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Investing for a comfortable income

You may have reached a point where you’d like to generate regular payments from your assets that enable you to live comfortably or allow you to afford the nicer things in life. This is especially important for those looking to retire, fund care costs, pay for education or simply top up your main earnings.

Investec can help you achieve this with a tailored and diversified investment strategy. It’s unlikely that your dividend and interest payments alone will give you all the cash flow you need, so our focus is on achieving the right level of income at a degree of risk that you are comfortable with. 

You may also wish to make allowances for the effects of inflation with a strategy that aims to preserve the value of income from your portfolio in real terms. Our Investment Managers can discuss the various options with you and structure your portfolio to meet your personal requirements.

We can help

Find out how we can help you invest for a comfortable income.

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Clients who used UK Investment Managers achieved investment returns 27% higher than DIY investors during the course of 2018.

Legg Mason, 2019

Keen to maximise your investment income? Consider this.

What’s the right level of risk?

How long will your money last?

Do you need the help of an Investment Manager?

How much income do you need to be comfortable?

Is residential property a good source of investment income?

What’s the right level of risk?

In investing, as in life, everyone’s appetite for risk, and their tolerance for making losses, is different. Some of us prefer a sedate walk in the park while others love extreme sports. When it comes to investing, some of us are highly risk averse, preferring savings accounts, while others may be keen on hedge funds which are seen as higher risk investments.

 

There is no such thing as a risk-free investment since without risk there is no reward. Remaining invested for the long term rather than trying to actively trade and time the market is one of the best ways to minimise risk.

 

Most important of all is understanding your personal risk appetite and ensuring that you are always comfortable with how your money is invested.

How long will your money last?

Your wealth is much like your health; the better you look after it, the longer you’ll have it. By planning carefully and giving proper consideration to your expected outgoings and sources of income, it is possible to ensure long-term prosperity.

 

Withdrawing lump sums from your savings and investments portfolio will reduce your base capital, meaning your money will have to work harder and may run out sooner.

 

Inflation is the big enemy of long-term savings pots so it’s vital to make allowances for this in your strategy. Our Investment Managers will work with you to build portfolios designed to preserve and enhance your investments over time.

Do you need the help of an Investment Manager?

Despite the possible attractions of managing your own portfolio, most people lack the expertise, confidence and time to manage their investment portfolios effectively by themselves. Our experienced, professional Investment Managers will actively monitor your portfolio on a regular basis, reviewing and optimising it to help keep it on track with your investment objectives.

 

We also draw on our large in-house research team to provide real-time analysis and insight into investment opportunities across all sectors, territories and asset classes.

How much income do you need to be comfortable?

There is no one-size fits all answer as the level of income you require is as individual as you are. It depends on your lifestyle, age, health and goals.

 

Your regular expenses will range from bills and food shopping to potential big ticket items like mortgages and maintenance payments. That’s before you even think about holidays and hobbies or paying for education. The balance is about drawing enough income from your investment without eroding the total value.

Our Financial Planners can do what’s called cash-flow modelling, which aims to predict the amount of income you might need based on your goals and financial situation, and work backwards to figure out how much you can sustainably withdraw from your investments.

Is residential property a good source of investment income?

There is something reassuring about bricks and mortar. From buy-to-lets to fixer-uppers, the tangible nature of property, and its reputation as a safe, inflation-beating investment, means this asset class remains popular.

 

The average rental yield on residential property in the UK is about 3.53% but it does vary across the country¹. It is however, becoming less tax efficient and with stamp duty becoming more expensive, residential real estate as an investment is becoming less attractive than it has been in the past.

 

As an alternative, commercial property funds, known as Real Estate Investment Trusts (REITs), offer a ready-made and professionally managed portfolio of commercial properties – from office blocks to retail parks that you can invest in, commercial property is a widely-held asset class and your Investment Manager will make sure your portfolio is fully diversified to balance risk and performance.

 

¹ Sevencapital.com. Expected rental yields across the UK. Figures correct as at 31 Jan 2020.

Ready to start a conversation?

If you’d like to have an informal, no obligation conversation about how we can help you invest for a comfortable income, please get in touch.

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Dean has always been questioning and positive on our behalf, fulfilling our aim of providing a good income from our investments whilst steadily maintaining reasonable growth of our capital.

Alison, Bristol

Your next steps

Preserving your wealth

With the confidence that comes from having your money invested strategically to preserve your wealth, you and your family can focus on achieving your life goals and dreams.

Want to learn more?

Investec can help you on the next exciting stage of your financial journey.

Our Investment Managers are ready to help you

Let us create the right portfolio to meet your personal goals.