Turning £250K into £1 million

Moonbeam

Help needed please as I may be about to receive approximately £250K through sale of shares in an individual company and not sure what to do with it....

Current financial situation as follows:

- Have house worth approx £250K with outstanding mortgage of £48K

- Joint income with hubby £28K - (working on increasing that)

- 1 child, with 2nd due very soon so income will be halved soon

- No outstanding debt in terms of loan, credit card, HP etc

- Cash ISA's in place for Hubby and I - currently used up full allowance this year and balance between the two approx £8000

- Investment ISA - £50 per month - current balance around £700

What sort of investments should I be looking out for - how do I find a good IFA, or can I do something myself with investments if so what company is good (have heard good things about Fidelity and Hargreaves Landsdown)....How do I minimise tax due on £250K (will give half to hubby before sale to maximise taper relief and allowances - but could I be doing more)...............



Or do I just go on a big shopping spree;)

cheerfulcat

Hi, Moonbeam,

Well, assuming that you do sufficient study and research, you have a much better of hitting the million if you do the job yourself than if you entrust the money to someone else. There is a certain amount of what some people seem to consider tedious work involved, though; if you are one of those people then the IFA route is probably a better one. If you are interested in looking further into investing for yourself, say the word and I'll post links. You could have a look at the Motley Fool for starters, anyway - and the TMF discussion boards here.

SteveCat

One word, PROPERTY! A sure fire way of getting good returns on your investment if you do things the right way.

RayWolfe

No it's not sure fire! It has been but the future cannot be known. Spread the risk!

dunstonh

SteveCat wrote:

One word, PROPERTY! A sure fire way of getting good returns on your investment if you do things the right way.

How naive is that!

mystic_trev

SteveCat wrote:

One word, PROPERTY! A sure fire way of getting good returns on your investment if you do things the right way.

That's what they said about tulips.

http://en.wikipedia.org/wiki/Tulip_mania

Bogof_Babe

If it were me, I'd pay off the remaining mortgage first. There's nothing like that feeling of being completely free of debt and the mercy of interest rate fluctuations.

In April you can add £3K each to your Cash ISAs, and you sound clued up about taking full advantage of the tiered interest rates between yourselves so I can't add anything to that aspect.

Once you know what's left, and how much you will need to live month-to-month, given your forthcoming change of circs, then let us know exactly how much you have left to invest and I'm sure one of the many experts on here will know how best to maximise your return.

I think £1million is a bit optimistic for a short term goal, but you never know.

lokiman

Moonbeam wrote:

Help needed please as I may be about to receive approximately £250K through sale of shares in an individual company and not sure what to do with it....

Current financial situation as follows:

- Have house worth approx £250K with outstanding mortgage of £48K

- Joint income with hubby £28K - (working on increasing that)

- 1 child, with 2nd due very soon so income will be halved soon

- No outstanding debt in terms of loan, credit card, HP etc

- Cash ISA's in place for Hubby and I - currently used up full allowance this year and balance between the two approx £8000

- Investment ISA - £50 per month - current balance around £700

What sort of investments should I be looking out for - how do I find a good IFA, or can I do something myself with investments if so what company is good (have heard good things about Fidelity and Hargreaves Landsdown)....How do I minimise tax due on £250K (will give half to hubby before sale to maximise taper relief and allowances - but could I be doing more)...............



Or do I just go on a big shopping spree;)

For some sensible advice, and a great key to taking hold of your investments, buy Phil Town's 'Rule #1' from amazon. I've never regretted it and truly believe that the fundamentals taught by it represent the best chance that you have of maximizing your investments. It teaches you to aim for and indentify safe investment opportunities that will earn you 15% pa. Check it out.

PosterBoy77

SteveCat wrote:

One word, PROPERTY! A sure fire way of getting good returns on your investment if you do things the right way.

Have you ever heard the term do not keep all your eggs in one basket? And only invest as much as you can afford to loose in any one investment. The key to all investing is spreading your risk, not amplifying it! Most property investments are actually quite risky, but that has been forgotten in the last few years as property has been going up. However, if you take a look at many BTL investors who have put down lots of small deposits and taken on large debts (a leveraged investment) they make good gains as the market goes up, but if it goes down they could easily wipe out all of their initial investment quite quickly.

Ian_W

Just a couple of quick thoughts. You don't say whether the shares are yours or someone else's who is gifting the proceeds to you.
If it's the latter then CGT would be payable by the person selling them. If it's the former can you sell part this tax year and part next? You've doubled your personal allowance to nearly £18K by giving half to your husband but you can double it again by straddling two tax years.

As you're going to be stopping work for a time shortly I would also consider [subject to no penalties] paying off the mortgage then using at least some of the remainder to supplement your income whilst you're on maternity leave. You have a choice then really, learn very quickly about investments or find a reliable IFA - not bank/bs connected - who specialises in investments.

BoL - not a bad problem to have.

SteveCat

I feel some have missed my point regarding my tip to invest in Property. Yes i know sometimes its risky and this is why i said: 'if you do things the right way' Yes if you do things the right way you limit the risk, it was a quick post and I certainly wasn't expecting anyone to go gung-ho into it.