Windfall

[hymerwoman]

 

Hi All,

I would appreciate some advice from the forum expertise.

 

I have just had a windfall from an elderly aunt of £50,000, yes thats correct, fifty thousand pounds.

 

My dilemma is:

 

A -do i invest it , though i do not wish to be paying someone's bonus at the end of the year. And, In what would i invest it in.

 

B-Do i splash out on that lovely enfield leisure 2 berth motorhome that i have been eying up on the internet.

 

Before you answer i would just like to point out that i am a widow and wish to stay so, but i have to admit that i was once introduce to a dashing tall young fellow by the name of Dave Newell at a motorhome show a couple of years ago!!

[Guest Tracker]

Congratulations!

 

First priority is to ensure that you have enough income to see youu through old age.

 

Second prioity is to ensure that you have a secure, efficient and low maintenance home.

 

Third priority is to ensure that enough cash funds are readily available to cover any sudden or unexpected emergency - like a gearbox failure, or a replacement central heating boiler.

 

Is there anyone in your family who you would like to give some cash to? Better whilst you are alive and you can see them benefit and also the longer you live the less inheritance tax becomes payable on any gifts

 

Everything else is optional and nobody can tell you what you should or should not do with your money - it's a personal choice that only you can make.

 

Don't be too worried about someone earning a bonus from your money. Building society staff don't get a bonus but they only pay 3% or so interest. Financial advisers and investment specialists do get commision and bonuses but as long as you get more than 3% what does that matter to you as you too will be a winner!

[laimeduck]

hymerwoman - 2011-09-13 8:16 PM

 

My dilemma is:

 

A -do i invest it , though i do not wish to be paying someone's bonus at the end of the year. And, In what would i invest it in.

 

B-Do i splash out on that lovely enfield leisure 2 berth motorhome that i have been eying up on the internet.

 

Before you answer i would just like to point out that i am a widow and wish to stay so, but i have to admit that i was once introduce to a dashing tall young fellow by the name of Dave Newell at a motorhome show a couple of years ago!!

 

Well I'm no financial expert but I would say "it depends"

 

Inflation at present min 5% - Interest rates much less, so if you invest it - your capital will decrease.

However if you really do need the capital to survive, then go ahead & invest it.

 

If you don't really need it - then buy your dream motorhome - if you travel, your experiences are priceless & worth far more than any investment you could ever make. No- one can take memories away - they are free & last for perpetuity. You will be the richer for them. :D :D

 

(Please note that under FSA rules I have no experience at all & this does not constitute financial advice & your investments, like the suspension on your van may go up when you go over a bump & then come down afterwards) - Terms & conditions may also apply >:-) >:-)

 

[Dave Newell]

Hmmm dashing tall and young eh? I think I like you :-D .

 

D.

[kelly58]

Put £30.000  into premium bonds and spend the rest on a motorhome you will have the joy of motorhoming and a supprise in the post every month if you win and if you get a bit short of cash you can get some out of your bonds within 4 days  , then if the financial market picks up then invest what you have left at a later date .

[CliveH]

All good points - I would add a couple

 

Firstly NSI have sadly dropped the £15,000 max per person Inflation linked 5 year investment - for a couple that meant £30,000 at a guaranteed inflation plus 0.35% plus access after one year but only 0.25% above inflation. This was exceptionally good value so do watch out if they introduce another tranche of funds later in the year or next year.

 

Secondly - what you do with a sum like this obviously needs careful thought. Remember the concept of not placing all your eggs in one basket.

 

 

 

Also remember that if you are otherwise well provided for then all the "safe" homes for such a sum - frankly - no longer are!

 

Three years ago as an IFA firm we could sit down with a client and assess their attitude to risk and if it was about 3 out of 10 (cautious) such that they felt they wanted no risk to capital but an income and some capital protection against inflation we could easily place them in deposit accounts and fixed interest where the return on average was 5 or 6%, inflation at 2.5% so they could have 2.5 to 3.5% as income and it all "wiped its face"

 

Now we have inflation at nearly 5% and interest returns considerably less than that.

 

So!

 

My advice?

 

Go and buy the motorhome as good deals are currently available because money is tight. Any investment that will beat the deposit rates at the moment HAS TO BE considered medium to long term - i.e. circa 5 years and more. So unless you want to be prepared not to touch the funds for a good few years and invest for growth not income, it seems pointless to me placing large sums on deposit where your capital is "safe" but it loses buying power "safely" because of low interest rates and high inflation,

 

And this is expected to continue for some years.

 

Other advice - consider buying second hand because if you buy new then you pay VAT which is an immediate loss. However, to strike a deal some dealers are giving away a tremendous "package" for buying new such that this tax disadvantage of buying new is offset.

 

Have fun!