09dolphin
Member of DD Central
Posts: 638 
Likes: 866
|
Post by 09dolphin on Sept 30, 2016 11:43:01 GMT
I expect to inherit £250K+ (will get the cash) in the next couple of months.
Presently I have about 60% of my capital invested in stocks and shares, 20% in standard building society accounts and the remaining money in 3 P2P accounts. I also have a secure pension which is enough for my present day to day needs + a house without a mortgage.
I want to keep some money easily available (building society) but feel I have enough for my needs even if some disaster happens - and it's so so safe even if interest rates mean it's not maintaining it's value. I have concerns re stocks and shares in view of brexit so not sure if I should increase my exposure by much. However I do intend to put in more as it's intended as a long term investment (10+ years) and past investments have worked for me.
The best place for returns at the moment seems to be P2P sites even though there is the risk of default, site going out of business etc so there is a risk.
With £175K to invest would forumites suggest I spread the risk by using another 2 or 3 sites, stick with FS as they offer reasonable security for loans which some sites don't (in my view). I do intend to leave my Ratesetter and Zopa accounts funded at the level they are.
I do have a PFA who really doesn't like P2P and tells me that a maximum of 10% of my capital should be invested on these sites.
Advice or views would be greatly appeciated
|
|
|
|
Post by Deleted on Sept 30, 2016 12:57:57 GMT
I expect to inherit £250K+ (will get the cash) in the next couple of months.
Presently I have about 60% of my capital invested in stocks and shares, 20% in standard building society accounts and the remaining money in 3 P2P accounts. I also have a secure pension which is enough for my present day to day needs + a house without a mortgage.
I want to keep some money easily available (building society) but feel I have enough for my needs even if some disaster happens - and it's so so safe even if interest rates mean it's not maintaining it's value. I have concerns re stocks and shares in view of brexit so not sure if I should increase my exposure by much. However I do intend to put in more as it's intended as a long term investment (10+ years) and past investments have worked for me.
The best place for returns at the moment seems to be P2P sites even though there is the risk of default, site going out of business etc so there is a risk.
With £175K to invest would forumites suggest I spread the risk by using another 2 or 3 sites, stick with FS as they offer reasonable security for loans which some sites don't (in my view). I do intend to leave my Ratesetter and Zopa accounts funded at the level they are.
I do have a PFA who really doesn't like P2P and tells me that a maximum of 10% of my capital should be invested on these sites.
Advice or views would be greatly appeciated
I agree with your PFA limit your P2P to 10% I'd look at funds especially global funds with a good track record over the past 10 years.
|
|
hendragon
Member of DD Central
Posts: 631 
Likes: 619
|
Post by hendragon on Sept 30, 2016 13:50:11 GMT
you might want to take a look at gold/metals. Easy to buy these days and plenty of choice. Coins or bullion bars are ,imho, a good hedge against inflation and a falling pound.
|
|
SteveT
Member of DD Central
Posts: 6,875
Likes: 7,924
|
Post by SteveT on Sept 30, 2016 13:57:50 GMT
That rather depends how the £250k inheritance stacks up versus the "60% of capital" you already have in stocks & shares. If it's substantially bigger than I'd be inclined to follow your PFA's thinking.
|
|
|
|
Post by mrclondon on Sept 30, 2016 14:22:39 GMT
With £175K to invest would forumites suggest I spread the risk by using another 2 or 3 sites, stick with FS as they offer reasonable security for loans which some sites don't (in my view). I do intend to leave my Ratesetter and Zopa accounts funded at the level they are.
I admire your confidence in the security of FS loans, and despite the fact FS will soon be my largest platform as my AC account dwindles, "reasonable" is not the adjective I would use for the security backing quite a few loans on FS whose valuations frequently have rather too much "hope value" in them for my liking. I skip more than I invest in. A max of 10% of net wealth into p2p sounds about right ... I'm at 15% but spending a LOT of time on due dilligence to try to minimise the risk, but as one of my secured loans on TC shows if the borrower has engaged in fraudulent practises (its speculation for now, but seems likely) it will be a total loss and was undetectable by casual due dilligence if as seems likely the accounts filed at companies house are a work of fiction. Diversification across loans and platforms is ESSENTIAL, and if you do decide increase your p2p holdings I would recommend considering more platforms. You should be targetting a maximum of between 0.5% and 1% of your p2p pot per loan (1% on better secured loans, 0.5% on weaker loans, 0% on loans whose worst case valuation is a capital loss on realisation).
|
|
arbster
Member of DD Central
Posts: 810
Likes: 426
|
Post by arbster on Sept 30, 2016 14:27:35 GMT
A max of 10% of net wealth into p2p sounds about right ... Just to confirm, how are you calculating "net wealth"? Total assets (including pensions and property) less total liabilities?
|
|
|
|
Post by mrclondon on Sept 30, 2016 14:34:56 GMT
A max of 10% of net wealth into p2p sounds about right ... Just to confirm, how are you calculating "net wealth"? Total assets (including pensions and property) less total liabilities? Correct. I don't subscribe to the exclude your primary residence way of viewing investments, mainly it has to be said because I live in inner London and could sell up and buy something considerably better elsewhere for less than half the proceeds, but in the extreme we have seen flats in some remote part of Scotland sell for less than £10,000 at auction (AC loan #86) i.e. it would be possible to buy a flat in remote Scotland for £10k, spend £10k rennovating it, and invest the balance from selling your primary residence (where ever in the country you currently live) in anything other than property if you so wished.
|
|
arbster
Member of DD Central
Posts: 810
Likes: 426
|
Post by arbster on Sept 30, 2016 14:47:49 GMT
Just to confirm, how are you calculating "net wealth"? Total assets (including pensions and property) less total liabilities? Correct. I don't subscribe to the exclude your primary residence way of viewing investments, mainly it has to be said because I live in inner London and could sell up and buy something considerably better elsewhere for less than half the proceeds, but in the extreme we have seen flats in some remote part of Scotland sell for less than £10,000 at auction (AC loan #86) i.e. it would be possible to buy a flat in remote Scotland for £10k, spend £10k rennovating it, and invest the balance from selling your primary residence (where ever in the country you currently live) in anything other than property if you so wished. Thanks. Agree with all of that, except the moving to Scotland part... 
|
|
phil
Posts: 190
Likes: 165
|
Post by phil on Oct 1, 2016 4:17:09 GMT
With £175K to invest would forumites suggest I spread the risk by using another 2 or 3 sites... I certainly would and I'd invest the whole lot in P2P investments that are secured by bricks and mortar at LTV max 65%. Only two ways to lose your capital are if property prices plummet or if the P2P site runs off with your loot. P2P sites are on to a good earner so it's in their own interest to continue running. I've diversified £230k through more than 100 property loans and get £1900 monthly for sitting on my backside. I raised the £230k from selling a buy to let property I owned. Equally I could have left that £230k in the buy to let and still have been subject to capital loss in a property crash.
|
|
|
|
Post by Deleted on Oct 1, 2016 9:56:35 GMT
Take care with property, loans where planning permission is not present and developments half complete are worth very little. I'd also suggest that 12% is not a good rate in the market. You can pick up 18 to 20% in some funds year after year, P2P has a place in the market but just that, it is certainly not the best game in town.
I recommend you look at trustnet and revew annual rates of greater than 15% and volatility of less that 13% and you'll find a bunch of funds with consistent great results. Turning your back on them is just crazy.
|
|
phil
Posts: 190
Likes: 165
|
Post by phil on Oct 2, 2016 11:51:34 GMT
I never invest in development loans or land, I only invest in established, residential bricks and mortar with a valuation of less than 65% LTV. The money I have invested is only at risk should property prices plummet by more than 35%. The security of my money is clearly visible to me in the form of the mortgaged property, I'm not so sure that the security of my money would be so clearly visible in the investments on Trustnet. Having said that, thanks for the tip and I for one will certainly look into it.
|
|
mikes1531
Member of DD Central
Posts: 6,453
Likes: 2,320
|
Post by mikes1531 on Oct 3, 2016 0:47:03 GMT
...I only invest in established, residential bricks and mortar with a valuation of less than 65% LTV. The money I have invested is only at risk should property prices plummet by more than 35%. : You're correct in that the capital of a 65% LTV loan isn't at risk unless the property can't be sold for at least 65% of the 'value'. But you need to remember that a property sold in a hurry is unlikely to fetch its whole value. Read the valuations carefully, as often a valuer will have been asked to produce an additional valuation to the one the LTV is based on, and that usually assumes a limited marketing period of 180 or 90 days. Obviously a lot depends on whether the property is bog standard and in a popular area where demand is strong and properties sell easily, or is a unique property in a more out of the way place, but it isn't uncommon to see that second price be something like 20% less than the 'market' price achievable if a seller can wait for the perfect buyer to show up. What this means is that in a forced sale with no general weakness in the property market, actually receiving 75+% of the market value after paying all the transaction fees -- lawyers, receivers, estate agents, platform fees, etc. -- might be considered a good result. With a 65% LTV loan, therefore, all it would take is a 10% drop in property prices generally before investors could find themselves in a loss position. Another factor to consider is the hoped-for interest. If it isn't payable until the end of the loan, then the price achieved would need to be another 10% or so higher to cover the interest accrued during the loan term and the time it takes to sell the property.
|
|
phil
Posts: 190
Likes: 165
|
Post by phil on Oct 3, 2016 7:57:59 GMT
...I only invest in established, residential bricks and mortar with a valuation of less than 65% LTV. The money I have invested is only at risk should property prices plummet by more than 35%. What this means is that in a forced sale with no general weakness in the property market, actually receiving 75+% of the market value after paying all the transaction fees -- lawyers, receivers, estate agents, platform fees, etc. -- might be considered a good result. With a 65% LTV loan, therefore, all it would take is a 10% drop in property prices generally before investors could find themselves in a loss position. Another factor to consider is the hoped-for interest. If it isn't payable until the end of the loan, then the price achieved would need to be another 10% or so higher to cover the interest accrued during the loan term and the time it takes to sell the property. Thanks for the advice. I should hope that I've mitigated somewhat the possible impact of capital loss in forced sales by diversifying in more than 100 different property loans. As for the hoped-for interest, 80% of my investments are with platforms that pay me monthly. It's a good point regarding increased LTV after six months but I like the FS platform and feel it's an acceptable risk to have about 20% of my investments with FS.
|
|
|
|
Post by Financial Thing on Oct 20, 2016 17:48:37 GMT
Take care with property, loans where planning permission is not present and developments half complete are worth very little. I'd also suggest that 12% is not a good rate in the market. You can pick up 18 to 20% in some funds year after year, P2P has a place in the market but just that, it is certainly not the best game in town. I recommend you look at trustnet and revew annual rates of greater than 15% and volatility of less that 13% and you'll find a bunch of funds with consistent great results. Turning your back on them is just crazy. While I respect your opinion Bobo, many of these funds are incredibly risky and once the stock market goes pop (it will), these funds will experience some crippling losses. With bubble type warning signs blinking all over my screen, I don't think now is a good time to be plunging money into managed funds.
|
|
hazellend
Member of DD Central
Posts: 2,363
Likes: 2,180
|
Post by hazellend on Oct 20, 2016 18:59:38 GMT
Take care with property, loans where planning permission is not present and developments half complete are worth very little. I'd also suggest that 12% is not a good rate in the market. You can pick up 18 to 20% in some funds year after year, P2P has a place in the market but just that, it is certainly not the best game in town. I recommend you look at trustnet and revew annual rates of greater than 15% and volatility of less that 13% and you'll find a bunch of funds with consistent great results. Turning your back on them is just crazy. Hi Bobo, Could you please be slightly more specific? I have no idea what you are talking about. Ahh, you are talking about stocks and shares. Past returns do not predict future returns, and in fact seem to be inversely correlated. Personally, my stocks and shares money all goes into just one ETF, Vanguard all world.
|
|
