@wolfwhohowlstoparadise Great advice thank you. Are premium bonds really worth it though? Or are you suggesting them for diversification?
I just inherited ~£200,000. Help!
- Thread starter fengchi
- Start date
wolfwhohowlstoparadise
New member
@fengchi It's difficult to answer the "worth it" part of your question.
https://premiumbondsprizes.com/#50000
According to that link, statistically you should win a minimum of £25 a month 91% of the time. Of course you could pile the £50k into a savings account, but the money is accessible with ~ 2 days notice, and the winnings are tax free. I guess it is a method of diversification.
https://premiumbondsprizes.com/#50000
According to that link, statistically you should win a minimum of £25 a month 91% of the time. Of course you could pile the £50k into a savings account, but the money is accessible with ~ 2 days notice, and the winnings are tax free. I guess it is a method of diversification.
@wolfwhohowlstoparadise Thanks!
siphosethu
New member
@fengchi Another great option is to put the money into a fund like VTSAX or some other total stock market equivalent. Don't touch it. Don't look at it for 20 years. When you open your account and see the balance, you might just pass out from the shock of the balance you see. 
Congratulations on your windfall.
Congratulations on your windfall.agapebondservant
New member
@fengchi Think long term. Wealth preservation over Time.
Plan to pass on the windfall. Only spend what can be generated by the $200,000.
It’s more than money if you realize it. First, it’s a back up plan. Safety.
It’s a personal finance opportunity. To launch you. Having it makes you appear less risky to a bank. Better interest rates. Down payment money.
It gives you the ability to take calculated risks sooner in life.
Get 75% into a trust so it’s safe for the rest of your life. And more Tax efficient.
50%. Invest for wealth preservation, long term mindset. Never touch it. It’s for retirement. It’s for your next generation. But just having it gives you more favorable financing terms. If invested well, the amount can grow to cover your retirement just with Time in the market.
25% I’d say it’s for higher risk investments. Long term. Buy quality long term risks that have high upside potential. Then let the choices play out. Avoid short term trading. When this grows too large, send funds to your forever hold wealth preservation allocation.
25% invest in yourself. Knowledge and starting a small business or website. Something to start generating income using your time. Something to teach you about business management. Taxes. Paperwork. Customers. Legal terms.
Your goal is to grow wealth from here. Never backwards. You want to have $200,000 to grow; not spend $200,000 and not honor the sacrifice someone made to give you that value. To help you and keep you safe.
If you think you’re going to mess it up. Don’t want to think? Then buy property and preserve the value as equity. It will reduce the cash flow needed to live long term or be a rental income for life to offset the mortgage.
Plan to pass on the windfall. Only spend what can be generated by the $200,000.
It’s more than money if you realize it. First, it’s a back up plan. Safety.
It’s a personal finance opportunity. To launch you. Having it makes you appear less risky to a bank. Better interest rates. Down payment money.
It gives you the ability to take calculated risks sooner in life.
Get 75% into a trust so it’s safe for the rest of your life. And more Tax efficient.
50%. Invest for wealth preservation, long term mindset. Never touch it. It’s for retirement. It’s for your next generation. But just having it gives you more favorable financing terms. If invested well, the amount can grow to cover your retirement just with Time in the market.
25% I’d say it’s for higher risk investments. Long term. Buy quality long term risks that have high upside potential. Then let the choices play out. Avoid short term trading. When this grows too large, send funds to your forever hold wealth preservation allocation.
25% invest in yourself. Knowledge and starting a small business or website. Something to start generating income using your time. Something to teach you about business management. Taxes. Paperwork. Customers. Legal terms.
Your goal is to grow wealth from here. Never backwards. You want to have $200,000 to grow; not spend $200,000 and not honor the sacrifice someone made to give you that value. To help you and keep you safe.
If you think you’re going to mess it up. Don’t want to think? Then buy property and preserve the value as equity. It will reduce the cash flow needed to live long term or be a rental income for life to offset the mortgage.
@agapebondservant Thank you, not too clear on what trusts are though…
@fengchi A trust is a fiduciary relationship in which a trustor gives another party, known as the trustee, the right to hold title to property or assets for the benefit of a third party.
Which is a fancy way to say that you are going enter a legal investment arrangement (usually with a wealth management firm or a solicitor) to lock your money away from yourself (you can be your own "third party") in such a way as you CAN get to it for legit purposes (buying a house, medical care, education, or distributed as an allowance) but in such a way that you cannot just piss it away on lavish vacations, a fancy car, fancy restaurants.
In the US having a trust allows money to bypass a lot of inheritance and estate taxes. I do not think the same is the case for the UK, though.
While almost anybody can be a trustor, it's best to go with somebody who does this on a regular basis. And don't worry about the trustor taking the money and running away with it. That is exceedingly rare because the penalties are so steep for doing that. It's like with a locksmith. (Any locksmith knows they have more to gain through being honest than through being a thief.)
Finally, whatever you do with the money, DO NOT invest in any kind of cryptocurrency. They are all of them "bigger fool" type scams and have no legal safeguards, because you are not dealing with the banking industry.
Which is a fancy way to say that you are going enter a legal investment arrangement (usually with a wealth management firm or a solicitor) to lock your money away from yourself (you can be your own "third party") in such a way as you CAN get to it for legit purposes (buying a house, medical care, education, or distributed as an allowance) but in such a way that you cannot just piss it away on lavish vacations, a fancy car, fancy restaurants.
In the US having a trust allows money to bypass a lot of inheritance and estate taxes. I do not think the same is the case for the UK, though.
While almost anybody can be a trustor, it's best to go with somebody who does this on a regular basis. And don't worry about the trustor taking the money and running away with it. That is exceedingly rare because the penalties are so steep for doing that. It's like with a locksmith. (Any locksmith knows they have more to gain through being honest than through being a thief.)
Finally, whatever you do with the money, DO NOT invest in any kind of cryptocurrency. They are all of them "bigger fool" type scams and have no legal safeguards, because you are not dealing with the banking industry.
seekingredemption
New member
@fengchi You could put 50k in premium bonds You might get 3-4.5 % return which is tax free more later
You could 20000 into savings isa ,perhaps for a fixed duration You might find that with other savings accounts you are paying tax
Whether stocks are an investment ?,you would be advised to put 10 or 20 k in every month I.e drip feed for a while not all at once
Try to avoid putting money into a country specific fund even if India is tempting( never put all your eggs in one basket -diversification to a point)
Don’t put money into a fund with someone’s name in it e.g Smith,Morgan etc unless it’s van Eck
USA Emerging Makets ,top of the range French Dutch (ASML)Danish (NovoN)German ,Santander Bank
Vanguard (accessible via AJ Bell) ,interactive investors have lower charges
What goes up can go down,only invest what you can afford to lose therefore don’t not invest more than half of it
You need to familiarize s yourself with dividend allowance 500 poundsonly and capital gains (3000) allowances
Savings interestallowance depends on your tax rate at best 1000.
Do not invest in AIM shares unless 5-10 k ,you are throwing it away
Gold despite its price , you could put 7.5 k max to purchase 125 grams approx in case of further wars aka geo-political uncertainty Lot of people dislike as no yield it’s just a hedge
Or you could purchase or begin to purchase a little property in Edinburgh,Cambridge Cheltenham,but at least somewhere where it won’t get flooded (global warming),anywhere but not at the bottom of a valley(head for the hills) Property seems stressful but is more reliable(bricks and mortar)
You could 20000 into savings isa ,perhaps for a fixed duration You might find that with other savings accounts you are paying tax
Whether stocks are an investment ?,you would be advised to put 10 or 20 k in every month I.e drip feed for a while not all at once
Try to avoid putting money into a country specific fund even if India is tempting( never put all your eggs in one basket -diversification to a point)
Don’t put money into a fund with someone’s name in it e.g Smith,Morgan etc unless it’s van Eck
USA Emerging Makets ,top of the range French Dutch (ASML)Danish (NovoN)German ,Santander Bank
Vanguard (accessible via AJ Bell) ,interactive investors have lower charges
What goes up can go down,only invest what you can afford to lose therefore don’t not invest more than half of it
You need to familiarize s yourself with dividend allowance 500 poundsonly and capital gains (3000) allowances
Savings interestallowance depends on your tax rate at best 1000.
Do not invest in AIM shares unless 5-10 k ,you are throwing it away
Gold despite its price , you could put 7.5 k max to purchase 125 grams approx in case of further wars aka geo-political uncertainty Lot of people dislike as no yield it’s just a hedge
Or you could purchase or begin to purchase a little property in Edinburgh,Cambridge Cheltenham,but at least somewhere where it won’t get flooded (global warming),anywhere but not at the bottom of a valley(head for the hills) Property seems stressful but is more reliable(bricks and mortar)
@fengchi Well, there's your retirement, son. Congrats! Invest in low-cost ETFs that follow the market, and feel relaxed about retirement!
That said, figure out what your travel costs will be for 3-6 months. Don't splurge. Just plan as if you can't really afford the vacation. Then pull that money from the retirement. (Yes, that's "technically" bad advice, but get your travels done. From someone who never did.)
That said, figure out what your travel costs will be for 3-6 months. Don't splurge. Just plan as if you can't really afford the vacation. Then pull that money from the retirement. (Yes, that's "technically" bad advice, but get your travels done. From someone who never did.)
agelababypo
New member
resjudicata
New member
@resjudicata Thank you