Invest in property or stocks and shares?

[BondStreet]

I’ve received an unexpected inheritance and would like to invest it somewhere but am a bit clueless.

I’ve lost close family members suddenly which has focused my mind on being able to retire as early as possible but will still need some level of income as the pension will unlikely be enough to comfortably live off so I need an income stream and was thinking either buy to let properties or stocks and shares. If I went down the property route I’d look to buy 4 houses to generate a decent income in 20 years time which would essentially be my retirement OR, should I plough the inheritance in stocks and shares and top up with my salary?

Inheritance is £200k for reference, realise how lucky I am to have that kind of lump but would prefer my parent to be here obviously.

any help or guidance appreciated.

I would —
⁃ 100k to get a buy-to-let mortgage for one or two properties and rent out
⁃ 50k on high interest rate time deposits
⁃ 30k on ready-made funds
⁃ 20k on Stocks and Shares ISA

Maximise your ISA and pension allowances. I would personally put it in stocks and shares rather than property as I don't have time to manage a rental property and 200,000 may not be enough to buy a property outright so you have to contend with a mortgage.

Government seem to hate both landlords and tenants in equal measure. If you want to be a landlord with multiple properties you need to get proper advice on how to run that to be tax efficient. I sold mine because I could not be bothered to deal with the constant agro and the unknown of future government policy.
Do you have any pension funds?
when I sold my rental I paid into my workplace pension (which I’m expecting I won’t be able to get back until I’m 60), added to my LISA (if you are under 40 this gives you free money but again this is locked away until I’m 60). The rest I am adding to ISAs (mine and DHs over a few years) and this I’m hoping will plug the gap between becoming completely knackered and being able to claim my private pension.
ISAs are not as tax efficient as adding to pension but I want access to cash before 60 and I don’t trust governments not to change pension rules again (I’d be surprised if ISA rules changed but then I thought remain was a cert 🤣)

For that kind of money, I would definitely speak to a financial advisor. With properties you need to take into account on paying capital gains tax. If it were me, I would invest £20k into Stock and Shares ISA now and open up two high interest savings account - stick £85K each in there as a holding place. Each tax year put £20k from the savings account into the ISA.

I would rather have pension/ISA income and savings in retirement- than have to manage properties.

As someone who is, rightly or wrongly, fixated on reaching £1M in savings and has read extensively on the topic, I would recommend opening an account with Fidelity or Hargreaves Lansdown. Invest the entire amount in the S&P 500, an index of America's 500 largest companies, and let it sit for about 25 years. Historically, if the economy continues as it has since WWII, you'll likely reach at least £1M.

To avoid taxes, you should drip-feed £20k per year into ISAs. While you may incur some capital gains tax along the way, this is a sign of success. Consider whether you believe the global economy will be larger in the future than it is today; historically, it has performed better than house prices, despite the UK's obsession with them. Use a compound interest calculator with a 10% annual return, the historical average, to see the potential growth. This demonstrates why compound interest is often called the 8th wonder of the world by investors.

This is the second best advice so far. The best advice is to speak to a financial advisor and get a detailed plan taking account of all your assets, liabilities, goals and risk tolerance. Pay a one off fee, then go and implement it yourself.