I want a monthly income from my inheritance, what should I do?

smashy

atush wrote: »

As far as i can tell, you dont really need extra income.

You do need to keep some (20K maybe) in emergency cash- put into the best interest rate acct you can find. Boost your pension maybe- another 10K. Start a pension if you dont have one (more than 10K as you are playing catch up).

Then invest the rest. instead of taking the income, you reinvest it. Look up compounding returns. This is the route to wealth/comfort.

Sounds like a good plan. I don't have pensions, so might start that.

Sorry my ignorance, what is compounding returns?

smashy

MoneySaverMick wrote: »

Clearing your debts is a very smart move and probably the most obvious one. Get yourself you own residential property to live in then have you ever considered property investment?

It's something I'm looking into as I have friends and family that are currently landlords. You can recycle some of your cash back out of each property you buy so that £70k could probably get you a few properties. On an interest only mortgage, £250 profit from a single property is very achievable so 4 would give you £1k. But that's as long as your happy with the risk in property, bad tenants, voids which may crop up from time to time.

I have looked at property investment as well and as far as I know there are 3 types:

- Buy to let
- Buy to sell
- Buy for holidays bookings

Buy to sell means you have to find discounted deals, do the work needed on the property and then sell it at a much higher price. That's good for who wants to make a full-time business out of it, not my case.

The buy to rent I'm not sure about it, but I do like the idea of buy for holidays bookings, especially in a place where there are always booking all year round, since you can make a lot more money than the normal tenant renting.

Robin9

Sort your own property out first. You'll probably need all of what's left after paying your debts as a deposit.

Eco_Miser

smashy wrote: »

Because money in a property I am living in is money that is "stuck" so to speak.

I am living there, so it's no buy to sell or buy to let where I can make a profit.

I just think it's a waste having everything going into the deposit and have nothing left for savings or investments!?

It may be stuck, but it's effectively paying off a debt (your mortgage) before you even incur it.

Obviously, keep enough ready cash to cover say six months spending, in case business is bad, plus all expected annual bills.

Whether it's better to invest (in stocks or funds) or reduce your mortgage is a subject of intense debate you will have to decide yourself.

Remember investments can go down as well as up, but a well diversified global portfolio generally goes up over most time period. You can take an income if you want, or re-invest the dividends to make even more in future.

You asked what compounding returns is, it's re-investing your profit to get interest on interest, or dividends on dividends. It makes your money grow much faster.

kangoora

smashy wrote: »

I have looked at property investment as well and as far as I know there are 3 types:

- Buy to let
- Buy to sell
- Buy for holidays bookings

Buy to sell means you have to find discounted deals, do the work needed on the property and then sell it at a much higher price. That's good for who wants to make a full-time business out of it, not my case.

The buy to rent I'm not sure about it, but I do like the idea of buy for holidays bookings, especially in a place where there are always booking all year round, since you can make a lot more money than the normal tenant renting.

You were doing so well before this post

Do you have the knowledge to perform a thorough due diligence of any future potential property purchase. Can you prepare a viable business case allowing for potential income, voids, maintenance costs, ground rent etc. How will you validate that your potential property purchase can achieve the figures in your business case - and asking the seller is NOT the way to do this

Take a look at this thread and the comments about someone thinking of buying a rental flat - https://forums.moneysavingexpert.com/discussion/6046161/property-investment-in-liverpool

or this thread about a holiday caravan let - https://forums.moneysavingexpert.com/discussion/6034454/static-caravan-advice

There's also all the other threads and scams around buying storage units, car parking spaces, retirement homes, forestry, fine wines, brazilian rain forest, carbon credits, hotel rooms (all promising 6% to 10% returns on your cash and ALL have gone bust leaving people with nothing) - there's a lot of fat sharks out there.

Investing in a cheap tracker fund in your pension via a reputable pension provider may seem boring - but boring is better than losing all your money in the worst case. At least the government will give you 25% of whatever you invest as a once-off bonus (subject to your overall income) - basically it's your tax back but in your case you didn't pay tax on it so it's a straight up bonus in your case.

atush

smashy wrote: »

Sounds like a good plan. I don't have pensions, so might start that.

Sorry my ignorance, what is compounding returns?

https://www.fool.co.uk/investing-basics/the-miracle-of-compound-returns/

atush

smashy wrote: »

I have looked at property investment as well and as far as I know there are 3 types:

- Buy to let
- Buy to sell
- Buy for holidays bookings

Buy to sell means you have to find discounted deals, do the work needed on the property and then sell it at a much higher price. That's good for who wants to make a full-time business out of it, not my case.

The buy to rent I'm not sure about it, but I do like the idea of buy for holidays bookings, especially in a place where there are always booking all year round, since you can make a lot more money than the normal tenant renting.

i'd forget about property investing at this point apart from your own home.

You need to set up a pension first and learn about investing.

smashy

Hi guys, thank you so much.

So I have been thinking a lot about this and my new strategy is:

- Pay all my debts and be debt free
- Continue to rent a house to live
- Educate myself on investments, savings, pensions, funds, ISA's, etc, also find a good financial advisor and invest the rest of my money on those things to make the money grow
- Because I am debt free, I'll be able to save more money per month and put into the investments
- Then in the future at the right time buy my own house with a lower interest rate

Is this a good plan?

Robin9

Yes to pay off your debts.

Then have a word with a mortgage broker and see what property you could afford.

atush

smashy wrote: »

Hi guys, thank you so much.

So I have been thinking a lot about this and my new strategy is:

- Pay all my debts and be debt free
- Continue to rent a house to live
- Educate myself on investments, savings, pensions, funds, ISA's, etc, also find a good financial advisor and invest the rest of my money on those things to make the money grow
- Because I am debt free, I'll be able to save more money per month and put into the investments
- Then in the future at the right time buy my own house with a lower interest rate

Is this a good plan?

yes, pay all debts, save a deposit, buy a home, have a pension.

save an emergency cash buffer, then look at investments.