Advice on where to put money for savings

SH_Zevar

Hello,

I’ve been very fortunate to have made some money from working at a small business which was acquired. I live at home with parents and have no debt, and my monthly expenses are fairly minimal.

I’m trying to decide what to do with the money I have made. My initial thoughts are to put 20% away into some form of medium risk investment (such as Vanguard or another DIY investing tool), 50% into a fixed rate bond, and the rest into my current cash ISA. Would anyone recommend this as the right approach?

As an aspiration, I would love this money to become some form of passive income in the future.

eskbanker

Nobody can really comment on whether that's suitable without more knowledge of your circumstances - the usual approach is to ensure that you have enough instant access cash for your foreseeable needs, then an emergency fund of still accessible cash for less foreseeable events, then to consider investing after that, either via pensions or other tax wrappers such as ISAs, but everyone's different and only you know what assets you already have, how much you're talking about, job stability, age, health, dependents, attitude to risk, etc, etc....

Your last comment might indicate pensions as a suitable vehicle but we don't know how far into the future you're looking.

Eco_Miser

Why have you got a cash ISA?

I ask because for most people there has been no point for the last four years, since the first £1000 interest (£500 for Higher Rate taxpayers, 0% for Additional Rate) is taxed at 0% anyway.

If you're thinking of passive income, you'll have to think beyond cash accounts. Vanguard can be a good choice to start with.

As eskbanker said, make sure you've got enough cash available for emergencies and normal living befor you start investing.