I've inherited some money, what to do?

[tommyurray]

I've been lucky enough to recieve some money from a deceased relative, around £20k.
I'd like to invest it wisely
I live in a rented house and have an income to live relatively comfortably.
Ultimately I'd like to buy a property to rent out, but £20k wont pay a deposit.
Any good, serious suggestions please?

Here are my suggestions
Buy to let even build to let is being hammered by tax changes(especially leveraged purchases) and new regs coming out I would not go there again
Park it in the bank and inflation will eat it( a legacy of mine was parked at2.5% interest when inflation was 17 % I’m still bitter about it better to have debt on assets than cash in the bank
Pay off your debts first as that will free up money that you would have paid in interest payments
Find a good steady investment / unit trust through a low cost platform
Put some in shares but research the company first some of my favourites are
Burford Capital (litigation finance )ever had the legal profession take the shirt of your back you may get some buttons back here
Scottish mortgage trust invest in tech companies
Griffin mining zinc miner in china(zinc low just now)
I like but do not own base resources
And a final one is the total wild card urals energy. UEN don’t know why it is so cheap could be a case of if something looks too good to be true it usually is ! But I am overweight on them
This is NOT investment advice just my own thoughts

 

[How much]

i would probably buy the best classic ford i could something like an RS Turbo or a very good Mk 1 or 2 Focus RS low miles good history and in 3 to 4 years you will have a reasonable profit in 10 years a good profit and no tax to pay on that profit either and fun to boot.

Or get a euro account at your bank , get a good FX broker not your bank to change the lot to Euros and sit on it till post brexit then change it back to £ that should make you a couple of grand anyway

 

[Still Farming]

20k to couple of grand ???maybe .

 

[little_p]

As above but research :
https://www.gov.uk/rent-room-in-your-home/the-rent-a-room-scheme

Potentially, you can let to 2 people, room(s) for up to £7500 p. a tax free. So consider a 3 bed mid terrace in a easy let area (consider students). Retain your own room, for it is your own home.
Clearly it would be only your business where you spend each night. Seek an accountants view before signing the deal.

Agree with your comments about doing research and getting Accountants advice beforehand. My accountant has told me to be careful about having more than one person lodge in your home (main residence). If you rent a room to one person and it is deemed as your main residence, then it isn't liable for capital gains tax. If you have more than one lodger there it may be deemed as a "lodging house" and therefore liable for capital gains tax. Sure enough spend each night where you feel like it, just make sure that there are no records - utility bills, bank accounts, electoral roll etc - of you living anywhere else.

Having students as lodgers has it own pro's and con's (more pro's than many would believe), but I would say that as a house share goes, the lifestyles of students and those of those working in the agricultural industry wouldn't be a good mix.

 

[Cowabunga]

Your son is wise NEVER VOLUNTARILY PAY OFF STUDENT LOANS certainly if they are pre-2012 ones! Its a bit more complicated for the later students but as a rule it is not beneficial to most to overpay unless on track for a high earnings career path. Student loans are unique in that the repayment rate is based on income and more imporatntly they are wiped after 30 years... they do not compare with any other form of debt. I have foolish friends who paid off their low interst pre-2012 student loans and then took out mortgages at muliple times the student loan rate

Trouble is, the student loan is a debt against that person, which reduces their credit rating or similar. It could effect the prospect of actually getting another important loan in future.
Unless I'm very much mistaken?

 

[Cowabunga]

REALLY??
A company developing a potash mine with 15% potash content how does it fit in standard compound fertilisers ie 16.16.16/20.10.10or 25..5.5 it is just filler to add to mop for trace elements or are you suggesting that we take in Sirius potash straight and handle 3 times the amount of fert and pay extra for haulage??
No if mining is where you want to invest I’d go for base resources (no recommendation ) free opinions are just worth what you pay for them

Would it not be processed to increase its potash content before retailing or blending?

 

[farmerm]

Trouble is, the student loan is a debt against that person, which reduces their credit rating or similar. It could effect the prospect of actually getting another important loan in future.
Unless I'm very much mistaken?

"From a long-term financial point of view, student loan repayments do not directly affect your credit score. This is because they won’t show up in your credit report as they’re deducted from your future income automatically with a fixed percentage after graduation" Equifax

So no, student loan should have not have a negative effect on getting a future loan.

 

[farmerm]

Recent interest on student loans are over 6%....

2 of my kids have hit the repayment thresholds within a relatively short time, lad will be the same 2 years after leaving Uni.

For anyone with a high earning potential it may be worth early repayment but for anyone set to be earning less than the equivalent of an roughly £50k today, on average, over the next 30 years, it makes no difference if the interest rate is 6% or 60%! The interest rate is irrelevent if you are in the 80% of students that will not have paid back their initial loan at the end of 30 years, once wiped it matters not if you had built up £4K or £40K in interest. Student loans are not like traditional loans, they require a different mindset.

 

[DRC]

Trouble is, the student loan is a debt against that person, which reduces their credit rating or similar. It could effect the prospect of actually getting another important loan in future.
Unless I'm very much mistaken?

Your mistaken. I don't believe it counts towards any credit rating.

 

[tommyurray]

i would probably buy the best classic ford i could something like an RS Turbo or a very good Mk 1 or 2 Focus RS low miles good history and in 3 to 4 years you will have a reasonable profit in 10 years a good profit and no tax to pay on that profit either and fun to boot.

Or get a euro account at your bank , get a good FX broker not your bank to change the lot to Euros and sit on it till post brexit then change it back to £ that should make you a couple of grand anyway

Would agree with euro prediction

Would it not be processed to increase its potash content before retailing or blending?

How?

 

[Cowabunga]

Would agree with euro prediction

How?

I’ve no idea. Probably by removing some of the non-potash content by either chemical or physical means. They dont mine 34.5% ammonium nitrate prills after all.

 

[kiwi pom]

For anyone with a high earning potential it may be worth early repayment but for anyone set to be earning less than the equivalent of an roughly £50k today, on average, over the next 30 years, it makes no difference if the interest rate is 6% or 60%! The interest rate is irrelevent if you are in the 80% of students that will not have paid back their initial loan at the end of 30 years, once wiped it matters not if you had built up £4K or £40K in interest. Student loans are not like traditional loans, they require a different mindset.

So you can get a student loan, not pay it back and after 30 years its wiped?

 

[tommyurray]

I’ve no idea. Probably by removing some of the non-potash content by either chemical or physical means. They dont mine 34.5% ammonium nitrate prills after all.

Sirius markets its potash as organic so chemicals are a no ,look at the volume that they hope to mine that would be some size of chemical plant and if you remove the trace elements you remove one of its main selling points and what do you do with the removed part which would then probably become waste which would make the product price uncompetitive
I think that Sirius plans to mine more phosphate than the uk uses in 1 year
I’m sure that if I’m wrong on any of my calculations someone on this forum will correct me but I don’t think I am

 

[tommyurray]

If your inco

me stays below a certain le veil debt is wiped after a period of time

Sorry bad typing and auto correct ment to type
If your income stays below a certain level the debt is wiped out after a certain time (do not know how long but 30 years does sound about right)

 

[DRC]

So you can get a student loan, not pay it back and after 30 years its wiped?

When you start earning over £21k, you start paying some of it back . It’s taken from your earnings at source. The scandal is that our government have handed it to a student loan company, who are compounding it at 6%, so in my daughter and many students case, the inintial £9k year for three years, £27k, now has a debt of over £60k.
My son was at uni when it was a more reasonable £3200 a year, which he began to pay back after getting to earn over £16k.
You pay I think it’s 3% of your earnings, but only on the difference between what you earn and the threshold . So earning Say £25k a year, you will pay back 3% on £4K .
The whole thing is a timebomb.
One thing that made Labour very popular with the students is they promised to abolish it.
I wrote to my PM, the right honourable Owen Patterson , Conservative , who couldn’t give two hoops about it.

 

[Thick Farmer]

When you start earning over £21k, you start paying some of it back . It’s taken from your earnings at source. The scandal is that our government have handed it to a student loan company, who are compounding it at 6%, so in my daughter and many students case, the inintial £9k year for three years, £27k, now has a debt of over £60k.
My son was at uni when it was a more reasonable £3200 a year, which he began to pay back after getting to earn over £16k.
You pay I think it’s 3% of your earnings, but only on the difference between what you earn and the threshold . So earning Say £25k a year, you will pay back 3% on £4K .
The whole thing is a timebomb.
One thing that made Labour very popular with the students is they promised to abolish it.
I wrote to my PM, the right honourable Owen Patterson , Conservative , who couldn’t give two hoops about it.

Christ. That’s nuts!

I left uni in 1999 and paid back my debt by 2003, but it was only £15k.

Surely if you leave uni with a debt of £60k that will be wiped in 30 years if you don’t earn much, there’s no incentive to start earning.... or even to go to uni in the first place!

 

[kiwi pom]

When you start earning over £21k, you start paying some of it back . It’s taken from your earnings at source. The scandal is that our government have handed it to a student loan company, who are compounding it at 6%, so in my daughter and many students case, the inintial £9k year for three years, £27k, now has a debt of over £60k.
My son was at uni when it was a more reasonable £3200 a year, which he began to pay back after getting to earn over £16k.
You pay I think it’s 3% of your earnings, but only on the difference between what you earn and the threshold . So earning Say £25k a year, you will pay back 3% on £4K .
The whole thing is a timebomb.
One thing that made Labour very popular with the students is they promised to abolish it.
I wrote to my PM, the right honourable Owen Patterson , Conservative , who couldn’t give two hoops about it.

The likes for answering my question not the system it all sounds a bit nuts.
Glad I was too thick to go to university

 

[tommyurray]

So invest everything in a highly leveraged and illiquid asset with historically volatile valuations, and in return he gets a succession of troublesome tenants who don't want to live in a £50k crack den, an accountant's bill and bugger all return on his investment.

Oh the boiler needs replaced? That'll be this years' profit gone, and most of next.

The tenant isn't paying the rent? That'll be six months without rent plus a couple of grand in legal costs to get them out, and they'll wreck the place.

The roof needs repair? Brace yourself landlord, this one will sting....

Buy to let is a mug's game at that level.

The only compelling case for rental returns I've ever seen was buying/building light industrial units in areas with strong demand.

Not going to disagree about repairs but tennants I’d check out myself do not use a company
points to look at
Meet and have a coffee with them see if you are comfortable with them
Look in their car when they come to see house good indication of how they will look after house drive past their. current address same reason
Check Facebook for lifestyle
Never accept current landlord as a reference
Avoid small children accept well behaved pets
Kids do £10 of damage to £1 for pets and no one ever offers a reference for their kids
Do that and you shouldn’t go far wrong
Seen Referancing companies falisify records to say that Tennant was checked out and they did that to a company that I would have expected to be a major client

 

[davieh3350]

Set up a student loan company.
Loan 2 students 10000 each over 3 years and hope that they earn enough to start paying you back.

 

[tommyurray]

Christ. That’s nuts!

I left uni in 1999 and paid back my debt by 2003, but it was only £15k.

Surely if you leave uni with a debt of £60k that will be wiped in 30 years if you don’t earn much, there’s no incentive to start earning.... or even to go to uni in the first place!

But correct