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

Roughly what area of the country are you in OP? MNers might be able to recommend a few IFA in your area for you to look into. I’d certainly recommend mine but they are a small local firm so unless you live near me (Suffolk/Cambs border) there’s no point me mentioning them!

Very sorry for your loss really hope you’re ok, you’ve had a really tough time.

Not sure about the hating on SJP. We have £500k invested with them and made a decent amount of money for doing absolutely nothing. Don’t know how this year will go though, but it’s a long term investment anyway. If markets are low it would be a good time to invest. But agree with others to talk to independent financial advisor.

I think it’s good that you’re keeping it quiet. We did the same, when I hear friends gloating about inheritance money it makes me cringe, especially in front of other friends who will never get a penny. We’re not special because we have it.

Save some in cash, you don’t know when you may need it. But not too much, you’ll probably spend it!!

Property could be a good idea but can come with its problems and we may have a crash when true unemployment hits.

Take some time out to travel..? You’re only here once and life is short; you can’t take it with you

Enjoy it and the peace of mind it brings, but try not to let it effect your life choices too much which it doesn’t sound like it will. When we got our money it was a shock and I spent a lot of time thinking about it at first, now I try to forget about it to be honest and live my life as if we didn’t have it, just with a bit less worry!

So sorry for your losses OP. I would definitely buy a rental income or two. Just make sure that you rent them out through an agent so they sort out all the important things like insurance and do all the checks and regular check ups of the tenants. Good luck and rural down the line sounds fab!!

Hey I know shite about financial planning matters but I’m going to tell you what I’ve learnt in 56 years of life. Over 36 years of home ownership my meagre home ownership of modest houses have netted me over £200,000 in profit from house price rises and trading up during that time. Only modest family homes but my point is bricks and mortar always increase and having Buy to Let homes can be a good long term financial investment. Maybe a future home/income for your child(ren) even? Unfortunately with Covid I really think all of this borrowing means we’ve got a tough time and a recession coming. Mortgages are the cheapest type of loans available. Have some cash available for emergencies and a comfortable life but sink what you can in future planning- pensions and earning income on your savings. Remember banks only cover you for loses if they go bust up to £85,000 but that’s not per bank but per banking group so definitely don’t put more money into sister banks in the same group. We lost lots of banks last time we had a bad recession. Don’t be scared and have some fun making memories too

So sorry for your loss! If your job is transferable and your husband can get a new job why don’t your move sooner if it makes you happier I would put the 250k away in a high interest savings account if your not planning on moving for 5 years and the. When your ready to move you will have it there ... I wish you all the best for the future

@Autumnterm

Jesus Christ *@Rubbishwithmoney*, there’s some dangerously ignorant, bad, wrong and double wrong advice here. And this is your parents’ hard earned inheritance!!

I have worked in this industry a long time so I do know what I am talking about. Please get independent financial advice before deciding anything. Proper independent financial advice. Not Mumsnet. Not a relative. Or a neighbour or family friend.

Not St James’ Place. Whoever said SJP is a network of IFAs is WRONG. They are chartered financial planners and they are not independent: their job is to recruit customers to SJP & SJP funds. They charge extremely high fees, including an exit fee if you take your money out in less than six years. Yes they give very attentive service, but you need your money to work as hard as possible for you, not giving it away in high fees.

A proper IFA will ask you lots of questions about your financial goals, how much risk you want to take, what your employers’ pension provision is like, and they’ll factor in how old you are too. They can set you up with a sensible strategy at a reasonable price across the whole market, and if you want to, they can help you manage it going forwards or you can do it yourself.

In the meantime:

Do not do crypto, peer2peer lending or crowdfunding if you want to see any of your parents’ inheritance again. It’s the equivalent of betting in a casino - fine if you can afford to lose the lot.

Get independent advice first before considering buy to let. A whole generation got rich doing that, but the rules have changed recently and it is much harder to make money now from BTL than it was for them.

Do NOT put it in a cash ISA. And unless you want or need to spend it very quickly, DON’T keep it in the bank. (Obviously you need to keep it in the bank until your IFA can help you invest it, and it’s always good to have a few months emergency cash to hand, but nothing beyond that.) Inflation is higher than interest rates at the moment so you are actually losing money if you keep it in the bank. Cash ISAs are even worse. Premium Bonds have terrible rates of return at the moment but even they are better than keeping it in the bank or cash ISAs.

But my best advice is please for the love of God and all the saints and prophets, please don’t listen to MNers about where to put your money. (You’ll notice I have not told you where to put it... just where NOT to put it...) If you want information before you see an IFA, go to the Martin Lewis Money Saving Expert website - it is accurate, impartial and wise.

This👆 lots of great independent advisers who are legally obliged to be transparent with fees. Most will give you some time to chat through what you would like to do and this should be a long term investment.

I've done BTL it is very hard to make money and the profits are heavily taxed now

@Hoppinggreen

I didn’t say SJP were a Network or that they were independent I said they were an umbrella for IFAs to work under. I used to work in M&A for IFAs so we were effectively working in competition to SJP who were also trying to get the IFA affiliates with them.

Anyone who is affiliated with SJP, or who has sold some or all of their business to SJP, or who “works under SJP’s umbrella” is no longer independent and therefore they are no longer an IFA. Full stop. It is highly misleading to give the impression that they are.

Just to clear up THAT misconception.

Hi OP,

Good decisions to pay off the mortgage and debts but please be sensible and save the remaining 250K in 2 separate fixed savings account for the future.

For the time being enjoy yourself with the money you would have spent on your mortgage and car repayments.

Stay away from the stocks and shares the market is too volatile right now.

@Pinkfluff76

So sorry for your losses OP. I would definitely buy a rental income or two. Just make sure that you rent them out through an agent so they sort out all the important things like insurance and do all the checks and regular check ups of the tenants. Good luck and rural down the line sounds fab!!

Definitely do not go for buy to let. You have to pay tax on the turnover, nit on the profit, abs from next year you cannot offset any costs other than repairs and management fees. Meanwhile you still have the hassle of tenants moving out, breaking things, complaining, answering various emails from agents, and then you have to pay capital gains when you sell. Really not attractive

@parentsnet123

Not sure about the hating on SJP. We have £500k invested with them and made a decent amount of money for doing absolutely nothing. Don’t know how this year will go though, but it’s a long term investment anyway. If markets are low it would be a good time to invest.

When markets are performing strongly and producing consistent returns, as they have for much of the last ten years, people don’t notice the high fees. Relative to the return, they seem trivial. Which is why SJP became a FTSE100 business.

When markets are volatile and/or falling, you have a double problem. Your assets are losing value AND you are still paying the high fees. When you aren’t making returns, all of a sudden you start to notice the fees more...

I am so sorry to hear about your parents OP.

I would put the max away in an ISA each year, and put £50k into premium bonds.

I would advise both you and your husband stick at your jobs.

Also maybe our £50k (both your salaries for a year) into an easy access savings account for a rainy day fund to help with loss of jobs / new roof /
New boiler / new car etc. I know £50k is a lot and some might not agree, but we have money put aside like this and it puts my mind at rest.

I wouldn’t buy an investment property - can be a hassle and day to day it makes no money, and no guarantee you will make a profit when you sell

I would set up the rest in a trust fund for your child, and if you plan to have more children see how that would work

Apologies, I haven’t read the entire thread.
There’s a reason Peter Hargreaves is in the top richest group in the UK / and I guess SJP as a company - unbelievable fees.

I would open an Interactive Investor account (I actually have one and am not techie), plonk £200k into an index tracker (Uk / global) with lowest fees and move chunks into an ISA each year up to the allowance. All on II. Rest in cash, in three high interest accounts (to spread risk). I’m not a personal adviser! Just invested for 20 odd years. Good luck

Actually - you will be below the pension threshold too - use a SIPP for any extra annual allowance.

You are looking for tax free, fees free, savings - that’s the golden rule.
Having said that - now I worry if there’s a market crash when you want to buy your bigger house! (Not my aim) - maybe see a decent IFA. But a really good one. Not sure where to find one, apologies. But the person you choose will have that future in their hands so please get (several if possible) references.

Safest option: secure investment, ISAs etc.
Middle option: buy to let with say 50% mortgage - you can always sell.
My favourite: move to the country and start a business.

I’m so sorry for your loss. I was in a similar position some years ago and went down the rental route. It’s been a bad experience with rotten tenants who defaulted on rent and damaged the property. I also invested in premium bonds, I’ve never had a big win but get something most months. You could probably invest £150k in them, £50k each for you and your husband and another £50k for your child. It wouldn’t necessarily earn much but it would be safe. If I‘d had the benefit of hindsight at the time I would have probably invested in a property in a coastal or rural area near to where I live, so that I could go there for holidays and weekends (Covid permitting!). Sorry if this has already been suggested, I didn’t have time to read all posts.

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.

• you say he works in finance. This is stupid advice as you will lose money due to inflation.

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.

• AVOID
• HUGE CHARGES ... saleys ... I've known people to have v bad experiences.

I'd have a chat with Pete Matthews, the advisor behind meaningfulmoney.tv/ who is honest, straight up and will help you optimize

You could drip into pensions, drip into ISA's

you also need to make sure its in an institution that covers you for more than 85k like NSI accounts or is split across multiple accounts

@Talk4000

Don't buy premium bonds. Waste of time. Again, been there done that. TERRIBLE RETURN!!

Better than rubbish interest rates though.

Oh for the days when my post office investment account gave me 12% interest!

@Viviennemary

I couldn't think of worse advice than investing in a crypto currency.

Agree. Do not do this!

When did owning property become a bad investment? It's the one way that thousands upon thousands of people make money as additional income. Property with management company and then you don't even have to think about it.

@MadMadaMim

When did owning property become a bad investment? It's the one way that thousands upon thousands of people make money as additional income. Property with management company and then you don't even have to think about it.

I can see that people would think twice if they needed a BTL mortgage, but if you have the capital to buy outright you have all the rent net of maintenance and letting / management costs.

And much less risk. In void weeks with a mortgage you still pay the mortgage and other overheads with no income. Bought outright: just the property overheads.

There's no money in BTL anymore.

Taxman has raided the hell out of it (George Osborne put the wheels in motion years ago and the tax has slowly tapered in) and it's no longer a goldmine of any kind at all.

I know two landlords with portfolios in London, both old hands at it.

Both seen over the last 3 years substantial reductions in their income. Gone from flash to much much more careful.

One is reducing portfolio and has made two sales. The other has had a mental breakdown.

Don't do buy to let. I would avoid it at all costs personally.

The days of Sarah Beenie and Kirsty and Phil are long gone.

I have a couple of friends who do BTL as a business
One with Student properties, the other with family homes. Both have been really hit hard by tax changes and now Covid (which I appreciate is unusual). They don’t have mortgages on their properties luckily but even so they have seen a drop in income
It’s still possible to make money but it’s certainly now how it used to be. If I was doing it now I would buy a UK holiday let

I think the thing people misunderstood is that BTL fall into a different class in bank lending. BTL mortgages come under commercial lending and if the banks go under or change policy you have to find a new lender immediately or satisfy the loan. With the changes to the law on say apartments and cladding many BTL properties will be very vulnerable as their properties can be rated zero value.

If I was doing it now I would buy a UK holiday let

The market is pretty saturated in non covid times. The overheads are high and many councils are trying to reduce the numbers in their areas.

It's also a job rather than an investment. Even if you farm out the advertising and cleaning/gardening there's still a load of maintenance required and the more you subcontract that then the less profit you will make.

Any problems will bounce right back to your door. We expect to redecorate from top to bottom each year and replace soft furnishings every 3-5 years. The days when guests would accept mismatched and charity shop furniture are long gone.

Unless you make it a lifestyle choice and have a number of units on site which you can service yourself then there's no big money in it.