Inheritance

It's a simple enough question, what do I do with 110,000 liquid assets?
At the moment I'm living alone in a rented flat for what I consider a very
reasonable 380 pcm. I'm not exactly happy here but it's perfectly acceptable. I'm not keen on buying this place though.
My current income is around 800 pcm. And my outgoings swallow a great deal of that.
I want to make this money work for me and provide a substantial income eventually if that's a realistic proposal, without any high risks to the capital.
At the moment I've moved the bulk of it to 1 year fixed interest savings with kaupthing and ICICI and also started 2 managed stocks&shares ISA funds.
This is just a temporary measure to get it earning something while I look at other, possibly better options.
Any advice is very welcome.
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JohnR wrote:

Find an Independent Financial Advisor.
http://www.unbiased.co.uk/
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Facts are sacred ... but comment is free

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Agreed, but beware the hobgoblins that jump up at this point and say 'don't'.
But if anyone is going to make any comments here they'll need to know how old you are and whether you are married, for starters.
Then they'll need to know what you mean by 'high risks'. Do you want any risk? What do you mean by 'high'?
Then they'll need to know if you have any other investments, or prospect of any.
Then they'll need to know if you're prepared to tie up the money and for how long.
Rob Graham
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robgraham wrote:

Don't. :-) And don't forget that such hobgoblins have no axe to grind.
For a sum as small as £110k it's debatable whether there is much point in doing all that much much active investment with any of it. Commission-based IFAs are apt to persuade the client to put all of it through their good offices (thus maximising their commission) and may fail to suggest that a good chunk (say 1/3 to 1/2) be kept in cash (i.e. high interest savings bonds/accounts). Fee-based (advice-only) IFAs might do the latter but are presumably few and far between.

Why?

Not necessarily. It's his money, and he may or may not wish to share it with his wife, if he is foolish enough to have one.

Fair enough.

Only if *they* are going to use this information to modify their understanding of what *he* has told them about his attitude to risk, i.e. if he's got another safety net, he can be more devil-may-care with *this* money.

No. They can simply tell him what options there are. Tying up the money typically gives a better return in the case of cash-based investments, and for market-based investments it helps smooth out short term booms and busts. Then he can choose to tie up some part of it for longer, and some for less.
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They may well have.

All IFAs have to offer the fee option - you must have known that.

Come on. Should a 20 year old get the same advice as a 70 year old?

I think you're winding me up - fair enough.
Rob
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robgraham wrote:

Exceptionally, perhaps, as in "Don't see an IFA, just lend the money to me."

I didn't know that, I thought they had the choice.

Most definitely. The age of the investor is irrelevant, other than indirectly. It is up to the investor to specify the time frame over which the investment is expected to remain "active".

The bit about being foolish to have a wife was a joke, but the rest of it was serious. Any money coming to a husband does not automatically co-belong to his wife. Of course any provision he may wish to make to ensure his partner is provided for in the event of his death etc is up to him, and, except for tax implications, is independent of whether he's actually married to her (or him). It's more relevant to what he puts in his will than whether and how he decides to invest the loot.
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Well, we are all entitled to our views.
But re the bit about IFAs having to offer a fee option, this has been around for a year or two. If they don't offer the fee option then they can't call themselves independent.
Rob
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On Tue, 26 Aug 2008 21:45:57 GMT,

If the OP is getting close to 55 then he should consider putting as much as possible into a cash SIPP. (IIUC he can effectively avoid paying any tax each year while he is doing this). Then, once he's 55 he can withdraw 25% cash free and use the rest for income drawdown.
If he's a long way from retirement or has a chance of being a higher rate taxpayer in a few years time then he should probably wait.
(I'm not sure if there are any limits on how much cash can be held in a SIPP)
Tim.
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On Tue, 26 Aug 2008 19:57:39 +0100, "robgraham"

Don't waste you money on an IFA.
The main interest of an IFA is to maximise their income - anyone who tells you otherwise is probably an IFA.
Chose the 4 highest interest paying accounts from one of the "money saving" sites and split the total amount between them. You can probably get guaranteed rates of about 7% for a year and your money will be totally safe.
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That's the option I've chosen for the short term, with a small component in a blackrock ISA stocks and shares fund (well 2 funds to be exact) which I will add to year on year if the returns seem worthwhile. Being new to the investment scene I just want to spend some time absorbing what's available and the relative merits.
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I find your comments about IFAs amusing given that you then go on to give worse advice. At least it didn't cost John anything.
Cash deposits are not a good investment for anything other than short term money. Here's a post I made from November 2006, the situation is unlikely to have changed greatly -
"Looking at retail price inflation (RPI), the buying power of a sum of money in November 1996 has been reduced by 23.5% and a sum in November 1986 has been reduced by 50.6%.
Interest rates, and therefore income, have fluctuated by +/- 36% since Nov 1996 and by +/-62% since Nov 1986.
Combining these gives us -
Capital Income
1986 100,000 10,875 1996 64,575 3,834 2006 49,400 2,470
Sources - http://www.statistics.gov.uk/statbase/product.asp?vlnk 8 http://213.225.136.206/mfsd/iadb/Repo.asp?Travel=NIxIRx
--
Daytona
(Not a financial advisor)
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Just out of interest, would you consult, or recommend that one was consulted, if he charged a fee rather than commission?
Rob Graham
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?
Read - (Amazon.com product link shortened) /> 3/
For a good holistic view of your finances - work through -
http://www.fool.co.uk/10steps/index.aspx
I'd invest in one of the following, in order of personal preference -
High yield, buy and hold strategy http://www.fool.co.uk/specials/2006/specials060208.htm
High yield, change each year http://boards.fool.co.uk/Message.asp?mid 414020
iShares FTSE UK Dividend Plus http://www.trustnet.co.uk/etf/funds/?fund4
Invesco Perpetual Income http://www.trustnet.co.uk/ut/funds/?fundG7
Invesco Perpetual High Income http://www.trustnet.co.uk/ut/funds/?fundG6
Barclays Global Investors (BGI) iShares FTSE 100 Exchange Traded Fund (ETF) http://www.trustnet.com/etf/funds/?fund (8
You should be able to get an inflation linked monthly income of £370-550 from the above.
If you're interested in buying a house, then wait until property prices have stabilised for at least a year - there's no hurry.
--
Daytona

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