[Closed] Investing a lump sum

I don't think safe with a good return exists anymore. If you want a good return there will be risk.

Property, £40 ! Shed in mid wales then ?

Personally I would look for something with zero hassle. So not property.
One of those funds that sticks it in the top 100 shares, a range of them. Basically it will stay a little ahead of inflation without you needing to concern yourself over it.

Unless you fancy a new hobby in investment / gambling 🙂

If I had a time machine I'd go back a year and say second hand cars! Who'd a thunk that back then? So, the guaranteed investment now?? yeah, good luck. 🙂

Air cooled Porsche?

If it was me:

Put 20k in a stocks and shares ISA now, and the other 20k in next April.

If you're sure you're going to leave it for 10 years and not worry about the inevitable ups and downs in the market that will occur, then within your ISA, buy £40k of a global tracker-of-tracker fund, such as Vanghuard lifestrategy 80 (80% shares and 20% bonds) or Vanguard lifestrategy 100 (100% shares).

The higher the percentage of shares the likely greater growth - but also increased volatility in the value as the bumps in the markets rock share values. Having a higher proportion of bonds supposedly evens out the volatility at the expense of longer term growth. So it depends on your appetite for risk.

If you want to have more control over your investment start by taking a look at a model portfolio such as these, and follow their recommendations. Or use them for inspiration before picking your own funds.

Low cost growth (tracker funds) https://www.ii.co.uk/model-portfolios#low-cost-growth
Active growth (managed funds, meaning higher fees but potentially) https://www.ii.co.uk/model-portfolios#active-growth

Then sit back while you get rich (not a guarantee).

(I am not a financial adviser!)

Buy garages. A mate buys them at about 15k each and rents them out for £100 a month.

Although I said all that without knowing how old you are, what you might want the money for, how much other savings/pension you have and so on.

So please do your own research too!

40k @ 5% is 65k after 10 years ... its 78k at 7%

You'd get that return in the stock market, maybe morre

Do as Snowy1 says

Good luck

First thing is tax efficient wrappers eg:

Depending on your age you could stick it in your pension (and your wife's). You'll get 20% tax added to it and be able to take 25% tax free from 55.

Or, your ISA allowance is £20k and using your wife's (assuming you're married) you have £40k between you.

Second is what do you do with it:

1. Cash in an ISA / Pension. Zero risk but you'll probably lose about 25%** in real terms due to inflation over 10 years.

2. Government bond. Zero risk but you'll probably lose about 15%** in real terms due to inflation over 10 years.

3. Stocks and shares. Even with a low risk portfolio there is a lot of risk if you have to take the money in exactly 10 years eg say there is a correction of 40% in 9.9 years - that would make 10 years time the worst possible time to sell up. If you don't mind being a bit flexible eg wait a couple more years if shares have dipped, then that would be your best bet IMO.

** Bit of a guess as no one knows what inflation will do over the next 10 years

Doubling in value in ten years from a safe investment is a big ask. Mostly what snowy1 says but contributing to a pension might be another thing to think about depending on what your tax rate is.

Stocks and shares ISA, put it into Fundsmith.

Property, £40 ! Shed in mid wales then ?

Two bed flat in Hawick

Fundsmith +100% since Feb 2017.
SMIT +397% in same period.
Usual caveat...past performance is no guide to future growth.

Have a look at peer 2 peer lending.
I use service called Zopa.com and get 4.5‰ return after bad debts.
The service does all the work, credit checking, missed payments etc.
they do an isa too.
max allowed in is £25k unless you have some licence.
Good as part of a portfolio.

SMIT?

Scottish Mortgage Investment Trust? Did very well off the back of deep Tesla investment in particular.

Fundsmith Sustainable equities has worked well for me. I should have put all my share money in there and I'd be better off just now, but shares are too tempting.

Mrs_oab and I have just had similar sized decision to make.

Paid some off mortgage.

Paid some into my pension.

Both maxed out stocks and shares ISA, both sustainable and balanced to confident portfolio's. One lot in Wealthify one lot in Clim8.

Time to sit tight fit the next 5+years. If we do ok, we pay off the mortgage. If not, c'est la vie.

What Snowy1 sez, again.
Ive got Money in an ISA in fidelity’s select 50 fund, currently getting around 5/6 %

I use St James Place who max the ISA allowance each year between me and the Mrs and then do mixed portfolio and pension stuff for me which I don’t pretend to understand. I’m not the sort to want to work the market and trust my adviser who understands my risk appetite and invests in line with that. I think I made 17% in a good year, been a bit up and down but as said above, long term trends tend to smooth these lumps out so if you don’t have a date in mind to take it, this works well.

40k into an index tracker. (Or a vanguard global fund).

Wrap 20k of it into an ISA this year. 20k of it into the same ISA next year. Year after, put whatever interest remainder there was into the ISA too.

Leave for the next 8.5 years = Profit.

OR - 35k into an ISA the same way you're doing now. 5k into Crypto. Specifically bitcoin.

The ISA will perform the same. I suspect Bitcoin, conservatively, will be 10x the value in 10 years. And if not, you've only gambled 5k. The rest is very sensible investment advice.

I don’t personally see the next ten years of equities returning the same as the historic average; sustainability commitments and the demise of support for hard capitalism will impact investor returns (plus usual macro covered above impacting for the next few). I bought the dip immediately post lockdown and I’m currently debating whether to sell now.

I use St James Place who max the ISA allowance each year between me and the Mrs and then do mixed portfolio and pension stuff for me which I don’t pretend to understand. I’m not the sort to want to work the market and trust my adviser who understands

Without appearing rude I would suggest you take a very very detailed look at the charges St James Place charge for their products, it might save you a surprisingly large amount of your money over time.

<Without appearing rude I would suggest you take a very very detailed look at the charges St James Place charge for their products, it might save you a surprisingly large amount of your money over time.>

Yep - https://www.evidenceinvestor.com/the-problem-with-sjp/

Without appearing rude I would suggest you take a very very detailed look at the charges St James Place charge for their products, it might save you a surprisingly large amount of your money over time.

OMG + 1000

The Sunday Times has run 100s of articles on how bad they are!

In the last league table SJP held 8 out of the top 10 worst performing funds!
They also have the highest charges by some mile.

The worst possible combination.

They do well as their agents spend a small amount of their enourmous commissions entertaining clients / appearing to be attentive, but really they're ripping their clients off completely.

Their commissions / perks are also off the scale, lavish holidays for their reps and ALL their frigging family on luxury yachts, gold cufflinks etc. All paid for with the clients money!!!!!

Also, some very dubious advertising, two weeks ago in the Sunday Times (article #376 on why SJP are rubbish) they were advertising themselves to ex-servicemen as IFAs which isn't correct as they're not independant, they only offer their own funds (which all underperform the market) so are 'restricted' advisors.

They really need regulating out of existence, their model is highly successful (for them) but all they do is rip off all their clients on a massive scale.

Nearly 80 per cent of funds run by the wealth manager St James’s Place (SJP) are failing.

Money looked at 51 SJP products, holding a total of £33.8 billion, and found that 39 (holding £29 billion) had underperformed their benchmarks, failed to meet their objectives or both.

Our analysis was based on the firm’s value assessment report, an annual requirement that forces investment companies to justify their fees by comparing returns against other funds.

https://www.thetimes.co.uk/article/four-out-of-five-sjp-funds-are-poor-value-md9hff8d7

Now if you've read this and want to move your money elsewhere, this is where you get really screwed, 6% withdrawel fee to move your money elsewhere. All my SIPPs / ISAs have 0% (zero) to move them. I could move the lot tomorrow for nothing.

Depending on your age you could stick it in your pension (and your wife’s). You’ll get 20% tax added to it

How does this work? You contact your pension provider and arrange a one-off fee, and then.... they speak to HMRC to ask for a top-up?

How does this work? You contact your pension provider and arrange a one-off fee, and then…. they speak to HMRC to ask for a top-up?

Yep. You ask your pension provider to make a one off contribution, fill in a form, sort out a BACs transfer.

Normally they will submit the request to HMRC for the 20% basic rate tax back on your behalf which will appear several weeks later.

If you're a higher rate tax payer, you then need to write to HMRC to tell them and they will then give you the extra 20% tax rebate as a cheque or BACs at the end of the tax year. You then pay that 20% into the pension yourself (in the next tax year), which then attracts another 20% rebate from HMRC via the pension company, and you again write to HMRC and get the extra 20% at the end of that tax year. This can repeat for ever with smaller and smaller sums each year.

NB The maximum you can pay into a pension in any one tax year is £40k (unless you're in the highest 45% tax band). If you already have a company pension, just split the £40k 50:50 between you and your wife's pensions to stay clear of the annual limit.