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

in Savings & Investments
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  • solidprosolidpro Forumite
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    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.
  • edited 16 January at 8:55PM
    Matt8888Matt8888 Forumite
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    edited 16 January at 8:55PM
    If he is 45 and renting and we should assume he is virtually unemployed his win, whilst welcome, is certainly not one to enable him to live a millionaire lifestyle. £1M is not that much these days when you consider the cost of houses and retirement. He should get some help calculating what he will need to have a reasonable income in retirement and, of course, how much he needs to spend on a house. That may well be most of the windfall accounted for. It is unlikely that sum of money can provide a "healthy income" from now for the rest of his life, but if living in an inexpensive area with low cost housing and a modest lifestyle, I guess it could be possible, and reading between the lines, that is probably his position?
  • edited 17 January at 11:23AM
    MD79MD79 Forumite
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    edited 17 January at 11:23AM
    Wouldn’t a buy to let (without the need for a mortgage) be advisable, assuming of course the choice of property was good? He’d get the rental income plus capital growth in the long term and wouldn’t need to worry about losing half the value in a stock market crash. Also not too much hassle if he uses an agent when renting it out. Yes property prices could also crash, but he’d still have the bricks and mortar, and should always be able to generate an income from it.

    Lots of people are advising against BTL these days, and no doubt it’s not as advantageous as it used to be, but plenty of people are still doing nicely from their rental properties, aren’t they?
  • AlbermarleAlbermarle Forumite
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    MD79 said:
    Wouldn’t a buy to let (without the need for a mortgage) be advisable, assuming of course the choice of property was good? He’d get the rental income plus capital growth in the long term and wouldn’t need to worry about losing half the value in a stock market crash. Also not too much hassle if he uses an agent when renting it out. Yes property prices could also crash, but he’d still have the bricks and mortar, and should always be able to generate an income from it.

    Lots of people are advising against BTL these days, and no doubt it’s not as advantageous as it used to be, but plenty of people are still doing nicely from their rental properties, aren’t they?
    The tax regime around BTL is much less friendly than it used to be , so margins are thinner. Can be non existent, even negative if you have months without rent being paid. Also can ne a lot of hassle. It seems more suited to experienced landlords with multiple properties and/or people in the building trade/ very good DIY skills. 

    Regarding investments , with a balanced portfolio a 50% drop is highly unlikely , although some ups and downs can be expected. In the long term it should produce at least a  similar return to the BTL but with almost zero effort needed.
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