What would you do with a million pounds??

Cash-Cow_3

Due to inflation it ain't worth a million anymore.

ToNik

Thanks for all the replies.

We are both nearly 30, have 3 children and no debts. My husband will never work again, but I will be.
I'll have to talk husband into seeing IFA as it really seems the best option, we have never had money so to speak and i'm concerned it will be £100 here, £100 there and before you know it is gone.

Aegis

ToNik wrote: »

Thanks for all the replies.

We are both nearly 30, have 3 children and no debts. My husband will never work again, but I will be.
I'll have to talk husband into seeing IFA as it really seems the best option, we have never had money so to speak and i'm concerned it will be £100 here, £100 there and before you know it is gone.

Simplest answer to that is to only speak to IFAs who will quote on a project basis. Ask them how much it will cost to assess the situation and make recommendations and how much more it will cost for annual reviews. If you want flat fees, ask at outset for flat fees.

There should be no way for further fees to mysteriously arrive if you've agreed flat fees in advance.

innovate

ToNik,,

until you have sorted out what to do with the money, put it into a number of savings accounts, making sure you do not have more than £85K in any (group of) financial institution.

If this is too overwhelming, put it all into an NS&I saver to start with - the interest rates are even more miserable there than in "normal" banks but you got your entire million protected in there. You can then decide bit by bit what money to put where.

You might even want to chance £30K in Premium Bonds whilst you are sorting out your finances - you won't lose the capital really (ignoring inflation) but should get the odd win, and who knows, may be you win another million.

The other relatively safe thing to do is to get yourself (since you are/will be working) an ISA for the max £5,640, at a good interest rate (check this thread for ideas). You also might want to set up your kids with a JISA each, and put money into high interest savings accounts, and Regular Savers, to feed your own and your kids' ISAs with the max possible amounts in the next few years.

You'll need a spreadsheet - or just a notebook and pen - to write down precisely what money is where.

I agree with several others who suggested you need an IFA - - and that you should not let any IFA to get his hands on more than probably half of your money. I suspect very much that no IFA will like the idea of NS&I, cash ISA, JISA, high interest savers, regular savers - - - there's not much room for them to claim any commission etc so they won't advise you to do it. IFAs also won't plan your day-to-day expenditures such as food, kids' care, holidays, clothing, housing etc etc - you got to have all that budgeted for outside any investments an IFA suggests. If I were you, I would consider anything I entrust to the advice of an IFA as play money - you may make a decent income / growth from it, but equally, it can all turn a bit pear shaped. In any case, for anything an IFA suggests, you need to have a medium to long-term horizon (I'll probably now get attacked by IFAs, lol, but I am at the other end of 50 now, so looking at things with a certain amount of practical experience - - and a lot more than many IFAs have).

Read up as much as you can on the main MSE site about Banking/Saving/Investing/Annuities, and continue to frequent the forums when you find the time - a couple in their late 20s, 3 kids, hubby not working again - - - I can see you have a rather full schedule! But at least you don't appear to have any immediate financial issues, and hopefully quite a bright financial future.

Good luck, ToNik - - you sound a very strong lady, keep being strong

jamesd

You should also consider splitting it across two different IFAs. There's ample money and that reduces the risk if there's trouble with one for some reason. The amounts involved are natural for paying on fee basis rather than commission.

You can expect to be able to take an income of £40,000-£60,000 or so a year indefinitely without reduction in capital value, increasing with inflation. That's using standard investments like unit trusts. The variation is dependent on the variation in capital value of investments used, more variation implies an ability to take a higher income.

If you're interested in property management then using up to half of the money to purchase ten to twenty properties with a mortgage would be one potentially appropriate way to go. That's a sufficiently large number to reduce the effect of voids due to tenants leaving and also properties inexpensive enough so that the capital gains tax effect at the time of sales would be more manageable. Using more than half of the money would hurt the diversification and risk reduction aspects too much. Interest only mortgages are standard in this area and the interest cost can be deducted from rental income.

An IFA won't be able to advise on such property transactions, it's outside their investment permissions.

atush

YHou will certainlky needISAs for both of you. Even if you split the money and spend some, your husband will be a taxpayer.

And you don't have to worry bt 85K per acct- if the accounts are in joint names you can put up to 170K in each. 160 to leave room for interest.

dealer_wins

As Del Boy once said....

Its not about the money, its about the power and the influence that money brings.

And what will I do with all that power and influence? SPEND IT.

iltisman

Put it in the bank and earn about £8k more than the average wage.

MoneySaverLog

Buy a house for cash, kit it out, have an emergency cash fund, no debts, and find a IFA to invest the rest to generate a monthly income for life.

I'd also go part time, I'd be bored sitting at home every day but 4 hours a day suits me fine.

innovate

MoneySaverLog wrote: »

I'd be bored sitting at home every day

You probably wouldn't be sitting much with 3 young kids and a disabled husband