I want a monthly income from my inheritance, what should I do?

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smashy
smashy Posts: 17 Forumite
in Savings & investments
I have my own business and am making around 4k a month which is great, but I never invested any money and one of my goals is to have financial freedom and security.

I received about 120k from an inheritance, and want to:

- Pay off my debts
- Use a % for a deposit for a mortgage
- Invest the rest of the money

So about the "invest the rest of the money", I am very confused about it.

I talked to a financial advisor but he was all about investing in stocks and shares and not touching money for like 5 years or so. My goal is not that.

My goal is to invest the money in a way that it gives me a monthly income in profits. Like for example have the money in an account that gives me like 3 or 4% of interest monthly.

Then I can use that profit to live, grow the money even more, etc.

Does this make sense and is there anything like this? Thank you!
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  • A_T
    A_T Posts: 959 Forumite
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    anyone who knows anything that pays 4% monthly please post ASAP!
  • kazwookie
    kazwookie Posts: 13,843 Forumite
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    How much are the debts?
    What % of what is left, do you want as a deposit
    How much do you want to invest?
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  • smashy
    smashy Posts: 17 Forumite
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    Debts are 20k.
    Deposit is 30k.
    Which leaves me with 70k to invest/save.
  • Alistair31
    Alistair31 Posts: 946 Forumite
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    edited 18 September 2019 at 6:30PM
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    Have you calculated just how little 4% of what you intend to invest (£70k) after paying debt and deposit (would leave you to “live off, grow money etc” ?
  • MaxiRobriguez
    MaxiRobriguez Posts: 1,780 Forumite
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    You won't get 3-4% without investing.

    If you want to avoid investing, your best bet may be to put the money in an offset mortgage account and avoid mortgage interest - if you have a mortgage, and if the remaining mortgage would be around £70k or just over.

    If you don't mind investing a little bit, you should be able to get 4% returns over the long term. The reason your IFA is suggesting 5+ years is investing comes with volatile performance so some years you'll get less, some more, but on average, you'll do better than saving. You could buy an fund composing of large cap companies with a healthy dividend payment, which should limit the volatility.
  • Robin9
    Robin9 Posts: 12,106 Forumite
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    4% on £70k will give £2800 pa (less tax) = under £200 a month
    Never pay on an estimated bill
  • colsten
    colsten Posts: 17,597 Forumite
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    smashy wrote: »
    Does this make sense and is there anything like this?
    No and no.

    I would recommend you go back to the Financial Adviser, or to a different one if you don't want to go back. There is no way you can get 3-4% monthly. Even 3-4% per annum would be hard / impossible to get. Ignoring that you want an unspecified amount of the £120K for paying off debts and for a deposit, 4% would give you £4,800 a year. That's £400 a month. Not exactly financial freedom, I am sure you would agree. But a guaranteed 4% annual return is not achievable in the first instance.

    EDIT: sorry, we have cross-posted. You get the gist, though.
  • smashy
    smashy Posts: 17 Forumite
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    Well, the reason I ask is because I have a savings account where the interest is like 0,35%, but I have a savings account for my daughter where the interest is 2%, so that makes around 1000k per month at least of profits.
  • Robin9
    Robin9 Posts: 12,106 Forumite
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    smashy wrote: »
    Well, the reason I ask is because I have a savings account where the interest is like 0,35%, but I have a savings account for my daughter where the interest is 2%, so that makes around 1000k per month at least of profits.


    You have £600,000 invested for your daughter ?
    Never pay on an estimated bill
  • smashy
    smashy Posts: 17 Forumite
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    Robin9 wrote: »
    You have £600,000 invested for your daughter ?

    2% of interest monthly from 70k is £1400.
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