what can i do with £400,000. PLEASE HELP

Ashlion

It depends what level of risk you are prepared to take in order to "make money". Is it that you just want to make enough interest to live on comfortably? You could invest your money in shares, but remember shares can go down as well as up. It may be wise to put a large proportion of the money into a few savings accounts or bonds where it's very secure with a high interest rate (around 6.5% currently), and put a smaller proportion into shares that you're prepared to gamble with. Although it's only a small proportion you could put £3600 into a tax free ISA, and add to the amount year-on-year.

A general piece of advice. Make sure that your money doesn't shrink. i.e. keep it in savings accounts which offer interest rates on your savings which are greater than the rate of inflation. And keep checking that you are getting a good rate every 6 months or more often if you can. Don't leave it in the same account for years as the rates tend to drop and the banks don't raise your awareness of this. Split your money up into at least three different institutions, so if one becomes insolvent, you won't loose everything.

Get yourself an independent financial adviser, and as others have said not an adviser from a bank, as they won't have your interests at heart. It's worth paying for qualified advice with the amount of money you're talking about. They will advise best how to cut-up your cake!

danyrich

I would say that 500k sounds like an ideal sum of money in order to set up a steady safe flow of income rather than spend it.

£500,000 at 5% average interest = £25,000/yr income interest only.

This means that you could potentially live on £25,000 a year gross (before tax @20% I think, apart from ISA which is tax free) for the rest of your life.
In fact, rather than "spend the first 100k" immediately, might I suggest saving it and trying to use the interest alone to finance your requirements as far as possible.
The more money you keep in savings the more return you can receive.

I would still seek financial advice as stated above since over time inflation may erode the purchasing power of that income.

I personally really rate cash ISA's, guaranteed income up to 6% annually tax-free.

Hope to have been of help

dunstonh

£500,000 at 5% average interest = £25,000/yr income interest only.

This means that you could potentially live on £25,000 a year gross (before tax @20% I think, apart from ISA which is tax free) for the rest of your life.

Problem is that 10 years down the road, if you have only used savings accounts, the £500k will only have the spending power of £300k and the interest will have the buying power of £15,000. (as you mention in your post)

Is it that you just want to make enough interest to live on comfortably? You could invest your money in shares, but remember shares can go down as well as up. It may be wise to put a large proportion of the money into a few savings accounts or bonds where it's very secure with a high interest rate (around 6.5% currently), and put a smaller proportion into shares that you're prepared to gamble with.

Investing is not just about choosing between cash and shares. There are many options in between.

Scousebird_2

jem16 wrote: »

Yes and make sure it's an Independent Financial Adviser specialising in investments and not an "adviser" from a bank.

Some banks will refer you to an IFA (eg HSBC) when you plan to invest funds like what you have, whilst giving you the support of being treated like a normal human being and you will have your own manager to look after you!

Banks are not all bad-they can be useful as well!!

superjaggybunnet

Head to the Cayman Islands.

Split the money between two banks and tell both that whichever makes the most for you in a year will get the whole lot to look after.

dunstonh

Scousebird wrote: »

Some banks will refer you to an IFA (eg HSBC) when you plan to invest funds like what you have, whilst giving you the support of being treated like a normal human being and you will have your own manager to look after you!

Banks are not all bad-they can be useful as well!!

You are not being seen by an independent IFA but one employed by a salesforce with sales targets and a sales manager. Also, my experience of bank IFAs is that most of them have little more knowledge than the tied agents they used to employ. No decent IFA is really going to want to work for a bank. Why try and flog £150k of business to earn £30k?

It doesnt matter if the salesforce is tied or whole of market. It is still a salesforce (and some of the bank whole of market salesforces use panels rather than true whole of market).

HGLTsuperstar

No-one else has mentioned the numerous benefits you're getting - suffice to say your "savings" will be way over the threshold and you're going to have to pay your own council tax and rent from now on.

jem16

Scousebird wrote: »

Banks are not all bad-they can be useful as well!!

For savings - yes. Investments - no.

ashsin

wow its alot to take in lol. thank you everyone for all of your advise its much appreciated. from what you have all said figuring out what i want for my self is the first step and the trust is a must in my circumstances and the rest i will have to learn and talk about with from an independent financial advisor, would it be a good idea for me to ask my solicitor ( brown turners ) who have been dealing with the compensation if they know a good financial adviser and should i keep them, or should i do my home work and look around myself ?

Lokolo

dunstonh wrote: »

Any responses (including the tongue-in-cheek ones ) will not really be of any use because your circumstances and an amount that size will impact on what is considered best.

Was that aimed at me?