£500k what to do with it?

[FinanceDumbo]

I'd like to pick your collective brains on this.

52 yrs old & should be in the fortunate position in the summer to have ball park £500k total sat in the bank, house is paid off & no mortgage.

So its a great position to be in, but not really enough to retire early on, but as per my user name I'm pretty dim ref finance stuff so hope you can offer advice.

For info, self employed, no private pension provision, not married, currently outlay £500pcm in child maintenance which will rise, at least 12 yrs of that & then on possibly child university costs etc, but that's some way off.

I may upgrade my current very modest property or am planning a move, also modest but bit more room, depending on that the figure might be £450k to £550k left,

I currently have approx £250k in savings spread over ISA maxed out regular savings & PBs. am quite risk averse ref investing in stocks etc but I do feel I'm missing out, friends are getting great returns, but again see username

Have been renting out a property, I want to sell it by summer, its not a bad return at £15k pa but I could achieve that figure with half the investment in a different property, recent changes make me feel I would rather not do that however & being a landlord can be very tricky, I've just been fortunate with decent tenants tbh & am aware how badly wrong it can go. A commercial unit bought to rent out is of more interest, but I've looked for ages & generally a bit above what I was thinking to spend & very few about.

Look foward to your thoughts.

[GiantEnemyCrab]

You can backdate 3 years pension provisions, so that would be 60k this year and 2 years of 40k (I _think_).

[Hobo]

FinanceDumbo said:

I'd like to pick your collective brains on this.

52 yrs old & should be in the fortunate position in the summer to have ball park £500k total sat in the bank, house is paid off & no mortgage.

So its a great position to be in, but not really enough to retire early on, but as per my user name I'm pretty dim ref finance stuff so hope you can offer advice.

For info, self employed, no private pension provision, not married, currently outlay £500pcm in child maintenance which will rise, at least 12 yrs of that & then on possibly child university costs etc, but that's some way off.

I may upgrade my current very modest property or am planning a move, also modest but bit more room, depending on that the figure might be £450k to £550k left,

I currently have approx £250k in savings spread over ISA maxed out regular savings & PBs. am quite risk averse ref investing in stocks etc but I do feel I'm missing out, friends are getting great returns, but again see username

Have been renting out a property, I want to sell it by summer, its not a bad return at £15k pa but I could achieve that figure with half the investment in a different property, recent changes make me feel I would rather not do that however & being a landlord can be very tricky, I've just been fortunate with decent tenants tbh & am aware how badly wrong it can go. A commercial unit bought to rent out is of more interest, but I've looked for ages & generally a bit above what I was thinking to spend & very few about.

Look foward to your thoughts.

I'm sure you'll get a veritable plethora of responses, but mine would be relatively simple.

Pick 25 funds which have performed consistently well over the past 10 years and divide your money equally between those. Personally, I'd also sell the rental property and do the same.

In relation to where to put the monies, initially max out your ISA contribution through a stocks and shares isa, maybe put another 100k in a more generic fund and share account which every year you transfer your ISA entitlement to your ISA, and potentially the rest in a SIPP (as you'll have access atd 55 to an amount of it if necessary). The only niggle in my head would be whether to put the money into a SIPP or into the fund and share account, only as I have concerns about pensions generally.

You should comfortably make in excess of 10% per annum, which compounded would add up very quickly into a sizeable pot. In 8 years, at 10% per annum it would be worth 1.1m. If returns were 15% per annum that would be 1.65m, and at 20% it would be 2.4m.

I wouldn't be waiting 8 years though personally. I'd be buying a princess yacht in 5 years time (when I'd like to think it has doubled in size) and floating around the med for a while, but each to their own.

[Somebody]

GiantEnemyCrab said:

You can backdate 3 years pension provisions, so that would be 60k this year and 2 years of 40k (I _think_).

If relevant earnings < £60k this tax year then there is no scope to use up carry forward allowances from previous years.

[macron]

Either way,

No private pension provision, do you have any employer one?

At your age, I would be thinking "stuff to help you retire", which could be rental property, could be funds in a wrapper, probably a pension if as above you can squirrel a fair amount away from this + previous years.

I'd also be making a will.

[OIC]

Yep - relevant earnings may limit SIPP contribution amount.

CGT on GIA accounts also tends to be more annoying now with the £3,000 annual allowance as it's essentially bugger all.

Plus you pay income tax at your marginal rate on savings interest in a savings account above £500 (40% income tax payer) or £1,000 (20% ic payer).

So it's hard to mess about with large amounts of money without interference by Rachel from accounts and her scummy mates.

Flexible ISA is the only easy way to have fun currently.

Either you needed to have built up a big number in the past 10+ years, or play fast and loose with a couple of years worth and get lucky.

Once you've managed to get 6 figures into a flexible ISA though, it's playtime everyday.

So try to do that would be my advice.

What to spend it on is actually a more difficult question.

[Cabbage Patch]

OIC said:

Flexible ISA is the only easy way to have fun currently.

Either you needed to have built up a big number in the past 10+ years, or play fast and loose with a couple of years worth and get lucky.

Once you've managed to get 6 figures into a flexible ISA though, it's playtime everyday.

I’ve read and reread this several times. I still have no idea what you mean. Doesn’t sound like any financial advice I’ve ever come across before.

[Jiebo]

Cabbage Patch said:

I’ve read and reread this several times. I still have no idea what you mean. Doesn’t sound like any financial advice I’ve ever come across before.

I’ve got 6 figures in a flexible ISA and I haven’t got a clue either. I seem to be missing out on daily playtime

[Sheepshanks]

Somebody said:

GiantEnemyCrab said:

You can backdate 3 years pension provisions, so that would be 60k this year and 2 years of 40k (I _think_).

If relevant earnings < £60k this tax year then there is no scope to use up carry forward allowances from previous years.

You also had to have had a pension in place for the years you want to backdate to.

[Cabbage Patch]

Jiebo said:

Cabbage Patch said:

I’ve read and reread this several times. I still have no idea what you mean. Doesn’t sound like any financial advice I’ve ever come across before.

I’ve got 6 figures in a flexible ISA and I haven’t got a clue either. I seem to be missing out on daily playtime

And you could be 'playing fast and loose' while 'having fun'.

[NickZ24]

What kind of risk you are willing to face?
That is the cardinal question.

[FriedMarsBar]

Cabbage Patch said:

OIC said:

Flexible ISA is the only easy way to have fun currently.

Either you needed to have built up a big number in the past 10+ years, or play fast and loose with a couple of years worth and get lucky.

Once you've managed to get 6 figures into a flexible ISA though, it's playtime everyday.

I’ve read and reread this several times. I still have no idea what you mean. Doesn’t sound like any financial advice I’ve ever come across before.

OIC's approach sounds really cool, maybe even sexy :-) My own ISA journey has been incredibly dull so it's piqued my interest.

[2 GKC]

macron said:

Either way,

No private pension provision, do you have any employer one?

At your age, I would be thinking "stuff to help you retire", which could be rental property, could be funds in a wrapper, probably a pension if as above you can squirrel a fair amount away from this + previous years.

I'd also be making a will.

Surely if he had an employer pension, he’d have a private pension?

[Armitage.Shanks]

2 GKC said:

macron said:

Either way,

No private pension provision, do you have any employer one?

At your age, I would be thinking "stuff to help you retire", which could be rental property, could be funds in a wrapper, probably a pension if as above you can squirrel a fair amount away from this + previous years.

I'd also be making a will.

Surely if he had an employer pension, he’d have a private pension?

How so? I have an employer pension with no need to take out a private one as well. I did take out an FSAVC though to help me play fast and loose.

[Ranger 6]

Hobo said:

.....Pick 25 funds which have performed consistently well over the past 10 years.....

Yes - how?




Not being argumentative - it's just that there are so many assumptions around money that people know what you're talking about and I'm one of those that don't know

[Scootersp]

At 52 stick to what you know/like/trust? With the eye on the need for a retirement income.

Sounds like you don't mind your work/job but do have an eye on retirement? Could you reduced work, delegate some to try and semi retire at some earlier point, so some income over a longer time rather than full steam ahead and retirement later? How would/will you spend that extra time?

I'm 51 and had a heart attack last year, hence my biased sentiment more towards today than 15-20 years time (i'm sure you'll be fine just saying!), I'd advise you to think about the ultimate use of the money, not to necessarily buy a Lambo! but for what would make you content, what could improve your life now and going forward.

The house move could be it, from modest to something with a certain something of worth to you (that's very personal)

Investing is a mindset where you have to be comfortable with a potential decline, a paper loss, and it might not be for you, the flip side is that £50k in premium bonds will buy you a lot less in 10 years than it does now, so you are guaranteed a real loss if not a nominal one (inflation views vary but it could be higher going forward than it has been in your life so far). If you fire and forget a chunk into the trackers everyone is mentioning you will at least not be alone, it's a consensus view, many many consider it a no brainer as long as you have a long time horizon (and if you put only a portion in you can) but 'everything' has a risk, even these funds, property etc, so go with what you know and what you will least regret if it's value went down significantly?

Turns out my best lifetime investment by % gain were x2 Japanese 90's sports cars, and cars are the least likely advice you'd get/should take so what do I or anyone else know, but I sure did enjoy them!

[StoutBench]

FriedMarsBar said:

Cabbage Patch said:

OIC said:

Flexible ISA is the only easy way to have fun currently.

Either you needed to have built up a big number in the past 10+ years, or play fast and loose with a couple of years worth and get lucky.

Once you've managed to get 6 figures into a flexible ISA though, it's playtime everyday.

I’ve read and reread this several times. I still have no idea what you mean. Doesn’t sound like any financial advice I’ve ever come across before.

OIC's approach sounds really cool, maybe even sexy :-) My own ISA journey has been incredibly dull so it's piqued my interest.

Yeah I'd quite like to know what playtime every day means

[Mr Whippy]

Jiebo said:

Cabbage Patch said:

I’ve read and reread this several times. I still have no idea what you mean. Doesn’t sound like any financial advice I’ve ever come across before.

I’ve got 6 figures in a flexible ISA and I haven’t got a clue either. I seem to be missing out on daily playtime

Same here.

Great for last 15 years if you were into risk/growth.

Now? Playtime could rapidly turn into getting mugged.

[Hobo]

Ranger 6 said:

Hobo said:

.....Pick 25 funds which have performed consistently well over the past 10 years.....

Yes - how?




Not being argumentative - it's just that there are so many assumptions around money that people know what you're talking about and I'm one of those that don't know

Somewhere like this for a starter;

Https://www.ii.co.uk/funds/top-investment/funds

Also look at Hargreaves Lansdown (or equivalent) and start researching on there. Maybe start by looking at their Top 60 funds, etc.

There are plenty of funds that have historically returned well over 5-10 years.

[bitchstewie]

If you go the stocks and shares route with some of the money don't try and pick 25 funds.

Settle on an appetite for risk and try to keep it simple.

A couple of index funds or a single multi-asset fund is a good starting point for most people.