Richard Alexander (Columnist)
FOR investors and savers, the income dilemma remains one of those elusive challenges created by today’s low interest rate environment.
Even though the Bank of England expects UK interest rates to rise ‘sooner than the market anticipates’, any progress in this regard will be very slow. Set this against the potential for inflation rates to increase over the same period and there’s precious little comfort for those hoping to see real income from capital.
The other thing to remember is that interest earned will typically be assessable for tax. If you have used all of your allowances against pension income, perhaps, then the net return will be even lower.
So what are the alternatives?
Traditionally, the Gilt and Sovereign Debt Bond markets have been a safe haven for providing Fixed Income but yields remain historically low. Plus, with US Federal Reserve talk of measures being introduced to stop a run on Bond funds, these probably don’t represent a realistic alternative at the moment.
What about the stock markets? The average yield on the FTSE 100 Share Index, for example, is currently running at around 3.4% which is not unattractive. But then, market values are relatively high at present and there’s always the concern that they may fall in the short term. Ironically, this increases the yield but if fluctuating capital values worry you, then the stock market may not be the right place either.
The common denominator here, when trying to assess alternative options, is that the view is based on a very short-term or immediate return situation. If a fund or investment option offering a one-stop-shop solution existed, it would be well advertised and you would probably be invested there already!
There is a solution, although it’s one that requires some lateral thinking and longer-term planning to be successful. This involves reviewing your resources and expenditure and identifying your income needs and when they will arise. It’s also important to consider future influences that may change any of these factors, in order to determine your needs over the medium-to-long term.
You might conclude that you will have to spend some capital in the short term to enable longer-term investments to grow before extracting income from them. You might, for example, plan to spend some capital to help meet your regular income needs; alternatively, you could purchase a temporary Annuity to provide set income for a short period.
What we’re really talking about here is taking the first tentative steps towards a proper financial planning solution. Approached carefully, it could be the perfect solution for you.
Best investment buy off plan in Spain
Irony is usually lost on here Rob.
Best investment is not to buy in Spain, at all. You will get ripped off one way or another.
As Fred states, don’t invest in Spain. No investment is safe, but if you look at HSBC, share price goes roughly between 600p to 625p, dividends 4 or 5%. I have a riskier one on Quindell, share price today on AIM, £1.97 as I type. It is being manipulated at the moment. 30% up on Monday and down 20% since then but I have £20k here. Let us see what it is worth by January next year.Don’t take my advice anyway. Time will tel if I made a good investment or not.
What a surprise to have the anti-Spanish wolfpack on here.
There are major bargains at the moment in Spain. Estate agents, like them or not, are ALL selling more.
Not sure how much you would get ‘ripped off’ as Fred puts it, by being lucky enough to snap up one of these? (BTW He invested here and must love living here – just a troll. I think he’s personally been ‘ripped off’ by LIFE itself.)
People are living La Vida Loca on the sun drenched costas, living a cheaper lifestyle, eating vastly cheaper larger fresher fruit and veg and cheap quality vino. (Not even mentioning people who have invested INLAND in Spain – cheaper still!)
Most walk about maybe smiling a bit too much for the wolfpack above.
Derek, not at all, I have too many properties there already, just having a general chat about where is the best place to invest and that is not a property in Spain once you pay 10% to buy, then get a dodgy etstae agent to charge 10% and above to sell, pay €1k to €3k on yearly maintanance and other bills, let alone any upgrades, major repairs. Rental income in Spain, do me a favour, look at OwnersDirect and see how many properties are empty outside of August, thousands. There is good reason why properties are cheap in Spain, 4 x more expenisve in Gibraltar, more expensive in Portugal, France and the list goes on. Lifestyle purchase yes, investment no. I talked someone out of it the other day in the UK. Happy to be of service to him but I try not to give advice to the tunnel vision poeple as they are going to buy no matter what, even illegal properties, you cannot help some people.
Derek,
your still at it – YOU DON’T LIVE IN SPAIN, YOU ONLY HAVE A HOLIDAY APARTMENT.
If it was so good you would be living in Spain, working for a Spanish company.
The truth is you are desperately trying to sell your crap built apartment, so any truthful comment on southern Spain jst makes it harder for you to sell – you are a shill, nothing more.
Stuart, I have not been reading this board for a while, does Derek not really live in Spain? Has that come out recently. I would laugh it were true.
A poster who lives in France (Stuart) attacks another poster for owning a holiday apartment in Spain! You could not make it up!
Hats of to REAP for the funniest comment I have seen in ages. Quindell of all companies!! LOL. It is a hollow shell and all who know the industry would not touch with a barge pole. I’d say tara to your £20K if I were you.
dampsquid,
still at it I see. Obviously you have memory problems.
Yes Reap, I found out the truth whilst viewing a thread from about 2 years ago, when he first materialised on this forum.
He has a holiday apartment on the coast and that’s all. This explains his abuse against anyone that tells the truth about Spain – he’s desperate to get out.
Derek, telling people not to invest in Spain is not anti-Spanish, it’s just a fact. Purchase costs, lawyers, agents and a plethora of other costs and taxes make Spain an absolute no-no for an investor. And what are people investing in exactly? Jobs? Business opportunities? A future for their children? Sadly, no. Your lifestyle doesn’t magically improve by moving to Spain, and many people quickly find they have to get a range of cash-in-hand jobs just to survive as the exchange rate plummets. Yes, there are lots of cheap properties now and you make the classic error of equating that as a “recovery”.
Cheaper lifestyle? You are very much mistaken. Utility bills have almost tripled in my own time here, IBI has almost doubled (whilst prices have plummeted) and a whole new raft of residency laws mean many people are now not even eligible for basics such as healthcare. This is the reality of Spain that you wish to hide. Luckily, you are failing.
I did invest here, and have freely admitted to making an error in doing so. Remember – you can invest in Spain, but it won’t ever invest in you.
Stuart, that is a shame he does not live there. El, as said, time will tell if I am right. Funny shell of a Company that employs 4,000 people. There are many comments around like yours that have seen the value up 30% Monday, down 20% now. Happy to put my money where my mouth is. Fidelity also own 10% of the Company, Prudential.. Anyway, not the place to go on about this here. Come back in January and I iwll be happy to accept your appology if I am correct.
Stuart, so he has not denied it so it must be true. Derek does not live in Spain. When he used to say, I am off to the beach, he must have meant Skegness or somewhere. What a disappointment, I was hoping that there was at least one person who lived there and was over the moon with some sun and now it turns out he does not live there, still what can you expect with someone who changes his name every few months. I always thought he came across as too positive for a person who lives there. Maybe he does not need to deal with the authorities I thought so maybe everything does seem perfect. Oh well, off to Spain again this month, Morocco, Gibraltar August… I will have a good time in Spain, it is good for a holiday and my lifestyle has bene great going there over the years, no good for your bank balance though. I do moan about Spain but I have great holidays.
Reap,
to be fair to the shill he was referring to the beach near his holiday apartment.
Your quite right Spain is good for vacations. Not being a slob the beach thing is nothing for us.We need to vacation where we can go for all day walks, breathe clean air with huge horizons. So there is the Alpujarros in Andalucia, the Picos de Europa in Asturias and the whole of the Pyrenees on either side of the border.
I simply cannot understand why the boring Med coast is so popular – try the coast of N W Spain and you will know what I mean and the food is much better as well.