Been left £130,000 net after my mum died, what do i do?

black-saturn

padders wrote:

Please don't listen to the muppets here

For the people who buy a house and sell it 6 months later there are bound to be some crashes and losses. I'm talking about long term investment. And please don't call me a muppet.

quickquid

I am assuming you know very little about investments. I base this assumption on the fact that you are asking for help on investing your cash and also the fact that you have just joined the website. To inherit a sizeable sum of cash and be bereaved is doubly daunting. Personally, I would do nothing other than putting the money in a savings account - this will give you time to gather your thoughts and earn you a reasonable amount of interest at the same time. You then need to learn about the various ways of investing monies and understand the pitfalls, etc., of each type of investment before you venture into that territory - browsing this site will help you. You may then possibly be confident enough to branch out into other areas of investing. However, should you decide to see a financial advisor, make sure you are clued up enough to understand what he is advising you!

padders_2

black-saturn wrote:

For the people who buy a house and sell it 6 months later there are bound to be some crashes and losses. I'm talking about long term investment. And please don't call me a muppet.

Then don't make such unqualified statements. Furthermore, a crash can result in a decade of loss on a house - not just flippers who loose out.

quickquid

Pack it in guys. The young lady has just joined the site hoping for advice not to witness a plethora of backbiting.

worried_and_confused

black-saturn wrote:

For the people who buy a house and sell it 6 months later there are bound to be some crashes and losses. I'm talking about long term investment. And please don't call me a muppet.

Of course the problem with the long-term, as the great John Maynard Keynes said, is that in the long-term we are all dead.

Many people are not in a position to buy a house 'for the long-term', and whilst over, say, the past 100 years property prices have gone up substantially, there have been long periods when they have fallen/not risen. If the OP was to buy a house and then find that in 3 years time they had to sell it due to a change in circumstances, they could quite easily find that they have lost money on the transaction (particularly when you consider the high costs involved in buying, selling and moving houses).

If the OP is looking to invest the money (or part of it) for the long-term, historically investing in equities has led to greater returns than property.

bbruce

You've had some good advice on here even by "experts" who trade insults.
I'd like to add my condolences.
Knowledge is all powerful so mug up on everything and take your time. "Easy come - easy go" springs to mind. You could blow the lot in no time - many lottery winners manage it with ease! It must've taken your Mum ages to build this up - pity she didn't spend some time trainining you on the subject.
Your thoughts of risking £50k seem a little rash though - I trust you don't mean risk it all - that's a far too high percentage of your net worth!!
All investments go in cycles and you could easily jump in near the peak and have to wait years to get your money back. I imagine you're looking for long-term growth so some equity based investment could be suitable as shares have historically performed best over any 10 year period.

dunstonh

black-saturn wrote:

Personally I would buy a house. Property investment always goes up and at the moment you are shelling out rent for something which is never going to be yours.

Where is it written that property investment always goes up?

Property is just as volatile over the long term as stockmarkets. Stockmarkets have outperformed property over the long term too. There are pockets of time when property would have out performed the other.

Property is currently over valued when you take long term average growth rates. Usually when that has occured in the past, a price crash or a period of no growth occurs. Equity investments, in general are currently below the long term growth average, although there are exceptions.

No-one knows the future but if you look at long term trends, we would be due for a property crash but continued stockmarket growth. Oh it we only knew the dates involved

Property is just one asset class and you shouldn't invest all your money in one asset class.

charlies_mum

Im sorry for your loss.

I am no financial guru, but I think the advice about putting into a savings account while you think about things is a good idea. I lost my mum a few years ago, and for a while after I wasn't in any fit state to make big decisions.

At least that way you will have a bit more money to invest when you come to a decision.

dunstonh

At least that way you will have a bit more money to invest when you come to a decision.

Good suggestion for the short term. Although if you put it off too long, you could lose a lot more than you gain. Anyone delaying investing by 6 months could have lost 35% growth on a low risk portfolio. The saving account would have paid around 2.5% in that time.

codetown

I would recommend to act very quickly and settle into a saving account which supports 130.000 pounds. Then you will think about a potential better investment. Some saving accounts have limits on maximum allowed (such as A+L Online saver), some have requirements on maximum to put in monthly etc.

For simplicity (i.e. not having to divide money into chunks) I would suggest an online saving account such as First Direct which is at present about 5.0% AER and allows to save up to 500.000.

Just be quick to put money in a saving accoung and remember that for that money at 5% you get: (gross) 6500 yearly, i.e. 541 pounds a month.
if you pay basic rate you get about 14.5 pounds net a day. This is money lost if you leave them in a 'normal' current account (there are some that are better of course, but usually far from saving rates).