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'd really recommend speaking to an independent financial adviser. They should look at maxing out your pension and other ways to invest tax efficiently for the long term, and buildinga sensible portfoliofor you.

Locking money away in 'risk free' savings sounds good to someone who hasn't had a lot of financial security, but all you are doing is effectively committing to losing money, on inflation every year. You'd end up with less than you started with in real terms (I.e. spending power), and significantly less than what you can accumulate through compound interest over time.

You have many years left before retirement, so investing for say a 30 year time horizon is likely to involve a portfolio of different investments, designed to yield a good return over several decades. Some of this may be in cash or government bonds, but I'd be very surprised if it didn't also involve investing in the stock market. Don't forget that temporary ups and downs, even if they look dramatic, don't really matter in the long run. My tracker funds went down a fair bit last year, but I invested an additional (smaller) sum at the bottom of the market and overall am now looking even better than before the market slump.

A good adviser will ask you lots of questions about your current situation and life plans, assess your appetite for risk, and won't try to flog you a specific company or investment. They'll be careful about fees D well - some fund management fees for example are comparatively high, and can eat into your profits without you gaining much benefit.

I would be very careful about investing in property - again, it sounds 'safe' but many people have found themselves unable to sell when they needed the money, encountered costly problems with the property or had nightmare tenants that they couldn't evict. Unless you have a very good financial buffer and other investments to balance out the risks I'd stick to a nice investment portfolio that requires much less effort and is likely to perform just as well over time.

Sorry, that was long! Hope you can enjoy the additional freedom over many years.

If this is all very recent I just wouldn't make any decision now. Put it somewhere safe, like 80000 in 3 different banks and wait. In a years time you will be in a better emotional state to make decisions

You don’t sound very financially clued-up, so I think you really need to speak to an impartial independent financial advisor.

You can only put £20k each into an ISA each year, and that barely scratches the surface of your inheritance.

There is also a “safe” limit of £85k per financial institution, so you’d go well over that and be at risk of the bank collapses.

Consider your pension options too. The government add £20 for every £80 you put in, so you could set yourself up nicely for an early retirement.

Oh and yes yes yes to a fun fund as mentioned by youseethethingis

I would be very careful about investing in property - again, it sounds 'safe' but many people have found themselves unable to sell when they needed the money, encountered costly problems with the property or had nightmare tenants that they couldn't evict. Unless you have a very good financial buffer and other investments to balance out the risks I'd stick to a nice investment portfolio that requires much less effort and is likely to perform just as well over time.

THIS, in bold and double underlined.

@Maxiedog123

If this is all very recent I just wouldn't make any decision now. Put it somewhere safe, like 80000 in 3 different banks and wait. In a years time you will be in a better emotional state to make decisions

good idea to divide it up as £80 k is the threshold by which you get your money back if the bank goes bust. Good advice.

There is also a “safe” limit of £85k per financial institution, so you’d go well over that and be at risk of the bank collapses.

IF you put it all in one institution, yes. If you have it spread over a few, then no.

Bouffant? Bouyant!

Or £85 k as mentioned by masking i can't remember which,. :)

Couldn't you use £150K in premium bonds? 50 for you, DH & your DC.

@gwenneh

There is also a “safe” limit of £85k per financial institution, so you’d go well over that and be at risk of the bank collapses.

IF you put it all in one institution, yes. If you have it spread over a few, then no.

Yes, that’s why I said per institution. Thanks for repeating what I said.

Be aware that some apparently separate banks are part of the same group, e.g. Lloyds and Halifax.

I would keep it in bank accounts and NS&I but then make much larger pension contributions. That way you invest in stocks and shares but you put it in slowly and get the tax relief on it against the tax you are paying on your wages. I would then use the money on the bank to top up wages.

If you want to move somewhere with land you can get it for less than £750,000, but probably only if you are able to move areas and you may not want to go that far.

As others have said don't make quick decisions. Bereavement is hard and if you make life changing decisions, you can make mistakes.

Additionally you are only in your 30s. You may still want to help your kids through Uni or to set up their own business and to buy their first homes. Equally you don't know what life has in store and this money will really insulate you if you have a tough time in future and help boost your pension.

Sell my current house and buy a bigger one with 4 bedrooms and a front/back garden.

I'd also buy a new car.

The money would get me quite a lot in the area where I'm from. I could also take a year off studying to have maternity leave instead of 3 measly months.

God I wish I inherited 500k 🤣🤣🤣

@BuffaloCauliflower my charity has just moved it's pitiful funds to an EQ ethical fund and it's amazing. Now the funds DO GOOD as they grow. Much lower carbon emissions portfolio as compared to the FTSE. (71%) less and about an 85% contribution to the sustainable development goals.

OP as well as premium bonds you can invest in something called income bonds. I think it's safer and you can earn a little bit of money too. I'll see if I can find a link.

I'm sorry for your loss.

Go and see an independent financial advisor - it'll be worth 10 times what randomers on the internet could tell you.

Tip from me. Be careful who you tell. Some of my very good friends stopped speaking to me when I inherited some money. I don't know about investing. Maybe a second property that you could rent out? That way you're getting an income too?

www.nsandi.com/products/income-bonds

I think it’s pretty clear what to do based on what you want to achieve and your timescales.

You want to move in the next few years and buy property. If you can afford the next move based on the £250k including running costs you have you don’t have a real need to generate income from that value and your priority would be to minimise risk. In which case I would avoid investing in shares which are a longer term investment. Holding in cash (across multiple providers to take advantage of government guarantees) is your best bet. Of course, a happy medium would be to invest a proportion 10/20% in shares and the rest cash. This would potentially protect against inflation but the stock market moves both ways

Properly investment ie rental would generate a higher return but not as liquid (less ease of access) and property value can move both ways.

As ever do your own research and use a financial advisor if unclear, none of this thread is professional advice.

@oopsiedaisie1

Tip from me. Be careful who you tell. Some of my very good friends stopped speaking to me when I inherited some money. I don't know about investing. Maybe a second property that you could rent out? That way you're getting an income too?

Yes and I agree 100% with this as well about telling people. Don't.

I also lost someone I considered my closest friend just after we inherited. I did not even tell her we had, but it was the obvious assumption due to a lack of siblings.

I'd buy property it's cheap up here.
Long term bricks n mortar is your best investment.

You need independent financial advice...but make sure it is independent .....try unbiased.co.uk for an adviser near you....speak to at least 3 and you will then get an idea of fees and the person you are dealing with. Other than whilst you are deciding on an adviser or you don’t feel ready to emotionally only leave what you need access to for emergencies in cash deposit accounts, cash ISAs or premium bonds. ( all of these have terrible rates of interest over the longer term...and may actually lose you money in real terms).

An adviser should try and work with you to determine your level of risk and the types of suitable investments...yes you will pay them for that however you need to look on it the same as you would putting a new boiler in or building an extension...you pay the experts for their knowledge....yes you can do it yourself but you need to be 100% certain you are comfortable with this and know what you’re doing !

And don’t use St James place....they are not independent and are notoriously expensive....

Good luck

Sorry for your loss.

What I'd do is pay off the mortgage and have an extension done as a craft room and library for me.

What was left I think I'd be inclined to invest in a property, the idea being that we would sell it when the dc need property deposits. Hopefully 1/3 of a house each would be enough to get them on the property ladder.

Yes, property goes down as well as up. But if our property went down, then so would potentially the ones they want to buy, so although we might have lost actual money they would still have a similar proportion for their house. That might be a bit simplistic though.

Very sorry for your parents. Are you happy with the house you are in? Would buying a bigger/more detached/bigger garden make your life better? What about a holiday home somewhere or a motor home to go travelling in?

I work in tech and we get free consultations from decent companies regularly. My co workers are way more into investing than I am but ultimately no one cares for your cash more than you.
Imo you are right to be wary of advisors. It's not they are bad per se but the fees can eat away or into profit as in the world of finance £250k annoyingly isn't that much.

I reckon starters for 10
You can do £20K PA each so you and your husband should open a S&S Isas.

Given the timings I would do 40K in the next month and another 40k in April once you are in the new fiscal.
That's £80k done.

Given you are a low earner you might want to consider a pension my gut says unless you want to lock it up dont bother.

I'd do 10k Bitcoin as a punt I reckon it cpuld go to 200k 250k (its 30-40k now)
Also 10k in gold (gold will continue to run I made a lot in the last 3 years)

With the remainder I think if you can do a low(ish) cost (ie no mortgage) BTL I actually would consider it especially if it's in your local area and you think it will go up as an asset in addition to providing passive income (which on lower income is way more efficient as lower tac band than if you were earning 100k pa)
My mum did a btl in cash 18 months ago and is getting a 10% yield I was like when she showed me the numbers.

Great problem to have.