£50,000 sitting in the bank

youngman1

Hi guys

Im new to this forum and im looking for some advice for my girlfriend. She has inherited some cash and has about £50,000 that she has no plans with. It's basically sitting in the bank (not smart i know) the figure was a little more initially but has slowly gone down as she has a beauty business which is not doing so well and has living expenses which cost more than she is making.

Basically I would like to ask you guy's what would you think is the best thing for her to do?

Property? This maybe hard as she is 21 with no track record and a business that makes less than £500 a month. Are there ways around this?

ISA? This could be a good idea but where shes not making much money at the moment she runs the possibility with being left with all of her money tied into an account.

Another business possibly? Maybe not at the moment

Getting a full time job and putting the money in an ISA?

What would you guys do if you had £50,000 in the bank?

Thank you in advance

george4064

What I would do and what your girlfriend would/should do, are very different things, because we have different risk appetites, different financial goals and objectives, and different circumstances.

If the £50,000 were mine. I would keep 3-4 months living expenses in high interest bank accounts, and put the rest into a diversified portfolio of income & growth investment trusts.


It looks like your girlfriend needs to consider her options with what she wants to do with her money. I have put some comments a few options you have stated;


Property? This takes a lot of maintenance, both time, experience and cost. Difficult to manage, particularly in contrast to a liquid investment portfolio.


ISA? Definitely, this is the most tax efficient way to invest. I wouldn't keep cash in an ISA, use high interest non-ISA bank accounts for cash.


Another business possibly? Only she can decide.


Getting a full time job and putting the money in an ISA? Sounds sensible, with the 3-4 months living expenses in cash, and the remaining in a Stocks & Shares ISA.

richy999

To be brutally honest, it sounds like she is living beyond her means and using the inheritance to meet her every day expenses... obviously this is not sustainable in the long term.

I would suggest that she needs to drastically reduce her monthly expenditure and/or find a better paying job. A full time job at minimum wage would pay more than her current income from the beauty business... perhaps she could do this on the side of a part or full time job?

That said, I would tread very carefully in offering her any advice... out of experience, I can tell you that offering unsolicited financial advice to ones partner can be tricky and painful at the best of times. Is there someone whom she looks up to and respects that you could approach, with a view to giving her a nudge in the right direction?

talexuser

The first thing to do is to address the fact the business loses money, otherwise the 50 grand will disappear in time with nothing to show for it.

Eco_Miser

George has said it pretty well.
Property is a business, does she want to go into business as a landlord?

She has to consider whether her beauty business will improve, possibly with a little investment; or is she going to be subsidising a hobby until her money runs out?

She can only put £15240 into an ISA each financial year, so that's £15240 into a Stocks & Shares ISA soon, and the same after April 6th, taking care of £30,440. The other £20000 in high interest current accounts.

Good bank accounts are listed here.

youngman1

Thank you all for your kind advice I will speak with her today regarding your comments.

bigfreddiel

While she is trying to decide put it all into an NS&I investment bond, will pay you £50/month, and although easy access, it is a bit of a hassle which may deter her dipping in every now and them

Or PremIum Bonds, everyone will say no, but I've won £800 in the last 6 months.

Cheers fj