Assistance required - got cash, but no ideas!

allydross

I am about to receive about £15,000 to £20,000 (more money than i've ever had in my life) i'm only 25, so hopefully have plenty of years ahead of me.

I have absolutely no idea what to do with the cash though - apart from knowing that i dont want to spend it!!

Any suggestions or help would be greatly appreciated.

MickMack

Take a look at the savings and investment part of the main site.

If it's a lump sum, then i would guess Gordon Brown will be wanting a slice of it (income tax) so i would get advice before locking it all away too soon.

If you get it before 5th April then i would try and put £3000 into a mini cash ISA for this tax year and that leaves you that you can put away another £3000 after the 5th April for next year.

After that it depends on how much risk your willing to accept on any alternative investments, you could look at Stocks and Shares ISAs but the easiest bet is going for the maximum interest savings account and in the future making use of your cash ISA allowance each year to shift it over to tax free savings.

Just my opinion, but definitely worth having a look at the savings and investment section of the main site.

Cannon_Fodder

Go for Cash ISA first, as suggested.

Have you any debts?

If they are more expensive (i.e higher interest rate) than the savings rates you can find, then it would be sensible to get rid of the debt.

Then switch any debt repayments to a Monthly Saver type account...

allydross

Hi - thanks for the responses.

I have sold a flat, and am moving into a property owned by my parents - does that mean i will lose out to the treasury with capital gains or income tax?

I like the idea of putting it in a high interest account, and then using it to fill up an ISA with £3k a year. sounds safe. boring but safe. and at least that way i understand what is going on!

i only have a student loan and £500 on a credit card - but after reading the bit on here about student loans, i guess i should just leave it as it is.

DocProc

allydross

Be very, very careful buying shares!!

For instance.....

If you bought £15,000 of one share and it lost just 20% from a kick off, then your remaining holding, now worth only £12,000, would have to increase in value by 25% JUST TO GET YOU BACK TO SQUARE ONE.

If you bought £7,500 each of two shares and you picked one winner out of the two, which ain't bad going, then if it went up by 10%, well, the other could go down by 10% and you would at least have broken even.

If the shares you pick go up from a kick off, then when would you sell them? What would be your target price to reach before you sell?

What use is a target price if the direction is only down?

Do you know what a 'stop loss' is?

Try doing things on paper first (ie. Do some 'Paper Trading') and see if you have got a feel for it.

There's a hell of a difference between just 'having a punt' and being an experienced, knowledgable, disciplined, 'Warren Buffet type' of investor.

How about you read a few books on 'Investing' first, too?

I hope that helps.

Ian_W

allydross wrote: »

I have sold a flat, and am moving into a property owned by my parents - does that mean i will lose out to the treasury with capital gains or income tax?
I like the idea of putting it in a high interest account, and then using it to fill up an ISA with £3k a year. sounds safe. boring but safe. and at least that way i understand what is going on!

There is no income tax to pay - well only on the interest earned by the money outside an ISA - and if the flat was your principle private residence, as it sounds like it was, it's exempt from CGT.
If you're going to need the money in the short to medium term [0-5yrs], say for a deposit on another property, stick to saving and max out your cash ISA ASAP. If you have longer than 5yrs investments do historically provide better returns than cash or property but can and do lose money over the short term.