I have too much money, what should I do with it?

[Loki]

Chest - invest in property. That'd be my advice. I've dabbled just enough in stocks to know that it's treacherous seas unless you're willing to put a lot of time into it.

 

As others have said, if you're paying rent and have money saved, you're crazy. Get a mortgage and convert that rent into a repayment on a loan for property that in all likelihood will continue to trend up in value for ever.

 

Also - if you lose your job, and your money is tied up in your property, it's relativelyu safe and you might get help with your mortgage. If you've got substantial savings, the government will expect you to spend every penny of it before offering you any help.

[quote the raven]

As others have said i would be to buy a house somewhere you would like to live, rent it out. I dont know how much you have to put down but try to cover the repayments with the incoming rent.

 

That way if you want to move in a few years you have 2 years off the morgage, if you dont want to move in no loss you are getting the house paid off for you and therfore you have a great retirement plan.

 

 

I invested in a student house 5 years ago an never looked back

[air_raid]

If you can buy a house outright, do it. As said already, security. Knowing they can never take your house away from you is a bigger deal than having a few extra quid in the bank.

 

Otherwise, depends how disciplined you want to be in regards to managing your own money. Letting out a property can be financially rewarding but can also be more trouble than it's worth because there's a raft of things that the tenants have to contact you about rather than sort it out themselves. Plus if you have a Buy To Let mortgage you have to keep an eye on when tenancies come to an end in comparison to when the mortgage deal expires because you don't want to get caught out with the rent your tenants are paying suddenly not covering the mortgage payment, like a load of landlords did in 2008.

 

Chest - invest in property. That'd be my advice. I've dabbled just enough in stocks to know that it's treacherous seas unless you're willing to put a lot of time into it.

 

That is the important word. If it's money that you're saving for the long term i.e. 10 years + or retirement, and you make sure you keep back a decent emergency pot in something accessible, I'd bung whatever you don't need in a FTSE tracker and forget about it. The country's still on it's arse, relatively speaking, and it might get worse before it gets better, but stick it in now and benefit from the eventual recovery. Plus if you were prepared to invest but unprepared to buy and sell your own shares, a simple tracker has a lower management charge than any fund that's actively managed.

[Stylin_and_Profilin]

I would also be a +1 for going down the property route.

 

The way the climate is these days there are some absolute steals going for, example, repossessed houses as the banks just want to wash their hands of them.

 

An example i'll give in my local town as i'm friends with a builder who told me this during the summer.

 

He built a block of two bedroom apartments which worked out at around

[King Pitcos]

Buy shares in Burger King and blow up all the McDonalds trucks.

[Sphinx]

Buy shares in Burger King and blow up all the McDonalds trucks.

 

I couldn't help think along those lines reading this.

[Guest]

If its less than 20k, isas are your safest and least risky option. Above that rental property

 

Financial advise is now all fees up front for advise, so shopping sound isnt what it used to be

[Loki]

I'd assume Chest's already got his money in an ISA, rather than putting it under his mattress.

 

Thing about ISAs though, you have to keep moving the money around. My "long term" Intelligent Finance tracker's rate suddenly plunged about 3 months ago to 1.5 or something shite like that. They're never going to give that good a return.

[Sergio Mendacious]

My parents' financial adviser had them put some of their money in housing in some hellhole (Huddersfield, IIRC), where a consortium of other tea-drinking Eggheads-non-question-answerers have stored some of their nest eggs, for a nice monthly rental payout and eventually post Pret incursion and gentrification lucrative selloff.

[neil]

There are a lot of stupid posts in this thread.

 

Firstly, if you don't have the usual basics sorted out then do that. Prepare a savings account, establish an emergency fund. Ideally that should be about 3+ months of money (that you don't touch) in which can support you should you suddenly find yourself out of income. Next, max out any tax incentive accounts you can, be that retirement, ISA, etc. Always make the most of those, especially if you have employer contributed funds - it's amazing how many people leave money on the table from their employers.

 

If you're all setup on the above then you can consider a few things. Personally I think buying a house is a rubbish investment. Any investment where you don't do your due diligence is most likely going to return little to no return (perhaps even negative). Most people who buy a house to live in, don't really do any due diligence in terms of investment value. They just buy something they like in an area that works for them. If you own the house for long enough (I've seen figures saying 6+ years in a good housing market) then it starts to give you some return.

 

Buying a house to rent out isn't an investment either in my opinion. It's a business. You have to run it like one. This means that while you may make money on it, there is also the chance that you have to invest significant income into it, deal with it being empty for a period of time, and put in the time to manage it with the various problems that will arise.

[gary v1]

There are a lot of stupid posts in this thread.

 

Firstly, if you don't have the usual basics sorted out then do that. Prepare a savings account, establish an emergency fund. Ideally that should be about 3+ months of money (that you don't touch) in which can support you should you suddenly find yourself out of income. Next, max out any tax incentive accounts you can, be that retirement, ISA, etc. Always make the most of those, especially if you have employer contributed funds - it's amazing how many people leave money on the table from their employers.

 

If you're all setup on the above then you can consider a few things. Personally I think buying a house is a rubbish investment. Any investment where you don't do your due diligence is most likely going to return little to no return (perhaps even negative). Most people who buy a house to live in, don't really do any due diligence in terms of investment value. They just buy something they like in an area that works for them. If you own the house for long enough (I've seen figures saying 6+ years in a good housing market) then it starts to give you some return.

 

Buying a house to rent out isn't an investment either in my opinion. It's a business. You have to run it like one. This means that while you may make money on it, there is also the chance that you have to invest significant income into it, deal with it being empty for a period of time, and put in the time to manage it with the various problems that will arise.

 

I agree with Neil. I'm currently a landlord but this wasn't a financial choice, more that I bought a flat in Glasgow then had to move to Dublin. It's not much fun at all. Having to deal with things that need replaced, advertising the flat to get new tenants, viewings, contracts, insurance and so on. I still spend more on the flat than I get from rent but I'm also getting my mortgage payed off at the same time. If I did all the maths I'd imagine I'm making some profit out of it but not what having

[Stylin_and_Profilin]

There are a lot of stupid posts in this thread.

 

Firstly, if you don't have the usual basics sorted out then do that. Prepare a savings account, establish an emergency fund. Ideally that should be about 3+ months of money (that you don't touch) in which can support you should you suddenly find yourself out of income. Next, max out any tax incentive accounts you can, be that retirement, ISA, etc. Always make the most of those, especially if you have employer contributed funds - it's amazing how many people leave money on the table from their employers.

 

If you're all setup on the above then you can consider a few things. Personally I think buying a house is a rubbish investment. Any investment where you don't do your due diligence is most likely going to return little to no return (perhaps even negative). Most people who buy a house to live in, don't really do any due diligence in terms of investment value. They just buy something they like in an area that works for them. If you own the house for long enough (I've seen figures saying 6+ years in a good housing market) then it starts to give you some return.

 

Buying a house to rent out isn't an investment either in my opinion. It's a business. You have to run it like one. This means that while you may make money on it, there is also the chance that you have to invest significant income into it, deal with it being empty for a period of time, and put in the time to manage it with the various problems that will arise.

 

I agree with Neil. I'm currently a landlord but this wasn't a financial choice, more that I bought a flat in Glasgow then had to move to Dublin. It's not much fun at all. Having to deal with things that need replaced, advertising the flat to get new tenants, viewings, contracts, insurance and so on. I still spend more on the flat than I get from rent but I'm also getting my mortgage payed off at the same time. If I did all the maths I'd imagine I'm making some profit out of it but not what having

[gary v1]

I just do it myself. Although that makes sense to get a letting agent I'm loathed to give someone

[Ant]

I had a couple move in at the start of June and I haven't heard form them since and always pay the rent on time so hopefully that continues and they've not turned my flat into a brother/drug den.

 

I expect you say that tongue in cheek, but a former colleague found himself in the unfortunate position where Strathclyde's finest had a quiet word in his ear as his rental property in the Merchant City had become a house of disrepute. This was particularly embarrassing for him given his involvement in good causes and his local church. I don't know if an agent would have the knowledge to "weed out" this element, but I know he had an awful time dealing with the moral and practical issues at hand. Thankfully all is now resolved, to the point where he can take a ribbing from folk about his Russian mafia associates etc.

[Chest Rockwell]

Thanks for all the responses guys. I