[Closed] Inheritance - what to do with it?

Condolences.

I'd suggest spending a small bit of it on some proper financial advice.

I'll look after it

*investments in BOL may go down as well as up..... but most likely down

i represnt the former finacail director of a african nation and can advice on som strong investment portoflios for your extrem benefit.

Sorry for your loss mate. Have a nice holiday (6 months? you could live like a king in thailand or similar places for very little money) and pay the mortgage off. That's what I would likely do. If you have kids, put some away for their future if they're young or help them with a house deposit or a car if they aren't.

My dad's a retired financial advisor and based on past performance, if your 6 figure sum is concerning you he could rapidly turn it into a 5 figure sum

Pay your inheritance tax, then spend half of what is left on something sensible like a rental property, and the rest on living well. Can't take it with you and all that.

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Condolences on the uncle, hope he had a good innings. I'm guessing there are no "retirement jobs" you would like to do that maybe this sum could allow you to set up as?

If not, never fully trust anyone else with your money. Whatever you're going to invest it in, look at it yourself and make an informed decision. Maybe spread it about a bit. But money anywhere is never 100% safe so you could just blow it all on bike parts/coke/hookers.

jekkyl - Member
Sorry for your loss mate.

It's mate now, is it?

😉

As above. Seek independent legal advice.

Personally I'd put it in a SIPP split between 4 or 5 large funds.

Hels the threshold on inheritance tax is £325,000 and the rate will be 40% of anything over that.

But yes if it was me I'd save enough to top up my pension contributions annually and buy a rental property.

I got some money (not as much as you) when my father died and was very sensible and paid off some of our mortgage.

I kind of wish I had been only half sensible and bought a holiday home somewhere isolated (and cheap!). Not as frivolous as coke and hookers but more short term life enhancing than my rather dull choice. Or a boat - a 2nd hand yacht would have cost money to keep but they maintain their value quite well and would have transformed my weekends.

Some bloke called Michael Jeremy /Jeremy Michael is offering free financial advice 🙁

Consider paying for some good financial advice (it can be hard to find).

You need to find the most tax efficient way of investing.

Max out an ISA each year is an obvious one (probably stocks+shares).

Then think about paying more into your pension as you could get tax relief. Well worth it if you are a higher rate tax payer.

After that, picking the right funds. Personally I wouldn't buy property. Look at fees and price stuctures (how much and how is it charged (flat fee per annum, time usage or performance). You will need to consider long term capital gains as well.

Personally I'd put it in a SIPP

I'm beginning to think you're on commission for SIPPs footflaps 😉

A mate just bought a one bedroom apartment in Chamonix for a low six figure sum. The rental income is between £500-750 a week depending on season. Buy an apartment, rent it out to give you a little bump to your current income and pay for trips out to Cham for skiing/biking. Then sell when you want to retire? It should make the years leading up to retirement a little more comfortable and enjoyable!

Property. A flat in the rubbish part of town near the centre if you want to make maximum returns but it will be more work. A holiday let somewhere interesting if you want to be a bit more fun. Either will keep giving you money well into retirement and will most likely rise a value a good amount when you want to cash in

nickjb - Member

Property. A flat in the rubbish part of town near the centre if you want to make maximum returns but it will be more work. A holiday let somewhere interesting if you want to be a bit more fun. Either will keep giving you money well into retirement and will most likely rise a value a good amount when you want to cash in

or a building rented by Bright House for teh ultimate cash cow

[quote=peterfile ]
A mate just bought a one bedroom apartment in Chamonix for a low six figure sum. The rental income is between £500-750 a week depending on season. Buy an apartment, rent it out to give you a little bump to your current income and pay for trips out to Cham for skiing/biking. Then sell when you want to retire? It should make the years leading up to retirement a little more comfortable and enjoyable!

if I had some spare cash I'd be doing this in a shot, although I made the mistake of looking at RightMove Overseas for Chamonix the other day, page 15 and it was still in 7 figures...

For the love of God. Has nobody said " Buy a Bike" .... Or two.

Chocolate covered cotton.

[i]You need to find the most tax efficient way of investing.

Max out an ISA each year is an obvious one (probably stocks+shares).
[/i]

Based on getting 1% from a ISA and some pension funds appreciating at 10%, I'd put it into a pension.

NSI bonds, be safe, might not earn great return compeared to other "investments" but it be safe, BUT if you win the big prize it retirement time!

[i]Based on getting 1% from a ISA and some pension funds appreciating at 10%, I'd put it into a pension.[/i]

You can invest in the same funds in both ISA and SIPP. They are just different product wrappers so doesn't mean one will perform better than the other. SIPP has better tax advantages but ISA is more flexible. Whether you can put inheritance into a SIPP I don't know, guess so.

Set aside sum you can comfortably afford to lose, say £20K, and play the equity markets with it - great fun!

Two things.....investing in a SIPP may not be that bad an idea. With the new pensions regime coming into effect from 2015 the case for pensions (over ISAs) can be quite compelling (particularly if you pay higher rate tax).

Commission - doesn't exist any more so footflaps must be after something else! 😉

There are limits to the pension contributions £40k pa iirc...but I could be wrong.

Based on getting 1% from a ISA and some pension funds appreciating at 10%, I'd put it into a pension.

An ISA can perform as well as a pension, just depends what you invest it in. However, the merit of a SIPP is that you will get a tax rebate which will supplement your investment. However, a pension is less flexible.

Flats in ski resorts often look tempting but when I looked at it they only rent out on average 6-8 weeks a year.

[i]There are limits to the pension contributions £40k pa iirc...but I could be wrong. [/i]

I believe the £40k limit is correct as I've looked into it too. But you could set aside a few years worth of top up contributions. Invest £40k in your pension and that gets topped up by £8k if you pay 20% tax.

I guess as we don't know how big the 'six figure sum' is then its just pie in the sky. There's a fair difference in what you can do with £999,999 compared to £100,000

Ok thanks folks

Have looked at SIPPs before will look into them again. Might put some in a fixed rate bond as well

Ta

Fill your ISAs with cheap index trackers (Vanguard). Depending on how long till you can access your pension (and your view on future government policy) fill your SIPP with cheap index trackers (Vanguard).

When ever I invest I always consider how much of my current income the investment will be able to 'replace'. Aslo consider how sustainable the income is.

A mate just bought a one bedroom apartment in Chamonix for a low six figure sum. The rental income is between £500-750 a week depending on season.

Well I think that's not quite right - maybe there are months of no rent? Or at least much less than £500/week.

I'd be buying a place in France, somewhere that you can rent out most of the year

[i]I'd be buying a place in France, somewhere that you can rent out most of the year [/i]

FWIW I'd only buy property in the country you live in (and understand the rules/regs).

Where in France can you rent a place out most of the year?

I was in the same position a couple of months back.
Paid off my mortgage.

Am now about to hand in my notice at one of my two part time jobs, and will be working 1.5 days a week in the new year and taking some time to brew beer, play guitar and ride bikes.

Coke and hookers.

I didn't bother reading the thread

When I was 18 I got an unexpected inheritance, I guess it was the equivalent of a six figure sum at the time, it was enough to buy a house and have a big party..

At a time when every single one of my mates was on the dole and on drugs it felt pretty strange and I didn't adjust well to suddenly being a man of wealth..
My girlfriend left me, I didn't want the abrupt responsibility of getting the roof fixed and insurance and bills, nor did I have the resources so I let the place..

The tenants ran it into the ground and then burnt it down, which was a blessing as that insurance I'd been loathe to fork out for enabled me to recoup my investment, somewhat jaded and definitely wanting out of the property game..

I suppose it took me about three years to fritter the cash away on fast living and the high life, so my advice would be to cut out all the initial faffing about and get straight into the serious business of pissing it up the wall.. 🙂

I received a six figure sum earlier this year.. It cleared my mortgage, bought me and the wife newer cars and went on a nice holiday with the kids.

Still got a bit left over which I've put into a fixed term bond for the time being.

Made my life considerably more comfortable having no mortgage to pay so my wages now go considerably further.

I've put into a fixed term bond

Pension limit is for a single year, if I recall you can backdate for prior unused years but only really worth it if you have significant income, ie don't put more into pension than you pay tax.

My number 1 suggestion would be buy to let property with a smallest mortgage on top easily covered by rent, assume interest rates will go up quite a bit when doing your calculations.

Well I think that's not quite right - maybe there are months of no rent? Or at least much less than £500/week.

He has a chap who leases it for Jan/Feb/March (and has done for years, he's honouring an existing agreement which was in place when he bought it) for £7.5k. Apparently this isn't uncommon for bankers etc in GVA and was one of the reasons why he bought this particular apartment. Why the guy doesn't just buy it himself I have no idea. The remaining weeks around those months were picked up quite quickly at £500-750 (£750 is the top end though, ie over Xmas).

It sleeps 4 (double bedroom and two sofa beds) and is right next to Midi cable car (so whilst in Cham Sud, it apparently commands a decent premium through the summer months from the mountaineering crowd). I think it's £500 for peak summer months.

Invest 30k in premium bonds the most you can have 30,000 chances of a win every month. You can always draw it out when you want as well.

Rocketman - I just renewed one that I had with the post office. Rate isn't amazing but better the devil you know.

condolences for your loss

When my dad passed away I inherited some stuff. First thing I did was put money into education fund for our kids as dad worked in education and that would have sat well with him. The rest of the money went into an offset mortgage on our current mortgage debt while we figure out what to do with it. I would of course give all of it away to have a few more years with him 🙁

I guess if the sum is large enough and you are already debt free, you have the opportunity to make the most of your life - so enjoy it and follow your dreams. Buy a sail boat or take a round the world trip?

edit - apologies - I missed you were looking for investment ideas.

[url= http://www.marke****ch.com/story/warren-buffett-to-heirs-put-my-estate-in-index-funds-2014-03-13 ]Warren Buffett said....[/url]

Passive money management - track the index

I am not a financial advisor....

Invest in shares. Don't worry too much about which ones, just a decent range - maybe 5-10k each (depends what you mean by 6 figure sum). Take a year or two over it, don't spend it all at once. You can expect about 2-3% dividend income plus whatever capital growth.

Don't use a fund unless you can check that the management fees are really low. Parasites, the lot of them.

I know this guy in Nigeria who can hook you up with a great investment.

Invest 30k in premium bonds the most you can have 30,000 chances of a win every month.

It changed not so long ago, it's £40,000 now.

SWAG: shares, wine, art, gold. Diversify for most security.

Buy oil when its somewhere near $50 /barrel
Give it 2-3 years and it will be back up somewhere near $100 / barrel

I'll take just a 5% commission for the tip.

I,d stick 30k on CF Woodford equity income.Tick the dividend reinvestment box,light a cigar,put your feet up and Waaaaaaaaait.Neil
PS,with inflation most bonds will lose you money.

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Oil is a decent shout IMO.

I,d stick 30k on CF Woodford equity income.Tick the dividend reinvestment box,light a cigar,put your feet up and Waaaaaaaaait.Neil

Pretty much my strategy!

I inherited about 20k in 1994ish when i was about 20. I invested it all for a few years then used some for a big holiday some for a couple of cheap cars etc and by about 2008 I still had 25k to use as a house deposit. So I guess my advice is use some fkr coke and hookers but invest a good chunk..depends on your age and responsibilities though I suppose.

Inherited some cash from my dad about 6 years ago. Some shares directly, some in investment trusts, also ISAs and self select SIPPs. Also cash in bank, to pay for kids music lessons, and so on.

I was also left some cash when about 18 / 20 - used that to offset the cost of buying my first flat, not regretted that. Never went into the buy to let game though.

I,d stick 30k on CF Woodford equity income.Tick the dividend reinvestment box,light a cigar,put your feet up and Waaaaaaaaait.Neil
Pretty much my strategy!

Hasn't that fund done less than 2% over last 3Y? vs FTSE100 doing 14%? For a 1% fee!

It has only been going for 6 months so bit early to judge

Warren Buffett said....

Passive money management - track the index

I am not a financial advisor....

A +1 from me.

It has only been going for 6 months so bit early to judge

Plus the fee is less than 1%...

It was up nearly 8% in 6 months until last week when the whole FTSE started to dive....

It has only been going for 6 months so bit early to judge

But probably fair to refer to the performance of the Invesco Perpetual Income fund prior to that since Woodford is, for the sake of argument, almost exactly the same from a strategy point of view. And those that stick big chunks into woodford relative to overall portfolio size just bear in mind that whilst his track record is excellent the fund is heavily weighted towards the pharmaceutical/healthcare sector.

PS,with inflation most bonds will lose you money.

Utter pish.

Buy a racing car and race it

New bike forks I reckon...

It has only been going for 6 months so bit early to judge

My bad, screen annoyingly shows a 3y return not allowing for inception

My bad, screen annoyingly shows a 3y return not allowing for inception

So if this is all a dream within a dream within a dream the returns could be different?

But probably fair to refer to the performance of the Invesco Perpetual Income fund prior to that since Woodford is, for the sake of argument, almost exactly the same from a strategy point of view.

He has been beating IP slightly over the last 6 months.

me the brother and sister got a tidy sum when an aunt died.. i paid off the mortgage.. sister paid half of her husbands gambling debt.. brother moved a hooker/money chaser in.. very attractive, 19 years old ( he was close to 40).. lasted a year.. but hes still smiling..

So why wouldn't property be the best long term investment? How about an industrial property/unit? Higher rent to value, less maintenance as most are just 4 walls and a roof.
Get a decent deposit off a tenant and away you go.

Find a good (and expensive) financial adviser.

I had 50k from my father (still with us thankfully...) last year. I kept some for house improvements and odd jobs, and gave the rest to an IFA. Quite steep (1% upfront and 0.5% per year...) but well worth it - the portfolio has made well over 10% in the last 12 months. It's as safe as I need it to be - the risks are strictly managed with a variety of stock, in case of poor performance in any particular sector.

Some folk set them up to provide an income, whereas mine just accrues value...

Gotama,you obviously haven't seen the yield on govt bonds lately.Try having a look sometime.Perhaps start with German govt bonds.You'll no doubt recommend rocketman to get rich with them.

BTW anyone looking for a long term, low cost tracker fund would do a lot worse than the HSBC FTSE trackers (accumulation or income) which IIRC charge only 0.1% pa and have a pretty good beta record (closeness of tracking)

Its where I stick our ISA pots each year.

BTW anyone looking for a long term, low cost tracker fund would do a lot worse than the HSBC FTSE trackers (accumulation or income) which IIRC charge only 0.1% pa and have a pretty good beta record (closeness of tracking)

Good choice, but be careful of the platform fees your broker charges...

indeed.
I use Share.com frequent trader which works for me quite well.

Long term currency speculation?

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It's got to go back up eventually... Right?