How to invest the income of a in-shore Limited Company?

[Financelady45]

Hello Friends!

I shall have a decent amount of money in a inshore EU company, approx 500K - 700K over 3 years (After corporate taxes).

Someone has suggested me to put all this money into real estate and live with the income coming from the real estate properties.

I am not in a hurry, so I would rather find a better way to make an automatic income.

A friend of mine told me that some EU insurance companies offer you a monthly tax free income if you move all money to their account.

Do you consider this a good solution? Do you have any other idea?
Thanks!

 

[void]

better way to make an automatic income

"automatic" passive income is a myth and nothing like this exists
even if you don't have to invest your own time or knowledge there is always certain level of risk that is taken - don't get yourself fooled by promises

 

[Financelady45]

"automatic" passive income is a myth and nothing like this exists
even if you don't have to invest your own time or knowledge there is always certain level of risk that is taken - don't get yourself fooled by promises

Thank so much for your comment. So you would basically invest in real estate, correct?

 

[void]

So you would basically invest in real estate

no, I wouldn't because it obviously applies to real estate sector too - in my personal experience taking care of the maintenance, hassle with tenants and making a good deal buying the right property in the first place can be really difficult - not mentioning that investments into real estate are often (sure not in all countries) heavily taxed and you're losing 3-10% with just purchasing
yes, somebody can take all the care about it for a reasonable fee but the reality is not that bright I'm afraid

can't give you any serious advice since I don't know anything about your background (age, family, plans for the rest of your life, experience and knowledge, ...) - you simply need to know what do you want in general

my (probably slightly biased) opinion is that one shouldn't trust others too much when it comes to money...
the general free advice is "invest into things you understand, if you don't understand anything then invest to education" - however this maybe works if you're thirty

 

[Financelady45]

no, I wouldn't because it obviously applies to real estate sector too - in my personal experience taking care of the maintenance, hassle with tenants and making a good deal buying the right property in the first place can be really difficult - not mentioning that investments into real estate are often (sure not in all countries) heavily taxed and you're losing 3-10% with just purchasing
yes, somebody can take all the care about it for a reasonable fee but the reality is not that bright I'm afraid

can't give you any serious advice since I don't know anything about your background (age, family, plans for the rest of your life, experience and knowledge, ...) - you simply need to know what do you want in general

my (probably slightly biased) opinion is that one shouldn't trust others too much when it comes to money...
the general free advice is "invest into things you understand, if you don't understand anything then invest to education" - however this maybe works if you're thirty

Hi
Thanks for your comments.
I am single, no kids. My dream was always to generate an automatic income of 1500-2000 euro and travel, write books, live in different places. to be honest I did a few great deals and now you can see where I am I have been working really hard for 10 years, now middle thirty, after no holiday for many years, i am thinking about the next steps. what would you do if you were me?

 

[Nyep]

A friend of mine told me that some EU insurance companies offer you a monthly tax free income if you move all money to their account.

Yes, this is called an Income Annuity. There are fixed income annuities, inflation-adjusted annuities, etc. with plenty of options on the guaranteed sum returned. I don't know about options in the EU, but there are plenty of options in the US. They are very real and usually very safe (just make sure you go with a large player).

Here is a sample income annuity estimator from a large US broker. As you can see, with 700K euro you can receive a pretty nice monthly income. Definitely better than what you had in mind.

**** Note that while annuities are a very safe way to receive income in the form of a pension-like monthly deposit, they are not a good vehicle for people looking to increase their wealth (=invest actively) or leave a substantial inheritance.

 

[Nyep]

If you want to be serious and in full control of your finances, you should read about F.I.R.E, where you will learn how to invest your money wisely and live off of your portfolio while maintaining or increasing your net worth. Start with ERN and/or MMM. Check out the Financial Independence reddit, and read on from there.

 

[void]

what would you do if you were me?

I'm the weirdest and most cynical person I know - hardly the person to give an average unknown John/Jane advises regarding life...

honestly my first thought was you should find a nice guy and have a kid (this would certainly give you new perspective )

now seriously - there are nice places in the world where you can easily live a really comfy life for 20k a year, take a breath, think, relax and study - you'll will surely figure it out
as Nyep suggests if you want a "passive" income you should understand the game first

 

[Financelady45]

Yes, this is called an Income Annuity. There are fixed income annuities, inflation-adjusted annuities, etc. with plenty of options on the guaranteed sum returned. I don't know about options in the EU, but there are plenty of options in the US. They are very real and usually very safe (just make sure you go with a large player).

Here is a sample income annuity estimator from a large US broker. As you can see, with 700K euro you can receive a pretty nice monthly income. Definitely better than what you had in mind.

**** Note that while annuities are a very safe way to receive income in the form of a pension-like monthly deposit, they are not a good vehicle for people looking to increase their wealth (=invest actively) or leave a substantial inheritance.

Hello Friend,

I just checked your link, its really impressive, you are right, its a pretty nice monthly income.
I personally like this solution:

Single Life with cash refund. You will receive this income for life. Your beneficiaries will receive a lump-sum payment of the original investment less income payments made to date.

A few questions:
1. Can the LTD invest money in this kind of income annuity?
2. I suppose, this will be merely income for the LTD, it means, I will get this as salary (Director) of the LTD, the LTD will make no profits and I will need to pay a few hundreds for social security and insurance. Correct?
3. Do you know who are the top 5 players?

 

[muhaddib]

Hello @Financelady45, kind of same position now but on a shorter term for the investment and diferent prespectives in life (for now)

Talk with a private bank, there are some options. I've done some investments this year on income founds. You buy them (there is allways a fee) and then, mothly they transfer the income to your account and decuct the tax (important as you are in the EU). The value of the fund is deppending on the markets so they will go up, or down deppending of the markets. However, in the past 3 months sice I subscribed them it did not change at all. It was 5 founds (for diverisificatio) and changes where 0.01 up or down on the funds.

So for now, I'm getting a monthly income already with tax paid and the inicital investment value is still 100% there

 

[jakonda]

Hi
Thanks for your comments.
I am single, no kids. My dream was always to generate an automatic income of 1500-2000 euro and travel, write books, live in different places. to be honest I did a few great deals and now you can see where I am I have been working really hard for 10 years, now middle thirty, after no holiday for many years, i am thinking about the next steps. what would you do if you were me?

I am a little bit confused by your name financelady45, previously worked on deals and now doesn't know what to do with the $$$... anyway...

In your place I will (first) go for a 21 days #holidays #offline #calm session just to clear my mind and try to find myself. Then I'll write my goals list and align my investment/retirement strategy to my goals and preferences. Afterwards, I'll check for "buy-to-let" investment opportunities (you've mentioned that RE is attractive to you), then pay for visit to professional fin. advisor, ...or maybe do some crazy things i.e. buy a turquoise Maserati...

 

[JimBeam]

Apart from many good advices already written I can give you one more: Do your homework! - meaning that you need to read about it and try and figure it out for yourself. You need to know what you're doing and how you can control whatever you're up to..

Little digression: recently I read a book written by Arnold Schwarzenegger (yes the I'll be back guy) named Total Recall: My Unbelievably True Life Story. Now, I knew very little about this guys life apart from that he's been a bodybuilder, and actor and a governor of California. But in this book he says how much "homework" did he do in all his business and he had a lot of them and later in investing: from real estate going to a point where he bought Boing 747 Jumbo-jet plane and rented it to an airline company. He learned all that by himself! I never actually admired him but after reading the book - he's my fucking hero. So, if you have free time - you should buy that one and read it - maybe just as inspiration.

Also, worth mentioning here is that if you have no idea how to invest - and you would have to take someone's advice - who's advice would you pick? I would listed what the #1 investor in the world has to tell me and IMHO that's Warren Buffett. And what he always proclaims is that you buy SP500 indexes. That's a basked of stocks of top 500 biggest companies in the world - and these companies are there to make money. That's a long term investment, associated with some risk, but on the long run it works since the biggest 500 companies are in the game to make money! Period. Even Buffett says that SP500 outperforms even his company can't beat them. Also worth mentioning that these companies that run these funds are multi billion dollar enterprises (some managing over 150 of billions of dollars) so these guys know what they are doing.

Homework links:
https://www.amazon.com/Total-Recall-Unbelievably-True-Story/dp/1451662440https://finance.yahoo.com/news/warren-buffett-says-couldve-turned-114-400000-230140222.htmlhttps://www.cnbc.com/2019/02/25/buffett-remains-bullish-on-index-fund-investing.htmlhttps://edition.cnn.com/2019/02/25/investing/warren-buffett-sp-500-stocks/index.htmlhttps://www.blackrock.com/us/individual/products/239726/ishares-core-sp-500-etfhttps://www.bankrate.com/investing/best-index-funds/