I just inherited ~£200,000. Help!

[fengchi]

This year I’m set to inherit about £200,000 (I am very grateful). I’m currently 22 M at university in England. I’m not trying to brag but I come from a pretty middle class family so money is fortunately not a huge issue, however as a uni student I don’t have much disposable cash, but do already have around £10k in savings / invested.

I’m keen on investing, although don’t know a whole lot about the current market. I’m also about to leave uni this year and hope to travel for 3-6 months and try and find a job in London.

Any advice on what to do with the money would be really helpful. The more specific the better ie. Good funds to invest in such as VUSA or whatever. Thanks.

 

[chunhe889]

@fengchi If u just put that all in retirement S&p 500 for 30 years congrats you never have to contribute to retirement youre done

 

[miamiamia]

@chunhe889 This. OP your retirement is set. Don’t touch it.

 

[fengchi]

@chunhe889 Would it not be wise to diversify …

 

[chunhe889]

@fengchi No time is your hedge in the market and youre 22. Do what u want with your money tho

 

[esdindia]

@fengchi The s&p500 is diversified, it represents 500 major US companies which make up a picture of the US market. If the s&p500 crashes, so too will whatever else you diversified into as in the global economy everything is dependent on everything else and when it comes to the US economy, every economy in the world is strongly dependent on it. So yeah, invest in the s&p500 and forget about it, you don’t need to hit a home run, you just need to get on base and you’ve already won.

 

[lumendei]

@fengchi By all means consult a fiduciary professional, but understand that we have decades of data that show that low cost index funds outperform literally everything else.

You’ve been given a massive leg up, don’t squander it buying dumb stuff or helping friends start businesses. Invest, tell nobody, and act like it isn’t even there. Your future self will thank you.

 

[resjudicata]

@fengchi The S and P 500 is 500 companies. It is diverse. Before making any real moves (no after you buy something fun for a couple grand) read up on basics of personal finance so you can appreciate the outline of the task ahead of you, and so you can understand basic terms. My wife is actually taking a $50 course offered by a local community college to catch up on these very things.

 

[leena2016]

@fengchi The S&P500 is an index fund with hundreds of companies in it. It is diversified, and it has had reliable returns for the past 100 years that very very few people or assets have been able to beat.

 

[josscarter]

@chunhe889 This

 

[cyjones85]

@fengchi I would say it sort of depends on your risk tolerance. General advice would be to set up some sort of emergency fund in a HYSA, look into index funds/ ETF (Vanguard S&P 500 as an example), and find some high yield CDs (5% or so). The money will compound over time, but it won’t happen instantly. I would avoid anything speculative (individual stocks or crypto)

 

[fengchi]

@cyjones85 Okay thank you, pretty low risk tolerance as obviously priority is to not lose it so this seems sensible.

 

[theghostyhooman]

@cyjones85 +1

 

[leaps]

@fengchi Put 90% in VTI and don't touch it till you're 65. It'll be worth $2 million. You're already set for retirement and now you don't have to worry about saving money ever again.

 

[mike1911]

@leaps But you should still save. 2 millions in 40 years might not be enough to retire on

 

[leaps]

@mike1911 That 2 million already accounts for inflation.

But yeah, I would definitely save 10% of income as well.

 

[fengchi]

@leaps Unfortunately don’t think we can buy VTI in the Uk

 

[mike1911]

@fengchi You should be able to buy S&P 500 equivalent. At that sum, I would call around brokerages to see what they can do for you. The lower the fees the better

 

[lenorea]

@fengchi Fyi, a post like this is sure to attract all sorts of scammers. Be very cautious of those that DM you.

 

[wolfwhohowlstoparadise]

@fengchi I'm not a financial advisor. Most of the responses you're going to get will be similar. Just take your time and don't rush into anything. Consider the following in no particular order of priority:

• Opening up and depositing £4k into a LISA for a first time buyer.
• Pay off any and all debts.
• Put £16k into a (Vanguard) Stocks & Shares ISA invested in VAFTGAG.
• Put £50k into Premium Bonds.
• I'd have at least £10k in an easy access savings account.
• Depending on your short-term goals (within 5 years (buying a modest car with cash for example)) will influence how much cash I'd have on hand. Maybe £40k in a higher rate savings account, but this might need a few days to have access to.
• You could open up a SIPP and deposit £40k, see the S&S ISA point above.
• Put the remaining £40k into a General Investment Account and siphon £20k a year into the S&S ISA.
• Venture over to r/UKPersonalFinance and take a look at their flowchart: https://flowchart.ukpersonal.finance/?\_gl=1\*wosdjm\*\_ga\*MjExNTQwMTExMi4xNzEwMjQ5OTUx\*\_ga\_TYXK2X3WJT\*MTcxMDk0NDY5Ny4yLjEuMTcxMDk0NDcxMS4wLjAuMA..

Ultimately though, if you decided that you wanted to put 100% of this money into buying your first home I'd lean away from stocks and shares. Think of stocks and shares as a 10+ year investment.