Please help, I inherited €850k and dont know what to do...

financial_noob

Hi folks, I was wondering if you could help give me some advise? I am a bit of a financial noob. Heres my story...

Last year I unexpectedly inherited €850k (net). This was a bit of a shock. I am 30 years old, in a relationship but not married. I do not have a house but I do have a good safe job. The only thing I have done with the money so far is make some donations to charity.

I dont spend much in general, I dont care for clothes, houses, cars or other things. I live a reasonably simple life that invloves doing things that dont require money. So this unexpected winfall left me sort of perplexed. I guess my plan someday is just to buy a house and have some money for kids and family down the road. In the mean time I dont really have any use for it. I fully understand that I am 100% the luckiest dude in the coutry right now to have all of this but as I hope you can appreciate I was doing ok before it happened. I earned enough money from my job to keep me in beer and food.

I am looking for some financial advise. Right now I have €100k in Rabodirect and the rest of it is in Bank of Ireland. €400k is in 1 year term deposit account, and the other €350k is in a 3 month term deposit account.

Note: The only thing I care about is that the money is safe. I dont care about investments or products that try to return big interest etc. I just want to leave it somewhere safe.

1.) Am I crazy keeping it in an Irish bank with everything that is hapopening?

2.) If its is dumb to leave it in a Irish bank, where should I put it?

3.) What are the chances of loosing any of this down the road by leaving it in an Irish bank?

Any advise you can give me would be appreciated. I am worried with all of ther talk in the news that I might be doing something wrong here. I dont think I can stomach talking to any proffessional financial advisors (sorry if you are one) but the ones I have met to date have seemed out for themselves and just tried to sell dumb investment products to me.

daheff

ok...best advice i can give you is to make sure you dont have more than 100k in any bank at a given time- as if that bank goes bust you will only be covered for a max of 100k (by irish regulator -so irish banks. different rules for different regulated banks eg rabo )


secondly...i would think that if you dont have property (and intend on eventually getting one) that this is a good time to buy a good one in a good area (with that kind of money)...i dont think property will fall too much further (thats my opinion)

thirdly- maybe look to max the contributions to your pension fund (if you have one- if you dont ....get one!) Even with the proposed new tax you still gain just by contributing (based off current tax benefits)....you can use the interest you gain on your lump sum to make up the difference to live off (if needs be)

****this is just what i'd do...but you would really need to talk to an independent professional advisor - and not one tied to any financial institution. in your situation it might be best to pay a good advisor for advice.

Danielle35

HI - Contact John Lowe - The Money Doctor, he is also on Newstalk , Tuesdays circa 12.30pm, he makes a lot of sense most of the time . You could send your query to Newstalk and they might pass it on . ( Congratulations by the way ) .

freeze4real

You're f'ing lucky.

Give me some of that would be a good investment.

Stick some in the stock markets.

Buy preference shares in a company. You can never loose them even if the company goes bust.

Mr Cawley

Step 1.

Split it up, with NO more than 100k in each bank. You will not be guaranteed otherwise. Call some international banks and ask them what they can offer you for your deposit. You can relax after this is done.

2. Spend a year learning about Financial Markets and how you can get some of that money working for you.

Never trust a financial salesman. They don't care about what money means to people, it's often just a figure in a world of bigger figures.

Do not buy property in Ireland.

Never rush into a financial decision.

Disclaimer: I trade the financial markets for my living.

karl tyrrell

Buy land its cheap now you cant go wrong

Raskolnikov

financial_noob wrote: »

I am looking for some financial advise. Right now I have €100k in Rabodirect and the rest of it is in Bank of Ireland. €400k is in 1 year term deposit account, and the other €350k is in a 3 month term deposit account.

I would have serious reservations about having a sum like this on deposit with an Irish bank. Would you not at least consider moving to Ulster Bank? They're doing a 3.7% one year fixed deposit account which is currently better than anything the Irish banks are offering, and also that little bit safer (i.e you're not covered by the Irish guarantee, which doesn't mean a lot considering the international bond markets don't trust it).

Raskolnikov

Mr Cawley wrote: »

Split it up, with NO more than 100k in each bank.

With 800k+, you're going to rapidly run out of banks to create accounts, especially if you exclude banks under State ownership (i.e. all banks).

yosser hughes

Danielle35 wrote: »

HI - Contact John Lowe - The Money Doctor, he is also on Newstalk , Tuesdays circa 12.30pm, he makes a lot of sense most of the time . You could send your query to Newstalk and they might pass it on . ( Congratulations by the way ) .

Eh no he doesn't make sense. John was great fan of Bertie Ahern back in the day and is a green jersey man. He will tell you to keep your money in the Irish banks as he has a very sunny outlook on the safety of Irish banks.He's a salesman.
My advice to you would be to get on a plane to Frankfurt and set up a German bond account.You can then transfer money in to it.
Property in ireland is only going one way. Down. Anyone who tells you otherwise is living in la la land.

3DataModem

Mr Cawley wrote: »

Step 1.

Split it up, with NO more than 100k in each bank. You will not be guaranteed otherwise. Call some international banks and ask them what they can offer you for your deposit. You can relax after this is done.

2. Spend a year learning about Financial Markets and how you can get some of that money working for you.

Never trust a financial salesman. They don't care about what money means to people, it's often just a figure in a world of bigger figures.

Do not buy property in Ireland.

Never rush into a financial decision.

This is excellent advice.

wildefalcon

Well, you need to consider what you want to do.

Invest?

Spend?

Give away?

If you are investing then the best advice is to diversify.

That means you put your eggs into lots of different baskets.

The traditional advice would be put

1/3 into shares

1/3 into cash

and 1/3 into bonds.

I would add a further piece of advice, related to the other posts above:

Have 1/3 in Ireland, 1/3 in Europe and 1/3 in the UK, mainly because I think there is a real risk that the Irish Government will leave the Euro.

And some final advice:

Split the funds between different institutions, just in case one goes bust.

Unless you want to play with the market (don't) I would consider a low transaction fee type product that allows you to own the top 100 spares in Ireland, Europe and the UK.

The major banks usually charge a lot for this service, check out Rabobank, and UK institutions, they charge a lot less.

Buy the UK financial papers such as the telegraph, and the Sunday times, to see what is going on.

Trust no - one, always check the fees, annual charges, and exit costs. Watch out for scams, penny stocks and the like.

But don't worry about it - make sure that it doesn't run your life.

G.

financial_noob

Thanks folks, really great advice all around. Splitting it up in different banks sounds good. I am guessing if we leave the Euro though whatever I have will be seriously devalued?

I have been told that in that case even Irish deposits in Rabo would instantly change from Euro to Punt or whatever we are left with.

I had been considering placing €200k in an Ulsterbank sterling account in the north. I figured it would help spread some of the risk to another currency at least, I fully understand that currency markets fluctuate a lot but sterling feels weak no compared to the euro so it might be a good time to do this?

yosser hughes

financial_noob wrote: »

Thanks folks, really great advice all around. Splitting it up in different banks sounds good. I am guessing if we leave the Euro though whatever I have will be seriously devalued?

I have been told that in that case even Irish deposits in Rabo would instantly change from Euro to Punt or whatever we are left with.

I had been considering placing €200k in an Ulsterbank sterling account in the north. I figured it would help spread some of the risk to another currency at least, I fully understand that currency markets fluctuate a lot but sterling feels weak no compared to the euro so it might be a good time to do this?

Correct. Many people wrongly assume money they have in Rabo would be protected in the event of an exit from the euro.It won't.It WILL be converted to Paddy Punts or whatever it is. Bear in mind Britain is engaging in quantative easing at the moment so don't be surprised if sterling loses even more of its value and a devaluation cannot be rulled out either.
Don't delay in your decision whatever you do as no warning will be given.
PS: Do not listen to those that pass themselves off as financial experts in the media in this country.By and large they haven't a clue.

BuffyBot

Go to a properly trained financial advisor. Really, taking advice off the net when it comes to something as serious as this does make the mind boggle slightly.

^
agree 100%

coylemj

freeze4real wrote: »

Buy preference shares in a company. You can never loose them even if the company goes bust.

Complete BS. If the company goes bust with more liabilities than assets, where will the money come from to pay the preference shareholders?

TiGeR KiNgS

Make sure you pay Capital Acquisition's Tax if it is liable in your case.
Seek a Financial expert's advice.

ToxicPaddy

Just reading this now and to the OP, a hearty congrats.. its good to hear of someone who hasn't based their life around money getting a good turn of luck like this so sir/madam I wish you well.

As most of the more regular posters have said here, diversify..

Spread your money between institutions, various accounts etc.. reduces risk and will give you some peace of mind. Look at some European banks in case we do decide to pull the plug on the Euro. Also look at some low risk pension schemes for nothing more than to grow it a little for when you retire.

And finally and most of all, enjoy life..

You now have some financial security and should you keep your head and don't do anything silly, it will be there to help you and your future family for many years to come :mad:

daheff

OP - what did you decide to do in the end?

fricatus

Mr Cawley wrote: »

Do not buy property in Ireland.

Mr Cawley may not agree with me adding riders to his advice, but I would make an exception: if you buy yourself a house for you to live in, in a good area that you like, and the price is not excessive, then it will be the best investment you make, because you'll never again pay rent for the roof over your head.

I would agree though, that you should steer clear of direct investment in property. As Eddie Hobbs says, do you really want a call at 3 in the morning from Shanghai, telling you the pipes have burst? If you do decide to invest part of your windfall in property, there are managed funds that allow you to do that without having to be a landlord.

BuffyBot wrote: »

Go to a properly trained financial advisor. Really, taking advice off the net when it comes to something as serious as this does make the mind boggle slightly.

This though, is the best piece of advice. A good rule of thumb is to avoid any adviser who earns his or her keep from commission, because they will sell you the products that earn them the most.

Pay for the advice yourself, and make sure that the only money the advisor is making from the transaction is the fee that you're paying over for this impartial advice.

Best of luck!

mozattack

financial_noob wrote: »

Hi folks, I was wondering if you could help give me some advise? I am a bit of a financial noob. Heres my story...

Last year I unexpectedly inherited €850k (net). This was a bit of a shock. I am 30 years old, in a relationship but not married. I do not have a house but I do have a good safe job. The only thing I have done with the money so far is make some donations to charity.

I dont spend much in general, I dont care for clothes, houses, cars or other things. I live a reasonably simple life that invloves doing things that dont require money. So this unexpected winfall left me sort of perplexed. I guess my plan someday is just to buy a house and have some money for kids and family down the road. In the mean time I dont really have any use for it. I fully understand that I am 100% the luckiest dude in the coutry right now to have all of this but as I hope you can appreciate I was doing ok before it happened. I earned enough money from my job to keep me in beer and food.

I am looking for some financial advise. Right now I have €100k in Rabodirect and the rest of it is in Bank of Ireland. €400k is in 1 year term deposit account, and the other €350k is in a 3 month term deposit account.

Note: The only thing I care about is that the money is safe. I dont care about investments or products that try to return big interest etc. I just want to leave it somewhere safe.

1.) Am I crazy keeping it in an Irish bank with everything that is hapopening?

2.) If its is dumb to leave it in a Irish bank, where should I put it?

3.) What are the chances of loosing any of this down the road by leaving it in an Irish bank?

Any advise you can give me would be appreciated. I am worried with all of ther talk in the news that I might be doing something wrong here. I dont think I can stomach talking to any proffessional financial advisors (sorry if you are one) but the ones I have met to date have seemed out for themselves and just tried to sell dumb investment products to me.

I am jealous, never given a red cent in my life. Owe €660k and have a bleak future

BuffyBot

Indeed - there's not much more to be gained from leaving this open.