Discussion
Just wondering what/how to advise the 2 kids (18 & 23)
What to do for the best with £200k each from an imminent house sale and little bits stuck in maturing bonds and a small ISA.
They have no real need for the money for the foreseeable so what would you advise?
I'm thinking maybe best to put about £100k into something a bit longer term for 5 or so years especially for the youngest and maybe them keeping a £100k 'fluid' in less long term investments or something.
Preferably easyish to sort out and run.
Bit disappointed with the £20k bonds that are due to mature and only gained 10% overall over 6 years. (I know people hate SJP with a passion, but i didn't put that in there
)
Would you advise wills? Seems pointless at the moment as rules of intestacy are pretty ok only the 2 kids and me (oh and a boyfriend). Tbf i haven't updated my will since the missus passed away a few years ago as it just goes to the 2 kids or their succesors.
Ps we are not powerfully built company directors so just a bit of genuine advice/guidance would be helpful before i blow it all on day trading for them.
What to do for the best with £200k each from an imminent house sale and little bits stuck in maturing bonds and a small ISA.
They have no real need for the money for the foreseeable so what would you advise?
I'm thinking maybe best to put about £100k into something a bit longer term for 5 or so years especially for the youngest and maybe them keeping a £100k 'fluid' in less long term investments or something.
Preferably easyish to sort out and run.
Bit disappointed with the £20k bonds that are due to mature and only gained 10% overall over 6 years. (I know people hate SJP with a passion, but i didn't put that in there
)Would you advise wills? Seems pointless at the moment as rules of intestacy are pretty ok only the 2 kids and me (oh and a boyfriend). Tbf i haven't updated my will since the missus passed away a few years ago as it just goes to the 2 kids or their succesors.
Ps we are not powerfully built company directors so just a bit of genuine advice/guidance would be helpful before i blow it all on day trading for them.
speedyguy said:
Just wondering what/how to advise the 2 kids (18 & 23)
What to do for the best with £200k each from an imminent house sale and little bits stuck in maturing bonds and a small ISA.
They have no real need for the money for the foreseeable so what would you advise?
Whose money is it - yours or the children's?What to do for the best with £200k each from an imminent house sale and little bits stuck in maturing bonds and a small ISA.
They have no real need for the money for the foreseeable so what would you advise?
It's a particularly difficult question as firstly, you know your children best and secondly they're probably quite different characters with different ambitions?
I think all you can do is guide them to see the funds as a long term life strategy to give them tremendous security and peace of mind and to go mostly boring. Taking them to a credible advisor who would explain how boring old compounding of a boring old portfolio would result in them being able to retire super early etc might be a good base to start from? Or explaining how it could generate a bit of income every month that they can use how they see fit through the stages of their life while also accumulating a bit etc. Also, how it could be used to claw back the bulk of their income tax for a long time by migrating it to a SIPP when they start to pay income tax?
I think all you can do is guide them to see the funds as a long term life strategy to give them tremendous security and peace of mind and to go mostly boring. Taking them to a credible advisor who would explain how boring old compounding of a boring old portfolio would result in them being able to retire super early etc might be a good base to start from? Or explaining how it could generate a bit of income every month that they can use how they see fit through the stages of their life while also accumulating a bit etc. Also, how it could be used to claw back the bulk of their income tax for a long time by migrating it to a SIPP when they start to pay income tax?
4K lifetime isa, 1K gift from gov. Repeat yearly until they’re ready to buy a house
16K into another ISA, they’re young so think 10 to 15 year investment. Repeat yearly
If they’re not working Chuck £2880 into a pension get £720 from HMRC. Even 5 years worth while they are at college should grow nicely by the time they can access it. repeat yearly. If they are working possible top up pension especially if paying 40% tax.
50K in premium bonds, quick access if needed. Usually win a bit each month.
Rest either in general investment account and then move across into ISA wrapper or some into one of the accounts like Chase paying at least a bit of interest.
This is what I have done for my daughter with her inheritance from her grandparents after lots of reading. Two tax years into this plan so far.
Of course if it’s their money so you can’t stop them blowing the lot
16K into another ISA, they’re young so think 10 to 15 year investment. Repeat yearly
If they’re not working Chuck £2880 into a pension get £720 from HMRC. Even 5 years worth while they are at college should grow nicely by the time they can access it. repeat yearly. If they are working possible top up pension especially if paying 40% tax.
50K in premium bonds, quick access if needed. Usually win a bit each month.
Rest either in general investment account and then move across into ISA wrapper or some into one of the accounts like Chase paying at least a bit of interest.
This is what I have done for my daughter with her inheritance from her grandparents after lots of reading. Two tax years into this plan so far.
Of course if it’s their money so you can’t stop them blowing the lot
Mr Dendrite said:
4K lifetime isa, 1K gift from gov. Repeat yearly until they’re ready to buy a house
16K into another ISA, they’re young so think 10 to 15 year investment. Repeat yearly
If they’re not working Chuck £2880 into a pension get £720 from HMRC. Even 5 years worth while they are at college should grow nicely by the time they can access it. repeat yearly. If they are working possible top up pension especially if paying 40% tax.
50K in premium bonds, quick access if needed. Usually win a bit each month.
Rest either in general investment account and then move across into ISA wrapper or some into one of the accounts like Chase paying at least a bit of interest.
This is what I have done for my daughter with her inheritance from her grandparents after lots of reading. Two tax years into this plan so far.
Of course if it’s their money so you can’t stop them blowing the lot
As above;16K into another ISA, they’re young so think 10 to 15 year investment. Repeat yearly
If they’re not working Chuck £2880 into a pension get £720 from HMRC. Even 5 years worth while they are at college should grow nicely by the time they can access it. repeat yearly. If they are working possible top up pension especially if paying 40% tax.
50K in premium bonds, quick access if needed. Usually win a bit each month.
Rest either in general investment account and then move across into ISA wrapper or some into one of the accounts like Chase paying at least a bit of interest.
This is what I have done for my daughter with her inheritance from her grandparents after lots of reading. Two tax years into this plan so far.
Of course if it’s their money so you can’t stop them blowing the lot
100% get a pension started for them. (try to make it easy that they keep contributing as they get older) We have started for our children at 16 and 13 with just small amounts going in each month for them but 1 child when we talked and showed potential compounded growth projections of 50 yrs has now put in £2k to max out her allowance.(I think she is very smart !!)
100% Max ISA
Deposit on a property.
Mr Dendrite said:
50K in premium bonds, quick access if needed. Usually win a bit each month.
If you're going to do this, try and get them to agree to share winnings. You cannot insist obviously, as they're both adults, but as they're both putting the same amount in, they might agree. How will one of them feel if the other wins a huge amount? Wouldn't they rather have a guaranteed half each? How will you feel if one cops for the million, and the other wins £25!Mr Dendrite said:
4K lifetime isa, 1K gift from gov. Repeat yearly until they’re ready to buy a house
16K into another ISA, they’re young so think 10 to 15 year investment. Repeat yearly
If they’re not working Chuck £2880 into a pension get £720 from HMRC. Even 5 years worth while they are at college should grow nicely by the time they can access it. repeat yearly. If they are working possible top up pension especially if paying 40% tax.
50K in premium bonds, quick access if needed. Usually win a bit each month.
Rest either in general investment account and then move across into ISA wrapper or some into one of the accounts like Chase paying at least a bit of interest.
This is what I have done for my daughter with her inheritance from her grandparents after lots of reading. Two tax years into this plan so far.
Of course if it’s their money so you can’t stop them blowing the lot
Spot on16K into another ISA, they’re young so think 10 to 15 year investment. Repeat yearly
If they’re not working Chuck £2880 into a pension get £720 from HMRC. Even 5 years worth while they are at college should grow nicely by the time they can access it. repeat yearly. If they are working possible top up pension especially if paying 40% tax.
50K in premium bonds, quick access if needed. Usually win a bit each month.
Rest either in general investment account and then move across into ISA wrapper or some into one of the accounts like Chase paying at least a bit of interest.
This is what I have done for my daughter with her inheritance from her grandparents after lots of reading. Two tax years into this plan so far.
Of course if it’s their money so you can’t stop them blowing the lot
b
hstewie said:
hstewie said: Whatever you do invest make full use of tax wrappers and keep costs low and diversify and at that age they are literally set for life if they choose to be.
£100K left to compound at an average of 5% is £700K in 40 years time.
Except 40 years for 20yr old is as about as understandable in time as the Jurassic. However as a 60yr old it was mere blink of the eye £100K left to compound at an average of 5% is £700K in 40 years time.
Percy Cushion said:
Without knowing your kids situations, I’d suggest:
a) Property to live in
b) Maximise ISA contributions
c) Pension
d) Enjoy some of it
In no particular order.
I think that order is about right. WE know that, because we are middle-aged ba) Property to live in
b) Maximise ISA contributions
c) Pension
d) Enjoy some of it
In no particular order.
ds with some perspective of life, the world and everything... But the younger you are, the less perspective you have, and even if they accept the principle, they won't really understand it. So yes the younger generation needs the older generation to guide, but they also need to make their own mistakes...Mr Dendrite said:
Except 40 years for 20yr old is as about as understandable in time as the Jurassic. However as a 60yr old it was mere blink of the eye
So true!Pensions are important for old people, first you have to get there.
Personally, my opinion is that when you are young, first thing to invest in is your education/training/career.
£200k is the difference between 5 years salary in a good job and 5 years salary in a poor job.
Invest it in the right career path and you can soon earn it back.
Maybe.
Then somewhere to live to avoid paying rent. Although in the near/medium term I am not confident that house prices won't fall.
£200k is how many years' rent or a reasonable flat in many parts of the UK.
Personally when I was younger, I was very pleased to not have all my (modest) wealth tied up in a pension, I wanted to be free to invest in business opportunities.
If you want to escape the wage slave track, you need to be active and have options.
Also if I had my time again, I might not tie myself to the UK.
This century, possibly even less so, there is a world of opportunity out there.
Personally, my opinion is that when you are young, first thing to invest in is your education/training/career.
£200k is the difference between 5 years salary in a good job and 5 years salary in a poor job.
Invest it in the right career path and you can soon earn it back.
Maybe.
Then somewhere to live to avoid paying rent. Although in the near/medium term I am not confident that house prices won't fall.
£200k is how many years' rent or a reasonable flat in many parts of the UK.
Personally when I was younger, I was very pleased to not have all my (modest) wealth tied up in a pension, I wanted to be free to invest in business opportunities.
If you want to escape the wage slave track, you need to be active and have options.
Also if I had my time again, I might not tie myself to the UK.
This century, possibly even less so, there is a world of opportunity out there.
Percy Cushion said:
Without knowing your kids situations, I’d suggest:
a) Property to live in
b) Maximise ISA contributions
c) Pension
d) Enjoy some of it
In no particular order.
If that was my daughter (25) then (d) will come out top and then possibly (a). The others won’t even feature. Whilst she can save money the ‘young’ generation appear to accept that borrowing/loans/HP for the ‘I want it now’ items is the new norm. a) Property to live in
b) Maximise ISA contributions
c) Pension
d) Enjoy some of it
In no particular order.
OutInTheShed said:
Personally, my opinion is that when you are young, first thing to invest in is your education/training/career.
£200k is the difference between 5 years salary in a good job and 5 years salary in a poor job.
Invest it in the right career path and you can soon earn it back.
Maybe.
Agree 100%. £200k is the difference between 5 years salary in a good job and 5 years salary in a poor job.
Invest it in the right career path and you can soon earn it back.
Maybe.
Investing in yourself in order that you can leapfrog your peers or become your own boss pays back month after months after month, and not just financially. So many young people still seem to expect employers to take care of (and fund) their training and development that they don’t always see that the ones progressing faster are sometimes (often) doing it for themselves.
Not everyone is wired to want that sort of life, in which case somewhere to live makes good sense if you/they can figure out how to avoid the obvious potential issue of bad partner choices causing problems.
Percy Cushion said:
d) Enjoy some of it
Most important IMHO.Not expensive cars, watches, clothes etc.
Explore the world and have some experiences while they're young and (hopefully) free of obligations like jobs, kids, mortgage etc.
Mountain climbing, hiking, scuba diving, kayaking, sky diving, visit ruins, road trips, museums etc.
LeoSayer said:
Most important IMHO.
Not expensive cars, watches, clothes etc.
Explore the world and have some experiences while they're young and (hopefully) free of obligations like jobs, kids, mortgage etc.
Mountain climbing, hiking, scuba diving, kayaking, sky diving, visit ruins, road trips, museums etc.
Couldn't agree more. Id be following most of the above advise, re.maximising S&S ISA's for a few years, property purchase and some into a pension however would be insisting they keep atleast £20k-£25k each aside for travelling through various parts of the world and gaining some true life memories.Not expensive cars, watches, clothes etc.
Explore the world and have some experiences while they're young and (hopefully) free of obligations like jobs, kids, mortgage etc.
Mountain climbing, hiking, scuba diving, kayaking, sky diving, visit ruins, road trips, museums etc.
LeoSayer said:
Most important IMHO.
Not expensive cars, watches, clothes etc.
Explore the world and have some experiences while they're young and (hopefully) free of obligations like jobs, kids, mortgage etc.
Mountain climbing, hiking, scuba diving, kayaking, sky diving, visit ruins, road trips, museums etc.
Yup. That's the bribe to encourage the sensible. Not expensive cars, watches, clothes etc.
Explore the world and have some experiences while they're young and (hopefully) free of obligations like jobs, kids, mortgage etc.
Mountain climbing, hiking, scuba diving, kayaking, sky diving, visit ruins, road trips, museums etc.
Getting a house too early is like the modern trend of people in their 20s to get a dog or cat. It's just a millstone that ties you down.
Having the money set aside to buy a house at a much later date when someone actually knows what their career is and where they want to be living is completely different.
If you're kids are going to leave school, get a local job, get married then getting a house in one's 20s seems logical. But if you're children are going to go to university, settle into a career that might see them move around then getting a property too early would be disastrous. You almost always are better off renting and being 100% flexible with nothing to tie you to a place while you settle into your career and really start learning who you are and what you want out of life. Owning a house at that point would be crippling.
White collar workers tend to settle down in their 30s not 20s. That's the point when having a chunk for a deposit and already having a chunk in a pension suddenly becomes hugely important.
Prudent, tax efficient, low cost investment while using the income to support key activities through the 20s such as a gap year, renting somewhere a bit nicer, feeling more stable while starting out are all really good investments for the yield. And as a strategy would make perfect sense to level headed youngsters.
Mr Dendrite said:
bhstewie said:
hstewie said: Whatever you do invest make full use of tax wrappers and keep costs low and diversify and at that age they are literally set for life if they choose to be.
£100K left to compound at an average of 5% is £700K in 40 years time.
Except 40 years for 20yr old is as about as understandable in time as the Jurassic. However as a 60yr old it was mere blink of the eye £100K left to compound at an average of 5% is £700K in 40 years time.
I'm just saying a few sensible choices now and they're set for life potentially.Gassing Station | Finance | Top of Page | What's New | My Stuff