Ah fair play to the brother for setting free the cash.
He is borrowing at probably 4-5% (with no owner occupier mortgage interest tax relief on the top-up since it's not to purchase/renovate his PPR) so he has to earn that net plus inflation to break even. That could mean a total net return around 8%+ (i.e. about 10% gross) before he is even getting a real return. Does he realise this?
my brother has released 50k (equity release) off a property he bought a few years ago. What would be the best investment for the money.
hes looking for ideas and thinking of an overseas property
I have just decided to release equity in my home to the value of 120k. I currently have no mortgage. My salary is 60k per year so I can handle the repayments.
My plan is to invest directly in the stock market by buying a diversification in stocks probably in the Footsie and Iseq. I have been dealing in stocks for about ten years so I understand there will be slumps and I believe I can handle this.
Here is where I need help
What kind of mortgage should I take out, interest only ? and over what time frame. I am forty years old.
How many stocks should I buy and how many industry sectors should I buy into.
Why was he going to concentrate most (all?) of his net worth in a single asset class? Was he aware of the risks?He has a house that is being rented out and is covering the mortgage. what he was going to do was buy an appartment in the UK and do the same, but that fell through.
That's a bit of a mindless approach to investing.I dont think he cares about a return once the rent covers the mortgage for a few years.
As above re. the risks of concentrating on a single asset class versus building a diversified portfolio.His plan is to build up a portfolio of houses to rent out.
Why doesn't he pay an independent, professional advisor to do a proper fact find/financial health check and recommend a range of possible savings/investment options that suit his specific needs to him?Thats all i can add to it need to talk to him later (and probably get him to get is own username so he can post questions).
Thanks for the replies.
It's not gospel, it's just someone's opinion. There was a period of close to 20 years in the 60s and 70s where equities underperformed bonds, although over longer periods equities outperform all other classes. If you're going to borrow to invest, you have to ask yourself whether you could cope with 20 years of equities underperforming.OK but according to The guide to savings and investments it is
[FONT=Verdana, Arial, Helvetica, sans-serif]WHEN TO BORROW TO INVEST IN THE STOCKMARKET[/FONT]
Bear in mind that that guide is simply the opnion of Brendan and whoever happened to review the guide or parts of it.OK but according to The guide to savings and investments it is