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The Best Way To Invest 100K

How to invest 100K

This is a question we are often asked. Well, there are many ways to answer this:

There are a multitude of ways to invest £ 100k But you should first establish what you are after – income or capital growth, or perhaps both?

If you are after income, you will probably be better off investing into bonds or to give this type of financial instrument its proper title, ‘fixed interest’. This means you lend someone your cash for a pre-determined period in return for a fixed return or yield every year (paid monthly, annually or perhaps all at the end), and at the end of the term, you then receive all of your capital back.

So this type of investment does not actually give you any growth at all, it only gives you the annual yield or interest, that is it. You need to be careful that you are not losing money if inflation is higher than the annual yield you are being paid. For example, if inflation is running at 3% p.a. and your income is only 2.75% p.a. then your capital is actually being eroded by 0.25% every year you are stuck in the bond.

how to invest 100k
best way to invest 100k

Interest rates are currently at very low levels and have been for almost a decade now. So if you want to invest for income in a really safe place like National Savings, you will get a very small annual yield of perhaps 1.4%. That is because you are taking very little risk by lending money to HM Government. If you want a much higher yield then there are wind farms and other ‘green’ investments advertising annual interest of up to 10%.  However, be aware that these types of investment are non-regulated and are generally only for non-retail investors. In reality, that means that you are actually investing in someone’s business. Also, it is a non-regulated business this means you are not being treated as a ‘retail investor ‘ so under the rules s you are giving up all rights to compensation if any of your capital (perhaps all of it) disappears.

Talk to us if you want to invest for income safely

Invest 100k

For growth.

To achieve actual growth you need exposure to equities (shares) and with this comes more risk. With shares you are not lending anyone your cash, instead, you are buying actual shares in their business. If that business does well, your shares will increase in value giving you real growth. However the opposite is also true if that business has a rough patch or perhaps the general market falls due to a recession which affects sales, then the share price will fall and on paper at least, you will have lost capital. Shares also, however, give you a regular dividend, if the company is making sufficient profits to pay a dividend. The average FTSE 100 company, for example, pays a dividend of around 4% which is substantial given where interest rates are currently sitting.

If you are going to invest 100k into shares, however, there is a huge range available from less risky utility companies that pay high dividends, to high-risk shares in mining companies that many pay little or no dividend but could double in price, or plummet in value very quickly.

How to invest 100000

Whether you want a high risk/high growth investment, or a much safer one that pays you a predictable income, talk to us about your options.

DISCLAIMER: Nothing in this article should be construed as investment advice of any kind. The opinions here are those of the author and do not constitute advice in any way. You should not make any investment decisions based on this article and should seek Independent advice from an authorised and regulated investment adviser such as Templar European Investment Advisers.

Templar is an Independent, fee-based firm of investment advisers and is licensed to provide investment services by the Malta Financial Services Authority in all 28 EU Countries. Templar is audited annually by Mazars (Malta) Ltd.

copyright 2017 – Templar EIS Ltd, trading as Templar European Investment Services