Investment Ideas…
Discussion
I have recently sold a house and have ended up with a lot of money (by our standards) sitting in the bank, around £800k.
I am retired (65) but my wife still wants to work, we don’t owe anyone any money, have a nice roof over our heads, have the cars I want and we don’t have any kids/grandkids to worry about. We can afford to pay our bills with the bits and pieces that come in and I dare say with some careful planning we could probably live the rest of our lives well just by eating up all the capital, but I would rather not do that.
So what I am looking for is an investment plan that makes a reasonable return for a reasonable risk. I would like reasonable access to at least half the money in case we come across a bargain bolt hole somewhere nice, unlikely to happen but just in case something turned up.
Had I wanted to put it into property and do the renting thing I could have just kept the house I had and done that, I don’t want to do that. As much as I like cars I have no space for any extras so not looking to invest in classics.
The simplest/safest thing would obviously be to split it up and stick it in banks and get whatever I can in the way of interest, but even with interest rates almost certainly creeping up in the near future the returns would still be grim. Not interested in Crypto, don't get it, not doing it.
I will at some point speak to an IFA and get their views but I dare say there will be people out there reading this who have found themselves in similar positions and I would be interested to hear what ideas they may have come up with.
Any genuine suggestions much appreciated, as well as the inevitable hookers and cocaine jokes, which whilst amusing may not be appreciated by the Mrs
I am retired (65) but my wife still wants to work, we don’t owe anyone any money, have a nice roof over our heads, have the cars I want and we don’t have any kids/grandkids to worry about. We can afford to pay our bills with the bits and pieces that come in and I dare say with some careful planning we could probably live the rest of our lives well just by eating up all the capital, but I would rather not do that.
So what I am looking for is an investment plan that makes a reasonable return for a reasonable risk. I would like reasonable access to at least half the money in case we come across a bargain bolt hole somewhere nice, unlikely to happen but just in case something turned up.
Had I wanted to put it into property and do the renting thing I could have just kept the house I had and done that, I don’t want to do that. As much as I like cars I have no space for any extras so not looking to invest in classics.
The simplest/safest thing would obviously be to split it up and stick it in banks and get whatever I can in the way of interest, but even with interest rates almost certainly creeping up in the near future the returns would still be grim. Not interested in Crypto, don't get it, not doing it.
I will at some point speak to an IFA and get their views but I dare say there will be people out there reading this who have found themselves in similar positions and I would be interested to hear what ideas they may have come up with.
Any genuine suggestions much appreciated, as well as the inevitable hookers and cocaine jokes, which whilst amusing may not be appreciated by the Mrs
That's a shed load of money to be managing in a tax-efficient manner & you are going to need proper advice. IM sponsor some threads in this forum (see the stickies at the top) & you might want to take advantage of a chat with Nik Burrows - it's free, but it's not regulated advice.
https://www.pistonheads.com/gassing/topic.asp?h=0&...
You couldn't burn more than £40k a year into ISAs & at 5% return you would see about £40k a year gain. With two lots of CGT allowance you'd be paying tax on £15.4k - or just pull out roughly £24.6k a year tax free & let the rest accumulate. That's very simplistic though - there must be much cleverer things you could do with it.
https://www.pistonheads.com/gassing/topic.asp?h=0&...
You couldn't burn more than £40k a year into ISAs & at 5% return you would see about £40k a year gain. With two lots of CGT allowance you'd be paying tax on £15.4k - or just pull out roughly £24.6k a year tax free & let the rest accumulate. That's very simplistic though - there must be much cleverer things you could do with it.
You don't mention what you have in way of pensions/ISA/other income etc?
If you've got other investment areas covered, so you can live comfortably and have no dependents, start spending it!
Both my parents passed away aged 63 and 67
Interested to know why you don't want to start spending your savings?
Well worth a read of this thread as well as the IM one(s) :-
https://www.pistonheads.com/gassing/topic.asp?h=0&...
If you've got other investment areas covered, so you can live comfortably and have no dependents, start spending it!
Both my parents passed away aged 63 and 67
Interested to know why you don't want to start spending your savings?
Well worth a read of this thread as well as the IM one(s) :-
https://www.pistonheads.com/gassing/topic.asp?h=0&...
Edited by WillB on Tuesday 4th January 12:19
If you want to keep it simple and cheap, then you could put some or all of it in one of Vanguard's combined equity and bond passive funds - I think they are called Life Strategy. If you have concerns that the current prices of equities and bonds are too high, then you could drip feed the money in.
Whatever you do, I urge you not to do what my late parents did.
When they both retired, they had (as I discovered) a fairly large sum of money which they'd invested. But instead of having an idea of what they were investing for and why, they just sat on it and eventually died with it. In the meantime they lived a rather meagre life when they could have been experiencing the richness that life has to offer.
Sure, it's great that my sister and I both inherited a decent amount of money - but I would far rather they'd lived their own lives to the full and had some fun.
There is absolutely no point in investing just for the sake of investing. You need to formulate a plan, an exit strategy. Decide why you're investing. Spending it is absolutely the whole point! And in your case (similar to me and my sister) with no kids - that plan should all be about you. Okay, maybe plan to leave ten or twenty grand to charity when you die, but the plan should be to make life as comfortable and fun as possible for you and your wife. Don't hoard it and die rich paupers.
TLDR: Divide it in half. You spend your half on coke and hookers; she spends hers on coke and gigolos.
When they both retired, they had (as I discovered) a fairly large sum of money which they'd invested. But instead of having an idea of what they were investing for and why, they just sat on it and eventually died with it. In the meantime they lived a rather meagre life when they could have been experiencing the richness that life has to offer.
Sure, it's great that my sister and I both inherited a decent amount of money - but I would far rather they'd lived their own lives to the full and had some fun.
There is absolutely no point in investing just for the sake of investing. You need to formulate a plan, an exit strategy. Decide why you're investing. Spending it is absolutely the whole point! And in your case (similar to me and my sister) with no kids - that plan should all be about you. Okay, maybe plan to leave ten or twenty grand to charity when you die, but the plan should be to make life as comfortable and fun as possible for you and your wife. Don't hoard it and die rich paupers.
TLDR: Divide it in half. You spend your half on coke and hookers; she spends hers on coke and gigolos.
Edited by Dr Mike Oxgreen on Tuesday 4th January 15:12
You don't sound like big spenders and with no dependents then you probably want to make a crude guess as to how long you'll both live. Maybe assume another thirty years with quality healthcare but the last ten possibly in a home etc. Work with a genuine professional to sort out a plan on how to move the cash into sensible, lowish risk and low maintenance markets that will fit how you wish to spend your retirement and ensures that you both, of just your wife see out your final years in a good quality home not fretting about anything, along with deciding what or who should benefit from anything left over.
There's a lot there to ensure comfort, health, freedom and peace of mind after a lifetime of working.
There's a lot there to ensure comfort, health, freedom and peace of mind after a lifetime of working.
Rob_125 said:
What are you investing it for? The government to get a healthy cut when you snuff it? You have maybe around 20 years to enjoy it to its full potential, I know I'd be spending it.
Yes but bear in mind that inflation - currently 5% - is going to make stuff a lot more expensive in future. The pile could run out sooner than you think ('compounding' but downwards). That's why you need some stuff invested going upwards to counter it.A cousin of mine inherited about £800K 10 years ago. His wife promptly set about spending it on houses and luxury cruises, and so now, age 71, he works as a postman to make ends meet. You can only spend it once, and personally I'd rather pitch it over the bar than under.
If it were me I'd be getting 2 x £20k in each of your names into a S&S ISA this side of the tax year, then another 2 x £20k in the new year and have £80k into an index linked fund, e.g. S&P500 VUSA ETF on Vanguard. It at least keeps 10% of the fund away in a tax free wrapper and can be accessed any time.
Beyond that I'd be speaking to a financial advisor.
Beyond that I'd be speaking to a financial advisor.
Dave350 said:
If it were me I'd be getting 2 x £20k in each of your names into a S&S ISA this side of the tax year, then another 2 x £20k in the new year and have £80k into an index linked fund, e.g. S&P500 VUSA ETF on Vanguard. It at least keeps 10% of the fund away in a tax free wrapper and can be accessed any time.
Beyond that I'd be speaking to a financial advisor.
What's an IFA going to do? I'd wager, advising you nothing more than you can find on the PH pages but charge you 3-4% of the top so maybe 30k and a 1% ongoing fee. It continues to puzzle me what an IFA brings to the table. Fox guarding the hen house springs to mind.Beyond that I'd be speaking to a financial advisor.
A few thoughts in no particular order.
1) It's a lot of money but it can be DIY managed you just don't know how to yet
2) I'd echo the suggestion of have a chat with IM (I don't use them but it's free and you've literally got nothing to lose)
3) Investing and saving aren't the same thing so be clear that with investing there may be less to take out than you put in at some point
4) Think about your appetite for a risk. A lot. With £800K in the bank I'd wager you don't need to take on a lot of risk to make a decent return.
5) Tax and wrappers and how to "structure" it are where there is probably more value in speaking to someone than there is paying for ongoing advice and management
6) Fees matter.
7) For some people there is value in paying an adviser
You could almost certainly invest some or all of it very modestly for a decent return whilst also being able to sleep at night.
1) It's a lot of money but it can be DIY managed you just don't know how to yet
2) I'd echo the suggestion of have a chat with IM (I don't use them but it's free and you've literally got nothing to lose)
3) Investing and saving aren't the same thing so be clear that with investing there may be less to take out than you put in at some point
4) Think about your appetite for a risk. A lot. With £800K in the bank I'd wager you don't need to take on a lot of risk to make a decent return.
5) Tax and wrappers and how to "structure" it are where there is probably more value in speaking to someone than there is paying for ongoing advice and management
6) Fees matter.
7) For some people there is value in paying an adviser
You could almost certainly invest some or all of it very modestly for a decent return whilst also being able to sleep at night.
WillB said:
Interested to know why you don't want to start spending your savings?
We do not live a lavish lifestyle but neither do we deny ourselves anything we want or need and live well, so we are spending it. My Mrs still works and doesn't earn fortunes but that still pretty much covers our living expenses as they are today.The reason I want to get some return on it is I see inflation going through the roof and when my Mrs decides to pack up work I expect the money to start dropping faster than I would like and I don't fancy ending up having to do a paper round on a zimmer frame.
Dr Mike Oxgreen said:
There is absolutely no point in investing just for the sake of investing. You need to formulate a plan, an exit strategy.
I agree - not interested in dropping dead with plenty of money in the bank but life has a habit of springing surprises on you and I would like to have a buffer just in case.I would rather die with some money in the bank and live life with some extra than risking ending up skint because I lived too long.
Hence why I am only looking for a reasonable return for reasonable risk.
Mr Pointy said:
IM sponsor some threads in this forum (see the stickies at the top) & you might want to take advantage of a chat with Nik Burrows - it's free, but it's not regulated advice.
https://www.pistonheads.com/gassing/topic.asp?h=0&...
Thanks for that https://www.pistonheads.com/gassing/topic.asp?h=0&...
I would recommend asking your question on this investment forum https://moneyforums.citywire.co.uk
The first thing is that you have a large amount of capital, and you do not need to take much risk. As others have said, spend some of it!
For the rest I like Capital gearing trust (CGT) and Troy Trojan together, different approaches to wealth preservation. Just google the names and you will find lots of information on them.
Good luck.
The first thing is that you have a large amount of capital, and you do not need to take much risk. As others have said, spend some of it!
For the rest I like Capital gearing trust (CGT) and Troy Trojan together, different approaches to wealth preservation. Just google the names and you will find lots of information on them.
Good luck.
Is there any CGT to be paid on the proceeds from selling that house? You don't say whether it was your primary residence, an inheritance where IHT is paid already, etc.
Just thinking that you don't want to lock up most of it, only to find that the portion you left for ready access is immediately consumed by a hefty tax bill.
Just thinking that you don't want to lock up most of it, only to find that the portion you left for ready access is immediately consumed by a hefty tax bill.
That's a decent lump of money to generate a reasonable pension income all by itself without needing to burn the capital I would have thought. However if you've already got pensions covered and with no inheritance concerns, then maybe use it to have fun, or do some good with. Start a business, employ people, be a philanthropist, invest in your community, give it to charity etc. My cut for that advise is 25% 
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