In fact, with shrewd investing and good research not impossible to turn € 10k into € 90k !!

Sure a no brainer would be to buy Vodafone shares and sell again in 6 months!

Zipppy

Sonnenblumen wrote: »

I hear what you're saying and yes it would be unwise to put all of your eggs into one basket. A ultra cautious approach would be to put €90k into a secure savings account and speculate with the other € 10k on stocks. It would be incredibly unlucky not to show a greater (real) return for the € 10k than the € 90k year on year. In fact, with shrewd investing and good research not impossible to turn € 10k into € 90k !!

Sure a no brainer would be to buy Vodafone shares and sell again in 6 months!

Hmmm..now you have me thinking...

Hadn't really thought the share idea.

I do already have some Vodafone shares...might be worth a punt

Farmer Pudsey

Sonnenblumen wrote: »

I hear what you're saying and yes it would be unwise to put all of your eggs into one basket. A ultra cautious approach would be to put €90k into a secure savings account and speculate with the other € 10k on stocks. It would be incredibly unlucky not to show a greater (real) return for the € 10k than the € 90k year on year. In fact, with shrewd investing and good research not impossible to turn € 10k into € 90k !!

Sure a no brainer would be to buy Vodafone shares and sell again in 6 months!

Zipppy wrote: »

Hmmm..now you have me thinking...

Hadn't really thought the share idea.

I do already have some Vodafone shares...might be worth a punt

You see zippy you fail to work outside the box, Vodafone will return around 5-8% over the next 6-12 months if you return more than that you wil be part of a general world market recovery but if we get a market dive you could lose 20%(not likely). You will also lose the investment capility to achiever better returns.

There is no such thing as a risk free return at the end of the day even An Post state returns could lose money if the state collapse however the risk is less. We all received advice 2-5 years ago that either the euro would collapse or the punt would return neither happened.

If you have 100K do you want a virtually risk investment, do you want a 5% return or the next year, a 5% return for 5 years or are you will to risk all on a 10-15 % return over the next 10 years.

simongurnick

Anyone here trade options?
Instead of the savings account I'd write some covered calls and take in the premium. Or write puts at prices you are willing to buy the security...if it goes down then you buy the stock at a price you want, if it doesn't you collect the premium.

Farmer Pudsey

simongurnick wrote: »

Anyone here trade options?
Instead of the savings account I'd write some covered calls and take in the premium. Or write puts at prices you are willing to buy the security...if it goes down then you buy the stock at a price you want, if it doesn't you collect the premium.

That is called gambling in a horse race one of the [EMAIL="f@@kers"]f@@kers[/EMAIL] have to win. A lot of this take a certain amount of skill. Over the last 20 years I think the monkey out preformed the traders punting on stocks most ant 12 month period. Different skill set. A newspaper and a pin as opposed to being in the game/know.

simongurnick

Farmer Pudsey wrote: »

That is called gambling in a horse race one of the [EMAIL="f@@kers"]f@@kers[/EMAIL] have to win. A lot of this take a certain amount of skill. Over the last 20 years I think the monkey out preformed the traders punting on stocks most ant 12 month period. Different skill set. A newspaper and a pin as opposed to being in the game/know.

A newspaper and a pin? Completely the opposite. Covered calls are one of the most conservative strategies out there.
Are you familiar with risk defined option strategies?

Zipppy

Actually another thought has occurred to me...

Let's say you had 100k to invest ....and you had a mortgage of 120k..

In these days of 0% return on deposits would it be best to pay off half your mortgage (or most o f) and reduce the term or monthly payments.
Surely 1% gained on an investment versus 5% mortgage rate is a no brainer??

gordongekko

Zipppy wrote: »

Actually another thought has occurred to me...

Let's say you had 100k to invest ....and you had a mortgage of 120k..

In these days of 0% return on deposits would it be best to pay off half your mortgage (or most o f) and reduce the term or monthly payments.
Surely 1% gained on an investment versus 5% mortgage rate is a no brainer??

most people are on trackers so not paying 5% are you paying 5%?

friendface

Have a meeting with BOI myself tomorrow, and in a similar situation, although I don't quite have €100k to invest (I wish ). I've had €20k in an access-plus savings account with BOI for the last six months, which returned just under €160 (after DIRT) for that period. Since then, the saving interest rate has dropped, and DIRT has increased (from 33% to 41%), so as someone else pointed out, savings are a bit of a waste of time - with the majority of savings accounts, you would be lucky to end up with 1.4-1.5% p.a. interest after tax.

Over the past few years, I've started to look into more investments and tried my hand at buying a few stocks online, with limited success. However, in order to succeed, it is generally advisable to spread your risk (through portfolio diversification) but, for small investors, this attracts higher entry/exit fees relative to your initial investments. For me, putting all my savings on one or two stocks is risky - and active diversification requires time, experience and research. I prefer to continue to invest smaller amounts until I gain enough experience, and have sufficient personal liquidity, to seriously invest in a personal stock portfolio.

Until then, I am looking at putting my current 'savings' on a passive fund, such as the S&P500 index fund, through BOI. I believe mutual funds are less attractive due to the general lower rates of return, due to management and transaction fees. Index funds are generally seen as being preferable to active investing or mutual funds. While the S&P500 is slightly higher risk, it provides a means of buying into a diversified portfolio. My only concern is whether is is advisable to buy into the S&P now when the US economy is not performing well. There is some concern that a lot of US stocks are becoming over-priced, and it may be better to look at one of the emerging market indices instead?

Zipppy

gordongekko wrote: »

most people are on trackers so not paying 5% are you paying 5%?

Not a tracker...4.4% I think

friendface wrote: »

Have a meeting with BOI myself tomorrow, and in a similar situation, although I don't quite have €100k to invest (I wish ). I've had €20k in an access-plus savings account with BOI for the last six months, which returned just under €160 (after DIRT) for that period. Since then, the saving interest rate has dropped, and DIRT has increased (from 33% to 41%), so as someone else pointed out, savings are a bit of a waste of time - with the majority of savings accounts, you would be lucky to end up with 1.4-1.5% p.a. interest after tax.

Over the past few years, I've started to look into more investments and tried my hand at buying a few stocks online, with limited success. However, in order to succeed, it is generally advisable to spread your risk (through portfolio diversification) but, for small investors, this attracts higher entry/exit fees relative to your initial investments. For me, putting all my savings on one or two stocks is risky - and active diversification requires time, experience and research. I prefer to continue to invest smaller amounts until I gain enough experience, and have sufficient personal liquidity, to seriously invest in a personal stock portfolio.

Until then, I am looking at putting my current 'savings' on a passive fund, such as the S&P500 index fund, through BOI. I believe mutual funds are less attractive due to the general lower rates of return, due to management and transaction fees. Index funds are generally seen as being preferable to active investing or mutual funds. While the S&P500 is slightly higher risk, it provides a means of buying into a diversified portfolio. My only concern is whether is is advisable to buy into the S&P now when the US economy is not performing well. There is some concern that a lot of US stocks are becoming over-priced, and it may be better to look at one of the emerging market indices instead?

Let's know how you get on

friendface

Zipppy wrote: »

Let's know how you get on

Thanks, but I'm not even sure what I'm doing yet. Just have a meeting tomorrow that BOI arranged with me. They obviously want me to keep my savings with them, but the savings account rates are so poor that I'm almost certain I won't be doing that. Also, AFAIK, they have a minimum term of 5-years on their fund/investment accounts, which seems a bit much for me to commit to - I'm only out of college and may decide to move away in the next year or two. Also, if I wanted to get a mortgage to buy a house, I don't know how they would assess money secured in a high-risk index account for 5-years

I also have a Rabodirect account, and they have a much greater range of funds, and I don't think there is a limited term on them. So I may move it there and decide what to do with it then. I'll update here once I make a decision, for better or for worse - still weighing up the options at the moment.

gordongekko

Boi will only sell you a boi product. You would be better going to an independent financial adviser.

gordongekko

Zipppy wrote: »

Not a tracker...4.4% I think

i don't know if anywhere that will beat that rate but do you want to tie up your money for such a long period of time. Also might be worth asking for for a few euro off the mortgage if your paying such a large sum off it.

friendface

Any suggestions on who to invest with? I have a trading account with TradeMonster, but have only ever made relatively small transfers to date. Cash is converted and held in US$ on transfer. They offered the lowest rate I could find on stock purchases, and have a nice online trading platform, which is why I went with them. I'm just not up to speed on what other charge I may face when transferring a lump-sum to an account like this?

Any decent alternatives? Would I be better off trading with one of the Irish institutions instead?

Thargor

friendface wrote: »

Any suggestions on who to invest with? I have a trading account with TradeMonster, but have only ever made relatively small transfers to date. Cash is converted and held in US$ on transfer. They offered the lowest rate I could find on stock purchases, and have a nice online trading platform, which is why I went with them. I'm just not up to speed on what other charge I may face when transferring a lump-sum to an account like this?

Any decent alternatives? Would I be better off trading with one of the Irish institutions instead?

Friendface it really might not be the time to start gambling your life savings right now, if DIRT is making most savings accounts a joke at the minute the answer is DIRT-free accounts like in the post office which I believe are the best returns at the minute anyway. Its only a feeling but Im thinking there could be bad times on the way and diversification wont protect much against that, do what you like I mean Im no expert just be very careful and dont feel like you have to invest it just because its sitting there.

Farmer Pudsey

Zipppy wrote: »

Actually another thought has occurred to me...

Let's say you had 100k to invest ....and you had a mortgage of 120k..

In these days of 0% return on deposits would it be best to pay off half your mortgage (or most o f) and reduce the term or monthly payments.
Surely 1% gained on an investment versus 5% mortgage rate is a no brainer??

It depends on how comfortable you are with your mortgage repayments. Have you tax relief on intrest this may reduce effective rate to 4%. If you pay off mortgage will you have the displine to save to replace the 100K. If you pay off mortgage will you require to borrow for house extension/improvment or car loans in the short to medium term before you save enought to do same.

Car loans and house improvment loans cost 7-10% so no point in pay back money to replace it with more expensive. If you think you will not need all the money in the shortterm maybe put 50% into a medium to longterm deposit 5-10 years. Put 30% ito a shortterm deposit to use instead of borrowing at 7-10% rates but pay money back into account as if you borrowed same. Use the remaining 20% to invest in shares/investment funds if you have that skillset or maybe pay back part of mortgage.

mickman

Thargor wrote: »

Friendface it really might not be the time to start gambling your life savings right now, if DIRT is making most savings accounts a joke at the minute the answer is DIRT-free accounts like in the post office which I believe are the best returns at the minute anyway. Its only a feeling but Im thinking there could be bad times on the way and diversification wont protect much against that, do what you like I mean Im no expert just be very careful and dont feel like you have to invest it just because its sitting there.

ahh, predictions :-)