Financial Channel

To the savvy investors out there.

I have $200K to invest.
I need this money intact back in my hands in 2 to 5 years.
What kind of investment vehicle should I be looking at and what are the tax implications?

Thank you very much.

Don't put it all in one place, you might want to break it up.

If you want to play it very safe then GIC's are for you. With $200K you can demand better than the posted rate of interest, not a lot better, but a little. Similar to shopping for a mortgage rate, ask around and don't be shy about asking for an extra 0.5%.

with 200k to play with you should be seeking professional advice, not asking on RFD.

the exception would be if you had significant previous experience with investing and what not. however, since you created this post it is obvious you have next to no experience.

if you want a 100% safe investment, then get a GIC or high interest savings account. but again, if you have 200k, see a pro, they will get you much better returns.

keep in mind that market is in a downturn at the moment and for all we know it may be an extended one!

Didn't want to go through a pro cuz all I want is 5% return or better.
Those pros just have their own interests in mind and want to push the products that give them the most commission.

Let's say a GIC is going to give me back about $900/month.
Is interest income taxed at the same rate as capital gains?
Can I stick the investment under my wife's name since she earns less than me?

Or maybe a safe income trust fund... because the dividends from income trusts are taxed less. Maybe something like Yellow Pages Group.

We're not talking like a million dollars here, I too don't think it's worth paying those so-called "professionals" for some $200k. Just do some homework, and of course understand that there are very few options if you want 100% safety in return.

Put it in Money Market Fund or a fixed term GIC if you want safe return. It would not be maximum.

If you want maximum return .... gotta diversify the $200,000 into several MFs.

Good luck achieving your goals on your own. Some people are able to do it. Some are not.

Given your expectations of finding a GIC to pay you $900/month (5+%) for a 2-5 yr time horizon, you will need luck.

Your perception that professionals put their interests over their own is unfortunate. There is the odd person who acts in an unethical manner. I am not certain what the regulations are like in British Columbia, however if a client engages me to work for them, I can lose my license if I put my interests ahead of my client. If I choose investments that are not suitable for the client, I can lose my license.

In the same vein, if I do work for a client, and I do my ethical duties and place them in an appropriate investment vehicle, making them (in most cases) more money than they could have earned on their own, do I not deserve to get paid?

Best of luck to you!
M

Buddy ... you really need to take some courses about taxes.

Interest income is 100% taxable ... Capital Gains is 50%.

Dividends are less as well. A good dividend fund would not be taxed as high as interest.

And if OP wants the money back after only 2 years -what happens then? He can’t get at it because he has locked it in…….My apologies for not being concise in my post? I should have been clearer.

If you lack trust in professionals, then expect a poor return if you plan on doing this on your own. By the way, the professionals do not cost money if you deal with the investment branches of the banks. The professionals that charge fees are private banking and wealth management firms. Do some research before you make a misinformed statement. And if you are very risk averse (like you stated), do not expect a high ROR if you want preservation of capital. Perhaps you should visit a professional to determine what you really want.

For example, visit an Investment Advisor at TD Waterhouse. They will structure a tailored portoflio to match your needs and you will get charged NOTHING.

These two statements prove you need to familiarize yourself more with investments and the services professionals can provide.

The first statement is very ignorant. An advisor at the big 5 banks are not advisors that work for Primerica.

Interest is taxed different from capital gains and dividends as mentioned previously.

In a case where the OP is pretty much looking for a GIC or cash equivalent investment, what is the (net) added value of an advisor? I can see some tax implications but apart from that, I get the distinct impression that he/she is not looking for stock/mutual fund advice.