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

So very sorry you’re in this situation OP, it’s horrendous losing a parent but to lose both must be far far worse.

I wouldn’t take unnecessary risks with your remaining £250k. If you dream of rural living then I would start putting together a plan working towards that. If you’re saving money from mortgage and finance payments and have a frugal attitude then your pot will keep growing naturally.

No need to rush decisions, you’re in a good starting position.

Hi Op,

I’m very sorry for the loss of your parents.

You can go
on unbiased.co.uk and find a financial adviser that you feel comfortable with.

It’s obviously your money and your decision but I think just putting it in a bank is a bad idea. It won’t keep up with inflation so in real terms will lose value.

You’re 30 with no mortgage so you can afford to take on some risk. It’s all about diversifying so your eggs aren’t all in one basket. You can have a portfolio of different types of investments that spreads your risk. An IFA will be able to explain it all to you so you feel comfortable with your decision.

Do not panic about parking the money for a while as you make decisions on what to do.

You have a 12 month temporary high balance protection:
www.fscs.org.uk/how-we-work/claims-process/temporary-high-balances/

If needing it to be parked longer than that then NS&I have an account which takes up to £2million.

However there are some things which would be good to do on or before 5th April 2021 (end of tax year) and repeat the same things the next day 6th April. It's just annual allowances reset then.
So do seek out advice, interview various financial advisers/planners, get recommendations, find someone you trust. Or be prepared to spend time learning things yourself - it's not rocket science.

Don't do St James's Place! My investment has been with them for a while and their fees have been more than their investments for me have made. Their rating is also appalling. I'm in the process of moving my stocks and shares investments across to the HSBC which are rated very highly. There are different portfolios to invest in, from low to high risk. Mine are in a balanced portfolio with SJP and I'll do the same with HSBC. The market with Covid has been bad, but will improve and if you can afford to buy while the market is bad, you'll get more for your money. All investments aren't for short term, so if you do invest, forget about it for 10years minimum. They're also likely to fluctuate, but I'd always say investment is worth a go.

STAY AWAY FROM ST JAMES’ PLACE.

I am literally writing a financial article on their underperformance and dodgy tactics.

I'm sorry for your loss op.

Given this is all relatively fresh and were in the middle of very unbalanced life right now I'd hold off any big decisions.

You must have more to live on as you now have no mortgage etc so I'd enjoy a bit more spends and put some of that freed up cash into savings you can access and put the 250k into savings that's harder to access and wait.

Finish your course, watch house prices increase then see if you can use the 250k plus your house price to buy larger. You'll have a significant cash deposit plus the sale of your home plus a wage rise.

Dh works in wealth management & general opinion of SJP is quite low. I think they are perceived as having rather cleverly identified that people with not much knowledge will look for a "brand" they recognise and that not much in the private client space is targeting (relative) mass market. The fees are high for the service.

I would try and find a small local IFA and start by using ISA allowances to get some money into funds - the IFA should be able to recommend some.

Generally I would spread the money around. Pensions are good, property can be, but both are an easy target for a desperate chancellor, so you don't want to put all your eggs in one basket.

Do leave yourself a good buffer in cash (in instant/short notice access bank savings accounts).

Think about what you want from the money e.g.

• do you primarily want it locked up for your DC long term?
• to top up your own pensions/retirement income?
• to enrich your lives now

Your aims and time frames will be a big factor in any recommendation for what you do with it, so it's good to try and get clear now what your priorities and wishes are.

I would buy another property as our house is the thing that has made us more money than anything else.

Sorry for your loss. If stocks you can lose and lose big. Either put in a bank account (try to find one with interest - but they aren’t great) or buy a house where you might enjoy going on holiday? Or buy a bigger house for yourself now? There is the risk the market will face, but stocks are riskier.

If want a range - by a cheap flat, but a substantial amount in a savings account and maybe invest say 1-5K. The main thing is it to be there should anything happen. I’d also put a substantial amount in a pension pot or annuity pot for when you can’t work. You can do more for your kids too ☺️

I would put enough aside for your child (and any others if you're likely to have more) to go to university, or if they don't use, as a house deposit / towards training etc.
And treat yourselves to the holiday of a lifetime once we can travel again.

With £250K to invest, you could (and IMO should) use the services of a discretionary portfolio manager.

When DH inherited from his parents 10 years ago, our IFA (who had helped us consolidate our multiple small pensions pots and improve returns) put us onto a firm called Quilter Cheviot.

They did the whole “what’s your attitude to risk, what are you investing for” thing, and then they just basically take charge. They decide what investments to buy and sell, they automatically transfer the maximum allowed into ISAs each year, and send us regular reports on how our investment is doing.

We have a named person in charge, who we have met and can email if we want to change the plan. They have done very well for us, and we are now looking forward to our imminent retirement with confidence.

Oh, you should be sure to keep back enough easily accessible cash to cover any planned big expenditures and 3-6 months’ income to cover emergencies.

Normal savings account and pretend it isn't there and private school

So sorry for the loss of your parents.
I would invest in property why are you being advised not to?

In trying to answer this question, you should try to map out 1) your financial goals ( medium term ie 5 years vs long term 20 years) 2) how risk averse you are 3) how active you are willing to be...

If you don’t want to take much risk , a longer term ( multi year) fixed rate bank deposit is the safest, but interest rates are crAp right now, I personally wouldn’t do this .
Moving one step up , have a look at equities. Something which is quite easy to manage and cheaper than using a wealth manager is to pick your own equity index and buy that ( it ftse 100/250, or the dax or cac etc) .. if you are willing to put in more effort/time buy single name stocks instead.. higher potential returns , but you have to be on the ball with what the company is doing.. for all of these, use your stock Isa allowance first so you don’t have to pay tax on the gains..
Property is more illiquid than stocks so carries more risk, also takes more effort to manage etc but lots of people have made a lot of wealth this way over the last decades..
The more sensible answer is probably to diversify ( part in stocks and part in property)

@emmathedilemma

I would put enough aside for your child (and any others if you're likely to have more) to go to university, or if they don't use, as a house deposit / towards training etc. And treat yourselves to the holiday of a lifetime once we can travel again.

Finally someone said something fun!

OP, sorry for your loss. It's an odd blessing when a windfall comes from someone you love dying.

Bit concerned what people are saying about SJP as a relative left a substantial amount of money for DC tied up at SJP. We just assumed they were good. Arte they not? If not, what can we do? DS is already hacked off with them because he asked to have his funds moved out of stock he disapproves of (tobacco and firearms) and they said 'we never invest in such horrid things'. He pointed the parent companies out on his investments list and they said they'd look into it but haven't got back to him.

Not wanting to derail the thread OP, sorry if I have, but would be grateful for more info on this.

On another thread, people are saying that premium bonds are a good, safe investment for small-medium sums and that you often win, making them more profitable these days than in savings accounts which have such low interest at the moment.

I wouldn’t buy another property, this used to be a good investment but is now more heavily taxed.
Look at ISAs and get your full allowance in before the end of this tax year, using both your and your husbands.
Next consider putting a large amount each year into your pensions, this might mean using some of your inheritance to live on but is a tax efficient way to save from your earnings.
Don’t forget you are young enough to open a lifetime ISA which would mean the government give you a large sum each year on top of your savings.
With what is left I would think seriously about your risk tolerance. At your age you should be looking at high risk investments as if you invest over the longer term you are more likely to get a better return.

Perhaps start a SIPP if you do not already have one. I know nothing about Trust funds but I believe wealthy people often set them up for their children - take proper advice.

I am so sorry for your loss.

I think you need a plan if you want to relocate and you have plenty of time to do that. Dont make any rash decisions.

Unfortunately any money sat in normal accounts will lose value year on year due to inflation. But the flip side is that stocks and shares are for long term investments and can lose money short to medium term.

The flow chart I have put up is brilliant as a basis of what is best to do with money to cover you for short and long term.

I'm afraid I can't offer you any advice on money, as I've never had any! But I'm so sorry to hear you've lost both parents, how awful for you. I'd just say follow your gut instinct and remember to be kind to yourself after such a terrible time xx

If you're interested in ultimately doing holiday lets, then buy a house or flat in a holiday area and rent it out. My friend works for hoseasons and says it's a very lucrative market, and definitely on the up. Even if you did it for the four years you should make a reasonable return.

Pay a local person to do the cleaning and checking etc.

So sorry that you've lost your parents while you're still so young, it must be very tough.

Sorry to hear about your parents.

You definitely need independent advice, I’m risk averse and not really clued up on investments but personally I don’t think you can go wrong with the right BTL property, if you’re careful and do your research. If you chose an estate agent to manage the property they will want roughly 10% of the rent. There will be higher stamp duty on second and subsequent properties to purchase and CGT when you sell. As well as maintenance, landlord obligations like safety certificates and the potential pitfalls in between like void periods and rogue tenants but if your BTL is paid for outright with no risk of missing mortgage payments I’d go for it. There are peaks and troughs but generally, long term property appreciates and you have the added bonus of it topping up your income/savings when it’s rented out.

Prices are due to come down over this next year so I wouldn’t do anything hasty and use the time to weigh everything up.

In the meantime whatever you do, spread your £250k across unlinked savings accounts, if a bank goes bust your only covered up to:

‘Under the FSCS the first £85,000 (as of January 2017) of your savings (or £170,000 if your money is held in a joint account) is protected in the event that the bank or building society goes bust. This threshold is the same as the €100,000 compensation offered to savers with European banks.18 Jul 2019
moneysupermarket.com › savings’

Wish you all the best.

Maybe post in the money matters thread as well?

OP for the amount you are looking to invest I wouldn't use a financial advisor, their fees are usually high and none have ever convinced me they are worth it. Have a look at Interactive Investor and look into Vanguard funds. Think about your pension, investing for your child and your tax position (financial advisors don't normally give tax advice so it might be better paying for this instead!)

I would jut say to be realistic about what you can do -so if you have not managed letting property before - not managed a glamping site before ... not invested in the stock market before - then be realistic about your ability and your plans.
Ask yourself the theoretical question "would I be happy to borrow money to do this? and if the answer is no - then do not "lend" it to yourself.

The other advice I would give is to stay frugal - don't get into extravagant habits.

I like the idea of a holiday home - a joy - an investment and an income!

just for info The FTSE 250 is NOT the top 250 companies by size - in fact they are the companies smaller than those in the FTSE 100 - so from 100 to 350.
A common misconception! The FTSE 350 is a combo of them both.