Lux Investing - What is the safest way to invest a lump sum of £300,000to produce the best or safest income from this amount?

What is the safest way to invest a lump sum of £300,000to produce the best or safest income from this amount?

Was thinking of fixed rate term bonds, but received a reply saying that the principle amount may not be available when the bond period is completed. Looking for a very safe method of producing an income but with no risk to the invested capital amount.

Public Comments

seek advice from a financial advisor
If you have that much to invest then surely you can afford an accountant?
There is no such thing as zero risk in investments.. everythign carries risk. the more income you draw down on the less the chance of maintianing the capital value (if you work on current real infaltiuon beign around 5% you have to get a retun in excess of 5% AFTER tax to maintain the value of the capital. safest investment is without doubt governemtn bonds, but its usually the poorest return. but its dsafe only as long as the government doesn't default or devalue the currency If I were you I'd put as much of it as you can into ISA's.. its not much but if you the maximium away every year it qucikly racks up. next safest is probably cash deposits with UK banks.. limit £30..35K per bank and you are covered by the deposit bond gurantee.. ie if the bank goes kaboom the state should make good your losses of captial. try to get a higher itnterest than jsut a cash deposit after that you are into the realms of specualtion.. shares, housing/property/art/you name it. I wouldn't buy shares right now I wouldn;t buy property (housign or commercial / office) buying art and other objects is tricky unless you have a really good knowledge and enthusiams for it. I wouldn't buy 'things' such as exensive / classic cars or other 'callsic' items. If I were you I'd put say half into bonds, half into cash deposits. I'd be temtped to cover the depreciation of the pind by buying say Euroibonds, or bonds that are in another currency... its arguable that the dollar may not fall to much more.. that coudl be a contender.. but I'd try the Euro, and probably far eastern currencies. but investing is (or should be) long term, and long terms stocks and shares have alwasy outperformed other investments. but its not of rth faint hearted, its not for the short temr, and £300K isn't really enough to play the market in a managed fund.
we have this problem with money from sale of my mums house as shes gone into care and need the income from the capital to pay it. we are putting it in hsbc high interest account. some on six months rollover some on 1 year before the crisis we were told about £1300/month income but may have changed by time we put it in of course. reason we chose this is shes banked there for year s so its all under one roof and i guess as safe as is possible these days.
Hello, I also had a similair problem as you have. I had a good amount of money, and wanted it to grow. So I looked around on the internet to find something that is: 1) giving me great returns towards a relatively small risk 2) Professional people who know what they where doing with my money. I'm glad to say I finally found a moneymanager who is capable of giving me good returns and give me a great support. On this blog you can follow up all the results that he is making: http://my-robottrader.blogspot.com/ My money is working for me, in Four months time I already have a ROI of 123%. So you don't hear me complaining! Annyway if you would like to get in touch with my moneymanager to have some more information feel free to contact me you can send an email to me at derrekmay at gmail.com. Then I'll give you the email adress of my moneymanager Hope this has helped you!
Your two biggest enemies are inflation and risk. First you have to think for how long do you want to invest your money. If you want your capital to produce constant and safe income for many years to come, then you should definitely rule out any cash / bonds / bank deposits / money market funds etc. for one simple reason - the value of cash is falling down in time. If you buy the safest investment available - government bonds - they are likely to produce around 5% from your investment anually which is around £15,000 a year, and they also guarantee that you will get your invested £300k back. Then you would probably also have to pay 20% tax on the interest received (unless you are a non-resident) meaning you will get only £12,000 a year from your investment - an equivalent of £1000 a month. Perhaps today a single person can make basic living with £1000 a month, (to some extent of course, i.e. low profile and outside big cities) but I can almost guarantee that in 20 years £1000 will not be even enough to pay your weekly rent or will barely pay for 1 week's basic food. Cash loses its value in time and in 20 years average people around you will be earning something like £5000 a week while your monthly £1000 will never be increased unlike their salaries. In 1985, 20 years ago, how much did a loaf of bread cost? A train ticket? A house? What was the average salary? Once you consider inflation, you will know that putting your money into bonds / fixed income is not a good idea - that is if you want a long term income that grows every year with inflation and want your principal amount also growing with inflation. So what else can you do? Well, there are number of options. The first is... Property. A good buy-to-let property will maintain the value of your principal investment (house value) and will also produce constant income that grows with inflation (rent you receive). Unlike interest from bonds, the rent you charge can be increased every year reflecting the rising rents in the area. And you can be assured that in the long term rents will grow year on year because of inflation. Perhaps right now is not the best time to buy an investment property in the UK, and I would reccommend not to buy at least until the average house will be worth no more than triple average annual salary. But look overseas for some excellent opportunities. East Germany for example - property in Dresden or Berlin is 5-10 times cheaper than in the UK and good quality city centre apartments cost there around £30,000-£40,000. German wages are very high, yet their house prices are extremly low! Make sure the apartments you buy are already rented out to solvent tennants for some time and that they produce at least 8% yield per annum, which is easily achievable in Germany. Once you find a few properties there that match the above criteria, you have a sound, long term investment. The second good investment are company shares. Companies make profits and most of them pay part of those profits to their shareholders as dividends. Say Tesco - it made £2.8 billion last year and it will surely pay part of it to all its shareholders this year. So do some research and select shares of well estabilished companies that pay large dividends every year. I think 4-5% a year of the share price in dividends is good enough, meaning that if shares of a particular company are priced at 100p and the company pays divident of 4p per share it is the right investment. But be careful - as with the property, I don't think now is the best time to buy shares in the UK... Again, look overseas for fantastic oportunities - for example Hong Kong or Taiwanese companies. Both Hong Kong and Taiwan peg their currencies to US dollar, which means the exchange rate of their currencies (HKD and TWD respectively) to USD is fixed (in Hong Kong the peg is in constitution). The peg requires their governments to maintain similar interest rates to those in the USA. But the economic situation in Hong Kong or Taiwan is completely different to the current situation in America, where there is a recession! Hong Kong is beginning to boom because of cheap credit available there (low interest rates) and cheap Hong Kong dollar (pegged to USD). Inflation in Hong Kong is about 7-8% but people can take 4% loans! It makes no brainer to borrow and buy whatever is available. Therefore solid Hong Kong or Taiwanese companies that pay high dividends are excellent long term investment - they will make large profits so they will pay larger dividends and their price will go up because they are valued in cheap Hong Kong / Taiwanese dollars. And sterling is still relatively strong to USD so you can buy more shares there than a year or two years ago. Another good investment for difficult times are commodities. As you may be well aware prices of food, oil or metals are very high and growing and this long term trend will probably never change as the value of money depreciate. Money is being produced at speed of 12-20% a year, (look at the recent money supply M4 figures) while commodities tend to maintain their value in time (gold is being produced at speed of less than 0.5% a year - total amount of available gold in the world increases at very slow rate because it can't be printed or "pumped" into the banking system like cash). So if you buy commodities such as gold, corn or oil, you will almost certainly preserve the value of your money and hedge it against inflation... But the problem with commodities is that they do not produce any income - gold will not pay you interest! But if you are smart, there is a method of killing two pigeons with one stone and having exposure to gold prices and still getting income: buy shares of gold mining companies! Share prices of gold mining companies tend to follow prices of gold (capital) but, as mining companies make profit, they also pay dividends every year (interest)! 4. Then there is another interesting investment, perhaps the least safe but potentially most profitable. Forex and carry trade. As you know, different currencies have different interest rates, e.g. in the UK Bank of England set them currently at 5% for British pounds, in the eurozone they are at 4% for euro, in Australia it is 7.25% for Australian dollar and in the USA 2.25% for US dollar. Two currencies with the lowest interest rates are Japanese Yen (0.5%), US Dollar (2.25%). The currencies with the highest interest rates in the world include Icelandic Krona (15.5%) and Turkish Lira (15.25%). Also New Zealand dollar (8.25%) and South African Rand (10%) are high yielding. How to use those differences to your advantage? Open a forex trading account, best with Oanda (fxtrade.com) as they pay you interest per second, make a deposit and buy Icelandic Krona (ISK) for Japanese Yen (JPY). On the forex platform you can leverage your trade, meaning that you only require a small deposit to perform a large trade. If you play with £10,000 you can buy or sell £100,000 worth of currencies if your leverage is set at 1:10. So do those simple trades: Buy ISK/JPY, sell USD/TRY, buy NZD/USD, buy AUD/JPY and sell CHF/ZAR. If you invest £50,000 in those trades (or £10,000 in each) with a conservative, safe leverage of 1:10, you will have trades that will produce around £130 a DAY! Your risk is that the higher yielding currencies will go down in value to the low-yielders, but then they could also go higher, meaning that you will earn extra. From the long term perspective currencies like Krona or Lira are very weak so perhaps it is a great time to buy them. The longer you keep your trades open the less risk there is of losing, after 3 years I can guarantee that you will be earning your £130 or more per day with very little or no risk to your capital. That's £48,000 a year with no tax from the initial investment of £50,000. So, there they are, my recommended investments. Spread your £300k between them and you have safe income that will grow with inflation for life. I hope it helps and I wish you good luck!
I know a company currently offering £75,000.00 annually (25%) without risk.
When you say no risk to the capital I assume that you mean that you do not want any falls in the value. This means that you should consider just cash based investments. A combination of fixed rate building society bonds, national savings and internet accounts is probably the best way forward. The downside is that if you spend the interest, the buying power of your capital will fall over the years meaning that the buying power of the interest will also fall. You are, of course, at risk to interest rate movements. Disclaimer: The answers above are for guidance only and should not be acted upon without you receiving independent financial advice relevant to your circumstances. To find and IFA please call 0800 085 3250 or go to http://www.unbiased.co.uk.
government bonds or gilts. The capital is "virtually" guaranteed. They are backed by the Bank of England.You can set up various timescales and intersest dates as there is a multitude of different gilts.There are also index linked gilts if you are` worried about inflation. However although interest rates may have further to fall, they are historically very low. Therefore in the med/long term if interest rates rise, which they might, the value of the gilts will go down, although the redemption yield woll stay the same. A classic portfolio would consist of bonds, cash at variable rate and blue chip securities, in a ratio that will take account of future movements. If you are not sure how bonds, yields etc work write to me at http://www.shareworld.co.uk