If You Had A £100,000
If you had £100,000 what would you do with it?
If you stick it in the bank you would get 0.1%. So a return of £10 per YEAR. That is 83p a month, less tax at the higher rate (the final insult) you would get 50p!
50p a month from a £100,000 investment. It sounds completely ridiculous. And it is.
It is not long before people realise that if rates stay low for any period longer than a year then it is best to get your money in to some form of investment. The easiest one to go for is the stock market.
You just give the money to the bank to invest in the stock market and they return you a return of better than 50p a month. Simple right?
We not really. Not when they take your money and make you MINUS £1,000 per month. Now it is not too bad if you keep your money in and let the market recover (as it will) but how long are you going to wait for that?
So what about property? Property prices are falling. You would have to be a mug to invest in property right? WRONG.
Lets say you take £100,000 and invest in a 10% yielding property. That means you will make £10,000 profit this year, next year and year after. Compare that to £10 a year from the bank.
You may lose in capital IF property prices decline but so what? You are making £10,000 per year. Even if prices fall by 30% over the next 3 years you would still be at the break even point. But if prices rise in the next 3 years by 10% then you will make a nice £40,000 when you include the rental profits.
If you can think of anywhere else to put £100,000 let me know but keep it clean!
Article Courtesy of Ajay Ahuja
