Ive got £170k and would like to know where to invest it

bigadaj

eskbanker said:

sebtomato said:
and if you win more than 2% through premium bonds (so anything more than £1,000 per year), make sure to refund the state, as premium bonds prizes are paid by the tax payer too.

Only on a technicality - if bondholders have paid £92bn into the pot in the form of loans, returning about £1.3bn of that each year as a form of pseudo-interest can hardly be realistically regarded as taxpayer-funded as such....

Not really a technicality, those bonds could be financed for hundreds of millions less on the open market, which costs the taxpayer at the end of the day.

dont_look_now

Since we're completely off-topic anyway, let me just say: it isn't taxpayers' money, it's public money.

sebtomato

eskbanker said:

sebtomato said:
and if you win more than 2% through premium bonds (so anything more than £1,000 per year), make sure to refund the state, as premium bonds prizes are paid by the tax payer too.

Only on a technicality - if bondholders have paid £92bn into the pot in the form of loans, returning about £1.3bn of that each year as a form of pseudo-interest can hardly be realistically regarded as taxpayer-funded as such....

I guess you are saying it's a fair return on the money invested. I agree, apart from anybody winning in excess of a relevant interest rate/prizes. Then it's money given to those people by the tax payer as the state pays all the prizes... 
Going back to student loans, my view is: if the OP has a way to avoid paying them back legally, then so be it. It's not abusing the system and the loophole shouldn't exist to start with. Same for people doing tax avoidance. If it's legal, then it can be done and people will do it. I am blaming the government for letting it happen.
There is very little morality when it comes to money and capitalism.

thegentleway

It's hard to advise without knowing what's important to you... It's also quite hard to lock money away from yourself. There isn't much stopping you selling your invesments and buying a lambo. I guess a buy-to-let would be prob be good as it takes time to sell a house and you have extra time to come to your senses.
My advice is to have a good think about what you want to spend the money on; clearing debt and buying a house is a great start. I think education is super important so I would suggest investing some of the money into yourself. You might also want to consider charity; seems crazy but it's more rewarding to spend money on others rather than ourselves.

thegentleway

Socajam said:

That's a selfish attitude to take - and I have read it on here time and time again - why should I repay my student loan.
Because the money it taxpayer's money and by repaying the loan, you are giving someone else who may be less unfortunate than you a chance to attend university.
If we continue in this vein, it is going to be only a matter of time before students will have to repay all of the loan regardless of how much they earn - welcome to the USA system
To al those who say tough, guess what the crap is going to hit the fan soon - post corona virus and all of us will suffer the consequences for the greed that have overtaken this country.  Yes, the rich do it too, so why should I not follow them?
You have the money repay the student loan and move on with your life with a clear conscience and the your integrity intact.

This is an interesting POV - I really like the sentiment of giving people less fortunate than you a chance to attend University. I would argue that paying back your student early isn't the most effective way to achieve this though. But more importantly, I'm much more interested in arguing that that they are far more unfornate people that can't even dream of going to University that need the money for much more basic needs. Should you spend the money on them first?

eskbanker

sebtomato said:

eskbanker said:

sebtomato said:
and if you win more than 2% through premium bonds (so anything more than £1,000 per year), make sure to refund the state, as premium bonds prizes are paid by the tax payer too.

Only on a technicality - if bondholders have paid £92bn into the pot in the form of loans, returning about £1.3bn of that each year as a form of pseudo-interest can hardly be realistically regarded as taxpayer-funded as such....

I guess you are saying it's a fair return on the money invested. I agree, apart from anybody winning in excess of a relevant interest rate/prizes. Then it's money given to those people by the tax payer as the state pays all the prizes...

No, the point I was making was that the scheme is effectively self-funding, in that the prize fund is a tiny fraction of the money flowing in the other direction, so my view is that it's more appropriate to view the prizes as a small deduction from the money contributed into the exchequer rather than seeing them as a genuine taxpayer-funded cost to the state as such.  The fact that some bondholders will win above the average doesn't mean that the excess is state-funded, as the total prize fund is fixed at 1.4% of the bonds in circulation, regardless of how many bondholders it's split amongst and in what proportions, so anyone winning more than their 'fair' share is only doing so at the expense of other bondholders rather than the taxpayer.

Anyway, as pointed out above, this is ever further off topic!

steampowered

As you are looking to keep this money for the long term, BY FAR the most important thing you can do for your long term wealth is to take the time to learn about investing, so that you have the skills to make the most of this money for the long term.

Most important - educate yourself on the basics of investing in the stock market. The easiest and safest way to invest in the stock market is through low cost trackers. Sites like Monevator are very helpful for learning about this. The average return generated by the major stock markets over the past few decades is 6-7% per year so that's a return of about £11 - 12k per year on your pot (some years will be more, some years will be less, some years will be negative - but that's the long term average).

Whatever you do, don't be tempted to just stick the money into premium bonds or NS&I for the long term. It's fine to do that for a few months, not a good idea for many years. You'd be losing money to inflation every year - that really adds up over time.

I'd do something along the following lines:
- Keep £10k or so to spend on travel and on enjoying myself. 
- Keep £5k in cash in a separate savings account as an "emergency fund", only to be used for emergency expenditure.
- Put £20k each year into a stocks & shares ISA (that is your maximum ISA allowance per year - make the most of it), using a low cost tracker.
- Put the rest into a conventional stocks & shares account - probably also using a low cost tracker.

You could also consider keeping £50k - 100k in cash as a house deposit. With the sum of money you have you and your age you are able to bear the (small) risk of investing in the stock market for say a 5 year timeframe so personally I would just invest everything, but you might decide your risk appetite is different.

I wouldn't rush to buy a house before you are fully ready. You generally want to wait until your are settled and in secure long term employment before buying - because owning a house with a mortgage does tie you to a particular area, and that is a really bad thing when you are young - as it is important to be able to do things like move to a different city for a better job or for better education opportunities.

raffraymon

Thanks for all the replies! I will take into consideration what each of you have said as it has all been helpful advice. I will keep you posted with what i decide to do with it but thanks again for all the advice!

sebtomato

eskbanker said:

sebtomato said:

eskbanker said:

sebtomato said:
and if you win more than 2% through premium bonds (so anything more than £1,000 per year), make sure to refund the state, as premium bonds prizes are paid by the tax payer too.

Only on a technicality - if bondholders have paid £92bn into the pot in the form of loans, returning about £1.3bn of that each year as a form of pseudo-interest can hardly be realistically regarded as taxpayer-funded as such....

I guess you are saying it's a fair return on the money invested. I agree, apart from anybody winning in excess of a relevant interest rate/prizes. Then it's money given to those people by the tax payer as the state pays all the prizes...

No, the point I was making was that the scheme is effectively self-funding, in that the prize fund is a tiny fraction of the money flowing in the other direction, so my view is that it's more appropriate to view the prizes as a small deduction from the money contributed into the exchequer rather than seeing them as a genuine taxpayer-funded cost to the state as such.  The fact that some bondholders will win above the average doesn't mean that the excess is state-funded, as the total prize fund is fixed at 1.4% of the bonds in circulation, regardless of how many bondholders it's split amongst and in what proportions, so anyone winning more than their 'fair' share is only doing so at the expense of other bondholders rather than the taxpayer.

Anyway, as pointed out above, this is ever further off topic!

I thought you could aim to earn 1.2% return per year if you have average luck (and that still beats many savings account). That means not winning any large prizes. Therefore, the taxpayers paying for those large prizes (and an extra 0.2%) who are going only to benefits a few is a waste of money, and people winning those large prizes should return them if they have some morality... The taxpayers giving a lot of money to a few hundred peoples per month doesn't seem to be right.

eskbanker

sebtomato said:

I thought you could aim to earn 1.2% return per year if you have average luck (and that still beats many savings account). That means not winning any large prizes. Therefore, the taxpayers paying for those large prizes (and an extra 0.2%) who are going only to benefits a few is a waste of money, and people winning those large prizes should return them if they have some morality... The taxpayers giving a lot of money to a few hundred peoples per month doesn't seem to be right.

Not sure where to start with these latest leaps of logic, but worth observing that the central appeal of PBs for many is that there's a chance of winning large prizes, rather than simply being a pseudo-savings account generating a mundane return (albeit more competitive recently as others have gone backwards), and so if the product didn't have that appeal then it wouldn't attract so many customers and therefore there'd be less NS&I funding available to the treasury, i.e. you can't legitimately assume that larger prizes are 'wasted money'!  To suggest that bondholders who win such prizes are somehow immoral for accepting them is beyond laughable....

Taking your position to its logical conclusion, NS&I should stop PBs entirely and simply offer their Direct Saver or Income Bonds accounts, if it's so important to you that returns from their products are fixed or capped at what you consider to be an appropriate level!  Or do you feel that the current gap between Income Bonds and the next best easy access savings account is also an outrageous 'waste of taxpayer money'?