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What To Do With Excess Capital?

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  • 13-03-2016 7:30pm
    #1
    Jasonsc
    Registered Users Posts: 78 ✭✭


    My ltd company is doing quite well since being started in late 2014. It's an internet company with low overheard and fantastic margins, and I'm now at the stage where I have money sitting in my business current account.

    I don't want to just leave it there to be eroded by inflation. My thinking is I'd like to put some amount in a low risk longterm investment - bonds, savings account, something like that. Then place another (smaller) amount in a slightly riskier investment - maybe with a robo investor company. And finally, reinvest capital in my business to grow it, and of course have some level of cash left in the bank as a cushion.

    Ideally I'd like to place a portion of monthly profit into the longterm safe investment, and the slightly riskier one.

    I have a few questions about this:

    1. Could you recommend a low risk longterm investment for a business? I was thinking An post bonds, but I don't think they're suitable for a ltd? Maybe a savings account with a bank is the best option here?

    2. Any robo investor companies in Ireland? I can't find any. Germany seems to have a few, but only seem to accept Germans. There's plenty in America that only accept Americans - although I found https://www.hedgeable.com/ which seems to accept non-residents. Transfer fees from EUR to USD and vice versa might be an issue.. but I mostly get paid in USD, so I could open a US bank account perhaps and have a portion of income sent there to invest with hedgeable.

    3. How does my general approach sound? Some very secure investment, some slightly riskier, and then also investment back into my own business.

    Any other general advice about this or recommendations where I can do further research would be appreciated. Thanks!


Comments

  • Options
    #2
    pedronomix
    Closed Accounts Posts: 997 ✭✭✭pedronomix


    Number?


  • Options
    #3
    Jasonsc
    Registered Users Posts: 78 ✭✭Jasonsc


    Should have mentioned that. I guess right now I'd like to invest 20-30k with another 1-5k per month.


  • Options
    #4
    pedronomix
    Closed Accounts Posts: 997 ✭✭✭pedronomix


    These are reserves, not capital and to be blunt, not a hill of beans in terms of a meaningful investment fund. Can you not put the money to work in the business to further increase profitability? If not, getting rid of any debt is the next best use. Next up is, get it into a pension. Last is grow the sum in the company, most inefficient and generally very generous to the taxman!


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    #5
    modmuffin
    Registered Users Posts: 407 ✭✭modmuffin


    Have you thought about putting it into a pension?

    Something I am considering myself at the moment. I have been told (yet to confirm) that you can draw down the pension from the age of 50 if you "retire" all interest in your current company, however there is nothing preventing you from continuing to work for another company and perhaps transferring your clients to that newco


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