How to invest 300k

edited 30 November -1 at 1:00AM in Savings & Investments
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  • steampoweredsteampowered Forumite
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    jacob.uk wrote: »
    I am going to see another one. I was just a little put off as they tried to convince me that I was moderately cautious when I do not think I am. I would not be prepared to risk 11% of investment over a year.
    You need to understand that - due to inflation - you are guaranteed to lose money each year. Inflation is currently 2.3% so you'd need to be getting interest to cover that plus any tax due for your money to hold its value.

    You say that you are risk averse. But there are risks involved in whatever you do. Keeping the money in cash involves inflation risk. Investing the money involves investment risk. You need to sensibly evaluate the risks in the context of a long term investment.

    I think you should strongly consider putting much of the money in a lower risk investment fund. If you are keeping that money for the longer term (i.e. 10 years+) that is a very sensible thing to do. Over the long term the increases and decreases balance each other out.
    Yes it will all be in trust, although I am the beneficiary, I would be 1 of 4 trustee's. I understand under the terms of the trust, I would not be able to have anything to do with the managing of that trust.
    I don't think this is correct. If you are a trustee, you will have responsibility for how the trust is managed.

    Have you taken legal advice on setting up the trust? It is worth doing this to ensure that the trust is set up correctly, and you don't find that the LA is able to charge care home fees anyway.
  • atushatush Forumite
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    jacob.uk wrote: »
    Please get off your high horse.

    It is nothing underhanded at all.

    It is acting perfectly well within the law.

    It is about protecting the compensation from future care costs, should they arise in the future after being the victim of crime and injured.

    If you are using a financial adviser yourself, then I am sure that you do all that you can to limit your tax liabilities, within the law

    I was after some financial advice, not a lecture on morals.

    You get off your high horse, you werent insulted but were corrected in some ideas you have that are down right WRONG
  • AudaxerAudaxer Forumite
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    jacob.uk wrote: »
    Yes it will all be in trust, although I am the beneficiary, I would be 1 of 4 trustee's. I understand under the terms of the trust, I would not be able to have anything to do with the managing of that trust.
    I'm a bit confused as you are looking about the best way to invest the trust and talking to some IFAs etc., but you say you will not be able to manage the trust. By looking at the best way to invest and making decisions on this I would have thought is part of managing the trust?

    Although it is a bit intimidating at first, these forums and the internet in general is very good for learning more about investing, as even if you do employ an IFA to give you advice, you (or the other Trustees) will have to make the decisions based on the advice as far as I understand it.
  • atushatush Forumite
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    jacob.uk wrote: »
    Sorry @Keep pedalling

    Little sensitive right now and probably read to much into it.

    The Compo was to cover past loss of earnings, and future loss of earnings and short term medical costs, not future care costs.
    I am just trying to invest that money sensibly whilst protecting it at the same time (within the law) in the most tax efficient way as possible.

    I have no understanding of any of this, neither does my family who would be trustee's.

    It is all very frightening.

    Reconsider the trust. It will limit you, and you can easily invest the money in your name and your partners name in ISAs and pensions which would pay out to them when you die.

    If some of the money is spent, putting you into better care than the council would give you- so much the better. But if you are buying now, and have a ground floor suite with bedroom and bathroom your family could keep you at home, with paid for care, for a long time meaning you wouldnt need to go into a home.

    you are in an ideal situation to make sure you have the right accommodation for you and your family's needs.

    There are many kinds of risks, and you arent thinking about all of them. One of them, inflation risk, would see your money plummit in buying power over the years. So a portion of it should be in equities as the risk over time is less, as in periods of ten years or more it pretty much always beats cash.
  • SuperscroogeSuperscrooge Forumite
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    jacob.uk wrote: »
    Sorry @Keep pedalling

    Little sensitive right now and probably read to much into it.

    The Compo was to cover past loss of earnings, and future loss of earnings and short term medical costs, not future care costs.
    I am just trying to invest that money sensibly whilst protecting it at the same time (within the law) in the most tax efficient way as possible.

    I have no understanding of any of this, neither does my family who would be trustee's.

    It is all very frightening.

    Sorry to hear you have been a victim of serious crime.

    With an award of this size and you considering setting up a trust, you definitely need financial advice.

    You are doing the right thing in speaking to several IFA's. Make sure they are definitely independent and not restricted advisers that can only give advice about one companies products. https://www.unbiased.co.uk/ is a useful website for finding IFA's

    Don't be scared of stock market investments. An IFA isn't going to invest your money in some high risk mining share where you could lose it all. If you are risk-averse only a small proportion of your funds would be invested in equities. But over a period of more than five years, equities are likely to give a higher return than leaving it all in cash investments
  • george4064george4064 Forumite
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    You need to understand that - due to inflation - you are guaranteed to lose money each year. Inflation is currently 2.3% so you'd need to be getting interest to cover that plus any tax due for your money to hold its value.

    You say that you are risk averse. But there are risks involved in whatever you do. Keeping the money in cash involves inflation risk.
    Investing the money involves investment risk. You need to sensibly evaluate the risks in the context of a long term investment.

    I think you should strongly consider putting much of the money in a lower risk investment fund. If you are keeping that money for the longer term (i.e. 10 years+) that is a very sensible thing to do. Over the long term the increases and decreases balance each other out.


    I don't think this is correct. If you are a trustee, you will have responsibility for how the trust is managed.

    Have you taken legal advice on setting up the trust? It is worth doing this to ensure that the trust is set up correctly, and you don't find that the LA is able to charge care home fees anyway.

    I wanted to highlight this important part in bold, so many people do not realise that it is considered risky doing nothing with your money. Since inflation will erode the value of the money you have earning zero or a tiny amount of interest.
    "If you aren’t willing to own a stock for ten years, don’t even think about owning it for ten minutes” Warren Buffett

    Save £12k in 2021 - #027 £13,229 (66%)
  • edited 14 May 2017 at 5:11PM
    LintonLinton Forumite
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    edited 14 May 2017 at 5:11PM
    Perhaps it would be helpful if you had a better understanding of what the risk is with a investment in funds of shares....

    The danger isnt that you could lose everything. Your money will be invested in 1000's of companies across the world. The chance of them all going bust is zero unless there is a massive global catastrophe. Under those circumstances I guess your cash woudnt be of much use either even if you could access it.

    However what will happen is that over the short term the total value of your investments will fluctuate. Typically by perhaps 1% a day, up or down. Though over time there will be more ups than downs. In times of major economic upheaval such as the 2008/9 crash very much larger falls can take place. The amount of the fall is determined by the details of what funds you invest in. You can invest cautiously which can significantly reduce the effects of a crash but the down side of this is that this will also reduce the possible gains in the good times.

    Many experienced investors are happy to put up with the occasional major crash and will invest in funds that perhaps fall 40-50% in the bad times, but will be expected to bounce back, and more, within a very few years. But there is no need for you to do this.

    It is up to the trustees or, if they have no professional expertise in investing, the advisors they employ to choose the right funds that will have the desired balance between temporary falls in the bad times and the need to provide the money to help support you for the rest of your life.
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