# 100K to invest please recommend best options.



## Mapara (9 Dec 2019)

Hi 
I am in the lucky position of having 100k to invest so wondering whether to use it as a down payment on a buy to let and top up with a mortgage to around 250k or would an  investment fund be a better way to go, or what other suggestions might you guys have.


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## Gordon Gekko (9 Dec 2019)

It’s impossible to give a meaningful recommendation without understanding your overall position and your attitude to risk.

Do you have an existing mortgage?
Do you have a pension?
Do you have savings?
What are your family circumstances?
How might you react if your investments fell in value by 10/20/30/40%?
What’s your income?
What other investments do you have?
How old are you?

They are just some of the pertinent questions.


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## Buddyboy (9 Dec 2019)

And do you have any loans? Paying off existing loans normally gives the highest rate of return.


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## galway_blow_in (9 Dec 2019)

Buddyboy said:


> And do you have any loans? Paying off existing loans normally gives the highest rate of return.



Depends on the type of loan - rate.


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## Buddyboy (9 Dec 2019)

True Galway_blow_in, but to clarify, they need to check the interest rate on the loan and check what you would get by deposit/investing.
I would guess, most credit union, credit card, car or personal loan will have a higher interest rate. 

Assuming they have loans in the first place.

The OP will need to do a bit more leg-work/give more information.


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## galway_blow_in (9 Dec 2019)

Buddyboy said:


> True Galway_blow_in, but to clarify, they need to check the interest rate on the loan and check what you would get by deposit/investing.
> I would guess, most credit union, credit card, car or personal loan will have a higher interest rate.
> 
> Assuming they have loans in the first place.
> ...



Ah OK, i didn't realise the OP was just looking for a savings investment


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## Mapara (9 Dec 2019)

Just to give you guys some more info on my situation.

I aged 55

No Mortgage on PPR

Investment property value about 200K...no mortgage

Pension.    Of about 200k

Savings      100k
Shares.       70K

Income      70k

 Rental income.   19200

So hopefully this helps to give a more informed opinion.


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## Buddyboy (9 Dec 2019)

Hi Mapara,
to get the best possible answers, you might consider filling out the form here





						Key Post - Basic information required for the "Money Makeover" forum
					

It can be difficult, but please try to use a meaningful title in your thread  For example "27 year old with mortgage arrears".  You will get a much better and much more coherent answer if you give as much information as possible in your first post. For example, if you give your mortgage rate, it...



					askaboutmoney.com
				




Also, have a look at previous threads on the same or similar questions. There is a wealth of information there.

(for example, the fact that we now know you have an investment property will change the answers given).

The more information you provide, the better.


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## Gordon Gekko (9 Dec 2019)

You seem to be pretty underfunded on the pension side; at 55, you can put €70k x 35% (i.e. €25k) a year away, so I’d focus on that. Maybe write a cheque for €50k now less whatever you’re currently putting away, i.e. 2019 and 2020 contributions? €20k of it will come back to you in time in the form of tax relief.

Then keep contributing the €25k for 2021 and subsequent years until you’re 60 and then ramp it up again in accordance with the rules.

Then I’d set aside 6 months’ worth of net salary (say €25k) and keep it in cash.

Then I’d forget about buying more property as you’re already overexposed to the asset class and to the geography.

I’m going to assume that you have the €100k in savings and we’re talking about another €100k.

So we’ve committed €55k to cash plus pension.

I’d add the other €145k to the €70k of shares you already have, review those shares (are they global or legacy Irish junk for example)? My aim would be to end up with a €215k diversified and global investment portfolio with a focus on a 10 year plus time horizon.

If there aren’t two tranches of €100k, I’d add the €45k to the €70k and just build a smaller portfolio using collectives rather than direct stocks.


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## Horatio (10 Dec 2019)

@ Mapara, 
If I were you I'd invest the lot with Fundsmith.co.uk T class product & watch it blossom.


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## Sarenco (10 Dec 2019)

Fundsmith. 

A low turnover, concentrated portfolio of 25-30 stocks, with an AMC over 1%.

Well, it wouldn’t be for me but each to their own.


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## Horatio (10 Dec 2019)

@Sarenco fully agree each to their own but it's been kind to us:


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## Horatio (10 Dec 2019)

Source: https://www.fundsmith.co.uk/fund-factsheet


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## Sarenco (10 Dec 2019)

Well, the fund has only been in existence for 9 years, which is not a long time in stock market terms.

In any event, past performance is not predictive of future returns.


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## Horatio (10 Dec 2019)

Sarenco said:


> Well, the fund has only been in existence for 9 years, which is not a long time in stock market terms.
> 
> In any event, past performance is not predictive of future returns.



Any counter proposals for his 100K?


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## Sarenco (10 Dec 2019)

Horatio said:


> Any counter proposals for his 100K?


I would invest the €200k pension pot in a global equity index fund and use the bulk of the €100k cash savings to buy 5-Year State Savings Certs.

He would still have more than 80% of his investments in risk assets (equities and property), which I think is plenty for a 55 year old.


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## Horatio (10 Dec 2019)

I wouldn’t trust the state with a dime I didn’t have to tbh.  I’m not familiar with the certs at all but state is a red flag imo. What do they return?


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## Sarenco (10 Dec 2019)

Horatio said:


> What do they return?


1%pa.  No tax, commissions or fees.

Pretty good compared to 5-year Irish government bonds, which currently have a negative yield of around -0.4%.

The market does not share your view on the creditworthiness of the Irish State.


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## KOW (10 Dec 2019)

Horatio said:


> I wouldn’t trust the state with a dime I didn’t have to tbh.  I’m not familiar with the certs at all but state is a red flag imo. What do they return?


  Best buys.  Take a peek,  100k in 5 year state savings as ~Sarenco suggested.


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## Horatio (10 Dec 2019)

Wait, what? 
That's 105k after 5 years. What am I missing here?


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## Sarenco (10 Dec 2019)

Horatio said:


> Wait, what?
> That's 105k after 5 years. What am I missing here?


Nothing.  That’s the State guaranteed, tax-free return.

It’s entirely possible that a €100k investment in Fundsmith could be worth €50k after five years.  Or €200k.  Who knows?


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## Horatio (10 Dec 2019)

Sure Fundsmith piece aside for the moment, surely you could do better than 1pa with acceptable risk. I'm even more convinced now that I wouldn't touch those certs.
Sure inflation is around 1.5% right? But like you said earlier to each his own.


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## Sarenco (10 Dec 2019)

If you know of any investment instrument that will give you a State guaranteed, tax-free, return of 5% after 5-years, I’m all ears.


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## Horatio (10 Dec 2019)

No I don't. Not being curt here but that kind of return tax free, risk free or otherwise just doesn't appeal to me.


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## Horatio (10 Dec 2019)

I can see our risk appetites vs. Return expectations  are different, I just wouldnt go there. I'd be willing to assume risk in return for, well, higher returns.


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## Sarenco (10 Dec 2019)

That’s absolutely fine but I simply suggested what I would do with the €100k cash savings if I was in the OP’s shoes.  

Savings certificates may well be the wrong choice for you depending on your specific circumstances.


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## Gordon Gekko (10 Dec 2019)

The flaw in your analysis versus Sarenco’s is that you’re looking at the €100k in isolation rather than as part of the OP’s overall asset allocation.

1% per year tax-free for 5 years is good for the defensive part of one’s overall pot. I wouldn’t be as conservative as that, as I’ve articulated above. My preference would be to ramp up the pension, keep six month’s net income in cash (i.e. €25k), and buy equities with the rest. But for the “safe” part of one’s portfolio, those State investments are decent.


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## Sarenco (10 Dec 2019)

For the avoidance of doubt, I absolutely agree that the OP should be maximizing his tax-relieved pension contributions (if he isn’t already).

But Gordon is bang on - it’s important to look at the OP’s full financial picture and not to focus on any particular investment in isolation.

My suggestion would still leave over 80% of the OP’s investment in risk assets (equities and property).  I don’t think that’s particularly conservative for a 55-year old with ~€570k of investments.


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## KOW (10 Dec 2019)

80% in risk assets by OP to me sounds fine.
Say 100k goes into 5 year state savings. In other words for a defensive play. This sum can be called on at any time with only loss of interest.
In other words should a very sweet opportunity arise at any time the full  100k can be used with minimal notice.


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## GSheehy (11 Dec 2019)

Sarenco said:


> ...State guaranteed....



We need to stop using the word *guaranteed* in relation to State Savings. 

It's simply not true and the word is nowhere to be found on any doucumentatation in realtion to these products. For a reason.


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## Sarenco (11 Dec 2019)

“Your State Savings are 100% protected by the Irish State”.





__





						Ireland State Savings - Savings Products & Prize Bonds | 100% Protected | State Savings
					

State Savings offers you tax free Savings Products and Prize Bonds 100% protected by the Irish State. No fees, sales commissions or transaction charges.




					www.statesavings.ie


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## Mapara (11 Dec 2019)

Thank guys for the feedback the debate and opinions so far, it's been very informative

Most important point I took on board is to max out my pension and then  look at making the other investment 



Gordon Gekko said:


> The flaw in your analysis versus Sarenco’s is that you’re looking at the €100k in isolation rather than as part of the OP’s overall asset allocation.


 I was probarly not looking at the big picture myself so that's a valuable point.



Horatio said:


> Source: https://www.fundsmith.co.uk/fund-factsheet
> 
> I hadn't heard of this before but will will do some research now.
> 
> All input has been appreciated so keep it coming.


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## Gordon Gekko (11 Dec 2019)

It is pie in the sky to talk about State Savings not being guaranteed; they are.

If those are ever in jeopardy, there are no safe havens and everything is goosed.


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## Mapara (12 Dec 2019)

Personally I would have  faith in the state savings guarantee,But at this moment I'm looking for something with a little more upside potential  which I know will also carry a risk of downside,but going  foward in the future 
 I would have no hesitation in investing in the State Savings.So still open to all opinions and suggestions ,,,keep them coming.


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## Sarenco (12 Dec 2019)

If you want to invest in equities outside your pension, a global equity investment trust (like F&C Investment Trust plc) might be worth investigating.


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## noproblem (12 Dec 2019)

Mapara said:


> Personally I would have  faith in the state savings guarantee,But at this moment I'm looking for something with a little more upside potential  which I know will also carry a risk of downside,but going  foward in the future
> I would have no hesitation in investing in the State Savings.So still open to all opinions and suggestions ,,,keep them coming.



"Keep them coming" you say. Very easy to do that but you're basically gambling with it and basing your projected return on events that happened in the past.


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## galway_blow_in (12 Dec 2019)

Sarenco said:


> If you want to invest in equities outside your pension, a global equity investment trust (like F&C Investment Trust plc) might be worth investigating.



Do you still rate the city of London investment Trust? 

Appears to be more stable than the broader FTSE from what i can see? 

Decent dividend.


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## Sarenco (12 Dec 2019)

galway_blow_in said:


> Do you still rate the city of London investment Trust?


As always, it depends on an investor's objectives and circumstances.

City of London Investment Trust is an income focused vehicle that seeks to maintain a high dividend, which can make a lot of sense for an investor with modest taxable income (a retiree, for example).


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## galway_blow_in (12 Dec 2019)

Sarenco said:


> As always, it depends on an investor's objectives and circumstances.
> 
> City of London Investment Trust is an income focused vehicle that seeks to maintain a high dividend, which can make a lot of sense for an investor with modest taxable income (a retiree, for example).



Would the fact that city of London focuses exclusively on one country bother you in terms of diversity?


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## Sarenco (12 Dec 2019)

galway_blow_in said:


> Would the fact that city of London focuses exclusively on one country bother you in terms of diversity?


Somewhat, yes.


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## Mapara (12 Dec 2019)

noproblem said:


> "Keep them coming" you say. Very easy to do that but you're basically gambling with it and basing your projected return on events that happened in the past.


I think you have misread my post  .
open to all opinions and suggestions ,,,keep them coming.


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## noproblem (12 Dec 2019)

Mapara said:


> I think you have misread my post  .
> open to all opinions and suggestions ,,,keep them coming.



Just giving my opinion. As requested by your good self.


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## FireDuck (6 Jan 2020)

Sarenco said:


> If you want to invest in equities outside your pension, a global equity investment trust (like F&C Investment Trust plc) might be worth investigating.



The IT seems to be the way to go since they are diversified and they are treated like a stock (unlike ETF's which are treated as unit linked funds).


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## RedOnion (6 Jan 2020)

FireDuck said:


> However the "F&C Investment Trust" tracks the FTSE 250.


How exactly is it managing to do that?
50% of their holdings are in US companies, 10% in UK...


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## FireDuck (6 Jan 2020)

RedOnion said:


> How exactly is it managing to do that?
> 50% of their holdings are in US companies, 10% in UK...



Sorry my bad, it's a constituent of the FTSE 250 (it's not tracking the index).
Comment updated!

I wonder can you find investment trusts that are similar to an index tracker.


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## johnny2shoes (14 Jan 2020)

Interesting answers.
How about splitting your 100k between four or five  sound stable companies listed on the stock market with big dividend return.
Some risk of course, but good chance of beating inflation with normal growth and dividend return.
I'm no expert but will soon find myself in a similar position as Mapara and fishing for good advice here as well.


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