Vast sum to invest - advice

Fed

I have been lucky enough to amass savings of over 500k through gambling. Currently I have it all in saving accounts/bonds at varying interest between 1.5-2.7%. I want to look to other forms of investment in the hope of better returns but im undecided on how to progress.

I’m 25, live in SW London and am about to begin a one year tenancy so the earliest I would likely look to property would be in one years time. I anticipate staying in the local area for the next few years at least but don’t envisage settling down with someone in the next couple, i’m unable to get a mortgage. How would you progress?

My current thought process is to invest 150-200k in various funds now, retain 300-350k in savings accounts and reassess the situation in a year with my earnings from this year. Local prices for a 2 (chosen 2 for reference) bed vary mainly from 350-550, and if I wanted to get a property and need extra funds I have the option of cashing in some of my investments though I appreciate that’s not ideal.

But I don’t know if i’d be better off retaining all the money in savings and spending it all on a nice flat (if I knew i’d spend the next 10+ years here I likely would) next year or the other extreme of continuing to rent for the next few years until I have more of an idea what my future holds.

I spoke to one IFA (he’d dealt with parents finances for a while) and his view was that property didn’t represent the best investment stream due to current market factors and advised a portfolio of funds (appreciate he’s inclined that way) to invest in based on my risk profile (Cazenove Multi-Manager Global, Jupiter Merlin Income and one other) . As far I can tell from the paperwork the fees are 3% of initial investment then the fund management fees and minor platform fees. 3% seems somewhat of a waste given I could go and invest in those funds myself with HL but the thought of pumping 150k+ into some funds myself is a bit daunting given my limited financial knowledge.

Sorry for the long post, any advice would be much appreciated

innovate

Go back and talk to the IFA again. Or choose another IFA if you don't like the one you spoke to. Playing about with £500K without knowing what you are doing is silly.

You cannot get advice on MSE. You just get opinions from a bunch of strangers who you cannot hold accountable for anything.

PS. I see you asked a similar Q in October 2011.https://forums.moneysavingexpert.com/discussion/comment/47832733#Comment_47832733

ChopperST

With that sum of money you need to be looking at investing and not saving as in real terms your net wealth is decreasing due to the erosive effect of inflation.

You need to answer a few questions prior to going forward.

What is your attitude to risk?
What timescale do you want to invest over?
How long are you willing to invest for?

I'm also interested in how you made your money gambling? I too am an amateur gambler but nowhere in your ball park. I ususally make between £1000 - £1500 a year on football and rugby and invest 50% of the profits to stop me increasing my stakes.

Fed

innovate wrote: »

Go back and talk to the IFA again. Or choose another IFA if you don't like the one you spoke to. Playing about with £500K without knowing what you are doing is silly.

You cannot get advice on MSE. You just get opinions from a bunch of strangers who you cannot hold accountable for anything.

PS. I see you asked a similar Q in October 2011.https://forums.moneysavingexpert.com/discussion/comment/47832733#Comment_47832733

Yeah I did, I don't want to spam just my circumstances are slightly different now. I'll look into some IFAs then, just if they advise me to invest I don't know if I should accept the investment charges or if i'm silly to think I could bypass them and select my own investments

ChopperST wrote: »

With that sum of money you need to be looking at investing and not saving as in real terms your net wealth is decreasing due to the erosive effect of inflation.

You need to answer a few questions prior to going forward.

What is your attitude to risk?
What timescale do you want to invest over?
How long are you willing to invest for?

I'm also interested in how you made your money gambling? I too am an amateur gambler but nowhere in your ball park. I ususally make between £1000 - £1500 a year on football and rugby and invest 50% of the profits to stop me increasing my stakes.

That's what im struggling to answer myself, whether to buy property or continue renting and invest in other avenues. I came up as 5/10 when seeing the IFA. I focus on online trading, like most things it's easy when you know how but I couldn't tell you how :cool:

ChopperST

If you are talking about property in London then that would be my bet.

I take it your technically a speculator as opposed to a gambler then :-)

cepheus

innovate wrote: »

Playing about with £500K without knowing what you are doing is silly.

I would be interested how exactly Fed obtained by the 500k gambling in the first place! :eek:

innovate

cepheus wrote: »

I would be interested how exactly Fed obtained by the 500k gambling in the first place! :eek:

Bet you would be, together with a bunch of others.

It could have been a fluke, it could be some sort of a "system", but it's not impossible. I know more than one person who made more than that from gambling - - and none of the genuine ones will ever tell on an internet forum how they did it. If anyone tells, it's more than likely a pack of lies.

innovate

Fed wrote: »

Yeah I did, I don't want to spam just my circumstances are slightly different now. I'll look into some IFAs then, just if they advise me to invest I don't know if I should accept the investment charges or if i'm silly to think I could bypass them and select my own investments

If you are smart enough to make half a mill from gambling, you should be smart enough to figure out how to invest your money / whether & how to trust an IFA. There are plenty of internet sites and books that tell you how to invest - - actively or passively. When you do more research, you will find out the diff between active and passive, and be able to decide what works best for you.

Fed wrote: »

That's what im struggling to answer myself, whether to buy property or continue renting and invest in other avenues. I came up as 5/10 when seeing the IFA. I focus on online trading, like most things it's easy when you know how but I couldn't tell you how :cool:

Seems you pretty much got it in your head your investment should be property. That's fine if you have done the risk assessment and found it within your limits. Though somehow I don't think you have. Suffice to say, the folks I know who have made half a million upwards from gambling, or from other activities, would never put all their money into just one asset class.

cepheus

There is an early window of opportunity in 'peer to peer' type games such as poker, until the amateurs are blown out. That leaves the professionals in the game, and it becomes progressively more difficult to make consistent profits.

I was going to say much the same as you did. If you are smart enough to make money gambling, the stock market offers better opportunities for calculated risks.

Froggitt

cepheus wrote: »

There is an early window of opportunity in 'peer to peer' type games such as poker, until the amateurs are blown out.

+1

I made money on Betfair out of Reality TV in the early days (XFactor, Big Brother, Dorothy etc) but its much tougher now the amateurs are "blown out".

atush

3% charges on 100-200K is far too high. This IFA is overcharging you (and perhaps your parents).

Ask for a set fee, but do look at property prices now where you'd like to live. If they are over 300K, then you might not want to invest the money at all (or over 100K of it) as it could fall over your one year time span.

Personally, I would have bought now, and not waited if you want to live in london, so would not have signed a new tenancy agreement.