£40,000 to invest - advice on the best way?

wibbler

My friend has £40,000 and is wondering the best thing to do to invest it? She is quite keen on Buy-to-let, or Buy/Renovate/Sell houses - which is best at the moment? Or are there better investments?

Archi_Bald

Being a landlord/lady is a big responsibility, and there is a lot more involved than you can see in "Homes under the Hammer".

It is impossible to say whether BTL or something else would be relevant for your friend because none of us have any idea about her circumstances. What is her age, what are her financial commitments, hase she got an emergency cash fund, has she got a mortgage, a pension, what is her attitude to risk, is the £40K her total liquid wealth etc etc.

If you, or your friend, can provide details to all those questions, somebody might have some ideas.

pjread

I'd say either "stick it on red", "stick it in an ISA" or maybe "feed it into a pension". depending on circumstance

wibbler

Archi_Bald wrote: »

What is her age, what are her financial commitments, hase she got an emergency cash fund, has she got a mortgage, a pension, what is her attitude to risk, is the £40K her total liquid wealth etc etc.

Hi! She's 34, no financial commitments, no mortgage, £40k is her only savings. She has a pension, she's the one that wants to do this so she is aware of the risk and is still keen.

Hope this helps.

pjread

ISA, other equities, pension contributions (maybe start a sipp...) all sound more sensible and less risky/hassle tbh

Archi_Bald

Agree with pjread. Also, she should have an emergency cash fund with some 6-12 months living expenses before she thinks of any investing. So that's more like only £30K left for investing.

The next major consideration should be not to have all her eggs in one basket. An S&S ISA would strike me a lot more sensible, and she can have property funds in there as part of a balanced portfolio if she think property is a good place to be invested in.

Just because she wants to do BTL doesn't mean she understands the risk, and the responsibilities, that come with BTL.

jimjames

wibbler wrote: »

Hi! She's 34, no financial commitments, no mortgage, £40k is her only savings. She has a pension, she's the one that wants to do this so she is aware of the risk and is still keen.

Hope this helps.

Why would you put your only savings into an illiquid investment? That just sounds crazy to me.

Also getting BTL will be very hard if she has no mortgage/property of her own already.

As already suggested S&S ISAs would be a better, more flexible option once she has an emergency fund sorted.

pjread

I assumed "no mortgage" meant "owns outright" to be honest. If so they're arguably exposed enough to property already, if not they might be a lot more sensible looking for a place to buy to live in...