What to do with £50k?

Humbug2015

Hello.

New here so be patient with me if I'm not adhering to any rules etc...

I've just inherited £50,000.

My wife and I own our home with no mortgage.

I'm 56, she's 35.

We'd like to invest the £50,000 to try and get some passive income.

I already have £15,000 of crypto that gives me about £200 a month but I'm not going to put £50,000 into that.

What would be the best thing to invest our money in to give us a decent return?

We've thought about buying gold with some of it, and to maybe put about £10,000 of it into my pension.

Any advice welcome and we're prepared to consider any genuine types of investment.

Thanks in advance...

Exodi

Do you have any debt? What is your pension situation? Are you on track to meet your retirement goals? Are you a higher rate tax payer?

This is usually the first courses of action due to the generous tax relief provided and TFA. Even better you could technically already drawdown.

You can appreciate this question comes up all the time (what to do with £X) and really it depends on your financial circumstances.

Rather than reinvent the wheel each time, UKPF on Reddit has a neat flowchart (though some may disagree with the order):

https://ukpersonal.finance/flowchart/

Albermarle

New here so be patient with me if I'm not adhering to any rules etc...

Your initial question contained more detail than many, so good first shot.

However as do many other people, you have omitted to mention your pension situation.
Often investing via a pension is the best route due to the tax benefits. 
So some details on that for both of you would be useful.

El_Torro

Agreed that a pension probably makes sense. 

Another option would be a S&S ISA. You can each put £20k into one this tax year, which covers most of the £50k. 

While there are some big fans of gold in this forum it's my belief (and the belief of most here) that a global tracker or multi asset fund in a pension or S&S ISA will serve you better.

dunstonh

We'd like to invest the £50,000 to try and get some passive income.

Pension is the best tax wrapper in that respect (beats ISA for most people).   You can hold passive investments in a pension but the income cannot be paid passively but that isn't a blocker and has a simple workaround.

What would be the best thing to invest our money in to give us a decent return?

That cannot be answered on the limited info you have given.

We've thought about buying gold with some of it, and to maybe put about £10,000 of it into my pension.

Gold doesn't provide an income and you would be buying at a peak.  Gold is a fear asset and rises in value when there are fears and falls when those fears go away.

Therefore, based on your requirement for passive income, gold would not be a suitable option.  If used as part of a balanced spread of assets then that is different but would require a different strategy to passive income.

Bostonerimus1

Do a budget so you can see where you can save...not spending gives you a fantastic return.

I'd put 6 months spending in the bank or maybe a cash ISA for emergencies.

Then pay off any high interest debt you have.

When that is done your priority should be tax advantaged accounts, ie workplace pensions, ISAs and SIPPs. if you don't have a workplace pension open a SIPP and then use your ISA allowance. To understand how you should invest your money inside your pensions, ISAs etc educate yourself about investment funds...I'd stick to inexpensive index trackers or a multi asset fund like Vanguard's VLS series.

jimjames

Humbug2015 said:

I already have £15,000 of crypto that gives me about £200 a month but I'm not going to put £50,000 into that.

Out of interest how does crypto give you £200 a month, I wasn't aware it paid interest? As above pension is probably a good option especially as you can access instantly if needed

Humbug2015

Thanks for all your replies.

I have four private pensions. My father got me to take them out when I was 16. One is an amalgamation of various smaller ones that I consolidated into a single one through Profile Pensions.

The other three are with Royal London and have 'special features' that guarantee an annuity plus 70% but I have to start the draw down when I reach retirement age I believe.

I've kept physical gold before as gold sovereigns and have sold the odd one or two at a time when they've appreciated in value, so sort of a semi-passive income.

I'm actually semi-retired.

My wife isn't working due to ill health and, without going into detail that's unlikely to change anytime soon as she's on a waiting list for treatment.

I have income from work.

No debts.

Humbug2015

jimjames said:

Humbug2015 said:

I already have £15,000 of crypto that gives me about £200 a month but I'm not going to put £50,000 into that.

Out of interest how does crypto give you £200 a month, I wasn't aware it paid interest?

You can stake crypto, and exchanges offer interest. If you have AXS for example, you can get 30% interest on that on the exchange I use.

Humbug2015

Out of interest, we asked ChatGPT to recommend investments and this was what it said:

🧮 Portfolio Example Allocation (£50,000)

Investment Allocation Est. Yield Annual Income

Vanguard UK Equity Income Fund £7,500 ~4.0% £300

City of London (CTY) £5,000 ~5.2% £260

Vanguard All-World High Dividend (VHYL) £7,500 ~4.5% £337

Henderson Far East Income (HFEL) £5,000 ~8.0% £400

iShares Global REIT ETF (IWDP) £5,000 ~5.0% £250

iShares HY Corp Bond (IHYG) £5,000 ~7.5% £375

HICL Infrastructure (HICL) £2,500 ~6.0% £150

Renewables Infra Group (TRIG) £2,500 ~5.5% £138

JPMorgan Global G&I Trust (JGGI) £5,000 ~4.0% £200

Cash / Money Market £5,000 ~4.5% £225

Total £50,000 ~6.5% ~£3,425/yr

Linton

Humbug2015 said:

Out of interest, we asked ChatGPT to recommend investments and this was what it said:

🧮 Portfolio Example Allocation (£50,000)

Investment Allocation Est. Yield Annual Income

Vanguard UK Equity Income Fund £7,500 ~4.0% £300

City of London (CTY) £5,000 ~5.2% £260

Vanguard All-World High Dividend (VHYL) £7,500 ~4.5% £337

Henderson Far East Income (HFEL) £5,000 ~8.0% £400

iShares Global REIT ETF (IWDP) £5,000 ~5.0% £250

iShares HY Corp Bond (IHYG) £5,000 ~7.5% £375

HICL Infrastructure (HICL) £2,500 ~6.0% £150

Renewables Infra Group (TRIG) £2,500 ~5.5% £138

JPMorgan Global G&I Trust (JGGI) £5,000 ~4.0% £200

Cash / Money Market £5,000 ~4.5% £225

Total £50,000 ~6.5% ~£3,425/yr

That looks to me like a reasonable well diversified generator of passive income.

I run a similar but rather larger income portfolio. Mine is held in an S&S ISA as that provides more room for other income to be taxed at basic rate.  That could well be a more important consideration than other tax factors in deciding whether to use a pension or an ISA.    Also your wife not working would significantly constrain the amount of money you both could put in a pension.

The platform I use (II) simply pays all interest/dividends directly into my bank account as soon as they arrive with no action required on my part.  I would doubt that could be achieved with a pension.

One aspect you need to consider is inflation.  It is unlikely that the income would rise in line with inflation.  So I would recommend a parallel long term 100% equity growth portfolio to buy more income funds as necessary.