investing in markets for income

MaserMike

MaserMike

Member
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329
Really boils down to what the OPs circumstances are, affordability, desires and risk taking. There’s lots of options and great advice for them as per this forum chat.

Personally I have chosen to do a mixture of safe/boring investments, but ultimately aim for quality of life and very early retirement….

I’m very fortunate to be mortgage free on my houses including buying outright a nice Cotswolds house last year, got my cars, loading up my pensions, savings etc. My moto in life has been don’t live beyond your means, if you can’t afford to pay for it ultimately don’t buy it and always have fall back plans.

Am I damned that I want to be loaded up with several mortgages (I.e. debt) and having to work until I’m a pensioner…. As per Wattie, interest rates and inflation are already starting to rise here too and those cheap mortgages are drying up.
 
Wattie

Wattie

Member
Messages
8,640
MaserMike said:
Really boils down to what the OPs circumstances are, affordability, desires and risk taking. There’s lots of options and great advice for them as per this forum chat.

Personally I have chosen to do a mixture of safe/boring investments, but ultimately aim for quality of life and very early retirement….

I’m very fortunate to be mortgage free on my houses including buying outright a nice Cotswolds house last year, got my cars, loading up my pensions, savings etc. My moto in life has been don’t live beyond your means, if you can’t afford to pay for it ultimately don’t buy it and always have fall back plans.

Am I damned that I want to be loaded up with several mortgages (I.e. debt) and having to work until I’m a pensioner…. As per Wattie, interest rates and inflation are already starting to rise here too and those cheap mortgages are drying up.
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Like your style-u got it sussed.
+Sound advice.
 
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williamsmix

williamsmix

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Messages
584
As ever, the economic news from the BBC is probably misleading this morning. They’re reporting 7.5% growth in GDP, which sounds good, eh(?)! But is that gross or net of inflation? If you take whatever measure of inflation you think is correct (also a bit of a joke) out of it there’s not a lot left! The same can be said for investments that are not generating enough income to keep up with inflation … and this is a very big issue. We can think we’re generating income and doing ok but we’re not even treading water.
 
Wattie

Wattie

Member
Messages
8,640
williamsmix said:
As ever, the economic news from the BBC is probably misleading this morning. They’re reporting 7.5% growth in GDP, which sounds good, eh(?)! But is that gross or net of inflation? If you take whatever measure of inflation you think is correct (also a bit of a joke) out of it there’s not a lot left! The same can be said for investments that are not generating enough income to keep up with inflation … and this is a very big issue. We can think we’re generating income and doing ok but we’re not even treading water.
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Trust nothing but your own instinct.
 
lifes2short

lifes2short

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5,867
i have had a number of residential lets for a couple of decades now and never had any issues from tenants and that's mainly because all the properties get refurbed and are in tip top condition and tenants treated with respect, if you rent out a sh1t hole then you're asking for trouble eventually, commercial lets are good, long leases with good covenants, but not high street stores, out of town sheds/units are good target now or even land where you can put a number of shipping containers down is a bloomin good earner
 
GeoffCapes

GeoffCapes

Member
Messages
14,000
williamsmix said:
As ever, the economic news from the BBC is probably misleading this morning. They’re reporting 7.5% growth in GDP, which sounds good, eh(?)! But is that gross or net of inflation? If you take whatever measure of inflation you think is correct (also a bit of a joke) out of it there’s not a lot left! The same can be said for investments that are not generating enough income to keep up with inflation … and this is a very big issue. We can think we’re generating income and doing ok but we’re not even treading water.
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In a couple of months inflation will be calculated on millions of things rather than a few thousand as is now done.
The article I read estimated that the 'real' inflation figure is currently around the 12-13% level rather than what is currently being reported.
Scary stuff indeed!

Interest rates will have to rise further and rise very steeply. I'm guessing we will see 5% in the not too distant future.
Even then, it's still no where near what they were when I first started work at 16 for the Prudential Mortgage Company.
16-17% mortgages we were doing. And lots of them!
 
williamsmix

williamsmix

Member
Messages
584
GeoffCapes said:
In a couple of months inflation will be calculated on millions of things rather than a few thousand as is now done.
The article I read estimated that the 'real' inflation figure is currently around the 12-13% level rather than what is currently being reported.
Scary stuff indeed!

Interest rates will have to rise further and rise very steeply. I'm guessing we will see 5% in the not too distant future.
Even then, it's still no where near what they were when I first started work at 16 for the Prudential Mortgage Company.
16-17% mortgages we were doing. And lots of them!
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Exactly! We have to think about the level of inflation we are experiencing personally because, if you have say 60K to invest, the value of that is constantly being eaten away by your own inflationary experience and that’s the minimum hurdle you have to try and beat before you’re actually getting anywhere at all! The National official figures for CPI and RPI - the ******** they teach you to reference at Business School - is pretty meaningless at an individual level … as people are going to realise very soon.
 
Wattie

Wattie

Member
Messages
8,640
comments above re inflation/interest rates are all on the money.
The trouble is, if interest rates are to approach levels anywhere near those touted the entire system will collapse before they do.

Central banks are trapped in the bs they have created.
 
j s pollo

j s pollo

Member
Messages
162
Oil I suspect will be the thing in the future as the world goes green and the demand for electric cars continue to rise the demand for oil will tumble year on year well into the future and many country's rely on the income they get from oil to keep their country's afloat.

So as the world demand for oil drops year on year country's will be forced to continually increase the price of their oil to compensate for their lost income .
So as I see it this could be a winner put your spare cash into oil wells and if you are part of the top one percent thats got all the cash stashed off shore may be worth a look into but i suspect they already know
 
williamsmix

williamsmix

Member
Messages
584
Wattie said:
comments above re inflation/interest rates are all on the money.
The trouble is, if interest rates are to approach levels anywhere near those touted the entire system will collapse before they do.

Central banks are trapped in the bs they have created.
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Yes, absolutely! After the Bank Bailout they suppressed interest rates to reduce the debt burden, which enabled asset values to recover. Enter the ring COVID followed by his best mate INFLATION and in this round the Central Banks can no longer suppress rates … Asset values are going to take a hit. But, we don’t know how hard. Maybe the Russians will help to determine that!
 
Froddy

Froddy

Member
Messages
1,072
Hi karatemaserati,

If your 60k is to go into the markets, could I suggest this strategy for you? It's called a "covered call".

The idea is that for every 100 shares that you buy in an "optionable stock" in the US market, you can sell options against that stock to collect premium.

If, for example, you bought 200 shares of SPY (which is the S&P500 ETF) at $440.46 (as of yesterday's close), that would cost you £64,952.

The expected move for SPY between now and 31/3 (the next quarter expiry) is plus or minus $32.36

If you sold 2 options contracts against your shares at the current strike price and at 31/3 expiration, you would collect $1,487 per 100 shares, or c. $3,000 for your 200 shares.

If the price of SPY rose by $14.87 or more during this period, the purchaser of the options might assign the contract and force you to deliver your shares at $440 per share. You'd surrender your shares at that price, but you'd keep the $1,487 per 100 shares which you'd collected in premium. You'd then buy the shares again at market price. Or, if so inclined, prior to assignment, you could buy the options contract back at the market price, pocketing the premium you'd collected to that date and hold onto your shares.

If the price of SPY fell at expiration, you'd keep the $3,000 and your shares would lose their value, but you'd rinse and repeat your option premium sale.

I've chosen the next quarterly expiration, but you could do this week by week, month by month (or even a couple of days in advance if you wanted to).

I've also chosen an "at the money" premium sale. You could go out of the money to reduce the risk of assignment; as you can see from the options chain image attached, the premium per contract reduces the further you go out.

Here's the blurb:
Covered Call Definition (investopedia.com)

96748
 
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Wattie

Wattie

Member
Messages
8,640
Wattie said:
Inflation at 40 year highs.
Central banks trapped.....raising rates to 1-2-3% isn’t gonna deal with inflation at 7%.
(Last time CPI printed this high interest rates were at 11.5% in the US)
Beware.

(If you don’t think there’s a problem how many of you could afford a mortgage rate of 4-5%)


Gold GBP 1/1/2016 £23,200kg
Gold GBP 1/6/2016 £29,156 kg

Gold GBP 10/2/2022 £43,338 kg.
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24/2/2022 GBP £47247kg
 
midlifecrisis

midlifecrisis

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Messages
16,278
Wattie said:
Especially when they thought NATO had their backs.
Think Afghanistan.
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NATO is a defensive organisation. If Russia attacked Latvia, Lithuania or Estonia it would be a different scenario.

Belorussia looks at joining in. Hopefully, Ukraine will resist.
 
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