# 300k to invest, but where?



## Taliesen (21 Jan 2010)

Hi,

My mum has recently received 300k and I want her to put it somewhere where she can get a good return on it. She's elderly and this is to pay for any and all expenses she may have for the rest of her days.

She does NOT want a long-term fixed account as 'value of investments may go down as well as up' and if she needs to withdraw it in advance of the maturity date she could lose thousands.

What would be the best bank/po/cu account to put it in in order to A) make sure it's 100% safe from institutional collapse and B) get a good rate of return on her investment ?

Please no suggestions of gold, shares, Monets etc. Liquidity is important.

Thanks.
T.


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## Pexus1976 (22 Jan 2010)

Taliesen said:


> Hi,
> 
> My mum has recently received 300k and I want her to put it somewhere where she can get a good return on it. She's elderly and this is to pay for any and all expenses she may have for the rest of her days.
> 
> ...


 
My suggestion:

Prize bonds
http://www.askaboutmoney.com/showthread.php?t=20903


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## PMU (25 Jan 2010)

Taliesen said:


> She's elderly and this is to pay for any and all expenses she may have for the rest of her days.


    You really need to work out how much money your mum is reasonably likely to need immediate access to, and plan accordingly. So, you could consider the following: work out how much she spends at present per annum, i.e. her annual spend.  Put this amount in the best instant access account you can find and put the same amount in the best 1 year deposit account.  Then, you could go on like this, building a ‘ladder’ of interest-paying deposits, including Post Office savings certificates, with different maturities of up to say 5 years. The idea here is that long duration deposits tend to pay higher interest rates than short term deposits, so rather than investing all of your mum’s good fortune in a low interest rate instant access deposit account, you split the money over several accounts that pay higher interest the longer you leave the money on deposit.   Under the deposit guarantee scheme http://www.itsyourmoney.ie/index.jsp?pID=125&nID=757#DGS deposits of up to €100,000 are protected, so don’t place more than that amount in any one institution. Then there is the risk of inflation..  Only equities consistently beat inflation (in the long term).  If inflation is a concern, your mum could put say 5 - 10% of her money into a euro equity tracker.  While this will fluctuate it should beat inflation in the long term [and she could always leave it as a bequest].  [Disclaimer: The above is comment / observation and is not a recommendation to follow any particular investment strategy or to buy / not buy any particular fund.]


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## NorfBank (25 Jan 2010)

Taliesen said:


> What would be the best bank/po/cu account to put it in in order to A) make sure it's 100% safe from institutional collapse and B) get a good rate of return on her investment ?



Herein lies the problem, there is no such thing as a 100% safe investment with a good return (depending on how you classify good). If there was we would all be in it 

To get a good return you will have to give up some of the security.
More risk = potential more reward.


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## Cuchuilan (19 Feb 2010)

Buy property maybe. Not just any old property. Prices low at the moment, get good value for €300,000 depending on where you are. If can rent it out easily then thats your money every month i.e. not servicing a mortgage. I know timing to sell isn't easy but house prices generally rise especially when buy at or near the bottom of the market.

I think this is something I'd seriously consider if its was my money.


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## ringledman (19 Feb 2010)

Cuchuilan said:


> Buy property maybe. Not just any old property. Prices low at the moment, get good value for €300,000 depending on where you are. If can rent it out easily then thats your money every month i.e. not servicing a mortgage. I know timing to sell isn't easy but house prices generally rise especially when buy at or near the bottom of the market.
> 
> I think this is something I'd seriously consider if its was my money.


 
The property market has way further to fall!

Property bottoms at an 'undervalued' level. I.e. when yields hit 8, 9, 10%+.

Nowhere near yet as this link shows - 

http://www.economist.com/businessfinance/displaystory.cfm?story_id=15179388

Irish property still 30% overvalued. 

Also once a boom in an asset ends, the next boom feeds itself into other assets and does not return to the asset that has just boomed for some time. 

Irish property will not show any real rises for a decade. 

The problem for elderly people these days is that interest rates are artificially too low and therefore there is no way of producing an income off the meagre interest the banks are paying on deposit accounts. 

The best place to make an income these days is probably from defensive global blue chip stocks that are cash rich and yield 5%+. Unfortunately the elderly don't like to take the risk so have no where to go to get a real income.


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## Complainer (19 Feb 2010)

Taliesen said:


> Liquidity is important.


Why? Is it important to have all €300k liquid?


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## Taliesen (19 Feb 2010)

Complainer said:


> Why? Is it important to have all €300k liquid?


Well sort of, yes. Perhaps not all, but definitely half.
If the time comes when she needs/wants to move into a retirement village, then the liquid part would be to pay for that, and the other half could be organised to pay out within 6 months - 1 year later. Do you follow?

She's pretty old-fashioned about things like this and the woman hasn't had the luxury of money in anywhere like this quantity for her entire life so is understandably reluctant to have it out of reach when she does have it.

Maybe Gold is a possible investment or even like someone mentioned, prize bonds...which I had never considered.

Regular savings accounts aren't much better than burying it.
Buying property is a no-go. She's nearly 80, and not in the mood to be a property investor. Pity she didn't have this money 10 years ago, huh ?

Anyway, thanks for the advice so far.

T.


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## Complainer (19 Feb 2010)

If you are going to be advising her, you have to be prepared to challenge her traditional thinking. If she wants to keep it all liquid, she will be getting poor returns. It is all about the risk/reward ratio.


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