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Advice needed - what to do with money from house sale?
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boisdevie



Joined: 26 Dec 2012
Posts: 271
Location: N Lancashire

PostPosted: Thu Aug 24, 2017 8:24 pm    Post subject: Advice needed - what to do with money from house sale? Reply with quote

I very much value the points of view here and the intelligence of this community so I'm seeking advice. I have £25k that is currently in an interest bearing account. However, interest rates are rubbish so I wonder what else I can do with the money. It's not enough to invest in property so what else could I do with it? I have no mortage or debts to pay off and my accomodation needs are already met. My lifestyle is nomadic to a degree so buying lots of stuff (blankets, candles, tinned food etc) is not possible for me.
What would you do with the money?
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adam2
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Joined: 02 Jul 2007
Posts: 7129
Location: North Somerset

PostPosted: Thu Aug 24, 2017 8:55 pm    Post subject: Reply with quote

10% into physical gold
10% into bitcoin
10% into Euro banknotes
10% into USA Dollar banknotes
10% into Sterling banknotes
50% into several different UK bank accounts.
10% into physical preps, blankets, candles, clothing, long life food, small tools. For reasons already given, I understand that you cant keep much of this sort of thing, but a little perhaps ?

And yes I know that the above adds up to more than 100%, that is to allow for one of the above suggestions being not applicable to your circumstances.

Yet another possibility would to be lend the money to a REALLY TRUSTWORTHY friend or relative in order to assist them to buy a property, or to help pay off an existing mortgage.
You could charge them a fair rate of interest on this loan. The rate is a matter of private negotiation, but a start might be to take the average of what you could have earned, and what they would have paid.
For example if you could earn 1% on a deposit account, but your friend would have to pay 6% interest on a loan, then about 2.5% interest might be fair. You would receive over twice what the bank would have paid, and they are paying less than half the interest rate that they would have incurred otherwise.
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fuzzy



Joined: 29 Nov 2013
Posts: 879
Location: The Marches, UK

PostPosted: Thu Aug 24, 2017 9:13 pm    Post subject: Reply with quote

Can you buy fairly secure storage buildings? Lockup garages for sale near your house etc. Obviously depends on the neighbourhood. Useful for house moves, or you can rent them out, or you can run a business from them.
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Potemkin Villager



Joined: 14 Mar 2006
Posts: 1115
Location: Narnia

PostPosted: Thu Aug 24, 2017 9:31 pm    Post subject: Reply with quote

adam2 wrote:
+

Yet another possibility would to be lend the money to a REALLY TRUSTWORTHY friend or relative in order to assist them to buy a property, or to help pay off an existing mortgage.
You could charge them a fair rate of interest on this loan. The rate is a matter of private negotiation, but a start might be to take the average of what you could have earned, and what they would have paid.
For example if you could earn 1% on a deposit account, but your friend would have to pay 6% interest on a loan, then about 2.5% interest might be fair. You would receive over twice what the bank would have paid, and they are paying less than half the interest rate that they would have incurred otherwise.


This worked well for me years ago and I was able to pay my friend off much faster and at much less cost than borrowing from a bank. We both made on the deal. However as A2 says it needs to be a really solid friend you lend to and these can be few and far between.
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vtsnowedin



Joined: 07 Jan 2011
Posts: 5212
Location: New England ,Chelsea Vermont

PostPosted: Thu Aug 24, 2017 10:09 pm    Post subject: Reply with quote

Do you have tax free municipal bonds in the UK?
My town here in Vermont just sold a million dollar bond for a new garage for the town highway department. 3.5% interest for twenty years and the tax payers have to pay it each year by statute.
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boisdevie



Joined: 26 Dec 2012
Posts: 271
Location: N Lancashire

PostPosted: Fri Aug 25, 2017 8:17 am    Post subject: Reply with quote

adam2 wrote:
10% into physical gold
10% into bitcoin
10% into Euro banknotes
10% into USA Dollar banknotes
10% into Sterling banknotes
50% into several different UK bank accounts.


Thanks for the reply. What is your thinking behind this?
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adam2
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Joined: 02 Jul 2007
Posts: 7129
Location: North Somerset

PostPosted: Fri Aug 25, 2017 9:21 am    Post subject: Reply with quote

Basically, not putting too many eggs into one basket.

In a bad crash, gold should retain value, it always has done in the past therefore a modest holding is prudent. Not too much though, gold pays no income or dividend, and carries the risk of loss by fire or theft.

UK banknotes are most useful for any short term emergency, think a hurricane Katrina type of disaster in the UK with businesses unable to accept anything but cash.

Any UK specific crash might cause sterling to inflate to uselessness, a supply of foreign banknotes could then be valuable. Not too much though since those countries might suffer a similar fate, and like gold, banknotes carry risks of loss.

Bitcoin is a useful hedge against inflation since governments can not print more of it. I cant recommend a large holding as anything new carries some risk of loss. Bitcoin is also totally reliant on electricity and internet service continuing.

Money in the bank has its merits, spread it around to spread the risk. The rate of return is very poor, but better than nothing. Whilst BAU continues you can access the money almost anywhere via cash machines.
Remember Northern Rock ? no depositor actually lost money but many experienced worry and delay, hence the suggestion to spread deposits around.

Physical preps could save your life in case of TEOTWAWKI, always worth consideration. If circumstance preclude large stocks of supplies, then small stocks are better than nothing.
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emordnilap



Joined: 05 Sep 2007
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PostPosted: Fri Aug 25, 2017 10:25 am    Post subject: Reply with quote

Remember, there are moves towards taking larger denomination notes out of circulation. It won't happen tomorrow - but it will happen. The €500 note has gone.

Sweden is moving towards being cash-free and they'll be spun as the way to go.
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emordnilap



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PostPosted: Fri Aug 25, 2017 10:31 am    Post subject: Reply with quote

vtsnowedin wrote:
Do you have tax free municipal bonds in the UK?
My town here in Vermont just sold a million dollar bond for a new garage for the town highway department. 3.5% interest for twenty years and the tax payers have to pay it each year by statute.


Dunno. I know the Irish version though and it's mad - 10 years, then what looks like a great return via interest. Then the interest is taxed quite heavily. Crying or Very sad

Anyway boisdevie, look at peer-to-peer lending, that often pays decent returns and can be very ethical.

And what about ISAs? I know nothing about them, just suggesting.

Oh, and have a look here too.
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adam2
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PostPosted: Tue Aug 29, 2017 9:28 am    Post subject: Reply with quote

ISAs and similar investments are not a bad idea IF you expect BAU to continue for the time that you expect to hold the investment. The rate of return is better than a savings or deposit account and there are tax advantages.

All such schemes are however putting money into stock markets, commercial property, loans and bonds or related investments. That could end very badly indeed in a severe crash.
Some of your money could end up in Greek banks, or being lent in car loans to the less credit worthy, or building a hard to let shopping centre.
Such schemes are NOT covered by any government protection, unlike bank deposits which subject to certain limits and other conditions are protected.
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emordnilap



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PostPosted: Tue Aug 29, 2017 10:36 am    Post subject: Reply with quote

adam2 wrote:
Such schemes [ISAs} are NOT covered by any government protection, unlike bank deposits which subject to certain limits and other conditions are protected.


I didn't know that. Interesting.
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PS_RalphW



Joined: 24 Nov 2005
Posts: 5486
Location: Cambridge

PostPosted: Tue Aug 29, 2017 11:29 am    Post subject: Reply with quote

I put money in a community wind farm (awel.coop). It is long term investment (20 years) but decent interest. The risks are basically climate change generating a wind big enough to break the turbines, or the government dumping its promise to pay feed in tariff.

A few other schemes around, mostly solar PV.
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cubes



Joined: 10 Jun 2008
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Location: Norfolk

PostPosted: Tue Aug 29, 2017 9:54 pm    Post subject: Reply with quote

I can't believe bitcoin is a good investment long term. The non-true-believers are on the hype train and are in for a big letdown. It has no more 'value' than fiat money and probably less as it's less useful.
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emordnilap



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PostPosted: Wed Aug 30, 2017 10:04 am    Post subject: Reply with quote

cubes wrote:
I can't believe bitcoin is a good investment long term. The non-true-believers are on the hype train and are in for a big letdown. It has no more 'value' than fiat money and probably less as it's less useful.


There again, neither did tally sticks, which were around a lot longer than our money has been. Laughing
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fuzzy



Joined: 29 Nov 2013
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PostPosted: Wed Aug 30, 2017 10:47 am    Post subject: Reply with quote

Tally sticks were foolproof low tech. They were destroyed because the gov/king/banks wanted the debt to disappear - pure theft.
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