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Have around 250,000 to invest - life insurance money :-(

(17 Posts)
grobagsforever Mon 07-Jul-14 08:18:14

I'd give anything not to have it and DH back instead but there you go. After settling the mortgage I have roughly this amount to help me raise my two under fives alone. I've already set aside a seperate sum to cover childcare until they start school at which point I hope the majority of our day to day expenses can be met from my salary.

So what do I do with this sum to help protect our future? Interest rates are all crap. Any bright ideas?

I know we're lucky to have well insured - so many in even worst situationssad

Hereward1332 Mon 07-Jul-14 10:22:53

Simple answer is that you should see an IFA - this sort of thing is what they're paid to look at, including possible tax issues, security of capital etc. For the sort of money you're talking about, it's worth doing despite thier fees. If you want to invest it your self, you need to think about your financial circumstances in total; how much risk can you afford to take; how much knowledge and experience do you have; can you afford to ride out dips in the market; do you need income from the capital, or is it a safety net.

Basically look to construct a portfolio (or invest in a ready made one) according to your risk appetite. Work out a % to keep in cash which will earn very little, but provide security should the stock market crash. The remainder you could invest for higher returns. Rather than investing directly, look for funds of funds (google Hargreaves Lansdown Multi Manager Funds, for example), and choose one which suits your appetite for risk.

grobagsforever Mon 07-Jul-14 12:27:59

Thanks. Don't really fancy any risk right now! I'll guess I'll see an IFA when I'm up to it.

ICanHearYou Mon 07-Jul-14 12:30:57

Gosh, what a turmoil of emotions you must be having.

I would save some of it for a holiday of a lifetime when the children are a little older,

Make sure you are taking care of you.

Namechangearoonie123 Mon 07-Jul-14 12:36:36

Seeing as interest rates are so crap I would buy a property next to the sea if you don't live there already. And either let it as a holiday let or keep it as a capital investment and take the children there for holidays and weekends.

It could give you a chance to make new memories as a family and provide a break from 'home' which may be quite difficult for you right now.

So sorry for your loss.

grobagsforever Mon 07-Jul-14 15:19:27

Property is a thought, if this crash/correction appears. My mum and sister live in a seaside town but I don't.

ICanHearYou Mon 07-Jul-14 15:58:08

can't go wrong with a rental property somewhere either, putting all the income aside and perhaps buying a new place in 20 years time so the kids have one each.

grobagsforever Mon 07-Jul-14 16:19:44

wow a house for each child.....DH and I were more of the stand on your two feet variety of parents. But then again how nice for them not to struggle.

MumOfEllynnAnAngel Mon 07-Jul-14 16:26:49

I can't even express how sorry I am for your loss! I think the last thing you want to hear now is exactly this... Something similar has happend to me too...

My advice re investment: It is good to be careful and consider all options but simplest is sometime the best, especially now.

Speaking from own investment experience, I concur with Hereward, but also think it might be a little bit too much to take on right now, (unless you are a financial expert)

So property might be something worth thinking about. You can also look in other countries within EU. Properties are cheaper (you could buy two perhaps) and if you rent them you get additional cashflow in every month.

Focus on creating pasive income that will give you more time to spend with your kids. It will be much needed. And the money you get from renting you can put to your Shares ISA or invest in a fund...

I wish you good luck deciding and let me know if you need any help.

take care

ICanHearYou Mon 07-Jul-14 16:31:30

It will be really nice for them to have that legacy from their father too, think about how much of life we spend (the majority of us) saving up for properties, renting crap properties and lining someone elses pocket.

Hereward1332 Mon 07-Jul-14 16:47:57

just a word of caution re-property. It is not a low risk option. You would be putting all your eggs in one basket - subject to whichever way the housing market swings. Realistically, how much house would you get for 250k. A property investment can be more about the heart than a rational financial decision; it's something physical, not just a number. Would you need to borrow to buy something suitable? Can you spend the time required to manage it yourself, or would you need to pay an agent to field calls about broken fridges?

What the right decision is depends on your personal financial circumstances, as well as what feels right for you. I'm sorry you're in this situation - for what it's worth asking the questions is a great start. I hope you manage to find the strength inside you to reach a decision you're happy with.

AcrossthePond55 Mon 07-Jul-14 17:58:12

My condolences on your loss.

Is there any type of savings/investment scheme to set aside a portion for your children's post-secondary education?

Rental property can be 'iffy' as Hereward states. Even though you'd have income from a rental there is still the cost of upkeep, repairs, taxes, letting agent, etc. Perhaps if you could find a rental in a place that you would want to live yourself once the children are grown it may be worth it? Sort of like buying your 'retirement home' early.

See a good financial counselor. If you don't know any, ask friends and family who they use/recommend. Be prepared to give them your 'wants' (low risk & return vs higher return for higher risks, accessibility vs locking it in timed-schemes) Ask also about tax ramifications as well as investment opportunities. Listen very hard to what they say. Then, if possible, sit on it for a while. They say you should wait a year before making any major life decisions.

ICanHearYou Mon 07-Jul-14 19:00:35

I think 250k would buy you a very reasonable family home in most parts of the country other than London and the South East, such houses will probably not lose value because they are not part of the ridiculous housing bubble in the South East.

Even here, in the South West which is very attractive to buyers and gets excellent rental on properties, you could buy a lovely family home for 250k.

specialsubject Tue 08-Jul-14 13:26:11

my sympathies too,I cannot imagine your position.

be aware that holiday letting is a LOT of hassle, and you should work on no more than 18 weeks occupancy a year. Plus there is all the turnaround work. A 'standard' rental (i.e. one that is someone's long-term home) obviously generates far less per week/month but can be much simpler.

for the short term, you need to keep the money safe. Which means it must be split between banking licences, no more than £85k in each one. Here is the 'who owns who' table :

you can get 3% (still pitiful) on current accounts but I'm sure that is the last thing you feel like doing at the moment. When you have the energy, the simplest route to find a home for some money at 3% or more is:

20k in a Santander 123: needs two direct debits and a standing order of £500. (You can do this by setting up a standing order from another account) This will also give you access to an 18 month Santander ISA at 2.3% which will take another 15k.
£19k in the TSB: 3 enhance accounts with 5k in each, two classic pluses with 2k in each. (they pay 5%). Set up standing orders going round them all.
£2.5k in the Nationwide for 5%.

a pension for you would also be worth investigating, and you may want to start one for the children.

I concur that you need financial advice, for now just get the money split and safe.

vinoandbrie Tue 08-Jul-14 15:20:06

I'm so sorry for your loss.

Please see a chartered financial planner, who will be able to help you by talking through what you want the money to do, how long you want to invest it for, your appetite for risk etc.

Even if you then choose to take what s/he says with a pinch of salt, with such a large amount that you want to benefit your children, it's worth taking professional advice.

Again, so sorry you find yourself in this saddest of situations.

Tallandgracefulmum Fri 11-Jul-14 23:53:17

Sorry about your loss.
You could divide the funds up and invest as others have suggested or you could consider purchasing x2 BTL say 50k properties in the UK, with the rental profit going into accounts for the kids.

20k you could put aside for childcare until the kids go to school.
30k you could put aside should you want to tap into for chilrens expenses over their schooling years., long term growth.

5-10k could set up a charity in the name of husband/father.

10k represent an amount for holidays over a period of years.
80k invest in shares, stocks, art, timepiece in memory of dad, long term savings, investments abroad.

Good luck.

tjcartz33 Fri 12-Sep-14 00:16:14

So sorry for your loss.
Understandably things may seem a little confusing here but you really need to see a financial advisor. If you already have property and are thinking about buying a rental property you need to consider your tax motivations if at any time you decided to gift or sell the properties, you may have an IHT problem, you may have CGT to pay, it may or may not be wiser to invest in trusts for the kids etc etc, property carries as much of a risk as other investments, you also mention pensions and Isas, a financial advisor should do a full fact find to see what your needs are before advising which product to choose, it may be that more than one product is needed, please see an advisor, someone thT can give face to face advice that you. Can build a rapport with, don't pay an IFA to do an initial consultation or a monthly fee, there are other types of advisor around, whatever you decide get advice first as you coul be creating a rod for your children's backs if anything should happen to you

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