Lump Sum Investment

[Slaught3r]

Question for all the financial guru's out there.

If I wanted to invest a lump sum and have that lump sum pay out interest per month over a period of time - what do I call that? An Income booster? Looking to see where I would get the most interest.

The amount will be between 3 and 5 mil but I don't want to just invest it and then someone else enjoys it when I pass away (no kids, but I am married so will invest some for the better half to help her when I am no longer here - also leaving her the house anyway and there is a 2m payout for her when I pass) - would like to reap the benefits of it in the short term, without spending the capital amount.

Apologies if I don't make a lot of sense, but not sure how to structure the question otherwise. Also not much of a financial megamind - so not really sure what my options are.

BTW - am 37 atm and also have other investments which I am not touching, including investment at AF not allowed to touch until I am 65, an annuity which I am contributing to monthly as well as a provident fund at my work.

Any suggestions?

 

[Gtx Gaming]

Buy a house and rent it out , you reap the benefits from the start and your capital amount would be what the house is worth, it just wont have it available if you need the money right now , as you need to sell the house first to get the money back. The house value would also increase overtime.

So you will be making money off the rent monthly and your capital amount will grow.

 

[BeLgaRiOn]

I would invest in a few student properties around a university. This will ensure that you have a steady source of income as the demand for such accommodation will always be guaranteed. High demand, low supply = great rental returns.

 

[chrisc]

Try Finbond Bank. They offer 10.75% on participation bonds and pay interest monthly. 5 year period

 

[Patty]

I've been investigating unit trusts. A lot of them are generating a return of 20-30%.

 

[froot]

I've been investigating unit trusts. A lot of them are generating a return of 20-30%.

I've got money invested in unit trusts, and sitting on 24% for the year currently (estimated based on YTD return). The past two months have been really rocky though. Take away this really rocky 2 months and I would have been sitting on target of 34%.

 

[Gaz{M}]

Sounds to me like you have enough other investments already to retire on.

Buy a Lamborghini with your R3 bar and enjoy your life.

But seriously, it is impossible to give advice not knowing your financial situation in detail. Maybe pay a financial advisor for a consultation to give some options to you.

If it was my money, I would split the lump sum into equal parts of the following:

1) 1 property to rent out
2) A decent balanced unit trust
3) Some Top40 ETF's
4) Some government bonds
5) Some cash in a money market

That way, no matter what, I have a balanced portfolio and can sell units or take dividends as income. There will be tax matters to consider, but the investment houses give you that info anyway. Buy each from a reputable investment house. Don't buy through a financial advisor or wealth company as they add on a few % commission.

 

[Slaught3r]

Thanks for all the replies guys - appreciate the input.

I was considering buying a townhouse or two and letting them, but I was put off by a mate of mine who did the same and had to fork out 20k to fix the place up after some numbnuts wrecked it after not paying rent for a couple of months.

I will check out Finbond and see what they offer - thanks for the tip.

Unit Trusts are definitely an option - will speak to a FA and see what my options are.

I don't think buying a Lambo will yield me long term gains... I have an uncle who is a Broker for Absa, might have a chat to him and see what my options are. Still waiting to see what exactly what the amount will be. Was also considering opening up a business for my wife to operate on the side, but the capital layout for a business is significant and it is pretty risky.

Again, thanks for everyone's input.

 

[Freshy-ZN]

Invest R300k in a herd of Bonsmara cattle, which are managed as your herd on the farm. You pay monthly rate per animal and get the sale price per head less running costs. Without the capital outlay normally required for land this kind of "farming" provides attractive returns. Thats what I would do....

 

[Slaught3r]

Invest R300k in a herd of Bonsmara cattle, which are managed as your herd on the farm. You pay monthly rate per animal and get the sale price per head less running costs. Without the capital outlay normally required for land this kind of "farming" provides attractive returns. Thats what I would do....

That is a bit out of the ordinary...

 

[atomcrusher]

Invest R300k in a herd of Bonsmara cattle, which are managed as your herd on the farm. You pay monthly rate per animal and get the sale price per head less running costs. Without the capital outlay normally required for land this kind of "farming" provides attractive returns. Thats what I would do....

With the recent mutterings about land redistribution in SA "a-la-Mugabe / Zimbabwe situation", I doubt that long-term investment in farming / livestock would be a safe bet.

 

[Rocket-Boy]

That is a bit out of the ordinary...

Freshy is a little out of the ordinary
I think the mountain air is getting to him...

 

[air]

@F-ZN - care to provide more detail?

 

[Slaught3r]

Freshy is a little out of the ordinary
I think the mountain air is getting to him...

I guess too much of a good thing is bad for you...

 

[Verde]

After the Abil disaster, you must have balls of steel to lend Finbond money.