Investment as booster while I share-to-buy

Grishkin

Hi Everyone,

I'm new to the forum and to the territory, so please excuse the lengthy introduction. I am still trying to narrow down my options here.

I'm coming into a fairly life-changing sum of money (£100,000 - £125,000). I currently rent on London and have no other significant savings, so this figure represents my future savings pot for property purchase and investing.

I figured I could afford to enter a share-to-buy scheme in my North London area, earning just enough to cover the rent for this while using my savings to cover the mortgage - and, in the short term, living costs. I don’t want to miss an opportunity with investment, however, even if it means I have to pay an IFA. I'm thinking, for example, that investment could eventually generate an income, to cover, say, living costs, or even further mortgage payments (especially in the long run, if, for instance, I wish to increase my initial property share). But I know very little about investment and I'm wary of the risks.

Regarding my share-to-buy mortgage, I can see I could cover my share in one payment, however this would leave me with only a small sum to invest, and obviously much smaller returns. I'm assuming therefore that committing to ongoing mortgage payments is my best bet, if I also wish to invest. But I'm really open to advice on this front as well.

I have had a couple of meetings and am roughly aware of the various levels and types of investment. Should I play it safe and invest a small sum, assuming investors would bother with/recommend this, and would it be worth my while? Alternatively, would investing a large proportion of the money be better, or even wise, given that I am making ongoing mortgage payments (even though the majority of that money won't be demanded until later)? Would it be better to ring-fence a substantial sum for investment, or could invested money simply generate capital for my mortgage as I go? I'm thinking the former, as I've been told it takes at least five years to generate significant capital from investment.

Alternatively, should I forget about investing and just rely on interest from ISA and other saving accounts? I'm aware that I could only pay £20,000 per year into a cash or stocks and shares ISA.

I haven't even thought about a pension.

Grateful for any advice!

Albermarle

I do not think most people would consider >£100K 'a modest amount'. Not life changing, but still better than a poke in the eye with a sharp stick !

Your post is missing a vital fact . Are you working ? Good salary ?

In general the usual answer to similar posts, is do a bit of everything i.e some in savings; some in S&S ISA; some in pension; some to pay a mortgage etc

Grishkin

Hi Albermarle,

Thanks for your reply. Yes, wrong adjective, it's actually a very large sum compared to what I'm used to. I suppose I'm thinking in terms of the property market, 100K doesn't get much, not in London anyway. Yes, I'm working but I'm not on a full salary. I'm a creative singer and performer, so on an unsteady income. I've supported myself in the past with other work but not full-time, still, I'd really like to drop that sideshow if I can.

Better than a spit in the eye from a dead man! As my Dad used to say. Thanks again for your reply. I'll keep poking around for a say forward..

LHW99

If you are working as self-employed, you can add up to your profit to a pension in that financial year. Ideally you would invest that, as it will be there for well over 5 years.

Apart from that, and particularly if you have irregular income, you should keep an amount in cash - perhaps 6 months living +mortgage expenses. You don't want a poor month to mean you miss a mortgage payment.

Beyond that, you could put £20k in a cash ISA - from next year that amount will drop, and you would need to use an S&S ISA to be able to put the rest (up to another £20k) in.