zlb
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Post by zlb on Jun 9, 2018 9:26:00 GMT
thanks. Remember reading about that tax break at some point. Wonder whether anyone gained a criminal record from letting out rooms/property on wrong type of mortgage? Ideally I'd not live there as well as lodgers for first couple of years ... But the tax break is attractive... Ok, I don't get it anymore. You said initially that you "can't afford to live there immediately.". So how would this work? You'd buy a house which you can't really afford, rent somewhere else, and rely totally on keeping your lodger-tenants there all the time to cover the mortgage? This sounds like a bad idea to me - firstly as you'd be operating a BTL which would be against your ML terms, and which would also be traceable as you're renting elsewhere. Second, if you get a bad tenant, you're going to be totally screwed with 2 sets of costs and no income. Apologies if I've misunderstood what you meant (?) thanks... It's complicated so won't go into personal details, but the main scenario that's discussed in press is where people stay with parents and get a BTL in order to move into it eventually. I have work colleagues for whom this is culturally normal practice.
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zlb
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Post by zlb on Jun 9, 2018 9:31:36 GMT
Ok, I don't get it anymore. You said initially that you "can't afford to live there immediately.". So how would this work? You'd buy a house which you can't really afford, rent somewhere else, and rely totally on keeping your lodger-tenants there all the time to cover the mortgage? This sounds like a bad idea to me - firstly as you'd be operating a BTL which would be against your ML terms, and which would also be traceable as you're renting elsewhere. Second, if you get a bad tenant, you're going to be totally screwed with 2 sets of costs and no income. Apologies if I've misunderstood what you meant (?) Also, I'm not sure the tax break applies if you don't live in the property ("Ideally I'd not live there as well as lodgers for first couple of years ... But the tax break is attractive...")
Thanks ... useful link. I was being mildly playful. There must be people doing this for one reason or another, but only staying at the property occasionally, eg people who stay a lot with parents for elderly care reasons. Or people who work/rent away from home. Perhaps not many though, who wouldn't be intentionally stretching the elastic band.
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hazellend
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Post by hazellend on Jun 9, 2018 9:32:36 GMT
The main 3 asset classes are equities, bonds and property. P2P is becoming more popular but should still have a smaller percentage of your asset allocation in my opinion.
BTL is fine, but a bit of a chore to manage and taxes are also onerous these days. Easier to buy into BTL equity through property partner if you want access to this type of investment.
My opinion is that most people only need broad exposure to global equities via a low cost index tracker.
If you invest through the years you probably don't need any other assets in your portfolio.
The only reason I came to P2P was for major tax advantages attached to it, but above that it is much riskier long term than equities.
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Post by Ace on Jun 9, 2018 14:38:39 GMT
The main 3 asset classes are equities, bonds and property. P2P is becoming more popular but should still have a smaller percentage of your asset allocation in my opinion.
BTL is fine, but a bit of a chore to manage and taxes are also onerous these days. Easier to buy into BTL equity through property partner if you want access to this type of investment.
My opinion is that most people only need broad exposure to global equities via a low cost index tracker.
If you invest through the years you probably don't need any other assets in your portfolio.
The reason I came to P2P was for major tax advantages attached to it, but above that it is much riskier long term than equities. It's not clear to me that P2P is much riskier (or even slightly riskier) than equities!!! I generally consider a well diversified P2P to be slightly less risky than equities, especially for those platforms at the lower end of the risk/reward scale.
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hazellend
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Post by hazellend on Jun 9, 2018 16:59:56 GMT
The main 3 asset classes are equities, bonds and property. P2P is becoming more popular but should still have a smaller percentage of your asset allocation in my opinion.
BTL is fine, but a bit of a chore to manage and taxes are also onerous these days. Easier to buy into BTL equity through property partner if you want access to this type of investment.
My opinion is that most people only need broad exposure to global equities via a low cost index tracker.
If you invest through the years you probably don't need any other assets in your portfolio.
The reason I came to P2P was for major tax advantages attached to it, but above that it is much riskier long term than equities. It's not clear to me that P2P is much riskier (or even slightly riskier) than equities!!! I generally consider a well diversified P2P to be slightly less risky than P2P, especially for those platforms at the lower end of the risk/reward scale. Equities can be very volatile, but if you buy and hold for 20 years you will probably do very well. P2P tends to create permanent losses as you crystalise the loss when defaulted property sold at a loss Finally. a passive tracker portfolio is very easy to maintain compared to a self managed diversified P2P portfolio containing 50 + loans
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Post by Ace on Jun 9, 2018 17:26:09 GMT
It's not clear to me that P2P is much riskier (or even slightly riskier) than equities!!! I generally consider a well diversified P2P to be slightly less risky than equities, especially for those platforms at the lower end of the risk/reward scale. Equities can be very volatile, but if you buy and hold for 20 years you will probably do very well. P2P tends to create permanent losses as you crystalise the loss when defaulted property sold at a loss Finally. a passive tracker portfolio is very easy to maintain compared to a self managed diversified P2P portfolio containing 50 + loans I agree with your first point, but think that P2P will prove less volatile and also do fairly well over the long term; though I accept probably less well than equities over the long term. I didn't say that P2P would give better returns over the long term, just that I don't agree with your assertion that P2P is higher risk. I agree with your second point as well, but I expect gains to out way losses. I would also expect some losses with equities, so again, I don't think that this supports your assertion that P2P is more risky. Your third point is hardly a fair comparison. It would be fairer to compare tracker funds with black box / Auto invest P2P models, which take similar management time. Again this adds nothing to the argument about whether equities or P2P is the more risky. You are, of course, entitled to your opinion about which investment type is the more risky, I simply wanted to point out that I for one don't agree with that opinion.
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littleoldlady
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Post by littleoldlady on Jun 9, 2018 17:55:50 GMT
The main 3 asset classes are equities, bonds and property. P2P is becoming more popular but should still have a smaller percentage of your asset allocation in my opinion.
BTL is fine, but a bit of a chore to manage and taxes are also onerous these days. Easier to buy into BTL equity through property partner if you want access to this type of investment.
My opinion is that most people only need broad exposure to global equities via a low cost index tracker.
If you invest through the years you probably don't need any other assets in your portfolio.
The reason I came to P2P was for major tax advantages attached to it, but above that it is much riskier long term than equities. It's not clear to me that P2P is much riskier (or even slightly riskier) than equities!!! I generally consider a well diversified P2P to be slightly less risky than P2P, especially for those platforms at the lower end of the risk/reward scale. You might like to correct the typo. If you actually mean what I think then I agree with you.
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Post by Ace on Jun 9, 2018 19:43:55 GMT
It's not clear to me that P2P is much riskier (or even slightly riskier) than equities!!! I generally consider a well diversified P2P to be slightly less risky than equities especially for those platforms at the lower end of the risk/reward scale. You might like to correct the typo. If you actually mean what I think then I agree with you. Oops, yes, thanks littleoldlady, didn't make much sense without correction.
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zlb
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Post by zlb on Jun 9, 2018 21:19:18 GMT
2. Why do people use mutual/friendly bonds? e.g. I read of one recently that described itself as "medium risk" for 1.45% (possibly) with capital returned at 70% initially (possibly). not sure where you see that bond but i thought the idea of these bonds offered by the likes of NFU was that they are a safer product and tend to be more multi asset and you can even take the with profits option.But must admit i thought they had fallen out of favour along with endowment products due to the high charges and you normally need to hold for a good few years pretty much crossed with jlend thanks. Didn't realise this similarity.
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jlend
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Post by jlend on Jun 9, 2018 21:29:21 GMT
not sure where you see that bond but i thought the idea of these bonds offered by the likes of NFU was that they are a safer product and tend to be more multi asset and you can even take the with profits option.But must admit i thought they had fallen out of favour along with endowment products due to the high charges and you normally need to hold for a good few years pretty much crossed with jlend thanks. Didn't realise this similarity. You need to hold for 10 years I seem to remember. They quickly went out of fashion when peps came along. I think the Friendly Societies still going still offer them but most of their income is now via ISAs
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zlb
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Post by zlb on Jun 9, 2018 22:05:18 GMT
It's not clear to me that P2P is much riskier (or even slightly riskier) than equities!!! I generally consider a well diversified P2P to be slightly less risky than P2P, especially for those platforms at the lower end of the risk/reward scale. Equities can be very volatile, but if you buy and hold for 20 years you will probably do very well. P2P tends to create permanent losses as you crystalise the loss when defaulted property sold at a loss Finally. a passive tracker portfolio is very easy to maintain compared to a self managed diversified P2P portfolio containing 50 + loans I've come across articles saying it's the end of 'buy and hold' for ever, owing sideways market. I've not observed such things for long enough,,what's (anyone's) considered opinion on this? It's got poor implications for opening small private pensions.
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zlb
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Post by zlb on Jun 9, 2018 22:07:26 GMT
thanks. Didn't realise this similarity. You need to hold for 10 years I seem to remember. They quickly went out of fashion when peps came along. I think the Friendly Societies still going still offer them but most of their income is now via ISAs I came across as said tax free without mentioning ISA. But otherwise seems prohibitive for 1.45% which is same as premium bonds average.
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macq
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Post by macq on Jun 10, 2018 0:01:26 GMT
from a quick look on the NFU web site it looks like they also do lump sum with profit bonds.Think as they add a yearly bonus which can't be taken back i believe(not guaranteed but like IT's they hold money back in good years) and a terminal bonus from investing in shares etc.o would expect much more then the 1.45% mentioned in posts as its basically a multi asset fund but they do have a money deposits one which pays a daily bonus which is rounded up at the end of the year which could be the lower rate product They do have an ISA but i think the appeal is the money goes in for 10/15/20 years and you don't have to think about it.Years ago the idea was for people who had no access to shares and that you were mutual investing with others so it was safer and you split the profit( So a bit like P2P  ) with the payout at the end.Which is why years ago they were a popular door step product with people saving for a set date many used it for a childs endowment at 18 or 21 starting when they are born.I had one and at 16 when the rep came to the house with the cheque he set up camp trying to sell another one so guess the commission was good! Would assume there's still a lot of money tied up in them and the likes of the Pru still offer them and they may have there uses but the charges seem will hidden |
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littleoldlady
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Post by littleoldlady on Jun 10, 2018 8:10:53 GMT
Equities can be very volatile, but if you buy and hold for 20 years you will probably do very well. P2P tends to create permanent losses as you crystalise the loss when defaulted property sold at a loss Finally. a passive tracker portfolio is very easy to maintain compared to a self managed diversified P2P portfolio containing 50 + loans I've come across articles saying it's the end of 'buy and hold' for ever, owing sideways market. I've not observed such things for long enough,,what's (anyone's) considered opinion on this? It's got poor implications for opening small private pensions. It's probably too early to say that the market will move sideways indefinitely. However the days of holding a particular share are probably over due to a number of factors, the global economy, the rise of tech, political instability etc. How many companies that were in the FTS100 thirty years ago even exist any more? How many of the top 10 global shares existed 20 years ago? That's not to say that there is no future in equities for a buy and hold strategy, just that what you need to buy is a solid fund or an index tracker. If you strip out inflation, currency movements and sentiment then logically in the long term the total market should move in line with growth in the productive economy in other words about twice GDP growth.
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zlb
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Post by zlb on Jun 10, 2018 9:13:37 GMT
I've come across articles saying it's the end of 'buy and hold' for ever, owing sideways market. I've not observed such things for long enough,,what's (anyone's) considered opinion on this? It's got poor implications for opening small private pensions. It's probably too early to say that the market will move sideways indefinitely. However the days of holding a particular share are probably over due to a number of factors, the global economy, the rise of tech, political instability etc. How many companies that were in the FTS100 thirty years ago even exist any more? How many of the top 10 global shares existed 20 years ago? That's not to say that there is no future in equities for a buy and hold strategy, just that what you need to buy is a solid fund or an index tracker. If you strip out inflation, currency movements and sentiment then logically in the long term the total market should move in line with growth in the productive economy in other words about twice GDP growth. ah yes, thanks for refreshing my focus on the logic in this. Articles I'd seen didn't make distinction between to individual shares and funds.
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) with the payout at the end.Which is why years ago they were a popular door step product with people saving for a set date many used it for a childs endowment at 18 or 21 starting when they are born.I had one and at 16 when the rep came to the house with the cheque he set up camp trying to sell another one so guess the commission was good! Would assume there's still a lot of money tied up in them and the likes of the Pru still offer them and they may have there uses but the charges seem will hidden