David McCarthy gives advice on Galway Talks, 25th October 2012
30 Oct 2012 | No Comments | posted by david | in Blog
Question: I retired from the public sector some time ago and have had my lump sum on deposit. I’m wondering what options I would have to invest these monies long term?
Answer: If you have no need for the funds over the next few years you would be better off to move some funds off deposit into a longer term investment over circa 4 years. Interest rates on 1 year deposits at the moment are in the region of 3% but will continue to fall over the next year or so. A longer term investment might be more suitable for your circumstances and if you are conservative then you could opt for a bond that provides a Capital Guarantee. There are quite a number of options currently available all of which have different features.
Question: A listener contacted us to advise that he presented his bank with a proposal to borrow €1m for an investment property. This individual has considerable assets and could in fact purchase the property outright however it would be far more advisable for him to borrow at least a portion of this sum. The bank in question would only give him 60% of the monies he required. As a result he is not proceeding with the investment.
Answer: This is quite a common problem whereby the Banks are not providing what I would describe as ‘normal’ finance on acceptable terms. Essentially they are telling this individual that they do not want to provide him with the finance when they offered such a low lending facility. Once again this points to the overly conservative attitude on behalf of the banks, which is stifling both the property markets and small businesses.