Investment Advice - €500K

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UbiquitousQ

Registered User
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Hi - hope to retire in 2-3 years. Will have about €500K cash that ideally will make a bit extra income for us. Have no idea where to go for advice though. Googled it but keep getting Americal sites.

We will be mortgage free with no debts, and will be getting a decent pension more or less akin to what we are living on at the moment (we put away about half our net earnings currently so will stop that). Have no dependants so not worried about leaving loads to distant relatives :).

I know it's not a straightforward question on how best to invest this, but just looking to see if is anyone on here is making some income on their lifetime savings. Is property the way to go for example? We will of course get some sound advice around the time we retire, but just curious at the moment.

Hope it's OK to ask something a bit vague.
 
You probably need to post in the Money Makeover forum using the template provided in order to get useful feedback.
 
Max your pension contributions.

Put the rest in equities - either directly or via an Exchange Traded Fund.

The state is making property investment very difficult at the moment, so avoid that.

Brendan
 
jim said:
  1. Equities bit risky for me approaching retirement.
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What has retirement got to do with it?

Presumably he has an investment horizon of 20 years?

A portfolio of equities is, in my opinion, less risky than residential property over that period.

The risk to property investment is very high

  1. Government restrictions on landlords selling making the property worth less
  2. Government restrictions on landlords making it impossible to sell the property
  3. Rent controls
  4. A bad tenant who refuses to pay the rent and refuses to leave
  5. A bad buy - just one property does not give you diversification
Buying a single property is a bit like investing everything in one share. It might work out very well, or it might be a disaster.
 
jim said:
Id buy a property. Equities bit risky for me approaching retirement.
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How is a basket of the best companies in the world more risky than a property, given that the Shinners are coming up the garden path wielding a machete and looking for landlords?

Is it more or less risky to hold a portfolio of the best companies in the world, or a piece of real estate situated on a small rock on the westernmost tip of Europe?
 
jim said:
Id buy a property. Equities bit risky for me approaching retirement.
Click to expand...
Also, @jim is probably confusing volatility with risk.
And it's not as if property values haven't been volatile even in recent decades.
 
In the absence of a money makeover its more difficult to opine. For example, maybe the OP already has exposure to shares or property.

A well priced, well located property can be a good investment just like a basket of global equities can be a good investment.
 
Agree that @UbiquitousQ should be strongly invested in equities - a diversified portfolio is the way to go. However I wouldn't be as negative on property as some posters here are. Yes, the government is constantly making landlords' lives harder; yes, the Shinners loom large and sinister on the horizon; yes, you can be very unlucky - but still, it should be considered. You can get gross yields of 8%+ right now without looking too hard. Any capital appreciation is a bonus, and historically almost always materialises.
If you're interested in property, know a particular property market and area very well, buy carefully, and select your tenants very carefully, you can do really well from property. Perhaps allocate half the €500k to a well-chosen property and the other half to equities. But if you want a more passive investment, and many people do, go with the full diversified basket of global equities.
 
  1. Equities bit risky for me approaching retirement.
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This was somewhat the thinking in the past when a retirement fund was used to buy an annuity but this is not the preferred route these days.
 
Thanks all - appreciate the replies. Won't do the Money Makeover yet but good to have some starting ideas to research.
 
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