What to do with £50k

MatyMoo

Thinking of downsizing and could end up with a £50k slush fund and mortgage free :j

I have never had this sort of money before and would have no idea what to do with it or what sort of income I could get from it so wondered what advice people would have?

Linton

If you invest in shares that paid dividends or possibly some higer income funds you could expect to get 4%-6% income that may broadly rise with inflation. However if you actually spend all the income you run the risk of the pot reducing in value and losing income if individual companies run into difficulties and stop paying dividends. So you may wish to take less and re-invest the rest.

Before you decide where to put the money it would be helpful for you to think through what you want it for. Do you actually need income now or would you rather save the money for later? If the latter, what are the timescales?

dunstonh

what sort of income I could get from it

About 3% a year if you want sustainable. So, £1500.

what advice people would have?

what are you looking to achieve from the money?

bigfreddiel

MatyMoo wrote: »

Thinking of downsizing and could end up with a £50k slush fund and mortgage free :j

I have never had this sort of money before and would have no idea what to do with it or what sort of income I could get from it so wondered what advice people would have?

No one is allowed to advise on MSE, it's the rules of the forum.

Having said that an IFA would just laugh you out of his office with that piddling amount, so here goes on a few tips.

Firstly, if you're working, paying into a pension and have six months worth of wages in an easy access account, and you don't need any income, and you're not buying a house then just invest this in an ISA perhaps a VLS 60 ACC fund and leave it. You can invest £15k now, another £20k in April 17. Invest the remainder outside am ISA as well and just leave it. Well that's what I would, and this is a tip, not advice.

Or just spend it, good luck fj

Eco_Miser

As said, you could invest it. Monevator is a good place to read about investing.
You could put it in NS&I's income bonds, and get 1% interest in perfect safety.
You could spread it round some bank accounts and get up to 5% on some of it. If you haven't already got savings, you should definitely do this with some of the money, for use in emergencies, and for planned spending.
You could do all of these things, and spend a bit, and add to your pension fund.
Just don't go and spend it all by accident thinking you've got lots of spare money.

da_rule

What about purchasing a property? There are some nice properties out there for less than £50,000. You could then rent it out as an income and would have an asset you can sell at a later date and (hopefully) make a profit on.

Eco_Miser

da_rule wrote: »

What about purchasing a property? There are some nice properties out there for less than £50,000. You could then rent it out as an income and would have an asset you can sell at a later date and (hopefully) make a profit on.

Or get a bad tenant, and have the place wrecked, sealed by the police under anti-drugs legislation, burnt, not to the ground, but to a point that requires expensive demolition or renovation, and have the insurance co reject your claim.

Unlikely but certainly not impossible.
Letting houses is a business.

Pincher

There was a TV program recently about flood victims. A landlord decided to sell up, through an auction. I think it went for about £47k, and the landlord said his reserve was £3k below that.

I know, they should do a follow-up on the buyer. :rotfl:

Still, if you just use inflatable furniture on the ground floor, you get to live in an idyllic rural environment. Until Mother Nature turns !!!!!y.

MatyMoo

Thanks for all your comments so far, it gives me food for thought

I am in the very early planning stages as I would need to prepare my house for sale and then move back home, slightly further north, where property is cheaper. It would also involve downsizing a little.

A lot depends on what I would get for my current home but, after taking moving costs in to account I think I will have a minimum of £50k and no mortgage.

Buying a second property had crossed my mind too.

cashbackproblems

Despite all the new second home tax changes coming in (on top of the extra 3% stamp duty) and the fact the property market has run out of steam and likely will fall, are we really recommending someone who just has a relatively small amount become a landlord?!!

Its stupid and sounds like you have been watching re-runs of homes under the hammer from 10 years back

da_rule

RICS have predicted a 3% rise in property prices this year and they were pretty much bang on with the 6% they predicted for 2016, even with Brexit and everything else that happened last year.

As the OP would be buying without a mortgage, the changes to mortgage relief won't effect them. SDLT would be payable at 3%, so that's £1,500 assuming the OP spends the whole £50k.

Investing in property isn't a short term investment (unless you're buying a shell, renovating it and selling it on). Yes there are risks with tenants, but you can mitigate these by using a decent agent (yes there are some out there) and ensuring that you have the relevant insurances.