200k to invest

[SillyNavySnail]

I am about to sell a small house I lived up before I met and moved in with my partner, which owned outright and rented out to friends for the last 4 years. Now worth 150-160k.

I also have inheritance, I have been stashing in locked away high interest accounts, moving some into my pension and s&s ISA each year.

I also paid for an extension on partners home, effectively buying 20% of the property. He pays the rest of the small mortgage. That setup will stay like that.

I was originally thinking go use my money from the sale (after cgt), plus my inheritance savings, with a 75k mortgage, buy a £250k property in a more desirable area and rent again. On paper, I'd earn slightly more in top savings accounts, but property is also an asset that will increase in value. I've accounted for cgt.

However, would I be better investing in SP500 etc, which is a risk, but not necessarily more than property (I flipped 3 houses in the past btw)

I have two children under 3. I opened an s&s ISA for both and put in 1k to both.

This money is for my retirement and their future. But, who know if in the future I may need to buy another house for us to live in if relationship breaks down etc. Or if my family will move in the next 5yr. That's one reason I'm perplexed with what to do

Many thanks

I take it they're not his children ?

and if you do break up…. would he want 50/50?

do you want to marry him? does he want to marry you?

I must admit I dont really understand all that

But at least you can live rent free in a house you own without a mortgage, if you need to.

He doesn't really want to get too involved, ae says its my money (bulk from inheritance) to do what i want with. Which I do agree with.

If he had a windfall I wouldn't really get involved

that is very odd OP

even setting aside fact you have children together!

Anyway, from what you’re saying, i think very very wise for you to be planning in the way you are. Very wise

Short version, the value of houses has been falling for the last 20 years, not rising. So the common advice to invest in property 'because it always goes up' is wrong.

Yes you can live rent free in a house without a mortgage. But the OP has said she would have a mortgage.

And if she bought a house now but doesn't need it for 10 years she might well have lost money compared with putting the same amount into investments that keep pace with (or beat) inflation and then taking it out to buy a house only if and when she does need it.

I don't understand why that's odd. It's my inheritance, it's up to me how I invest it surely?. I didn't expect to have it another decade or so, gotta make the best out of a shut situation by investing it wisely

as i say… i think you’re being very wise 🤷

Yes I get the last point

But on the first, you mean that although the number of the value might be higher for property, lets say my property, because of inflation its not worth more of my money in real terms?

So we bought this for 136 in 2009 for example, I think it would probably sell for around 270ish, lets say 250

So the number is higher but due to inflation its not worth more?

See a private investment advisor. We can't help with this.
Are you written into co-ownership of your partner's property?

Yes, that's exactly it.

Of course it will vary for individual houses - if you make the right improvements or the area has something like a new school or improved train service you might make money even after deducting inflation. But on average inflation has been going up at the same speed or even faster, so a bigger 'numerical' price of a house you've owned for 10 or 20 years is in fact the same or smaller 'spending power' price.

Plugging your example into the BoE inflation calculator https://www.bankofengland.co.uk/monetary-policy/inflation/inflation-calculator £136k in 2009 is worth £210k now. So if you could sell for £250k you have beaten the average (although you'd also need to take into acount maintenance costs, mortgage interest etc to work out if you've actually made a profit).

They are his children
What made you presume otherwise?

No idea what the parenting split would be on a break up I'm not considering. Just protecting myself for worse case, as not married and neither us want marriage

The S&P 500 is a great choice for any money you won't need for five or more years. The US stock market consistently outperforms all of the others. Vanguard is your best choice for a low-cost tracker (index) fund. They invented them.

I use vanguard for my pension and s&s ISA for myself and the kids. I'm thinking S&P 500 for 20-25yrs and let the compound interest grow, it's just deciding how much to put in. Thank you

Your terminology made it sound like they weren't his I.e my children rather than our children.

Ah ok, sorry for the confusion. Deffo my children, but also his and ours