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How old is your brother in law? Does he have any prospects for new employment? Is he coming up to retirement?
At my age, I am 40 with 24 years on my mortgage, I would keep the money safe because I'd have to pay my bills until I found a new job. Chances are I'd get a lower wage as well, so I would need that money over time.
If he falls on hard times, he may need to borrow money against the property again.
How much is he paying in interest? The interest rates are ridiculously low, and so any return of 4% or more is likely to be worth more to him in money terms. I would consider P2P lending - I'm currently getting about 8% from one site.
There is a simple answer, can he get a return higher than the mortgage cost?
rates are low, but so are returns at the moment.
I have had a similar case of whether to invest the money or payoff a chunk of the mortgage. I have invested the money with Zopa (p2p lending) at a rate of 6-10%, my mortgage is 3% so its worth doing for now, but the money is locked in for 5 years (1% charge to release early).
If mortgage rates start going up then repaying the mortgage may be the better option
Funding Circle is getting me about 8%
Put in, say, £100. Lend out to companies (spread it to reduce the risk). Loans can be anywhere between 6 months and 5 years. When you get enough interest, lend it out. Minimum you can loan to a loan request is £20.
You can sell you loan at any time, charging a premium if you can get away with it. Loan requests are graded. A grade you get about 7% interest, down to grade E where you get 17.9%.
I've lent to about 200 companies in 3/4 years, a few have defaulted but are repaying anyway, and my losses are far offset by my gains (hence my 7.9% return).
Worth a try, seems more flexible than Zopa, but I could be wrong.
Bought some Bitcoin back in November and since then my investment has nearly doubled.
https://blockchain.info/markets
Bitcoin is seeing a huge amount of investment at the moment as people speculate on whether the Winklevoss twins will have their ETF (exchange traded fund) granted by the SEC.
https://www.bloomberg.com/news/artic...on-bitcoin-etf
Their ETF will basically be a $20m trust fund that trades off the fortunes of Bitcoin. If it gets the go ahead then it legitimises the electronic currency and some real players will begin punting in.
Bitcoin is now at an all time high, reaching £1000 per Bitcoin yesterday for the first time. Might be worth bunging a few quid into it and holding on for the ride, you never know, in a few years that Bitcoin might be worth £30,000 or more.
Even if the ETF doesn't get approved it would probably crash down to around $800 per Bitcoin then steadily recover again as it has done for the last few years.
If it does crash that low I'll be happy to buy more at the lower price because I'm confident in its future with or without the SEC.
I only wish I got in back in 2009 when you could buy 5,000 Bitcoins for $27
no where to invest or decent rates , so pay off and stop paying them interest , that will be your saving
Pay off mortgage now whilst rates are low. Nothing like being free of it. You can save up quicker with less overheads if you are careful and then choose to invest where you want. Interest rates will rise eventually, they have never stayed low like this in history.....
I'm in the mix for redundos too and have thought about the same thing. Personally, if I get the bullet, I'd all but pay off the mortgage and get a temp job anywhere to pay the other monthly bills.
The problem with your investments these days is that the markets don't make any sense, as why put money you've earned into something that could be worth nothing tomorrow. Your house is the most important thing, followed by Council Tax, home insurance water rates. Every thing else can be rationed according to your circumstances.
I guess it's all down to the individual and their age and family circumstances that will be the determining factor. My view has always been never borrow money, or if you have to, get out of debt as soon as you can.
http://www.moneysavingexpert.com/mor...ges-vs-savings
Interest of 2.9% means you need to find a return of 3.6%, for example.
There's no better way to invest than investing in property. Pay off the mortgage, sell house for profit and do same again
If Ninianclark's brother-in-law is a steady Eddie type then paying off the mortgage and becoming debt free would help him sleep more soundly. I'd class p2p lending and bitcoin as gambling rather than investing.
Adding some fact to this throwaway statement (not untypical for you).
This year I had £500 in my Funding Circle Account, i added another £500 over the course of the year.
Returns so far this tax year - £80.45.
Fees £7.79
Bad debt £8.61
That's mostly on £500.
Last year I made £56 on £500 - £0 bad debt.
Year before £36 on about £350.
In 3 years, only 4 companies have defaulted (all this year). The one's director has just repaid the loan, two of the others are repaying monthly, and the fourth is likely to default with me seeing nothing. But, they only owe me about a fiver anyway.
So, 4 companies out of circa 200 I have lent to over the years - and I don't lend any company more than £20. Could be risky to some, but for me the gains make the very small risks worthwhile. Plus, you're helping SMEs...
Some people run to the cash machine if there is a hint of problems - there's caution, there's risk, there's sensible risk and then there's paranoia. Technically speaking, you are "gambling" putting money into Barclays or HSBC. Yes, the Government back up the first £75,000, but how long would it take to get that back? No-one really knows do they?
I appreciate you are "considewably more wicher than yow", This post was directed to someone with a touch more intelligence (and class) who could has the ability to multiply the figures up and compare it to the interest remaining on a mortgage and/or other investments.
I see you've not offered any advice, yet, and the OP would probably welcome some advice from an investment egg head like you. I would too because my ISA paid the same interest as above on an account holding 18 times more than my P2P account.
Last edited by Kris; 04-03-17 at 07:29.
Anything guaranteed will get you a hefty 1% if you are lucky.
Invest in shares and you are at risk.
The lower zopa rates have a guarantee pot to protect funds, but that will only work as long as that find does not run out.
The zopa plus fund has a built in 3% assumed loss rate. So I lend out at an average of 10% (unprotected) but the advertised return is 7%. Though the loss rate could be higher or lower.
In my opinion your money is at bigger risk investing in shares.