# How best to invest 750K...



## markod (14 Jan 2007)

Hi all

Following our recent downsizing to a smaller house (we now have no mortgage) we have about 750K available to invest.  Our priorities for this cash are:

Generate a regular annual income if possible, to supplement our salaries.
Use it as the basis of a pension.
Keep at least 30% of the funds relatively liquid, just in case we have a rainy day.
In terms of our employment/tax situation, I am paid a small salary ( currently 24K per annum) as director of a new startup company. My wife is a PAYE worker and gets around 75K per annum.  In case it influences matters, I am 40 and my wife is 36.

We would be willing to invest about 100K in high risk products, 250K in medium risk products and the rest in relatively secure products.  We are only amateur investors, so any products need to be relatively straightforward and not need daily hands-on management.  

If it was your money, and you shared our goals, how would you suggest investing the funds and *what kind of returns would you expect*?

Many thanks for any advice you can offer


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## markowitzman (15 Jan 2007)

I think 30% for rainy day is too much.
I would get pension running and get tax advice on how to structure it in your company.
For income I personally would go for high yielding blue chips, some commodities for diversification etc.
With that amount of money I would go the direct route with a good stockbroker or wealth manager rather than pay annual management fees on funds.
Others will disagree but for the inexperienced I think it is better to have someone experienced to guide you rather than just getting a "product seller" in a bank selling you funds off the shelf.
Buy and hold the shares long term (min 10 years plus).
Consider diversification into an investment property with less than 50% ltv so as to ride any fall and leverage your returns and also to get cashflow for yourseves (go interest only).
As regards high risk do you really need to?
I think you can get 6-10% on shares/property which will compound very nicely. I suppose maybe a BES would be the high risk or possibly investing some money in your own business so as to attract future investment.
However as the company is a start up I would not overfund.


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## dunkamania (15 Jan 2007)

markowitzman said:


> I think 30% for rainy day is too much.
> I would get pension running and get tax advice on how to structure it in your company.
> With that amount of money I would go the direct route with a good stockbroker or wealth manager rather than pay annual management fees on funds.
> Others will disagree but for the inexperienced I think it is better to have someone experienced to guide you rather than just getting a "product seller" in a bank selling you funds off the shelf.
> ...


 
agree with the 30%,its probably too much.

I would seek the help of an independent Financial adviser,your stockbrokers goals arent necessarily aligned with yours.

I would recommend at least some exposure to emerging markets(high risk) as you have a long horizon,lowish liquidity needs,average risk constraints and are seeking growth


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## markowitzman (15 Jan 2007)

Fair points and to add maybe some form of hedging also?


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## HighFlier (15 Jan 2007)

max out your pension from your salary to get the tax relief and augment your income from your savings by the same amount.


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## goodtiming (16 Jan 2007)

I invested 700k in BOIs managed funds on Dec 1st and have seen 7.5% growth since then I've got a mix of seven different funds with some risky like their geared irish equity fund which is up 16% and some more safe options like their evergreen fund. I've also put smaller amounts in Japan and their pacific basin fund which are up about 3% since dec 1st.
For spending money I opened an nib ecb-tracker a/c with 50k in it. I can put money from here into my current a/cs instantly so it suits me.



It was mentioned in the evergreen fund thread but I thought i'd ask again here. When does one sell a fund? Do you pick a profit margin you're happy with and pull the trigger, or do you stay in and try to ride the peaks and troughs. We're up about 54k in 6 weeks and my wife is liabel to divorce me if we drift too far down. I know some will say sell the ones that are up most but these are the irish share funds and I think we should have a very healthy 07 in the Iseq.
BTW the BOI funds are sold in units so you can sell out of one and into another without incurring any trading costs bar the normal management fee of 1.5%.


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## dunkamania (17 Jan 2007)

Assuming that you are liable for CGT,and that your expected horizon is 15+ years than you should not be selling your holdings if they were properly allocated in the first place.

As for the recent large increase you have already seen,the market could well revert to the mean leaving you with a smaller gain or even a loss in the near future.dont try and sell now and buy back when the market dips,it would not be a good strategy for you.

I would suggest you only look at your fund performance a few times a year,because you seem overoccupied with market swings.Let the market do its job,and get on with enjoying your life.


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## goodtiming (17 Jan 2007)

dunkamania said:


> Assuming that you are liable for CGT,and that your expected horizon is 15+ years than you should not be selling your holdings if they were properly allocated in the first place.


 
I'm not 100% sure but I think there is only a dirt tax liability associated with these products. I know it works out much the same in the end


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