📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!

40k - what do i do ?

Messsiah
Messsiah Posts: 22 Forumite
in Savings & investments
I know loads of people ask the same question, and i HATE to be another, but despite reading and reading and reading....I am still confused...

I have recently received my end of year bonus which was a nice lump sum of £40k.

Now..what should i do with it, to maximise my money making ?

I have thought about buying a property...but the recent instability, has put me off.

I am 31, single, and living in a my parents home ( they have moved to Dubai on a permanent basis, so no housing issues for me ! )

I have NO debts, no savings ( except this £40k ), and no ISA's or shares.

Basically..a blank canvas with £40k.

Any suggestions would be most helpful, and I would especially love any responses, which can suggest whom to save/invest in, with specific bank/organisations.

ie - Icesave, or TSB 8% account etc.

Tks

~M~
I am a Criminal Defence Lawyer, so if you need any legal advice, don't hesitate to ask.

NB - I don't know anything about Civil Claims, County courts or Conveyancing etc etc...just Crime !

~Always on the lookout for a good deal~

Comments

  • amcluesent
    amcluesent Posts: 9,425 Forumite
    Given your age, single status and, from a £40K bonus, some significant earned income just putting this in a savings account seems inappropriate.

    I would put £10K into 3 managed funds (using a tax efficient way like a SIPP)

    1) India (i.e. JP Morgan Indian Investment)
    2) New Energy Technology (wind, solar cell etc.) (ie. JP Morgan New Energy Technology)
    3) "Green" fund concentrating on waste management, recycling (i.e. Jupiter Green Investment Trust)

    £3K in a cash ISA
    £3K in online savings account
    £4K on a nice hi-fi (heh, it was a bonus!)

    And start some regular contributions to pensions and savings
  • plonkee
    plonkee Posts: 86 Forumite
    Firstly I would put 3-6 months expenses in a savings account.

    If you will want to buy a property for your own or investment purposes in the next say 5 years then I suggest you put it all into savings - £3000 in the best paying ISA and the rest in the top paying savings account. See relevant articles on site.

    Personally, I would invest the money.

    I'd probably spend £1000 on myself, put £7000 in a stocks and shares ISA, 3-6 months expenses (say £7000) in the top paying savings account (Icesave?), some into my SIPP (say £7000) and the rest into unit trusts / ETFs.

    A portfolio I'd consider for me is 70% UK index tracker, 30% international (probably index funds / ETFs) trying to ensure that my whole portfolio (pension, ISA, standalone) gave me this coverage. I'm reasonably well aware of the risks involved and am not a particularly cautious investor.
    thoughts on personal finance @ plonkee.com
  • Messsiah
    Messsiah Posts: 22 Forumite
    amcluesent wrote: »
    Given your age, single status and, from a £40K bonus, some significant earned income just putting this in a savings account seems inappropriate.

    I would put £10K into 3 managed funds (using a tax efficient way like a SIPP)

    1) India (i.e. JP Morgan Indian Investment)
    2) New Energy Technology (wind, solar cell etc.) (ie. JP Morgan New Energy Technology)
    3) "Green" fund concentrating on waste management, recycling (i.e. Jupiter Green Investment Trust)

    £3K in a cash ISA
    £3K in online savings account
    £4K on a nice hi-fi (heh, it was a bonus!)

    And start some regular contributions to pensions and savings


    I love the suggestions !

    Thanks a ton for that, i will be looking into JP Morgan :)

    ~M~
    I am a Criminal Defence Lawyer, so if you need any legal advice, don't hesitate to ask.

    NB - I don't know anything about Civil Claims, County courts or Conveyancing etc etc...just Crime !

    ~Always on the lookout for a good deal~
  • Jespin_2
    Jespin_2 Posts: 1 Newbie
    Originally Posted by amcluesent viewpost.gif
    Given your age, single status and, from a £40K bonus, some significant earned income just putting this in a savings account seems inappropriate.

    I would put £10K into 3 managed funds (using a tax efficient way like a SIPP)

    1) India (i.e. JP Morgan Indian Investment)
    2) New Energy Technology (wind, solar cell etc.) (ie. JP Morgan New Energy Technology)
    3) "Green" fund concentrating on waste management, recycling (i.e. Jupiter Green Investment Trust)

    £3K in a cash ISA
    £3K in online savings account
    £4K on a nice hi-fi (heh, it was a bonus!)

    And start some regular contributions to pensions and savings

    I'd be careful of constructing a portfolio as above when you currently have no savings/investments. The 3 suggestions above are all fairly high risk and I would not suggest these would make up the basis of your portfolio. You would be wiser looking to start with a good managed UK fund and there should really be many other areas of investment, both in asset classes and geographically, before you look to diversify into more specialist areas.

    Most important are the already mentioned suggestions of emergency funds, ISAs etc. Also, a SIPP may not be the best of ideas depending on what you may have in store for the money in the future. As always, it is difficult to say on these forums without going into a lot more detail.

    Regards
    James
  • amcluesent
    amcluesent Posts: 9,425 Forumite
    >The 3 suggestions above are all fairly high risk...<

    True, but given the OP's age and assumed income, investing for windows and orphans isn't necessarily appropriate.
  • Coops10
    Coops10 Posts: 46 Forumite
    It isn't quite as simple. You need to establish your own attitude to risk, ascertain when the funds may be required, make a contigency fund etc. I'd be wary of the out of the blue recommendations for these funds. Your best bet is to speak to an IFA. An hours meeting where different investments can be pinpointed and tailored to your needs will be more than worthwhile.
    I am an Independent Financial Adviser.

    Anything posted on this forum is for discussion purposes only. It should not be considered financial advice. Different people have different needs and what is right for one person may be different for another. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser who can advise you after finding out more about your situation.
  • Ximian
    Ximian Posts: 711 Forumite
    Part of the Furniture 500 Posts Combo Breaker
    Some good suggestions already and here are my suggestions:

    Have an emergency fund (already suggested by plonkee) of 3-6 months salary in an account that pays high interest and provides easy access. This will help with any unforseen emergency.

    Cash ISA (this is Tax free savings! Take advantage of this fact)
    How would you consider your attitude towards risk?
    Stock market investing is considered a medium term investment so 3-5 years or more (with no guarantees). If you are concerned about risk then maybe Bonds and Certificates are a better option:
    Government bonds and certificates are Tax free with low risk such as Index-linked Savings Certificates from NS&I: http://www.nsandi.com/products/ilsc/index.jsp
    Tax-free* returns of up to 5.65%** AER*** variable (equivalent to 9.41% gross for higher rate taxpayers)

    And as suggested, it's probably best to speak to an independant financial advisor so that you can discuss your needs for the future and save and/or invest appropriately.

    Good luck
This discussion has been closed.
★ ★ ★ Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 351.6K Banking & Borrowing
  • 253.4K Reduce Debt & Boost Income
  • 454K Spending & Discounts
  • 244.6K Work, Benefits & Business
  • 600K Mortgages, Homes & Bills
  • 177.3K Life & Family
  • 258.3K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.2K Discuss & Feedback
  • 37.6K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.
Update Your Picture