How would you invest £1M, starting from scratch?

GeoffTF

Alexland said:

IvanOpinion said:

The problem with your suggestion is that if you ask such a question of 10 different IFAs you would get at least 30 different answers.

If paying IFA ongoing charges then the drawdown rate would need to be even more conservative so retiring at 45 probably wouldn't be possible and the best advice would likely be to keep working / get a job.

The old rule (based on historical US stock-market returns) was that you could draw down 4% each year in a tax free fund with no expenses. Stock market valuations are now at a historical high (particularly in the US). If you pay a lot for something, your chances of selling it at a profit are limited. Returns going forward are likely to be much less. If you add on tax and IFA charges, you may not have much left (and the markets could go down of course). An IFA is not going to bother with lots of savings accounts, which pay much better interest with less tax than bonds with equivalent risk.

threlkeld53

maxsteam said:

Haha. Not Darlington, not 1970s. This is currently sold STC. It was used as offices. It's in the city centre. It's 2 minutes walk from the main library, 3 minutes walk from the main theatre. There are a couple of bars nearby which I would not visit but they are round the corner. It is likely to stay as offices but someone who likes such bars would be happy living here...



The point I am making is not that this house is right for everyone but that £150k will get considerably more than an entry-level property in much of the UK. I could list a dozen or more cities where similar properties are available, not down south and not tourist areas.

This seems like a potentially good investment. 3-storey commercial property in Hull. Could be worth looking into. I think it's been on the market since July 2021.

Thrugelmir

JakeHyde said:

 But from what I’ve been reading, a lot of people (inc. Warren Buffett) say sticking your money into an Index fund like the SNP 500 hands down beats any kind of professional fund manager, manually picking stocks and shares.

Then reread what he actually said. Misinformation is how misunderstandings occur. Was an answer to a specific question. For the record WB is a US resident and not recommending this course of action to a global audience. 

Shankers

Here's a suggestion:

350k on a house
15k on stamp duty, legals, removal cost
10k on furniture for new house
20k on car
50k on maxing out premium bonds
40k in a pension (e.g., a SIPP)
20k in a tracker fund in a S&S ISA, drip-fed equally over 12 months
'Savings ladder' with cash in a 5 year fix, 4 year fix, 3 year fix, 2 year fix, 1 year fix, with about 40k in each; then each tax year drip-feed the maturing money into the S&S ISA and SIPP next tax year once you've switched it to replenish some of your emergency fund
15k cash instant access emergency fund
30k for new clothes, holiday, generally things you enjoy

That's around 750k

If your 'friend' is freelancing, why not also do the following: Retraining. Put around 100k in a war chest for university education fees and living expenses for 3 years. In his early 50s, my father in law retrained from sales to working as a paramedic and has loved it. He took a 2 year accelerated degree course as part of his training. Use some of the 100k for course fees and the rest to cover living costs for the 2 or 3 years.

That's still some money left over. 

MaxiRobriguez

Shankers said:

Here's a suggestion:

350k on a house
15k on stamp duty, legals, removal cost
10k on furniture for new house
20k on car
50k on maxing out premium bonds
40k in a pension (e.g., a SIPP)
20k in a tracker fund in a S&S ISA, drip-fed equally over 12 months
'Savings ladder' with cash in a 5 year fix, 4 year fix, 3 year fix, 2 year fix, 1 year fix, with about 40k in each; then each tax year drip-feed the maturing money into the S&S ISA and SIPP next tax year once you've switched it to replenish some of your emergency fund
15k cash instant access emergency fund
30k for new clothes, holiday, generally things you enjoy

That's around 750k

If your 'friend' is freelancing, why not also do the following: Retraining. Put around 100k in a war chest for university education fees and living expenses for 3 years. In his early 50s, my father in law retrained from sales to working as a paramedic and has loved it. He took a 2 year accelerated degree course as part of his training. Use some of the 100k for course fees and the rest to cover living costs for the 2 or 3 years.

That's still some money left over. 

The guy earns next to nothing and you're advising him to spend £60k on stuff and putting 5x more in savings than a pension and 10x more in savings than an investment ISA.

Are you trying to make the OP bankrupt through inflation eating away at heavily spent capital?

House fine, money for retraining fine. Money that is left needs to work hard because it's not a huge pot and won't last half a century. At most £50k in savings will be enough to ride out bear markets given the OP is used to living on nowt. Literally everything else can find it's way into tax efficient investments. 

jimjames

threlkeld53 said:

maxsteam said:

Haha. Not Darlington, not 1970s. This is currently sold STC. It was used as offices. It's in the city centre. It's 2 minutes walk from the main library, 3 minutes walk from the main theatre. There are a couple of bars nearby which I would not visit but they are round the corner. It is likely to stay as offices but someone who likes such bars would be happy living here...



The point I am making is not that this house is right for everyone but that £150k will get considerably more than an entry-level property in much of the UK. I could list a dozen or more cities where similar properties are available, not down south and not tourist areas.

This seems like a potentially good investment. 3-storey commercial property in Hull. Could be worth looking into. I think it's been on the market since July 2021.

On the market for over 6 months at that price suggests something is wrong with it. If it was such a bargain in the current market it would have been snapped up almost instantly. Maybe not such a bargain after all!

CustardApple

Make sure he gets a prenup if he gets involve with someone and plan on marrying

maxsteam

jimjames said:

threlkeld53 said:

maxsteam said:

Haha. Not Darlington, not 1970s. This is currently sold STC. It was used as offices. It's in the city centre. It's 2 minutes walk from the main library, 3 minutes walk from the main theatre. There are a couple of bars nearby which I would not visit but they are round the corner. It is likely to stay as offices but someone who likes such bars would be happy living here...



The point I am making is not that this house is right for everyone but that £150k will get considerably more than an entry-level property in much of the UK. I could list a dozen or more cities where similar properties are available, not down south and not tourist areas.

This seems like a potentially good investment. 3-storey commercial property in Hull. Could be worth looking into. I think it's been on the market since July 2021.

On the market for over 6 months at that price suggests something is wrong with it. If it was such a bargain in the current market it would have been snapped up almost instantly. Maybe not such a bargain after all!

I would not want to live there. There's no parking and a couple of dodgy bars nearby. It only looks a bargain if you are looking at it from an expensive part of UK where many people grow up in the belief that they will never be able to afford their own home. If you look at it as someone who lives a few miles away, the price looks a little high to me. OP is single so might be thinking about spending £150k on a posh apartment.

I will restate the point that £150k will buy a lot more than an entry-level property in much of the UK.

adindas

threlkeld53 said:

maxsteam said:

Haha. Not Darlington, not 1970s. This is currently sold STC. It was used as offices. It's in the city centre. It's 2 minutes walk from the main library, 3 minutes walk from the main theatre. There are a couple of bars nearby which I would not visit but they are round the corner. It is likely to stay as offices but someone who likes such bars would be happy living here...



The point I am making is not that this house is right for everyone but that £150k will get considerably more than an entry-level property in much of the UK. I could list a dozen or more cities where similar properties are available, not down south and not tourist areas.

This seems like a potentially good investment. 3-storey commercial property in Hull. Could be worth looking into. I think it's been on the market since July 2021.

If the surrounding is not that cheap than, it might be a good idea to use a surveyor to investigate that. it might be Cheap for a reason??

Previous Surveyor bad report, Bad neighbourhodd, No Lenders want to loan after discovering the problem, Leasehold close to expiration ??

solidpro

Keep job. 50% capital into a home, 50% mortgage.
Drip feed £20k per year into S&S ISAs and up to £40k a year SIPP.

That's it.