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  • FIRST POST
    • JG7
    • By JG7 21st Mar 17, 1:12 AM
    • 7Posts
    • 1Thanks
    JG7
    19 Year old Euro Inheritance - what to do?
    • #1
    • 21st Mar 17, 1:12 AM
    19 Year old Euro Inheritance - what to do? 21st Mar 17 at 1:12 AM
    Hello,

    Quick introduction - I'm currently a student at university, studying Accounting and Finance, and have a basic knowledge of investing etc. I am on the verge of inheriting around €150k, and would really appreciate advice on what best to do with the funds.

    My current plans are just to open a Euro account and place the funds in there; but as a finance student i'm aware this would be one of the least productive ways of handling it. Currently, as student I have a lot of time to learn about investing and ways of creating passive income, but I don't know the best place to get started. If you were in my position, what would you do with the funds?

    All help and advice is appreciated

    Regards
Page 1
    • JG7
    • By JG7 21st Mar 17, 6:09 PM
    • 7 Posts
    • 1 Thanks
    JG7
    • #2
    • 21st Mar 17, 6:09 PM
    • #2
    • 21st Mar 17, 6:09 PM
    Any and all advice is welcome
    • Apodemus
    • By Apodemus 21st Mar 17, 8:32 PM
    • 778 Posts
    • 570 Thanks
    Apodemus
    • #3
    • 21st Mar 17, 8:32 PM
    • #3
    • 21st Mar 17, 8:32 PM
    I think folks would need a bit more info about your current financial situation, your life plans and whether you envisage being in U.K. or eurozone for the longer term.
    • Plus
    • By Plus 21st Mar 17, 8:38 PM
    • 217 Posts
    • 171 Thanks
    Plus
    • #4
    • 21st Mar 17, 8:38 PM
    • #4
    • 21st Mar 17, 8:38 PM
    In the first place, open at least two Euro accounts to transfer it into - one isn't enough to have FSCS protection. Citibank, Barclays, HSBC, Lloyds and others have Euro accounts - they're pretty lame as current accounts, but should do enough to just put the money in a holding pattern.

    Once you have that sorted, you then have time to work out what you want to do with the money - including deciding whether to change it into a pounds or not, and when you might do that. There's no need to be hasty - time spent learning may prevent expensive mistakes at the beginning.
    • JG7
    • By JG7 23rd Mar 17, 1:04 PM
    • 7 Posts
    • 1 Thanks
    JG7
    • #5
    • 23rd Mar 17, 1:04 PM
    • #5
    • 23rd Mar 17, 1:04 PM
    In the first place, open at least two Euro accounts to transfer it into - one isn't enough to have FSCS protection. Citibank, Barclays, HSBC, Lloyds and others have Euro accounts - they're pretty lame as current accounts, but should do enough to just put the money in a holding pattern.

    Once you have that sorted, you then have time to work out what you want to do with the money - including deciding whether to change it into a pounds or not, and when you might do that. There's no need to be hasty - time spent learning may prevent expensive mistakes at the beginning.
    Originally posted by Plus
    Thanks very much for reply - even this has helped me significantly. I am now looking into opening two Euro accounts. Under the impression that Barclays and HSBC offer the best rates. In a bit of a tough position as I have no-one really to advise me on this situation.

    Where do you feel may be a good place to start learning with this sort of situation and strategic investment decision-making? I have read basic investor books such as the intelligent investor, purely out of interest - but even from there I'm not too sure how to get started.

    Thanks again for your response - really appreciate it.
    Last edited by JG7; 23-03-2017 at 1:07 PM.
    • JG7
    • By JG7 23rd Mar 17, 1:37 PM
    • 7 Posts
    • 1 Thanks
    JG7
    • #6
    • 23rd Mar 17, 1:37 PM
    • #6
    • 23rd Mar 17, 1:37 PM
    I think folks would need a bit more info about your current financial situation, your life plans and whether you envisage being in U.K. or eurozone for the longer term.
    Originally posted by Apodemus
    I am currently a student, with a small overdraft in my second year, around £20k of debt, which I was planning on paying back regularly through monthly payments when in a job post-graduation.

    I have plans to study for a masters in finance and will use some of the funds for that, otherwise the rest is to either save or invest and I realistically don't want to touch it. In the future I hope to be in London but as I have dual nationality (British/French) I could work in the eurozone if the opportunity presents itself.
    • greatkingrat
    • By greatkingrat 23rd Mar 17, 1:51 PM
    • 35 Posts
    • 43 Thanks
    greatkingrat
    • #7
    • 23rd Mar 17, 1:51 PM
    • #7
    • 23rd Mar 17, 1:51 PM
    I'd clear the overdraft / loans first. That still leaves you with a substantial sum to invest for the future.
    • Plus
    • By Plus 23rd Mar 17, 6:57 PM
    • 217 Posts
    • 171 Thanks
    Plus
    • #8
    • 23rd Mar 17, 6:57 PM
    • #8
    • 23rd Mar 17, 6:57 PM
    Thanks very much for reply - even this has helped me significantly. I am now looking into opening two Euro accounts. Under the impression that Barclays and HSBC offer the best rates. In a bit of a tough position as I have no-one really to advise me on this situation.
    Originally posted by JG7
    For Euro accounts, almost nobody pays interest. Citi used to, but I discover their accounts now have a nasty monthly fee - so best avoided. Finding Euro accounts is hard enough. As you have a French connection you might be able to open a Euro account in France: while the interest rate won't be high, you'll likely have more options there. British banks are pretty useless when it comes to Euro services, so all the accounts offered are a bit lame (they seem to prefer cheques to online banking, for some reason).

    Have a look at monevator.com for investment basics. And don't feel you have to jump in straightaway - better to learn with small amounts as you go than make expensive mistakes.
    • JG7
    • By JG7 23rd Mar 17, 8:20 PM
    • 7 Posts
    • 1 Thanks
    JG7
    • #9
    • 23rd Mar 17, 8:20 PM
    • #9
    • 23rd Mar 17, 8:20 PM
    For Euro accounts, almost nobody pays interest. Citi used to, but I discover their accounts now have a nasty monthly fee - so best avoided. Finding Euro accounts is hard enough. As you have a French connection you might be able to open a Euro account in France: while the interest rate won't be high, you'll likely have more options there. British banks are pretty useless when it comes to Euro services, so all the accounts offered are a bit lame (they seem to prefer cheques to online banking, for some reason).

    Have a look at monevator.com for investment basics. And don't feel you have to jump in straightaway - better to learn with small amounts as you go than make expensive mistakes.
    Originally posted by Plus
    Thanks for the information. I will look into the Euro accounts in France. I know this may be hard to answer, but with your current knowledge, what would you do with the funds if you were in my position right now? Mix of bonds, stocks & cash? ETFs? ISAs? Wondering out of curiosity more than anything
    • Superscrooge
    • By Superscrooge 23rd Mar 17, 8:40 PM
    • 848 Posts
    • 589 Thanks
    Superscrooge
    If you are thinking of stocks and shares investments then it makes sense to use your full ISA allowance each year. You only have two weeks left to use this tax years ISA allowance.
    • bigadaj
    • By bigadaj 24th Mar 17, 6:43 AM
    • 9,630 Posts
    • 6,133 Thanks
    bigadaj
    If you are thinking of stocks and shares investments then it makes sense to use your full ISA allowance each year. You only have two weeks left to use this tax years ISA allowance.
    Originally posted by Superscrooge
    Which just means opening an account and crediting your money. There's no particular need to rush a purchase of funds, you can take your time doing that.
    • Plus
    • By Plus 27th Mar 17, 8:29 PM
    • 217 Posts
    • 171 Thanks
    Plus
    Thanks for the information. I will look into the Euro accounts in France. I know this may be hard to answer, but with your current knowledge, what would you do with the funds if you were in my position right now? Mix of bonds, stocks & cash? ETFs? ISAs? Wondering out of curiosity more than anything
    Originally posted by JG7
    It rather depends on what your goals are: are you planning to buy a house anytime soon, for instance? What are your timelines for needing the money: 1, 2, 5, 10, 20, 50 years?

    Using your ISA allowance is a good idea, if only for the paperwork it saves. If it were me I might be tempted to exchange about £15K, putting the maximum £1200 in a HTB ISA (assuming you don't already own a property but intend to some day in the UK) and then parking the rest in a S&S ISA. What to buy in the S&S will depend on your attitude to risk and time horizons.

    Don't forget you can get risk-free interest equivalent to many bonds using current accounts and regular saver accounts. So, while it would mean holding pounds rather than euro, it is possible to get better performance. Whether to hold pounds or euro might depend on where you intend to spend the money at the end of the day. This matters less for equity holdings - a US tracker is going to depend on the dollar irrespective of whether you pay GBP or EUR for it.

    My personal lesson: once upon a time I looked at the EUR/GBP rate of 1.50 and said 'oh, that's been stable for years, I'll stay in pounds'. How wrong I was.
    • steampowered
    • By steampowered 27th Mar 17, 10:59 PM
    • 1,530 Posts
    • 1,491 Thanks
    steampowered
    Until you have done your research and have decided what you want to do with the money, I would put all of the money into a FTSE tracker fund.

    This is a low risk and easy way to invest. Given the amount of money and your age, you should be taking a reasonable level of investment risk.

    Invest as much as possible through ISAs, this doesn't matter now but will matter once you are a tax payer.

    I do not think you should try to time the exchange rate. There is really no difference between receiving £1 and receiving EUR 0.86 (at the current exchange rate). Leaving your money in Euros and accumulating no interest, if you decided to try and time the currency market, is a bad idea because (1) you are as likely to get the timing wrong as you are to get it right, and (2) while you wait you are losing investment income.
    • bigadaj
    • By bigadaj 28th Mar 17, 8:59 AM
    • 9,630 Posts
    • 6,133 Thanks
    bigadaj
    Until you have done your research and have decided what you want to do with the money, I would put all of the money into a FTSE tracker fund.

    This is a low risk and easy way to invest. Given the amount of money and your age, you should be taking a reasonable level of investment risk.

    Invest as much as possible through ISAs, this doesn't matter now but will matter once you are a tax payer.

    I do not think you should try to time the exchange rate. There is really no difference between receiving £1 and receiving EUR 0.86 (at the current exchange rate). Leaving your money in Euros and accumulating no interest, if you decided to try and time the currency market, is a bad idea because (1) you are as likely to get the timing wrong as you are to get it right, and (2) while you wait you are losing investment income.
    Originally posted by steampowered
    Reasonable view apart from the ftse point, and all world tracker would be far lower risk and almost certainly perform better.

    As well as the diversification just look at how the pound has devalued over decades, that in itself would lead to better returns no matter what currency you want to base yourself in.
    • steampowered
    • By steampowered 28th Mar 17, 10:08 AM
    • 1,530 Posts
    • 1,491 Thanks
    steampowered
    Reasonable view apart from the ftse point, and all world tracker would be far lower risk and almost certainly perform better.

    As well as the diversification just look at how the pound has devalued over decades, that in itself would lead to better returns no matter what currency you want to base yourself in.
    Originally posted by bigadaj
    Very true. Either way, the Op is almost certainly going to be better off investing his money rather than leaving it in cash.

    For people who are new to investing, my advice is to pick something simple and diversified to start with, while doing a bit of research to find out more.

    On the pound, it has been up and down over the past few decades and currently sits at a low point. This suggests to me that may be a good time to buy pounds, although I don't have a crystal ball! (here is a graph showing movements against the dollar since 1990).
    Last edited by steampowered; 28-03-2017 at 10:21 AM.
    • bigadaj
    • By bigadaj 28th Mar 17, 1:19 PM
    • 9,630 Posts
    • 6,133 Thanks
    bigadaj
    Very true. Either way, the Op is almost certainly going to be better off investing his money rather than leaving it in cash.

    For people who are new to investing, my advice is to pick something simple and diversified to start with, while doing a bit of research to find out more.

    On the pound, it has been up and down over the past few decades and currently sits at a low point. This suggests to me that may be a good time to buy pounds, although I don't have a crystal ball! (here is a graph showing movements against the dollar since 1990).
    Originally posted by steampowered
    Yes agree with the simple and diversified point inch is why I'd choose an all world tracker, I hold a fidelity and a vanguard version in different portfolios.

    The pound is on a continuing downward trend, it's interesting I was thinking about this earlier. It obviously represents the continuing relative shrinking of the British economy over the last 150 years or so, and whilst I agree it will probably rally in the short term then it will no doubt continue to weaken with the British economy over future decades.
    • JG7
    • By JG7 28th Mar 17, 8:48 PM
    • 7 Posts
    • 1 Thanks
    JG7
    For Euro accounts, almost nobody pays interest. Citi used to, but I discover their accounts now have a nasty monthly fee - so best avoided. Finding Euro accounts is hard enough. As you have a French connection you might be able to open a Euro account in France: while the interest rate won't be high, you'll likely have more options there. British banks are pretty useless when it comes to Euro services, so all the accounts offered are a bit lame (they seem to prefer cheques to online banking, for some reason).

    Have a look at monevator.com for investment basics. And don't feel you have to jump in straightaway - better to learn with small amounts as you go than make expensive mistakes.
    Originally posted by Plus
    Reasonable view apart from the ftse point, and all world tracker would be far lower risk and almost certainly perform better.

    As well as the diversification just look at how the pound has devalued over decades, that in itself would lead to better returns no matter what currency you want to base yourself in.
    Originally posted by bigadaj
    Thanks for your response. Interesting conversation. With regards to 'risk', i'm happy to take on some but of course not too much. I dont really need/want access to the funds for another 20 years, when I will perhaps by a house. I will most likely be in full time education until 2019, and upon graduation will hope to rent.

    I have a 'meeting' with Barclays just to open a Current account and then a Euro account (as im currently with NatWest who dont even offer such facilities!!). Once the funds are in this Barclays account, from there would my best bet be to move 20/25% it into an all world tracker? The only future plan, currently, it to use the funds for a masters - the rest I would like to tie up in investments.
    • bigadaj
    • By bigadaj 28th Mar 17, 9:32 PM
    • 9,630 Posts
    • 6,133 Thanks
    bigadaj
    Thanks for your response. Interesting conversation. With regards to 'risk', i'm happy to take on some but of course not too much. I dont really need/want access to the funds for another 20 years, when I will perhaps by a house. I will most likely be in full time education until 2019, and upon graduation will hope to rent.

    I have a 'meeting' with Barclays just to open a Current account and then a Euro account (as im currently with NatWest who dont even offer such facilities!!). Once the funds are in this Barclays account, from there would my best bet be to move 20/25% it into an all world tracker? The only future plan, currently, it to use the funds for a masters - the rest I would like to tie up in investments.
    Originally posted by JG7
    The key thing is to match your expected liabilities with your savings and investments, this is what undid northern rock eventually.

    So work out what you are likely to need in the short, medium and long term and allocate those funds appropriately. Short term in cash savings, currently current accounts and regular savers assume you qualify for them, long term into the all world tracker for example, medium term then maybe a mix and potentially some p2p as well.
    • inflationbuster
    • By inflationbuster 28th Mar 17, 9:35 PM
    • 114 Posts
    • 21 Thanks
    inflationbuster
    Convert the EUR to GBP you're going to get an excellent rate now.

    1. Spread an amount of cash you're willing to risk into a basket of FTSE100 stocks. E.g., BP for example currently paying 6.8%. Use an ISA build it up as a 2nd pension for your future retirement. I started in 2009 (in my early thirties) putting cash in almost every tax year to date a total of £88,320 with current book at £139K (around £50K profit tax free).

    2. Get a buy to let have an agent manage it for you. Put enough equity such that the rent covers the mortgage plus cover your tax bill. You should still (double check though) be able to offset interest against the profit with commercial property. I did this whilst in my 4th year at University, bought a cheap commercial property for £59K earning rent at £860 per month now and property is valued at £145K

    3. Keep the rest as cash to support your years at University
    Last edited by inflationbuster; 28-03-2017 at 9:47 PM.
    • JG7
    • By JG7 21st Apr 17, 2:52 PM
    • 7 Posts
    • 1 Thanks
    JG7
    Convert the EUR to GBP you're going to get an excellent rate now.

    1. Spread an amount of cash you're willing to risk into a basket of FTSE100 stocks. E.g., BP for example currently paying 6.8%. Use an ISA build it up as a 2nd pension for your future retirement. I started in 2009 (in my early thirties) putting cash in almost every tax year to date a total of £88,320 with current book at £139K (around £50K profit tax free).

    2. Get a buy to let have an agent manage it for you. Put enough equity such that the rent covers the mortgage plus cover your tax bill. You should still (double check though) be able to offset interest against the profit with commercial property. I did this whilst in my 4th year at University, bought a cheap commercial property for £59K earning rent at £860 per month now and property is valued at £145K

    3. Keep the rest as cash to support your years at University
    Originally posted by inflationbuster
    Thanks for this advice. Really clear and concise, and good ideas. I am in the process of setting up a Euro account, now with HSBC. They have offered to give me professional financial advice to help best invest the funds and grow them, especially as I'm not really looking to use much of it at all over the next 15-20 years. Does anyone have any recommendations, or have any of you yourselves had this sort of advice before? I dont want to pay for a service that is just as useful as using these forums and doing my own research.

    RE: property. I have been looking into similar ideas like you have done, even purchasing a student property as it is cheap and rents out vey well. However I'm not too sure where to start, whether its best to approach an agent outright or even speak to my current landlord for his ideas

    Thanks for your help
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