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Investing in your practice

To get a return on investment

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I've not really thought about my practice as an investment more a job, which is probably where I'm going wrong! At the moment it's me and a full time helper in a small rented office.

First world problems but I've got around £250,000 in cash and I'm scratching around for some worth while return which isn't easy

- buy to let isn't very appealing at the moment

- fhl are booming but will that be short lived

- no btc etc for me

- already maxed out my pension

- mortgage is paid off

Then I thought perhaps the best way to get a decent return would be to invest it in my practice, seems pretty obvious really, I could spruce up the office, go big on advertising, buy a block of fees etc.

How would you invest in your practice?

Replies (31)

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A Putey FACA
By Arthur Putey
10th Jun 2021 13:55

Good question! Probably depends on how long you want to keep working and whether you want to (one way or another) do what amounts to buying more work. And what your interests are.

The last thing I would do is put money into my practice, it gives me a decent living and taking on more staff to service more clients would just be a lot of hassle, at a time when there is a lot of pressure on fees, and other grief.

One thing you didn't mention is property development which is still buoyant depending where you are. I'm looking for a second business that doesn't involve selling my time or accountancy, but am not that interested in property.

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Replying to Arthur Putey:
Slim
By Slim
10th Jun 2021 14:27

I'm not looking to retire for about 15 to 20 years and agree I would have to take a step back and be the manager rather than the do'er and all the problems that involves.

I've done a few developments which gave incredible returns and I'd like to do more in the future, it's just finding the sites and they can be time consuming even if you have a main contractor ime.

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By I'msorryIhaven'taclue
10th Jun 2021 14:12

Buy and mothball a few new cars. Not electric or hybrids., of course. Maybe an Aston Martin DB11 and a Morgan.

Cash in post 2030!

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Replying to I'msorryIhaven'taclue:
A Putey FACA
By Arthur Putey
10th Jun 2021 14:37

If I had the space that's what I'd be doing, probably looking at 90s cars that are still off the mainstream and haven't already gone up that much.

Anyone near Gatwick could buy the Rolls-Royce breaker business from "Steve the Maniac Swapper"! There's good money in breaking Shadows and later models.

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Replying to Arthur Putey:
Slim
By Slim
10th Jun 2021 14:54

Some of the cars have already gone crazy, the price of some Skylines etc now that the Americans can import them :O Old Fords have gone mad. Shame I don't have any.

I thought about a 106 GTI but don't think it will ever make big money, I do have a couple of 90's cars an Exige and an S2000. The Exige hasn't done badly but I've spent a fair bit on it.

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Replying to Slim:
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By Mr_awol
10th Jun 2021 16:31

106 GTi was hardly iconic (although great fun).

205GTi on the other hand - but has already jumped in value and difficult to tell whether it will continue to do so or not.

I am tempted by an Mi16 - you can get them at a lowish price, and a lot of them were stripped for engine conversions in 205s etc which will limit their numbers. Whilst the engine had a fantastic reputation though, the car itself is no 205 and as such it is hard to tell whether the prices will eventually follow in their little brothers footsteps.

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A Putey FACA
By Arthur Putey
10th Jun 2021 14:43

Or buy a pub with enough space to accommodate the practice. While twiddling your thumbs during quiet periods you could knock out a set of accounts. And hold networking events, tax clinics etc. or accountancy pub quizzes. If you found the right place there's also be space in the car park to keep a few old cars. If you buy a going concern free house and it doesn't pay its way, then you have a change of use property development project to move on to. Actually I'm getting to like that idea ....... off to look on Fleurets!

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Replying to Arthur Putey:
Slim
By Slim
10th Jun 2021 14:56

Unsurprisingly there is a lot of pubs popping up for sale around me but the planners try everything to refuse planning to convert.

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Replying to Slim:
A Putey FACA
By Arthur Putey
10th Jun 2021 15:57

Does running an accountancy practice from a trading pub require change of use? Or is it working from home?

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Replying to Arthur Putey:
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By alialdabawi
10th Jun 2021 15:38

And have a steady stream of MDTP consultants visiting you site daily...

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Replying to Arthur Putey:
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By I'msorryIhaven'taclue
10th Jun 2021 15:39

Accountancy pub quizzes...just like Any Answers?

With Tallula on the door, karaoke-king DJKL, and alternative comedian Arthur Putey!

Reckon there'd be enough wet sales?

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Replying to I'msorryIhaven'taclue:
A Putey FACA
By Arthur Putey
10th Jun 2021 16:00

You wouldn't be able to keep up with demand on TDs special "saddos" quiz nights where you can play "guess the section"! Or a darts game based on Bullseye with "Tolleys Special Prize"

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Replying to Arthur Putey:
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By In a Daze
11th Jun 2021 00:25

If you buy a free house, you can make quite a good return on your investment. Quite a few pubs come with external buildings which can easily be converted into an office for your practice.

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By Justin Bryant
10th Jun 2021 15:42

I've always thought it a great shame that HMRC don't allow the public to invest in their tax investigation/litigation cases (to hire more HMRC staff etc.), as it would be win-win. I would put all my money into that if I could!

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blue sheep
By Nigel Henshaw
10th Jun 2021 16:19

Might be stating the obvious but if you were going to invest in a practice or buy fees there would only be two reasons for doing so - a) either you think you can improve whatever you buy and therefore the value increases or b) you dont have enough fees already and need the extra profit. A third reason might be if the practice you were buying into had something you felt would add to your existing business (staff, premises, a niche etc)

I have done it for both reasons, b) when I was first starting off and a) when I saw a badly run practice with good potential, once on my own and once with a partner. Each time it was an excellent investment but it comes with a time price and unless I had some life changing event I would not do it now, too much hassle.

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By bernard michael
11th Jun 2021 09:28

£50K in Premium Bonds has always worked well for me. If you have a wife/family you can lend/give them enough for a similar investment.
The advantage is that when a good alternative comes along you can access the money in days but in the meantime maybe win something

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By I'msorryIhaven'taclue
11th Jun 2021 13:53

Not much enthusiasm so far for investing in your practice, Slim. Not even a new office carpet!

How about investing in you instead? I'm thinking laser eye surgery £15k, plastic surgery £20k, and a month at an expensive health farm £15k; with a brand new Armani wardrobe to complement your new image.

Oh, and a fiver for a stick with which to beat off the women ;-)

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Replying to I'msorryIhaven'taclue:
Slim
By Slim
11th Jun 2021 14:35

Hahaha

I didn't expect much but I thought there would be more enthusiasm than this!

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Replying to Slim:
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By Hugo Fair
11th Jun 2021 16:03

What ... before trying out I'msorry's suggestions?

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Replying to Hugo Fair:
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By I'msorryIhaven'taclue
11th Jun 2021 16:32

I suppose Slim's alternative is to invest in sending the kids off to University.

With £250k, you might have to draw lots if you've more than two sprogs ;-)

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Maytuna
By DJKL
11th Jun 2021 16:50

I would be really boring and if extracting cash is an issue (not sure if a company) invest within say the company in things that are readily portable like investment trusts where dividends are not taxed within the corporate wrapper (though issues re how long until retirement and such investments changing company status re BPR and BADR might influence my choice)

If extracting cash is simple (sole trader) then ISAs etc would be my route though I might then just drip feed into trackers etc as well as/ instead of ITs..

As I am currently in the position of having agreed a sales price for our Swedish house but not being able to actually get to Sweden to finish the transaction , at least until after 31st August per the Swedish rules, this has really reinforced my view that readily saleable assets with virtually no holding costs are the way to go.

Of course everyone has different things they like and things they do not, for me ITs are simple, low maintenance, the only time commitment being selecting which ones at the start and occasional monitoring of what is happening, a world spread with a spread of risk, especially if acquired slowly over time, seems one of the simplest things to buy, hold and if need be liquidate.

Frankly I would not be enlarging your practice unless this is actually your aim in life, for one thing it is more eggs in the same basket, for another it involves more work.

I suspect this is all because as I get older the most precious thing to me is my time, I would not want to invest in anything that takes time/makes my life more complicated.

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Replying to DJKL:
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By I'msorryIhaven'taclue
11th Jun 2021 21:48

I thought that was a Volvo I spied parked on the drive in your avatar!

We've touched on the matter before, DJKL, but the architecture is so obviously neo-Scandinavian it can only be classical Swedish; and, based solely upon your picture, I'd warrant in the Hallerud vicinity, or thereabouts. Definitely not Scotland, as there are no tenements ;-)

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Replying to I'msorryIhaven'taclue:
Maytuna
By DJKL
11th Jun 2021 22:11

Correct, though my eyesight is not good enough to tell if it is a Volvo (hire car) or my old (j reg) , now long gone, Mercedes 300

Edit-Having checked the picture to my folders, it is Xmas 2005 and it is the old Merc, it will be back when the ferries ran Newcastle-Norway-Gothenburg and getting over was straightforward.

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Maytuna
By DJKL
11th Jun 2021 22:25

Here it is without snow, should anyway have changed avatar at end of spring

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Maytuna
By DJKL
11th Jun 2021 22:21

.

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By I'msorryIhaven'taclue
11th Jun 2021 22:35

Newcastle-Norway-Gothenberg doesn't sound all that straightforward - bet you took in a few fjords en-route. And I shudder to imagine where the less straightforward route might circumnavigate itself , nowadays.

Christmas 2005 was the Dordoigne, as a direct result of watching one too many episodes of Escape to the Country / Chateau / Nearest Brit Colony. Yours truly imagined he might have his seasonal breakfast sherry on the decking. but hadn't reckoned with its icy surface. Ker-plunk! Maybe, like you. I should have turned up my collar and headed North!

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Maytuna
By DJKL
11th Jun 2021 23:15

No fjords really as stops were coastal, a lot simpler than Newcastle-Amsterdam then driving across Netherlands, across Germany below Hamburg (not good fun after 3.00 pm) , short ferry to Zealand, then up through Denmark past Copenhagen , bridge to Sweden (near Malmo) then drive up into Sweden, circa 850 miles driving each way, leave Amsterdam ferry at 9.00 am and get to house in Sweden at 6.00 am the next day, or stopover near Puttgarden and effectively take two whole days.

Norway route had the ferry stopping at either Stavanger or Kristiansand and no worries about a few drinks with meal after boarding as by time you docked in Gothenburg it was well into afternoon on the following day.

Once sale goes through I think it will instead likely be a small cottage in Scotland once we sell our Edinburgh house and buy a flat here instead, just need to offload kids first and as son ought to be gone late this year to New York and daughter is down in Nottingham, that may now be possible, all degrees being over (Well at 27 and 29 if they want any more they can pay for them themselves)

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By Hugo Fair
12th Jun 2021 00:01

Oh the optimism of that last half-sentence! My youngest is broaching 30, but after a continuous stream of degree/masters/doctorate is no longer enjoying post-doc life in lockdown USA and threatening to return 'home'. They (we?) don't seem to breed them with the same escape instincts that drove me all those years ago!

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By I'msorryIhaven'taclue
12th Jun 2021 12:41

We put up way too much scaffolding around our brood. They each hung in there at University for a fourth year - Masters and the like - but didn't spend long at their chosen vocations before returning to base.

Son #1 lasted the longest: 2 years teaching maths at a grammar school, which he gave up because he couldn't stand the bullying!

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Replying to I'msorryIhaven'taclue:
RLI
By lionofludesch
12th Jun 2021 23:15

I'msorryIhaven'taclue wrote:

We put up way too much scaffolding around our brood. They each hung in there at University for a fourth year - Masters and the like - but didn't spend long at their chosen vocations before returning to base.

Son #1 lasted the longest: 2 years teaching maths at a grammar school, which he gave up because he couldn't stand the bullying!

These kids can be brutal to young teachers.

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Maytuna
By DJKL
12th Jun 2021 16:11

Well son's wife is American, works in New York and they have taken on an apartment there (not that he can really get there often until he gets a spousal work visa) so I think we will be safe from him, daughter will likely return to Edinburgh once she finishes her professional training down south but as her other half has just bought his own Edinburgh flat I suspect we will soon be be second choice lodgings.

Daughter has completed her masters and no doctorate signs with her, she is now chasing Chartered status, son has realised how much he can earn just based on his BSc and experience so cannot see him doing anything further, the one I possibly need to worry about is daughter in law as she has only amassed a first degree and two masters and works in academia, but think cost of that one is more down to my son to pay than us.

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