£150k spare - what to do with it?

[themummyway]

It's currently spread across various ISAs which are expiring and due to covid, I'm stuffed as far as interest rates go.

I'm mid-20s and own a home.

Not overly keen on investing in property as I can't deal with the faff, but I'm not sure what else I can do.
Premium bonds are a little confusing to me...

This won't go well

Make an appointment with a financial advisor.

Buy Amazon stock.

Sending my sort code and account number in a private message, cheers.

The OP has posted in investments, if you've not really got anything to add maybe find another thread 🤷

In the real world even £1.5m in spare cash is no biggie. The more you have the more you spend and the younger you are the more inclined and temptation to be frivolous with seemingly large previously unseen amounts of resources.

As it's £0.15m I would just make some contact with an "independent" financial adviser and stick it into some super safe flexible interest earning account. There are not many around given that Bank of England may be contemplating zero percentage points base rates soon possibly as due to Covid economic collapse. Ideally split the sum into two accounts from competing and non connected banks/financial institutions as the current rules for governmental backed financial compensation is still capped at £85k per person per banking group (from memory so double check).

Then after advice work out your mid to long term budget and financial requirements plus a bit (not much) of luxury spend possibly and invest accordingly. Go super safe as with the pandemic and Brexshit who knows what will happen? Maybe the sterling may reach record lows against the basket of major world currencies etc. And if you are thinking crypto - be very very careful as it's complex and does not "follow" usual financial pricing modelling! Gold is probably safe but super high value as for obvious safe store of asset reasons so no to little possible asset value appreciation maybe??

If lost then splash the cash and I am happy to accept as long as it audit trail clean. Just kidding on this last bit but well done and remember in the grand scheme (and especially if it was gifted to you) of things £0.15m is not enough to live on for that long without making it work and earn for you!

Undeveloped property on a train line is my number one investment go to. Especially if its within 90 minutes of the city. Don't need to worry about tenets, and it values better than a house.

@lukasiak

Undeveloped property on a train line is my number one investment go to. Especially if its within 90 minutes of the city. Don't need to worry about tenets, and it values better than a house.

Any recommendations of places?

@ResIpsaLoquiturInterAlia

In the real world even £1.5m in spare cash is no biggie. The more you have the more you spend and the younger you are the more inclined and temptation to be frivolous with seemingly large previously unseen amounts of resources.

As it's £0.15m I would just make some contact with an "independent" financial adviser and stick it into some super safe flexible interest earning account. There are not many around given that Bank of England may be contemplating zero percentage points base rates soon possibly as due to Covid economic collapse. Ideally split the sum into two accounts from competing and non connected banks/financial institutions as the current rules for governmental backed financial compensation is still capped at £85k per person per banking group (from memory so double check).

Then after advice work out your mid to long term budget and financial requirements plus a bit (not much) of luxury spend possibly and invest accordingly. Go super safe as with the pandemic and Brexshit who knows what will happen? Maybe the sterling may reach record lows against the basket of major world currencies etc. And if you are thinking crypto - be very very careful as it's complex and does not "follow" usual financial pricing modelling! Gold is probably safe but super high value as for obvious safe store of asset reasons so no to little possible asset value appreciation maybe??

If lost then splash the cash and I am happy to accept as long as it audit trail clean. Just kidding on this last bit but well done and remember in the grand scheme (and especially if it was gifted to you) of things £0.15m is not enough to live on for that long without making it work and earn for you!

Really appreciate this advice, thanks for this!

@lukasiak

Undeveloped property on a train line is my number one investment go to. Especially if its within 90 minutes of the city. Don't need to worry about tenets, and it values better than a house.

Any recommendations of places?

@lukasiak

See a couple of financial advisors that specialize in retirement planning. Invest with the one that makes the most sense to you.

I would suggest an investment property... but would hang off until jan to see what happens to the market... you can pay a % of your rent to an agency to deal with the tenant and all the issues.

Or you could get yourself a nice holiday flat near the sea... after covid problems that’s what I would do!!

Re Premium Bonds, you buy bonds up to £50k maximum investment. Each £1 bond has a unique number, so if you buy £10k bonds you will have 10k unique numbers.
Each month everyone's bond numbers are entered into a prize draw, like a lottery. If any of your numbers are chosen then you win a cash prize, tax free.
You can withdraw your investment at any time, even if you never win a prize your investment is always safe.

So it's like playing the lotto but always being able to get your money back.
Sounds too good to be true? You don't earn interest on your investment. You are never guaranteed to win prizes, it's luck.

Why not keep it in ISA wrapper and invest it? Sounds like you may be using Cash ISA at the moment.

I would:

1. Put aside at least 6 months of expenses as an emergency fund. Premium bonds or NS&I Direct Saver may be good for that. You want safety, accessibility, any interest/winnings is a bonus. Be aware that the money loses to inflation, so have enough but not too much.

1. Invest the rest in as globally diversified investments as possible.

If you like the simple life then Blackrock Consensus or Vanguard LifeStrategy products will give a lot of diversity at a low cost. Keep this in the ISA wrapper by transferring Cash ISA to S&S ISA with your selected platform. I would choose fund/funds first then look for low cost platform on which they can be brought. Have an investment timescale in mind of 10+ years.

1. If you do not own property and might in the next 5 years, plus would be a first time buyer and under age 40, then consider using a Lifetime ISA for £4k per financial year. The Government topup is larger than you are likely to get from putting the money in an investment.

Upgrade to a better property in a better area? ~
Extend?
Invest in ground source heating / solar and thoroughly insulate your home, so as to reduce future bills?

@lukasiak

Undeveloped property on a train line is my number one investment go to. Especially if its within 90 minutes of the city. Don't need to worry about tenets, and it values better than a house.

Hmm. Think that would have been good advice before Covid, but it could be years before 'good transport links' regains its cachet.

I'd also hold off til Jan to see what the domestic property market does.

I have £250k invested with Old Mutual. I know the 'advisable' thing to have done was to buy-to-let, but I'm morally opposed to that.

Are you making full use of your tax allowances? This money is already using ISA tax wrappers but is any of it "spare enough" to be locked away long term in a pension?

It sounds like you don't really have an overall financial plan.... work out what your short and long terms needs and objectives are for the life you want to live, and then look at how your assets can best be used to support that plan. Until you know what you're trying to achieve it is hard to suggest the most appropriate ways of investing that are suitable for you personally.

Good advice from NannyNick and Sunseed, once you have carved out 6 months expenses as an emergency fund and also an amount for any potential big spends that you might make in the next 5-6 years ( car, holidays etc) then (depending on your circumstances) you could look at investing in a diversified stocks and shares ISA and or a pension. A pension contribution has the added benefit of tax relief but you won't be able to access the money until 10 years before your state retirement age. It is worth getting professional advice to help you with your decisions as there is a lot to think about and with interest rates being so low you get almost nothing by keeping it all in cash.

Please don't go to an IFA.

Take some time to educate yourself about finances on sites such as moneysavingexpert.com and you will save a fortune - not just now but for the future too.

Just popping in to say yes have a long term plan for what to do with it. A certified financial planner is what you need as they look at where you are now in relation to long term goals and work out how to get you there. As you are so young you have given yourself lots of options.