How much of a financial cushion do you have, and how do you manage it?!

[Miljah]

We have some cash we want to invest. It'll probably go into managed funds via a financial adviser.

My question is, given that just about all forms of investment are paying low interest, with bank accounts paying all but none- what should we do?

Should we leave a smallish amount to hand in the teensy interest current account (after our CC are paid off, monthly), and put maybe £10,000 in a slightly higher interest 'savings account' with less access or penalties for non-planned access; and put the rest in managed funds?

Or keep the cushion small (monthly CC paid off, + say £2000 over) and all the rest into the managed funds and take a bigger hit should we need to withdraw any of it?

WWYD?

I would put the equivalent of 3-6 months living expenses (depending on how stable your income is) in the savings account and the rest in long term investments like stock based mutual funds.

Does your advisor get compensated by a commission on what you buy or an hourly rate like an accountant?

Commission. 0.5%

And thanks for your input!

You're welcome! And the 0.5% is reasonable as long as he doesn't also get paid anything by the investment company.