99k windfall : where best to invest in short or longterm

mkdon

Hi I have the guts of 100k which I would like to invest

What return could I get for this,

Any advice appreciared

topper_harley2

Zero information given. Impossible to give any meaningful advice. Search this forum for 50 threads asking this identical question. It's been answered 50 times over, like here https://touch.boards.ie/thread/2057770948/1/#post104277624
Simple advice, pay 100k off your mortgage, if you have one.

garrettod

Hi mkdon,

As topper correctly points out, you've given zero information given to help anyone answer your question properly.

How about a bit of info ?

- Mortgage Interest Rate (and is it a Fixed Rate, Tracker Rate, Standard Variable Rate) ?
- Age Profile ?
- Other obligations (investment properties, dependents etc.) ?
- Other incomes (are they more than significant to cover all living costs and save a little each month and how safe is this income) ?
- When do you expect to ever need this cash (or can it be put away "forever") ?
- Pension arrangements / contributions ?
- Are you prepared to accept a level of risk, in order to get a potentially higher return and if so, what percentage of your capital could you accept losing in a given year ?
- Do you have any experience with investing in shares, bonds, long term savings products provided by life companies, property investments, other categories of investments (ie commodities) ?

Anyone trying to offer any sort of meaningful advice really needs responses to the above questions to get a bit of a handle on your circumstances, before they can try to make suggestions to you. Otherwise, they may just be wasting their time suggesting things that are not appropriate, or won't give you what you are after.

badboyblast

topper_harley2 wrote: »

Zero information given. Impossible to give any meaningful advice. Search this forum for 50 threads asking this identical question. It's been answered 50 times over, like here https://touch.boards.ie/thread/2057770948/1/#post104277624
Simple advice, pay 100k off your mortgage, if you have one.

I always find it strange that people like to advise to pay off your mortgage, a mortgage is the cheapest loan you will ever get so you should never pay this off until you have to.

Money makes money, give your money to the bank and they will just make more money from it, you can`t eat concrete, hang onto your money, if you have insurance to cover your mortgage then your family are sorted if you happened to pass away.

Paying off a mortgage early is dreadfull advice IMO

mkdon

badboyblast wrote: »

topper_harley2 wrote: »

Zero information given. Impossible to give any meaningful advice. Search this forum for 50 threads  asking this identical question. It's been answered 50 times over, like here https://touch.boards.ie/thread/2057770948/1/#post104277624
Simple advice, pay 100k off your mortgage, if you have one.

I always find it strange that people like to advise to pay off your mortgage, a mortgage is the cheapest loan you will ever get so you should never pay this off until you have to.

Money makes money, give your money to the bank and they will just make more money from it, you can`t eat concrete, hang onto your money, if you have insurance to cover your mortgage then your family are sorted if you happened to pass away.

Paying off a mortgage early is dreadfull advice IMO

SORRY FOR LACK OF DETAILS

I have no mortgage.

Looking to invest the money for 1-2 years . Minimal risk.... 

what are my options? seems interest in deposit accounts is poor

surely other advice?

JeffKenna

mkdon wrote: »

SORRY FOR LACK OF DETAILS

I have no mortgage.

Looking to invest the money for 1-2 years . Minimal risk....

what are my options? seems interest in deposit accounts is poor

surely other advice?

Minimal risk = deposit accounts I'm afraid.

garrettod

badboyblast wrote: »

I always find it strange that people like to advise to pay off your mortgage, a mortgage is the cheapest loan you will ever get so you should never pay this off until you have to.

Money makes money, give your money to the bank and they will just make more money from it, you can`t eat concrete, hang onto your money, if you have insurance to cover your mortgage then your family are sorted if you happened to pass away.

Paying off a mortgage early is dreadfull advice IMO

It's far from that clear cut.... individual circumstances play an important part in this decision, but in very simple terms....

• If you are paying say 3.5% pa on your Homeloan and you repay it early, there's a guaranteed return on the money you've "invested", with no risk to your capital.
  
• If you invest the funds elsewhere, there's no absolute guarantee of a return equal to or better than what you've achieved by repaying the homeloan early, while there is also a risk to your capital with many types of investments.
  

Without knowing the person's full circumstances, you cannot say whether or not paying of a mortgage early is dreadful advice or excellent advice.


.

topper_harley2

badboyblast wrote: »

I always find it strange that people like to advise to pay off your mortgage, a mortgage is the cheapest loan you will ever get so you should never pay this off until you have to.

Money makes money, give your money to the bank and they will just make more money from it, you can`t eat concrete, hang onto your money, if you have insurance to cover your mortgage then your family are sorted if you happened to pass away.

Paying off a mortgage early is dreadfull advice IMO

Overpaying an SVR/LTV mortgage (obviously ignore tracker) will give you a return of anywhere from 3 to 4.5%, which is both tax free and risk free. Provide me with any other investment that can match that (and is 100% tax and risk free) and i'll eat my hat.

mkdon

JeffKenna wrote: »

mkdon wrote: »

SORRY FOR LACK OF DETAILS

I have no mortgage.

Looking to invest the money for 1-2 years . Minimal risk....

what are my options? seems interest in deposit accounts is poor

surely other advice?

Minimal risk = deposit accounts I'm afraid.

what ishighest rate for deposit account? 1 percent per year

Peregrinus

Well, return on any investment is the reward you get for accepting risk. You want minimal risk, so you'll get a low return.

Assuming you're investing in euros you can invest anywhere in euroland; you're not confined to investing in Ireland, unless you like the convenience of dealing with a local deposit-taker. You can currently get 4.5% on a one year euro-denominated investment with Prominvestbank in the Ukraine, or 3.9% with Piraeus Bank in Greece, but I think that just highlights the risk/return connection. Anywhere in western Europe you'll find it hard to better 1% at the moment. You'll do well even to get that much, frankly.

badboyblast

topper_harley2 wrote: »

Overpaying an SVR/LTV mortgage (obviously ignore tracker) will give you a return of anywhere from 3 to 4.5%, which is both tax free and risk free. Provide me with any other investment that can match that (and is 100% tax and risk free) and i'll eat my hat.

You are obviously risk adverse and this is your thing, nothing wrong with that.

If an opportunity comes your way and all your money is given to the bank then you have nothing to play with, its a fact, ill say it again, you cant feed your family on concrete

topper_harley2

badboyblast wrote: »

You are obviously risk adverse and this is your thing, nothing wrong with that.

If an opportunity comes your way and all your money is given to the bank then you have nothing to play with, its a fact, ill say it again, you cant feed your family on concrete

Feel free to say it as often as you like, it doesn't mean its a good point in the context of an investment of 100K

Obviously if OP invests the money in mortgage then they can't get it back to cover emergency like job loss etc. In a similar manner, would they be happy selling an investment fund at 60% loss in same scenario, had they invested it in some magical opportunity to which you refer? Probably not, nobody wants 40% loss, but it beats starving. However, they should not be in either situation. In both cases they would/should have emergency fund in place before investing in mortgage or equity fund or magic beans, then they've sorted the "can't eat concrete" issue.

I'm not risk averse at all. I have couple of ETFs in equity/bond mix but stopped paying into them as I realised mortgage overpayment was better for me. I would counter that you are acutely risk averse as you have said "hang onto your money"! Where? In a bread bin?!

You are mixing two unrelated arguments into one:
1) An opportunity coming up - tell me an opportunity that guarantees approx 7%pa gross return, every year for next 25 years. How long would you wait for said opportunity to come up? 5 years, ten years?
2) Can't eat concrete - totally redundant point as I explained. Are you suggesting OP should keep 100k on deposit as an emergency fund for a rainy day?! If you think that is a good approach then you are in definitely risk averse, not me.

PS you still haven't offered the OP any actual advice yourself, merely disagreed with mine....perhaps you could share something tangible as well as critiquing others' advice?

soirish

JeffKenna wrote: »

mkdon wrote: »

SORRY FOR LACK OF DETAILS

I have no mortgage.

Looking to invest the money for 1-2 years . Minimal risk....

what are my options? seems interest in deposit accounts is poor

surely other advice?

Minimal risk = deposit accounts I'm afraid.

Not necessarily

Eircom_Sucks

soirish wrote: »

Not necessarily

Lash it on city winnng the league . Dead cert

mkdon

Cardiff city?

Squozen

I'm using Mintos P2P as my 'reasonably safe' investment right now. I'm only buying loans with buyback guarantees and keeping the terms short, but the returns are around 10% before tax.

garrettod

Hello,

P2P funding is not without it's risks ...

Do some research on the strength of guarantees, because as a general rule - they don't deliver what you expect they will deliver (namely a bullet proof guarantee of something happening / not happening).

Also, click here for the Mintos discussion thread and read about some experiences investing on this platform.

Squozen

Oh, I'm aware there's a risk, that's why I only have about 10% of my investments in Mintos. I intend to be pulling most of the money out by the middle of next year. But at the end of the day there's nothing that's 100% safe if you want any sort of return.

I absolutely would not be putting €100k into Mintos or any P2P platform.

garrettod

Squozen wrote: »

....at the end of the day there's nothing that's 100% safe if you want any sort of return.

Very true and it's frustrating when you can't even get 1% on a cash deposit for example, so that does tempt you to take on the risks.

My main fear is that P2P's growth is being driven by demand from many small "investors" looking for half decent returns, but who don't fully understand the credit risks associated with many of the loans on the P2P platforms.

In very simple terms - there are loans going out on some of the Irish platforms at 7% reliant on a small privately owned business with small (albeit apparently stable profits), that could quickly come under financial pressure and have limited reserves to rely on... to only then hope that the person who put the Personal Guarantee up for the loan will (a) honour it and (b) can afford to honour it. Banks would lend to the same type of borrower, with a mortgage over a property worth say 130% of the value of the loan, at similar rates !

That's 7% gross, so even if all goes according to plan, you end up with 3.5% net of tax on a reducing balance loan which often only runs for say 12-24 months, so in reality you are averaging a net after tax return of say 1.75% - 2.25% on the overall sum you have invested.

That sort of return or better can currently be achieved on most main equities, where you can take a risk on a PLC company making far greater profits, with greater reserves, under the constant watchful eye of full time professional investors, etc.

... and to top it all off, if you lose your capital on equities, it's a capital loss for tax purposes, but if you lose your investment on P2P, you have no tax benefit.

.