What would you do with...

notreallynew

300k?

I've come into a little bit of money earlier than planned. Basically I need a plan on where to put this.

Details are:
32, married, no kids (yet)
Mortgage: £277k @ 5.7%, 2 year fixed (house value ~£350K)
Salary: £80k (+25k bonus)

Wife is a lower rate tax payer so possibly some room to move there.

My current thoughts are to clear the mortgage & then start with regular savers... I'm thinking I may have to meet with an IFA but friendly as they are I'm thinking I'd rather self manage!

UsernameAlreadyExists

"earlier than planned"? what would you have done with it had it arrived later?

In your shoes, I'd move into a 500K+ house

notreallynew

unfortunately it's an inheritance...

JohnRo

Sorry to hear that, money is scant consolation.

As for investing there aren't any short cuts imho, it just takes time to get to grips with what you really want, what's available, how you get there and how you react to investments not doing what you want them to.

Read a good book or two about investing. Get a feel for what's required, you could do a lot worse than spend time on this forum reading what others are saying and doing.

The IFA thing doesn't have to be all or nothing either, split the pot, let a good IFA manage some and you manage the rest then make a cost comparison and judge how well you're both doing in say 2 or 3 years time.

As for books, the obvious one I've read and recommend is Tim Hale's "Smarter Investing"

Good luck.

gadgetmind

I assume you're already dodging the 60% tax bracket above £100k via pension contributions?

Anyway, clearing mortgage makes sense, as does starting to work on a cash buffer.

Longer term, it's down to how you prioritise lifestyle now versus early retirement. You can start doing some serious S&S ISA investments and/or holding unwrapped investments in your wife's name, both of which we're personally doing.

ColdIron

I was in a similar position to you and I think the best advice anyone can give is not to rush into anything, take your time

If you are worried about your bank going bust in the meantime you might consider sticking it in an NS&I direct saver, the rates are not the best (1.5%) but your cash is as safe as it can be and you will sleep better at night

Putting some into funds/unit trusts etc makes sense and if you want to self manage rather than use an IFA a S&S ISA is a good starting place as, if for no other reason, the annual limit instills a sense of discipline and limits the damage you could do until you get the hang of it

calypso_rhapsody

Have you checked the penalty for early repayment of your mortgage? As it is fixed i would expect some. You will need to weigh that against the savings in interest charge and the sense of security that owning your own home would give. I agree - don't rush, take some time to work out what is most important to you.

grey_gym_sock

personally, i'd only pay off part of the mortgage, reducing it to c. 50-60% LTV, low enough to get any low-LTV mortgage rate (that you otherwise qualify for), and invest most of the remaining cash. but if you're not comfortable with such a high level of investments, it's OK to pay the mortgage off and then build investments up more slowly. the worst thing to do is rush into investments, panic at the first market hiccup, and sell everything.

there's a good case for at least filling S&S ISAs for both you and your wife every tax year (£11,280 each this year, if you haven't used any ISA allowances yet - though more likely you have).

jimjames

Personally I'd pay down part of the mortgage once any penalty period is over. Pay off more if you think the return you can get will be less than the mortgage rate, if you can get a better return on the money then don't pay down the mortgage.

As above if you haven't got pension sorted then use your allowances, max out your ISAs for both of you for this tax year and then continue to do so going forward to make as much tax free as possible.