I’ve just inherited 500K WWYD?

[Rubbishwithmoney]

Name changed and looking for advice. I appreciate this is a lovely financial position to be in but it’s also come with the loss of my parents and I don’t want to be accused of bragging. I’ve also not told many people in RL because of the current situation and I don’t want people to treat me differently.

I’m 30, married with 1 child. My father died a while ago and my mum suddenly died last year. I didn’t expect I would be in this position so young but I’ve inherited just over 500K. I had recently bought a house, so I’ve used 200K to pay off my mortgage and around 50K on some home improvements, paid off the cars and paid off a credit card. I’ve also put some in a child saver account.

My husband and I both have relatively low paying jobs (£25K) but we both really love our work. I’m currently working towards a qualification paid for by my employer and would need to remain in my area for at least 4 more years.

I’ve spoken to a family friend, who works in finance. He thinks I should lock the remaining 250K up in a bank and doesn’t believe in any form of risk.

I went to see a St James Place advisor and that seemed really positive but since reading St James Place reviews online. I’m worried about expensive fees, losing a lot of money in stocks/shares and paying large exiting fees if I want to take the money out.

I’ve also looked at property to buy to let as an investment but family friend and financial advisor both say this is a bad investment.

My main goal is to move away from the area we live and buy a property with land in a much more rural location. However, I would need around 750K to do that. I would be able to transfer my job and husband could either get a new job or work from our property doing holiday lets/Glamping type work. I don’t want to have to take a gigantic mortgage out that our small wages would struggle to pay back.

My mum would normally give me honest advice and I’m really struggling to make decisions without her.

So I’m asking WWYD with the remaining 250K?

AIBU to find a stockbroker to invest it for me? Should I put it in a ISA for 4 years and not touch it?

Thank you for any advice and sorry for long post x

I’m surprised you were advised against buying somewhere to let. We were advised exactly the opposite, and my partner and I rent out a flat and it’s amazing for us. I suppose it depends where you buy, but I absolutely wouldn’t write off this option.

Go to an independent financial advisor- they will split the investment into safe, medium, high risk to make the most of your money x

Is a and shares to spread risk. Some in trust for your child maybe to help with uni fees or house or pension for them.

You need to have £12 -15 K in an easy access saver for rainy days and car/boiler replacement etc.
Put the max into tax exempt options like ISA.
St James' Place is good as a place to put some long term savings - eg investment bond. You get to decide the level of risk of your investments. Choose LOW risk if you would rather safe, but lower interest.
You have to pay tax on the amount you withdraw, if you take out more than a small percentage of the original investment in any one year. Fees not a worry - you don't pay much.
Don't put all your money in one place - spread your risk.
Enjoy some now too.

Like a lot of others - I’d take time deciding. You’re bound to be a bit bewildered due to your loss and obviously the huge change in your circumstances. I’d be wary of investing in a property at the moment as I think the potential financial ramifications of COVID and Brexit are still to hit us and could be huge. I’d be sitting on that money for at least 12 months.

Please be careful about buying a huge property with land. I know it’s the dream and very aspirational but I grew up in a similar property and although it makes for a lovely childhood they cost a lot to run/upkeep and there tends to be a lot of hidden costs you wouldn’t think about. Council tax alone can be huge!

Sorry about your Mum

You ask WWYD, so,

I would pay off my mortgage, same as you. For me, that's £150k
Then I would invest £250k in 4 or 5 sustainable funds in my SIPP. eg Jupiter Ecology. Some this financial year, some next, to maximise tax advantage.
Then, I would put the other £50k into short terms savings or an ISA.

I'm a lot older than you (54) and don't have very good pension provision. I also don't have children or a husband so, mostly, I'd want to make sure I had money invested for retiring (and this would make me think about retiring at 60 rather than 67), and for a very good holiday once covid is over.

So sorry for your loss. I'd invest in precious metals as a long-term investment personally

What about the other £50k?

Why would property be a bad investment? My parents brought their home for £95k in 1999 which is now worth £700k. Doesnt seem like a bad retun in just over 20 years.

Plus you're securing a stable position for your child in the future. Buy to let and when he/she is old enough, they can either move into said property or sell it and buy one at the time as he will have a hearty deposit to do so, in addition to the savings you have on the side for him/her.

If I had that money I would have bought another property in London and done refurbs sell on to make profits or put on for rental income and use the income as saving for children so they can go to better university afterall that’s an asset which will increase in value always!
I won’t put money in bank for tiny interest pennies ! I would enjoy renovating an old house and making profits keeps u busy xx done that been there xx

St James Place are very good and not expensive. They know what they are talking about. We have never regretted our decision to seek, and take, their advice.

keep it in circulation

Agree you should probably be putting a decent chunk into your pension. On your current salaries you are unlikely to be putting aside enough to have the comfortable retirement most of us dream of. A financial advisor can help you with this and with working out how to get the best out of saving the rest for future holidays etc. Sorry for your loss. I also lost both of my parents too young and even now I'm nearly 50 I still miss them so much. Good luck with everything. x

Premium bonds £40.000 in both names (cant loose it.) Put some in isa and rest split between banks. make sure their not sister banks, Guaranteed to a certain amount. I wouldnt invest at the moment because the worlds turned to shit.

Maybe give a percentage to the Trussell Trust or similar charity in memory of your parents and put the rest in an ISA for a rainy day/ future house repairs etc.

I would also put what you would have paid in mortgage fees into savings, I think it’s a good habit to keep up. You can dip into it for holidays and things but it’s a good habit, also means if you move again and have to have a mortgage it’s not too much of a shock.

Bank it but remember to spread it between different banks. There's a limit of about £80,000 guaranteed by the government for each bank account should that bank go under.
You have received some excellent advice such as 'what's your hurry, finish your course before you do anything' or 'your property should increase in value'. So many times on the Radio 4 money program, I hear of people who've invested and been ripped off. Lost life savings or a pension pot. You can't afford to play with this money so don't, leave that to people with money to lose.

Get a recommendation if possible from someone you trust for an independent financial adviser. Not one linked to a bank as they only deal with banks products and fees ridiculous. We took a bit of a risk and chose one locally which we knew nothing about and they have been brilliant. Fees seems expensive but we have stayed ahead of the game and investments have done well. Most now invested in Stocks and share ISAs. Make sure they are independent.

Diversify your investment. place in a investment fund someone like Vanguard. Although 500k is a decent amount it won't be enough over the long term. you need to make it work for you.

Property has worked well for us.

Not an apartment (service charges too high and eat into your rental income)

2x houses, at least 3 bed if not 2. You will not go wrong.

But Ethereum

Sorry.....buy....not but!

Good advice isn’t free, but it’s worth it. Problem is, it’s hard to know who will give good advice.

I’d max out my pension contribution, and ISA contribution this year, and my spouses’.

If I invested in shares it would be in low cost tracker funds. Check out Fidelity, they are known for being value for money.

I’m sorry about your mum.

@Rubbishwithmoney

Pay off mortgage.
Then stick no more than 85k in different banks.

Treat yourself.

Then relax and think.