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£1,000,000 investment
Comments
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Malthusian wrote: »Total non sequitur. Why do you think the OP needs to set up a trust?
The OP says he wants minimal risk. A diversified "low/medium risk" portfolio should be expected to fall by at least 25% in the next crash. Can the OP cope with "losing" £250,000+?
When that crash is going to be is largely irrelevant. If the OP does invest for the long term there will be a crash at some point, and it will feel largely the same whether it's in next year or in 2024.
The trust can be used for tax planning purposes and a stock and bond portfolio is what I would do to grow the money. It is not what the OP asked for, but I don't think the what they asked for is the best approach. I would be looking to use the money to provide multi-generational financial security and so estate planning is the first priority. Obviously trusts and their taxation are complex and they are not as permissive as they once were, but I'd look into them to see if they have any advantages also pensions are a way to pass money on without IHT....it's complex and so i would get expert advice.
Tax is probably the OP's biggest issue and I would get that structure sorted before thinking about investments.“So we beat on, boats against the current, borne back ceaselessly into the past.”0 -
@Murphy_the_cat, no, she was definitely from Blackpool0
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bostonerimus wrote: »The trust can be used for tax planning purposes
Trusts are often less tax efficient than doing nothing, unless you know exactly what you are doing. Which illustrates the value of professional advice as you say.0 -
I'd be prepared to take MORE risk with what's left, as it's still money I wouldn't have otherwise had, and I haven't worked all my life to earn/save.
There is a tendency for people to treat unanticipated "windfall" profits/bonuses/prizes/inheritances as not really their own money, causing them to subsequently assume risks with that money that they would not ordinarily entertain...
Referred to as the "House Money Effect"* in behavioural finance, it is something to be on guard against.
Once windfalls are banked then, since money's fungible, you should treat it exactly as you would money you earned through hard graft: be just as sensible, prudent, rational.
Now, it may be that a dramatic increase in your wealth arising from an unexpected windfall could, by taking care of your immediate financial needs (eg. paying off debts, securing housing for you or other family members), create a new found capacity for you to invest for the longer term, but that capacity and motivation to invest (perhaps enabling someone to make longer term equity investments for the first time in their lives) should be for considered, rational reasons, not an irrational one such as attaching less "value" to the windfall than to money earned via wages or other conventional means.
At least the OP hasn't succumbed to this house money effect.
* https://www0.gsb.columbia.edu/mygsb/faculty/research/pubfiles/1154/thaler_and_johnson.pdf0 -
Agreed, it depends on the exact situation.“So we beat on, boats against the current, borne back ceaselessly into the past.”0
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Spending it and helping my children is my objective but I am not financially sophisticated enough to even match inflation. I blame the Bank of England and that Mark Carney, isn't he going soon ?
With 1 million to invest. Many people with common sense will be seeking advice from professional.0 -
IMHO, if it were me i would pay off any non mtg debt, id boost my and my OHs pension if it has allowance to use up, fill 2x s&s isas, open JISAs for the kids. Replace my car if it needed it, any other things that need replacing and any home maintenance that needed doing. plan a holiday if you dont have one booked.
Then I would look into an IFA to help with the rest, knowing that I would transfer some of these assets each year to ISAs/Pensions.
And I thought there was an NSI account that pays 1.15%. Move the cash there in the meantime.0 -
I have received some really useful advice and food for thought since my original post, thank you. It's also been suggested that I will soon be dead or in a care home and also that I might be some kind of fantasist who dreams up posts on financial forums. It's even been questioned why a person with £1,000,000 sitting in a bank at 1% should have an issue with Mark Carney.
But seriously, I have since investigated local Financial Advisors in my area and I was very surprised to see the sheer number of them. Nearly every neighbouring road seem to have one.
What should I look out for with a FA and what's it going to cost me please ?0 -
It's even been questioned why a person with £1,000,000 sitting in a bank at 1% should have an issue with Mark Carney.
Because it's a very odd thing to take issue with, since your inflation losses are entirely of your own making, and nothing to do with Mark Carney.But seriously, I have since investigated local Financial Advisors in my area and I was very surprised to see the sheer number of them. Nearly every neighbouring road seem to have one.
What should I look out for with a FA and what's it going to cost me please ?
Firstly you'll want to ensure that the adviser is an IFA - independent.
It's difficult to say what it'll cost - they range in price.
There'll be plenty of great input along soon I imagine. In the meantime try to spend a little less time reading the Daily Mail and listening to Nigel Farage . :beer:0
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