£100k to invest

Ev7477

This is a strange post to be writing. A family member died and has left me approx £130k, which I was not expecting. I don't want to waste any of it. At the moment I have no savings as we are having building work so I want to put £20k into ISAs but beyond that I'm lost.

I'm married, mid 30s with one toddler and another baby on the way. We both work full time. Our income covers all our outgoings with enough to save £300 p/m but that will change in Feb 2018 with two children in childcare for six months.

I found a financial advisor who said he was independent but spent the whole appointment selling one particular fund.

A holiday would be nice. As would some house improvements, but is that a waste? We may need a new roof in five/10 years.

So option 1 is investments with the right financial advisor, option 2 would be a buy to let, which would give a regular income and hopefully an asset that goes up but couldn't afford one near me as I'm in the South East. Option 3 would be to put it towards the mortgage but that feels like a waste. We owe £295k on a house valued at £550k, which we can afford on one salary.

Can anyone advise where to start please? I never expected to be in this position.

eskbanker

What's your mortgage rate? That's not to say that paying down the mortgage will be the right thing to do, but it would make more sense if it's a higher rate than a lower one.

BTL certainly works for some but is becoming less profitable and being a landlord/lady involves a fair amount of work.

Personally I'd speak to more (genuine) IFAs before deciding....

xylophone

An emergency fund? Consider using interest paying current accounts - two Tesco current accounts each for you and your spouse would be an option.

You might also wish to consider a Nationwide Flexdirect each and a joint Flexdirect with associated Flexregular saver each.

You can cycle the required monthly £1000 in and out from the Tesco accounts.

http://www.nationwide.co.uk/products/current-accounts/flexdirect/features-and-benefits

You might wish to consider additional contributions to your pensions.

Your might wish to consider a JISA for your child and for the new baby in due course.

https://www.gov.uk/junior-individual-savings-accounts/overview

http://www.moneysavingexpert.com/savings/junior-isa

You might wish to consider a stocks and shares ISA for you and your spouse.

http://monevator.com/compare-uk-cheapest-online-brokers/

http://monevator.com/using-vanguard-lifestrategy-funds-life/


https://www.unbiased.co.uk/ re Independent Financial Adviser.

Ev7477

Thank you so much for the replies. I've not heard of unbiased before so will give them a try.
The mortgage is on a low apr so I'm sure there are better ways to maximise the return.

A BTL with no mortgage would minimise our risk but I agree that it's a lot of work.

There's so much to think about! Thank you

Eco_Miser

Receiving a legacy like this can bring mixed emotions - grief for the late relative, and joy for the windfall. so commiserations and congratulations.

House improvements that genuinely improve the house and the life of its occupants are not a waste - subject to being value for money. They may not increase the value of the house by their cost, but if you're not planning on moving anytime soon, that's irrelevant - you'll be the one benefiting.

A holiday could indeed be nice, and there's now no financial reason not to take one.

A BTL with no mortgage is missing out on one of the primary reasons they've become popular - leverage (investing with other people's money).
A BTL in a different part of the country will be expensive in terms of agent's fees and travel expenses.
This is in addition the the unfavorable tax treatment, and concentration of risk into one property, and possible expenses and lack of income if you get the wrong (or no) tenant.

You can invest in a worldwide range of stocks and bonds, preferably within collective investments such as Unit Trusts(UTs) and Open Ended Investment Companies (OEICs), collectively 'funds'. These spread your risk throughout hundred or thousands of companies, so you are not going to lose all your money, though the value could drop by 50% in a very bad year (and then recover to a new high). You can do this inside a Stocks & Shares ISA, a pension, or outside any tax wrapper. You can do this yourself, or pay an IFA to do it for you. Monevator is a well-regarded financial blog with articles that explain much about investing. Even if you use an IFA, reading the blog will help your understanding.

Reserve money for the house roof, and for other emergencies in high(ish) interest current accounts and regular savers - usually one sole for each of you and spouse, and one joint, but two or three sole each where this is possible (Tesco & BOS). There's a regularly checked list here.

jdw2000

Regarding the house roof...

How many bedrooms do you have? How many will you potentially need in the future? Will you perhaps need to move to a bigger house?


If you like where you live but the house becomes too small, then instead of a new roof have a loft extension put in. The amount of money it saves you on your house move (stamp duty etc), and the amount it will add value to your house, means that the loft extension will pay for itself and be cost neutral.


If you do not need more rooms, or may move in the future, then either patch up the old roof or just get a replacement roof put on. A new roof will not add money onto your house. A new buyer will expect it to have a decent roof anyway, and if it doesn't have one they will knock you down in price to put one on there.

Do not put a loft extension in to make money. It will only make back what you put in.


Hope that makes sense.

Ev7477

Thank you. The house is our long term home and I'd large enough. While a loft extension would be nice we do have a place for the occasional guest and I can't justify the cost.

All of yiur replies are very helpful. Yes, it does stir up mixed emotions. I land its hard to know what's for the best.

How much would you expect to pay for independent financial advice?

bobclayton

Hi Ev7477,

Financial advisers normally charge you either a fixed rate for the advice, and then a percentage of the investment. Others won't charge you for the advice up front, but will have fees if solutions are taken.
I'm the latter if you wanted to get some advice - happy to help! Send me a PM.

ColdIron

bobclayton wrote: »

Others won't charge you for the advice

I'm unsure if this is legal for a regulated advisor but it's certainly :spam:

bobclayton

Apologies for my choice of wording! I have corrected.