Need help investing / saving £450,000

atush

If I was you I'd open a share account with someone like LLoyds and invest the £450k into twenty different blue chip shares.

OP, thank goodness this isn't you.

While I am personally happy to invest this way myself, I would never suggest this to a newbie investor such as yourself. Single shares can be risky, even if you have 20 of them. And like running your own investment fund, it takes time and knowledge something you don't have -currently but you could get there in time. So reading up on investment is something I highly recommend, even if you start off using a professional.

So, spread out the cash for now (and use NSI) and then look at short (ie 2 years living costs) medium term (thinkgs that need repairing/replacing/renewing like cars, house etc) and long term needs (such are pension for you, and higher education for your child).

For short term and some of the medium term cash is fine. But for long term (ie 10 years or more) you want to be in some sort of equities be they wrapped in ISas, unwrapped or wrapped in a pension. Over any 10 year period (including the last ten) they have outperformed cash.

New investors such as yourself are afraid of market volatility and even crash/recession and you are right to be concerned. But those of us who remained invested over 2008 to present have done just fine. Those who invested, then panic sold are the ones who lost out.

mgdavid

doughnutmachine wrote: »

If I was you I'd open a share account with someone like LLoyds and invest the £450k into twenty different blue chip shares.
..........

really bad advice for the OP and far too risky.

wigglefish123

£450k should yield a fairly secure 4% a year from the UK stock market. I'd imagine you could survive on £18k a year if your mortgage has been paid off?


If I was you I'd open a share account with someone like LLoyds and invest the £450k into twenty different blue chip shares.


Every year you should max out your share ISA and when you are earning max out your pensions.


You should go to the library and get some books on investment. I think having a sizeable portfolio means you should at least know the basics of investing ie keeping cash means you lose purchasing power due to inflation....

Ignore this - do as others have said go and see 2 or 3 local IFAs and go with who you feel most comfortable with and who you think offers the best service for their fee - post back on here if you're not sure.....it's too much money to look after yourself with no real experience of investments...good luck

bigadaj

OP, probably worth posting back after meeting the IFAs, as much to review their fees as for the advice, but I'm sure you'll get some useful comments.

doughnutmachine

atush wrote: »

While I am personally happy to invest this way myself, I would never suggest this to a newbie investor such as yourself. Single shares can be risky, even if you have 20 of them. And like running your own investment fund, it takes time and knowledge something you don't have -currently but you could get there in time. So reading up on investment is something I highly recommend, even if you start off using a professional.

So, spread out the cash for now (and use NSI) and then look at short (ie 2 years living costs) medium term (thinkgs that need repairing/replacing/renewing like cars, house etc) and long term needs (such are pension for you, and higher education for your child).

The OP wants investments for her and her daughters future. That means she has to invest in the stockmarket (450k isn't really enough to buy property). I honestly don't think leaving 450k in cash is a good idea - it's virtually guaranteed to lose purchasing power.


Using simplified maths: It's likely that cash will lose 2% purchasing power a year, so after two years this 450k is worth 432k, then if the OP takes out 20k a year for living expenses ie this 432k is now 392k......


Or the OP invests in the stock market and can realistically get a 4% a year income. OK, the stockmarket is more volatile, but I would rather have the volatility than watch 450k dwindle to nothing.

wigglefish123

Or the OP invests in the stock market and can realistically get a 4% a year income. OK, the stockmarket is more volatile, but I would rather have the volatility than watch 450k dwindle to nothing.

Agreed but doing this without any advice and with amount involved is asking for trouble - far better for the OP to get advice from a good IFA and look at a mixture of investments and asset classes.

grey_gym_sock

the problem with your suggestion isn't that it involves the stock market. the problems include:

(a) using individual shares adds unnecessary extra risk

(b) 100% in shares is almost certainly too much

(c) 100% in UK shares (none overseas) adds further unnecessary risk

Wilkins

doughnutmachine wrote: »

The OP wants investments for her and her daughters future. That means she has to invest in the stockmarket (450k isn't really enough to buy property). I honestly don't think leaving 450k in cash is a good idea - it's virtually guaranteed to lose purchasing power.

No one is suggesting permanently leaving the £450k in cash.

Using simplified maths: It's likely that cash will lose 2% purchasing power a year, so after two years this 450k is worth 432k, then if the OP takes out 20k a year for living expenses ie this 432k is now 392k......

Your point is valid, though the loss (2%) is exaggerated.

Or the OP invests in the stock market and can realistically get a 4% a year income. OK, the stockmarket is more volatile, but I would rather have the volatility than watch 450k dwindle to nothing.

Indeed. This is what many of us experienced investors would do, but we do not really know enough of OP's circumstances or her risk tolerance to make informed recommendations. It takes a long time to acquire investment knowledge and we do not know if OP has the inclination or ability to do it. This is why she should get professional advice.

doughnutmachine

wigglefish123 wrote: »

Ignore this - do as others have said go and see 2 or 3 local IFAs and go with who you feel most comfortable with and who you think offers the best service for their fee - post back on here if you're not sure.....it's too much money to look after yourself with no real experience of investments...good luck

Lol, it's funny, I think going to an IFA with 450k is bad advice. If the OP goes to an IFA the IFA will charge an initial 3% then an annual 0.5%. Or £13,500 and £2250.....


All for dumbed down advice that's designed so that the client cant sue the IFA.

doughnutmachine

grey_gym_sock wrote: »

the problem with your suggestion isn't that it involves the stock market. the problems include:

(a) using individual shares adds unnecessary extra risk

(b) 100% in shares is almost certainly too much

(c) 100% in UK shares (none overseas) adds further unnecessary risk

(a) holding shares directly also reduces the costs associated with fund management. Lol, I've not actually seen any worthwhile evidence that all those fund managers etc can actually add value.


(b) with an 18k investment income the OP doesn't need a huge cash reserve - she has already paid her mortgage off.


(c) a lot of UK shares do have overseas sales... it's really not hard to go abroad and see products sold by UK companies. ie Unilever, Shell, Diageo etc