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.