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

@Rubbishwithmoney you could put £150k in to premium bonds, between you whilst you breath and decide what to do.

So Sorry for your loss OP, I know what you are going through but SJP are not independent IFA's, they are not tied as were the advisors from banks so they tout that, but they are restricted to the products they can offer, so you would not get whole of market options from them, I sadly lost my dad 5 years ago inherited 250k (between brother and me) we put £65k each into a rental property but, brother is in the building trade so have no maintenance issues tenants ring me I ring him, we bought in an area we knew well local to us and so far have had the same tenant, putting your money into property can be hard if you have bad tenants, or do not have access to good trades people, like you just lost my mum so have more money coming, as an ex financial advisor (who declined a job offer with SJP) would stick to the £85k per institution, will use my stocks and shares allowance in a managed fund, but only a small amount, used ISA allowance so will do premium bonds, also looking at regular savers (12 months) to drip feed money into, not a lot but usually £3600 pa max but up to 3% return to pay for yearly extras, the rest i am just going to sit on until we know where the country is going and what will happen when we can finally come out of lock down, look after yourself because if your like me at the minute I have good and bad days xx

I’m not a financial advisor, here is what I’d do. (Long term 6+ years hold)

Open an account with fidelity and put everything diversified among different Bailie Gifford funds.

Do this after the stock market settles down a bit. Expect heavy volatility in the coming weeks,

Op I've not waded through the thread but someone on another thread was investing 10 k.

Look up vanguard funds.. They buy a little of everything so loses and gain even out. They have life stragety funds.. So I have 100% equity and another one 80% equity 20% bonds... Generally the younger you are the more exposure to risk you can take but this isn't high risk exposure because your literally buying a little if everything.

Jack boggle said, why look for the needle in the haystack when you can buy the haystack.
I'd look up and choose 4 index funds eg one that follows us stock market, one for UK, one for Japan and drip feed in, then a life strategy fund.. With the bulk in.. Then one or two gamble funds.. I say gamble but my higher risk funds are heavily weighted to Unilever, Diego etc so solid companies..

Also open up your own sipp, self invested personal pension.. If you put 80 in, the gov will add 20.
And this goes up the more you put in.

So... The aim would be to set all these funds to reinvest... And by the time you retire, you can live off the income without touching your capital.

Also open a junior stocks and shares for your child and ear mark money for future dc... And open them a sipp!! Imagine how much saving a little and often for them would add up too in 50 years!! Nice little bonus for them.

Then put a smaller emergency amount in premium bonds, easy access remember that value will erode.

My investments plunged over covid but took off again and have been consistently 20 %up.

I did buy one fund at the right time, which has performed exceptionally well but I know this is not sustainable even though its a great fund and that's Scottish mortgage.

Divide up all your normal money into various saving pots...

At 30.. To open up your own sipp and for your dc would be a wondeful peace of mind and give it so long to grow but never buy in large lump sums.. Always drip freed in.

I inherited a teeny amount and spent a year researching, cross reference funds with financial resources... Googling... And it all came back to low cost index funds.. Buy a little of everything... Spread risks.. Rewards won't be as great as funds eg Scottish mortgage however the returns are steady and safer.

Also check out money saving forum and Mr money moustache.

Always invest in property if you're new to investment, just buy a small place in the best area that you can afford.

OP, I am sorry about your mum .

I know others don't recommend it, but I've only ever invested in property. It has its ups and downs, but has overall been the most fantastic investment. I have got 50k in Premium Bonds, and the rest in property.

I don't have a job or any pension - property is my pension fund as well as my income and an appreciating asset.

I'd buy a house for your child and the let it out using the income to save for university for them. They won't have the stress of saving for a first time property deposit & property is always a good longterm investment.

Sorry for your losses. Holiday home sounds lovely.

So sorry about the loss of your parents. It is a bitter sweet windfall and one to take your time about.

Don't go with St James' Place! They're very expensive. And they're not independent, so they can only sell some products. My husband is an IFA...

Word of mouth is the best way to find a financial advisor. Ask your friends and family for recommendations?

@DrR78

I would invest most (80%?) of it in a range of funds - good spread geographically and sectorally. Then don’t look at it too often, just rest assured that over the long term - 5, 10, 20 years - it’ll do way better than cash and is way less stress than landlordery.

This. I would not buy to let—crazy work and risk. Honestly I would not have even paid my mortgage since you are not likely to spend more. You need growth and you have time.

Find a solid financial advisor. We have a really good one and I wouldn't know what to do without them. You can tell them what your goals are and they will make financial suggestions how you might get there.

I would speak to 2 or 3 independent financial advisors plus your bank who will have a personal banking service and see what they can offer. I would suggest maxing out your isas (adult and junior) now then your next annual limit kicks in in April. Then I would put into semi liquid safe funds /accounts right now as it pretty unclear where the markets are heading - property makes sense but not right now, many are forecasting a fall and the sum whilst a lot isn't sufficient for a portfolio unless you are going to get btl mortgages and be a serious investor.

I'd be tempted to max out premium bonds for this year too, interest rates are rubbish!

Who would take any risks with 250 though?

Surely the majority would be safely invested and maybe 10 grand in some sort of gamble scheme if one must.

As pp said, coming up to April, putting 20 x 2 into two stocks and shares isa would be fabulous...

Also it can sit as cash so no stress about funds right now whilst you read around funds.

I think I’d put £50k in premium bonds and the rest in property to buy a bigger better main home ( not a holiday home)
You’ve plenty of time to save for a pension etc and years of working ahead of you. You could have a lovely big house to live in mortgage free for ever.

It depends what you want, do you have a long term goal?

Banks are safer than investments, but with a good financial adviser you could make some smart investments.

Stay away from StJames Place, I used to work for them, in the short period I was with them I witnessed them misleading clients with out of date investment performance data, forge a client signature and pressure clients into investments they didn’t want.

If this was me, now in my current situation I’d probably put some in the bank and the rest I’d probably invest in property. You would’t even need to buy the house outright get a buy to let mortgage and use the rent to pay off the mortgage as well as make some profit. Obviously house prices would vary by area.

Make an appointment with a properly independent financial advisor.

You need to discuss pensions, ISAs, inheritance laws (does your DH get 50% if you divorce and other worst case scenarios), and other general saving issues.

It's a huge amount of money but won't change your life unless you are sensible with it.

OP, I would go to your bank first and foremost. They will have advisors who will help build an investment portfolio for you, you can choose your level of risk and have a full discussion about what you want to do with it in future.

You won't be committed to this long term, but your money will be safe and earning a bit while you grow in confidence.

I'd buy another house, or two flats, and let them at a fair rent. Provide two other families with homes and be a good landlord.

@Impatiens would you rather be the OP and have lost both your parents in the last year? I'm pretty sure I know which the OP would choose.

The above are low risk.

Yes they’ll also make your cash pile shrink by 1-2% a year in real terms.

Hello!
Firstly, sorry for your loss.
Secondly, I would strongly recommend contacting an independent financial adviser. St James place are VERY expensive, as advisers go.
I am married to a financial adviser and you'd be welcome to pick his brains if you'd like. If you do, just DM me and I'll send you his details. He is lovely (promise) and can give you guidance on a first call for free. If you wanted him to make a formal recommendation he would charge obvious but he would be happy to help FOC for a call or two if it would help.

Sorry for your loss, OP. You've had great advice here, hope you manage to find that place of your dreams.

You need a proper IFA to help (and SJP dont have a great rep). Look for a local one with a good rep from other clients. They are quite well regulated these days which helps. They will assess your needs based on many more variables than you can disclose here.

@Justthebeerlighttoguide

Who would take any risks with 250 though?

Surely the majority would be safely invested and maybe 10 grand in some sort of gamble scheme if one must.

As pp said, coming up to April, putting 20 x 2 into two stocks and shares isa would be fabulous...

Also it can sit as cash so no stress about funds right now whilst you read around funds.

There is no such thing as a "safe investment" though. The art is finding the investment that matches the risk you are prepared to take.