Long post, sorry. Will try to keep it concise.
I inherited and invested about £180,000 in December last year. I chose "ethical" investments brought an advisor. They're now worth about £156,000. I get that a drop in the market is to be expected sometimes but I've never invested before and have previously been quite bad with money, ie spending all I had, not saving enough etc.
Facts about me:
- I have 3 kids living with me, two of whom might want to leave in next 5-8 years (early teens). One is younger and likely to stay another 10-12 years maybe. Not sure about uni for any of them, oldest definitely capable but not a partier and nervous about student debt. Younger two possibly not academic enough. There is a modern university in our city.
- I literally HATE my part time professional job. I do have a pension with it but it's not great as haven't worked full time for years.
- Generous maintenance from ex but this will diminish in next few years as kids become of age.
- Struggling to make ends meet with cost of living crisis, like everyone. Cannot increase hours as work have no budget to do that. Plus, hate job but unlikely to earn as much if I change sector/role.
- I want to enjoy my life NOW because my parents died young and I might do too (but I am in good health, luckily). I don't want to be impoverished in old age either though.
My idea is, and because I am shit with money, I can't tell if it's a good one so please tell me if there's a glaring pitfall I've overlooked:
- Withdraw maybe £100,000 of investment and buy a flat outright when market falls in the spring as is predicted. This is a realistic price for a two bed flat in our area.
- rent it out and pay income tax on the rent
- if oldest child/older two children want to stay local when they're older, rent it to them
- potentially sell many years in future and pay capital gains tax (but I don't know what that would be)
Am I being ridiculous? Has anyone done this with a property for young adult children? Are there any flaws that I can't see?
Thank you for any input; I am a dolt about this kind of thing.