Strategies, ideas, does & don'ts for saving, investing and portfolio (incl cash) management

nick5990
nick5990 Posts: 23
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edited 7 May 2023 at 9:08AM in Savings & investments
I am due to receive a few thousand from a passed family members estate.
Without mentioning the total, I am considering splitting this inheritance between 25% NS&I fixed term bonds, 25% Cash ISAs, 25% Instant access, and 25% in Stocks and Shares (split between L/T ISA £16k, S&S ISA £0.8k, and general investment accounts £13k).
My current S&S investments excluding SIPPs is around £30k. Value of SIPPs is around £14k. Age is 36.
I have a 2015 scheme NHS Pension, current value est as £10k, and plan to draw on this from 68.
I have no holidays planned, but when I do go on them try to keep them under £1k for upto a week duration. Perhaps 4 of these over the next 10 years.
I don't own any property. I am a named beneficiary of a family trust which has one property.
No interest in owning property currently.

I am not considering adding to my SIPPs since would like to build up savings outside stock market first.
One significant expense I anticipate is another used car which would be £6k+, and cannot presently cover this (without selling stocks / shares), but could do after inheritance received (within circa 3 months). Do not have 6 months plus expenses easily accessible currently.
Rent is £350 / month including bills.
I have not used all of my ISA allowance this year, but would consider maxing it out if deemed sensible.
I am torn between safer options but it being eroded by inflation, or riskier & chance to match or be close to inflation over a 10+ year period.
My disposable is around £600 per month of which I was investing £300 in a regular saver (now maxed out & maturing soon), and £50 to £200 variable in stocks & shares (now reduced due to likely car expense in next few months).
Still doing £25 / month going into Vanguard LifeStrategy 60% / 80% equity) funds. £50 / month going to LF Blue Whale.
I did have a higher risk appetite before the car expense identified (11 plate near end of its life), and now I am a bit more cautious.
I am also slightly concerned about the US in terms of US Stockmarket. Its had a significant bull run over last 10+ years, 50%+ of my £30k is est in there, and would not want it to go up in smoke by 30% over the course of a week for the next black swan event that comes along. I know that being in equities in the long term historically is the right thing to do from what I've read.
 
Would appreciate peoples thoughts given the above - strategies, considerations, ideas, does & don'ts please
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  • El_Torro
    El_Torro Posts: 1,429
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    You're right to keep some money in cash, even after paying for a car. However too much money in cash will (as you say) be eroded by inflation and not maximise your wealth in the long term. Typically between 3 and 6 months worth of expenses should be in cash, especially for someone your age. Individual circumstances differ of course, this is a rule of thumb. 

    Your pension is pretty small for someone of your age. Yes, stocks, specifically US stocks, might fall in the coming months or years. In the long term though the trend has always been upwards. Don't forget too that if you invest in global trackers or multi asset funds they rebalance their percentages as the different stock markets rise and fall. 

    As I say I would consider focusing on your pension, either with a lump sum or bigger regular contributions. Having said that you haven't given details about your long term goals or how much you have in investments and savings.
  • wmb194
    wmb194 Posts: 3,131
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    nick5990 said:
    I am due to receive a few thousand from a passed family members estate.
    Without mentioning the total, I am considering splitting it between 25% NS&I fixed term bonds, 25% Cash ISAs, 25% Instant access, and 25% in Stocks and Shares (split between L/T ISA, S&S ISA and a general investment account).
    My current S&S investments excluding SIPPs is around £30k. Value of SIPPs is around £14k. Age is 36.
    I am not considering adding to my SIPPs since would like to build up savings outside stock market first.
    One significant expense I anticipate is another used car which would be £6k+, and cannot presently cover this (without selling stocks / shares), but could do after inheritance received (within circa 3 months).  
    I have not used all of my ISA allowance this year, but would consider maxing it out if deemed sensible.
    I am torn between safer options but it being eroded by inflation, or riskier & chance to match or be close to inflation over a 10+ year period.
    My disposable is around £600 per month of which I was investing £300 in a regular saver (now maxed out & maturing soon), and £50 to £200 variable in stocks & shares (now reduced due to likely car expense in next few months).
    I did have a higher risk appetite before the car expense identified (11 plate near end of its life), and now I am a bit more cautious.
    I am also slightly concerned about the US in terms of US Stockmarket. Its had a significant bull run over last 10+ years, 50%+ of my £30k is est in there, and would not want it to go up in smoke by 30% over the course of a week for the next black swan event that comes along. I know that being in equities in the long term historically is the right thing to do from what I've read.
     
    Would appreciate peoples thoughts given the above - strategies, considerations, ideas, does & don'ts please
    75% cash feels far too risk averse to me but it might depend on other factors e.g., how secure you feel in your job. You don't have to be overweight to the US, you could shift to other regions, but American companies earn money all over the world so... *shrug*
  • JohnWinder
    JohnWinder Posts: 1,719
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    Your enquiry is a lot more general than many bring here, so I wonder if a general resource is a good thing for you. You’ll probably know, and if so you might want to scan the contents or coverage of Powell and Hollow’s recent book How to Fund the Life You Want. Your library might have it, or get it for you.
  • nick5990
    nick5990 Posts: 23
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    wmb194 said:
    nick5990 said:
    I am due to receive a few thousand from a passed family members estate.
    Without mentioning the total, I am considering splitting it between 25% NS&I fixed term bonds, 25% Cash ISAs, 25% Instant access, and 25% in Stocks and Shares (split between L/T ISA, S&S ISA and a general investment account).
    My current S&S investments excluding SIPPs is around £30k. Value of SIPPs is around £14k. Age is 36.
    I am not considering adding to my SIPPs since would like to build up savings outside stock market first.
    One significant expense I anticipate is another used car which would be £6k+, and cannot presently cover this (without selling stocks / shares), but could do after inheritance received (within circa 3 months).  
    I have not used all of my ISA allowance this year, but would consider maxing it out if deemed sensible.
    I am torn between safer options but it being eroded by inflation, or riskier & chance to match or be close to inflation over a 10+ year period.
    My disposable is around £600 per month of which I was investing £300 in a regular saver (now maxed out & maturing soon), and £50 to £200 variable in stocks & shares (now reduced due to likely car expense in next few months).
    I did have a higher risk appetite before the car expense identified (11 plate near end of its life), and now I am a bit more cautious.
    I am also slightly concerned about the US in terms of US Stockmarket. Its had a significant bull run over last 10+ years, 50%+ of my £30k is est in there, and would not want it to go up in smoke by 30% over the course of a week for the next black swan event that comes along. I know that being in equities in the long term historically is the right thing to do from what I've read.
     
    Would appreciate peoples thoughts given the above - strategies, considerations, ideas, does & don'ts please
    75% cash feels far too risk averse to me but it might depend on other factors e.g., how secure you feel in your job. You don't have to be overweight to the US, you could shift to other regions, but American companies earn money all over the world so... *shrug*
    Ok, to clarify the 75% is just for the inheritance, not of the whole portfolio
  • nick5990
    nick5990 Posts: 23
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    Your enquiry is a lot more general than many bring here, so I wonder if a general resource is a good thing for you. You’ll probably know, and if so you might want to scan the contents or coverage of Powell and Hollow’s recent book How to Fund the Life You Want. Your library might have it, or get it for you.
    Ok I'll look into it thanks
  • Albermarle
    Albermarle Posts: 21,225
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    50% in US is lower than the size of the US financial markets  globally, so in this respect you are actually underweight in the US. 
    Global index trackers typically have around 60 to 65% in US.
    Having said that you are not the only one to be a bit nervous about being too reliant on US investments, but it is not normally recommended to reduce the % too far.
    As others have said, your pension fund seems too low and when contributing to a pension, you gain tax relief ( if you have enough earned income) 
  • nick5990
    nick5990 Posts: 23
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    50% in US is lower than the size of the US financial markets  globally, so in this respect you are actually underweight in the US. 
    Global index trackers typically have around 60 to 65% in US.
    Having said that you are not the only one to be a bit nervous about being too reliant on US investments, but it is not normally recommended to reduce the % too far.
    As others have said, your pension fund seems too low and when contributing to a pension, you gain tax relief ( if you have enough earned income) 
    Ok thanks. I didn't mention my 2015 NHS Pension nor property details previously. They are now added to my initial post
  • jimjames
    jimjames Posts: 17,501
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    You don't mention the total but you can't have 25% in cash ISAs alongside 25% in S&S ISAs if that is £16k. Your total limit is £20k per year across all types of ISA.
    Remember the saying: if it looks too good to be true it almost certainly is.
  • nick5990
    nick5990 Posts: 23
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    jimjames said:
    You don't mention the total but you can't have 25% in cash ISAs alongside 25% in S&S ISAs if that is £16k. Your total limit is £20k per year across all types of ISA.
    Yes good point. I could max those out upto the 20k limit across all ISAs, so the percentage in ISAs from the inheritance likely to be less than 25% if chosen
  • wmb194
    wmb194 Posts: 3,131
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    nick5990 said:
    wmb194 said:
    nick5990 said:
    I am due to receive a few thousand from a passed family members estate.
    Without mentioning the total, I am considering splitting it between 25% NS&I fixed term bonds, 25% Cash ISAs, 25% Instant access, and 25% in Stocks and Shares (split between L/T ISA, S&S ISA and a general investment account).
    My current S&S investments excluding SIPPs is around £30k. Value of SIPPs is around £14k. Age is 36.
    I am not considering adding to my SIPPs since would like to build up savings outside stock market first.
    One significant expense I anticipate is another used car which would be £6k+, and cannot presently cover this (without selling stocks / shares), but could do after inheritance received (within circa 3 months).  
    I have not used all of my ISA allowance this year, but would consider maxing it out if deemed sensible.
    I am torn between safer options but it being eroded by inflation, or riskier & chance to match or be close to inflation over a 10+ year period.
    My disposable is around £600 per month of which I was investing £300 in a regular saver (now maxed out & maturing soon), and £50 to £200 variable in stocks & shares (now reduced due to likely car expense in next few months).
    I did have a higher risk appetite before the car expense identified (11 plate near end of its life), and now I am a bit more cautious.
    I am also slightly concerned about the US in terms of US Stockmarket. Its had a significant bull run over last 10+ years, 50%+ of my £30k is est in there, and would not want it to go up in smoke by 30% over the course of a week for the next black swan event that comes along. I know that being in equities in the long term historically is the right thing to do from what I've read.
     
    Would appreciate peoples thoughts given the above - strategies, considerations, ideas, does & don'ts please
    75% cash feels far too risk averse to me but it might depend on other factors e.g., how secure you feel in your job. You don't have to be overweight to the US, you could shift to other regions, but American companies earn money all over the world so... *shrug*
    Ok, to clarify the 75% is just for the inheritance, not of the whole portfolio
    Why are you thinking about it in a silo? Wouldn't it be better to see things in the round?
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