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

If you're prepared to lock it away for at least 5 years then stocks and shares are a good option. I would probably drip feed it in as the market is high at the moment. The Vanguard products may be worth looking into (or other passive funds) if you don't go with an IFA or other investment manager. I would personally keep at least 50k cash and invest the rest over the course of a year or two. Use your ISA allowance every year.

Speaking as a retired IFA I'd avoid St James's Place advisers at all costs.

Don't rush your decision - take your time and choose your adviser at leisure. Interview a couple and see which proposal you like best. Also look carefully at charges. Cheapest is not always best but you want to be sure if you're paying higher charges that you are getting value for them

Why not buy to let? My house is for sale by the Landlord, purely because they are looking to move and don’t want a BTL affecting their new rates. I don’t want it as an 58, but have been here 13 years and am a good tenant! 3 dbl bed, 2 recep semi. Needs no work for a new LL. New boiler a few years ago, running repairs all kept on top of. £125k to burly. Rental income £600 Tax £120 leaves £480 pcm. Save £180 towards any repairs etc and keep £300pcm. That’s £3,600 per annum in an investment of £125k. That’s a return of 2.88 % with your capital in bricks and mortar. We know we’ll have a new Ll very soon as the LL has told me they’re getting interest already. Cash buyers. Makes sense. So why would it be a bad thing? 🤷‍♀️

You have two financial based friends and they said “not to invest in the market” and “Don’t buy property” ehhhhhh? When you say they’re in finance do you mean they work behind the counter at NatWest? As that advice is absolute pony.

You can’t lock 250k up in a bank and not touch it! I mean you can, but do you not know about the deprecation of money? Your 250k won’t be worth 250k in today’s money in 5/10 years. It will be worth less. And you have nearly no decent saving account options these days.

The only thing which will return a long term profit is an investment portfolio or property (properly sourced and managed of course).

The key being long term.

My advice would be to speak to a totally impartial and independent financial advisor- not some one you know! Decide on your risk level - what you are comfortable with and go from there.

You can educate yourself on financial matters in the meantime, youtube has some very good channels.

I’m really sorry for your loss, it’s a very shit way to come into such a life changing amount of money

Thank you all for advice so far, I definitely feel like I was trying to rush into making a decision.

I will spend time this evening, going through replies properly. X

Another one saying to avoid St James's Place. Really hard to break the relationship and very expensive.

If you have a Skipton Building Society near you you could try them. They're a mutual so don't have shareholders to pay. I think the initial advice is free and it's up to you if you want to go ahead. They'll work out your risk profile first and advise accordingly.

I'd put the money into investments and get £20k a year ISA wrapped so that in 10 years the income from £200k would be tax free. Interest rates on cash savings are so low atm it's not worth it.

Personally I don't feel property will ever be a bad investment.

With £250k I'd:

• Spend £160k on two houses to do up and rent out (£60k per house plus £20k renovation each)

Once they were done and going I'd use the remaining £90k to do the same a third time but would be looking for houses to do up and sell on, then rinse and repeat.

I would give it all to the mumsnet user stripeyIIIIItscmsfkmf

Don't rush anything. Bank it as your friend suggests. Then take some time to heal and reflect.

Are you sure you need 750k to get a place with land in the countryside. Explore Wales Scotland or Ireland. You could get a smallholding for the money you have.

I’d buy another house and rent it out

I think I would have chosen a different thread title for starters so as not to be so 'in the face' of people who've lost their income and are massively struggling.

Have not read beyond the first page so apologies if repeating but don't keep £250k in one bank - you will only get back £85k in the event of bank collapse - this is a government guarentee thing. If you spread it about, you'll get back £85k from each bank/building society.

I would put £50k in premium bonds for a start - you will probably win every month. My mum had £5k in them and had been winning very small amounts very regularly.

I am risk averse but it is a lot of money to just have sitting acheiving very, very low rates of interest at the current time. I would be tempted to get advice from a few financial advisors and see what sits comfortably with you as being the right mix of investment and security.

You don't have to put the full amount in one place.
If it was me I would get proper advice, but to get the most out of the advice I would first ask myself questions like:

• How much will I need access to within the next 5 or 10 years?

• How much am I willing to "lock away" for over 10 years? (I would consider investing this in a passive, low fee fund with a low fee platform. Some are very low risk long term. This can be a low risk way of investing in stocks and shares... pick a diversified fund that aims to track the stock market, you dont need to pick individual stocks yourself. In the short term your investment will go up and down but over the course of 20 years or more should go up.)

Whatever you do, you don't want this money to earn less than inflation in a bank somewhere because that's a guaranteed loss!

• How much money am I willing to invest in a more risky investment? This might be £0, or it might be £1000, or it might be £50,000!

I agree with others saying property, I’m unsure why you have been advised against it as property never drops in value, you would need to pay to keep the property up together but you would have the money it was making in rent to cover costs and some profit?

(1) If you earn £25k, you can put up to £25k in your pension before the end of the tax year (minus what you’ve already put in so far). Do that for yourself & DH.

(2) ISA’s x 2 before the end of the tax year and then again in April = £80K.

(3) JISA for each DC - £9k each tax year. JSIPP. £2880 each tax year.

(4) Premium bonds if you’re ultra cautious. £50k each - even for your DC.

Personally, I don’t think that you need a financial adviser. Read up on funds/unit trusts/investment trusts and DIY it. It’s not difficult to grasp the concept of spreading risk and investing in different sectors.Take your time - there’s no hurry. You have 2+ mths to open your ISA before the end of the current tax year.

Pensions rely on the vagaries of the stock market so hardly risk free.

Max out your ISA £40k (don't know why people are suggesting your husband use his - the money isn't his.
Max out your Premium Bonds.
Put the remainder on deposit and think carefully.

I would advise against property. The world of work and retail (commercial property) will change markedly post covid and a lot of commercial property will be converted to private dwellings increasing supply and reducing prices. Totally the wrong point in the cycle.

I would carefully consider pensions and setting aside some for your child/ren's University education.

Personally with the UK being the place to holiday for a long time to come, I would. It a holiday home somewhere nice.
Let an agency manage it for you, and just book times you want to use it.
At £500 a week income for about 20 weeks of the year your looking at £10,000 return and that's far better than any bank account.

You need to decide when you'll want to access your money. If you have around £200k sitting around. I'd want to invest about £10k in a higher risk venture with the possibility for a really good return (e.g. Crypto). I wouldn't buy another house, that's calssic 'dumb flow'. (Unless of course you have a reason you can make money on property e.g.economies of scale by buying loads of properties and having a team on hand to manage them or because you know alot about the housing market). You have no liquidity on a house and massive exposure to the market. If you're that certain about property prices rising then just invest in a fund which is linked to the property market. In actual fact though I'd just invest in a diversified fund. With quantative easing as long as you hold steady and don't need the money in the next 5 years it's historically been basically a guaranteed return. Then I'd keep the other 100k in super safe bond.

Firstly 💐 for you.

Maybe do your research on where you’d like to move, rent out your current property and rent for a while to see what it’s like there before buying. Rental income will cover your rent and you’ll be in a great position to buy if/when the time is right.

Honestly I would go and see an independent financial advisor, they can advise properly for whatever risk you are happy with.
Also, yes, stay away from Saint James Place, they are not very good.
I’m sorry for the loss of your parents

It’s too soon to decide because your loss is still naturally very raw. Put it in savings accounts, being mindful of the FCA compensation limit if the bank goes under (just in case), so you will probably want to split it across a few banks.

Then decide what to do a year from now. I think it’s too soon to launch a business venture - the longer you spend deciding the better the decision you will make

I would buy a lovely holiday cottage or something by the seaside x sensible financially and something you can enjoy xx

Avoid SJP. Their marketing seems to rely on people being duped into thinking there is some royal connection. I’ve had numerous clients complain about their fees.

You definitely need a financial advisor!

Make sure you max out your ISA allowances each tax year (so put away £20k now and another £20k after 4th April). If you are treating it as family money you can also do the same in your husbands name.

You can also put away a lump sum in your child’s name (but perhaps think about this carefully as it will be locked away until your child is 16 and if you have more children you’ll want to be able to put away the same amount for them so don’t go mad to start with!)

You can put money into a general investment account linked to stocks and shares, exactly the same as a stocks and shares ISA just not tax free.

Find a local independent financial advisor - ours is great and they really are worth the fees - ours charge £500 a year to manage all our investments/pensions and then take a % of any new products we take out.