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What to do with c.£140k

by emz 16 February 2010 |

6 comments | Love

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For my brother. About to inherit this amount of money. He is single, 23 and lives at home. Has no debts or mortgage and no intention to move out anytime soon. At the moment what we have recieved so far of this money (54k) is sat in a savings account (in both our names so is safe) earning minimal interest.

Some advice please to use this money to "set him up for life" please.

We have a joint letting property we were also left as part of the estate so probably wouldn't want to get another one.

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MikeGG1 posted
Please see my comments for your £50,000.
The remaining £90,000 could be invested in equities. I presume that he has no experience of that sort of thing, so I would suggest that he uses Tracker funds or Exchange Traded Funds, at least initially.
Perhaps £70,000 in a couple of Global Trackers and the remainder split between Commodities, Property and Emerging Markets.
I wouldn't recommend Buying to Let at your ages.
Mike
Posted on 16 February 2010 | Love 1 love Report
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liesarenocomfort posted
Hi Emz,
I'm a bit confused because you have posted two similar questions - one suggesting you have received £50k and then a second referring to your brother getting £140k.
Could you clarify - are these two inheritances for you and your brother (in which case how much are they each) or is it just one inheritance for your brother?
My other question, if it doesn't seem rude, is I'm wondering why your brother isn't asking for advice (if he's 23). Are you just asking on his behalf, or do you look after his finances for some reason?

Posted on 16 February 2010 | Love 0 loves Report
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emz posted
I am asking on my brother's behalf. We would discuss it but ultimately it would all be his decision. The reason I'm asking is cos I'm the one that "gets" money & finance (being an accountant) lol! I've posted two seperate questions as our circumstances are different. I am married with a mortgage and planning a family. We got the same amount inheritance but I paid off 90k from my mortgage. I want my money easily accessable for costs of having kids etc. Whereas my brother is single with no dependants and no debts living at home. What would be good for me wouldn't necessarily be good for him.
Posted on 16 February 2010 | Love 0 loves Report
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liesarenocomfort posted
Ah got you - now it makes sense (it wasn't just a "pressed the wrong button job then!). In which case I don't have much to add to Mike's advice - definitely give the premium bonds a big miss and for your brother, a good wodge into equities.
For your brother it may be worth thinking about (starting) a pension if he hasn't got one.
Posted on 16 February 2010 | Love 0 loves Report
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emz posted
I hadnt thought of a pension. Thanks! Something else to put on the list.
Posted on 16 February 2010 | Love 0 loves Report
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Swarbs posted
My suggestion would be:
1. As liesar states, invest in a pension. He's only 23 so it could grow for at least 40 years and thus be a sizeable amount on retirement. Based on past stock market performance, the amount could be around 15 times larger by the time he retires! Stick £50k in the pension now and he could reasonably expect to retire at the age of 63 with a pension of £750k! Although bear in mind that in 40 years time that £750k will be worth a lot less than it is now. Is he working? If so, invest the same amount as his gross salary and he will get tax back on all that amount, further boosting the value of the pension.
2.Put £50k into a cash savings account as Mike suggested for you. This money will be there in case he needs any money for an emergency. Try to encourage him not to spend it!
3, Invest the remaining £40k into shares as Mike suggests. But also open a shares maxi ISA and feed the maximum amount into it per year to ensure he avoids paying any capital gains on the money. This money is for the medium term (i.e. at least five to ten years) and is for when he finally decides to move out and buy a property of his own. Having this money ready could mean the difference between being able to afford a deposit or not.
Posted on 16 February 2010 | Love 0 loves Report

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