240,000 invested for income

Mirno

It's probably best to see an IFA.
Depending on your wants/needs you'd do different things.
Do you want
£X while you study (for N years)? (What do you want to do with what's left?)
£X for as long as possible until the amount runs out (possibly increasing X with inflation)?
A reasonable amount for life (if so your age comes into this).

Simplest option is
Store in savings, transfer the amount monthly to your current account.
More advanced options involve putting money in investments, then to a savings account (investments may not pay monthly - so this will act as a reservoir), then to your current account.

Whether you want to invest (or maybe in some fixed term accounts if you're risk averse) depends on timeframes.
Size of reservoir depends on the investments, and how much you want to withdraw.

This is all off the top of my head as how I'd set it up if I had to by myself. I'm not a financial adviser though, so there may be better options.

Mirno

innovate

Don't keep more than £85K in a single financial institution.

An IFA might be able to help you achieve a 5% net return per annum, though you will have to pay them handsomely for the advice.

Savings accounts will pay you pittance - 1.5%-ish annual return if you are lucky.

You can do slightly better (2.3% may be) in current accounts but the absolute max you could hope to stick into various current accounts is a total of £90K.

Linton

innovate wrote: »

Don't keep more than £85K in a single financial institution.

An IFA might be able to help you achieve a 5% net return per annum, though you will have to pay them handsomely for the advice.

Savings accounts will pay you pittance - 1.5%-ish annual return if you are lucky.

You can do slightly better (2.3% may be) in current accounts but the absolute max you could hope to stick into various current accounts is a total of £90K.

The difference between 5% and 2.3% of £240K is £6480. I am sure you could get an IFA for significantly less than that and so recoup the charges in less than a year. Also bear in mind that an IFA should be able to minimise tax.

So I recommend the OP talks to a few local IFAs and chooses one who he feels most comfortable with.

jimjames

MichaelCollins wrote: »

Sorry, I'm not too concerned about access to the capital, just the interest so I can get an income. The capital could be tied up for a year or two or maybe longer. Is that possible though, to retain access to the interest but tie the capital up?

If you only need immediate access to a portion of it then you might not need to keep it all in savings accounts.

Investing some in funds could increase the annual return you get and also hopefully give increase in capital long term. If you aren't comfortable doing this yourself then using an IFA will help you achieve a higher income.

mark55man

With a massive influx of cash - where maybe beforehand you didn't have too much too spare - you need to rethink your view on money and how to make it work for you. Cash only is a strategy that very few wealthy (and you are :-) investors use. They learn to understand how to structure their money so that it works to meet short and long term needs - and I don't mean putting it all on the stockmarket

Firstly - don't rush - all the suggestions about maximising cash income will work for you for 3-6 months or even 1-2 years longer - but not over 10-15 years. This should give you time to read around (which will be useful for your business career as well)

You need to work out how much money you need access to and you need to have an emergency sum put aside (any of the cash mechanisms above is good). You do not want to be a forced seller when times are bad!!

You need to understand the hierarchy of asset classes (ie cash, bonds, equities, property, commodities), and what return you may get on them - particularly in your case fixed income where for some but not equity levels of risk you can achieve yields of 8% or £20,000 a year.

You need to work out what your investment objectives are is for (and I suggest you include way beyond your short term training needs - eg that sort of a sum is a great basis for an early retirement plan - or if you were so minded but many on this board including me would disagree to start a BTL property portfolio

As an example over on http://boards.fool.co.uk/high-yield-hyp-practical-51676.aspx people talk about a high yield portfolio (HYP) which is basically dividing you money into 24-30 shares for income. It is meant as an annuity replacing income stream (the dividends) which as you will not be earning will be tax free. Here the idea is to focus on the income and not the capital value (I don't do this but plenty of wise pensioners and cautious investors do do this)

Then you get into the worlds of shares (equities) and funds and into passive (buy a tracker) and active (buy a skilled manager).

An IFA would take you through this and choose (Asset allocation) the best strategy to meet your needs. If the IFA charges you 0.5%-1% of your pot for this advice well its a lot of money but I suspect you will better off, and better structured to face whatever

Sorry for banging on but I wish someone had set me down this path 20 years ago

Eco_Miser

What mark88man said.

Also, you don't need to take an income while studying; you can place a sum sufficient to live off in high interest current account (which will fall to zero as you spend), and deposit or invest the rest for maximum total return (capital growth plus dividends/interest), which doesn't need to be touched until the first sum is exhausted. (You can probably take the dividends/interest annually to keep your spending fund topped up).
The return on the invested part should more than cover the spending on the spending part.