Long and complicated post… Sorry!

More by luck than good judgement, having just hit 40, I’m in an enviable position right now where I’m accruing spare cash. Of course, there’s some reasons behind this… I’m in a relationship with my GF, where we split everything 50/50… Mortgage, bills, the lot (OK so if we go anywhere, I’ll tend to pay for the hotels and let her pick up the food costs just to give her a bit of leeway, but that really is it). She doesn’t live hand to mouth, she has a good job, but she has 2 teenagers that she hasn’t had a penny of maintenance money for from their father (he’s long term sick, chronic emphysema) and she doesn’t earn as much as I do anyway. She’s lucky to save £100-150 a month, where due to various reasons (better paid job with better perks, selling off assets I no longer need etc.) I’m saving 10x that each month right now easily! In fact, with what I have in the bank right now, the sale of 2 motorbikes I no longer use (keeping the one I do), various cycling equipment that I no longer use personally or is left over from the closure of my shop etc… I could easily pull £20k together in the next couple of months, as aside from bikes (and motorbikes) I really don’t have particularly expensive tastes!

Then there’s the other worrying factor… I am notoriously terrible with cash in the bank, and will find ways to spend it if I don’t have a plan!

So… What to do with it…? I’m aware of the stock “coke and hookers” answer, but also acutely aware that it might not go too well with the GF. There’s also the realisation that both these things have the potential to be highly addictive, and that £20k probably won’t get me very far, and it will quickly turn into a habit that needs financing somehow! 😉

The obvious answer would be mortgage… We’re due for renewal in 4 months or so, I could bung a load into the house, get a much better deal where we have more equity and lower monthly payments etc. But like I said above, the GF and I do EVERYTHING 50/50 when it comes to bills etc. We’re both happy with this and don’t wish to change it.

So what to do with it? Savings interest rates are the worst in living memory, next year’s holiday is already paid for (by virtue that it was cancelled this year, and I was given vouchers which I’ve already used to rebook it). I already have a car (that I don’t need) that I barely use, so upgrading that whilst it might seem fun, wouldn’t make any sense. I don’t need any more bikes, with 3 MTB’s and 2 road bikes it’s firmly “1 in 1 out” now anyway purely in terms of space, and 3 of them barely get used anyway… Really, I’m having an existential crisis where I’ve realised I have far more “stuff” than anyone could ever need, but even worse than that, I can’t see a way to do anything more positive with the spare cash than to accrue more “stuff” right now sadly…

My best mate says to put it into the mortgage anyway, then just get a lawyer to write into the mortgage agreement that should anything unfortunately happen and we split or had to sell the house for other reasons, that I get the first £20k before anything else is split 50/50… However I’m about as trusting of the legal system as I am of inner tubes! Also the GF doesn’t like this idea either, as it takes away from the 50/50 thing. She’s not likely any time soon to have any more expendable income either, especially if her kids go to uni… There’s also the fact that if we did split up, she wouldn’t be able to afford to buy me out in a month of Sundays as it is, let alone if I’ve put an extra £20k in. I know I’m perhaps looking into this too deeply, but her ex husband cost her a LOT of money (they had to sell their house to pay off his gambling debts, he is an alcoholic, she had to work whilst he stayed home trying to get signed off “long term sick” which he finally achieved 2 years after she saw sense and left him), and she’s only too conscious herself of the need to keep it all 50/50 and clear and transparent at all times otherwise money can become a problem in a relationship…

I’d go into Classic car buying an selling, but I don’t have anywhere to store them, and realistically I don’t have the contacts to get the deals that are going to make the money anyway (those I know that do, all have 30yrs+ in the trade!). I could invest in a better “family” car, but I can count the number of times in the last year that all 4 of us and the dog have travelled anywhere together on the fingers of one hand… 2.5x over in fact! The GF’s BMW is fine for now anyway, it does a lot less miles now than it did 18 months ago, and at 12 years old with many big scary bills behind it, it’s at the point of running it into the ground over time now anyway, and as a mother of 2 teenagers and a Labrador, a car is a mode of transport at best and a workhorse, so whether it’s worth £3k or £30k, it’ll get full of dog hairs quickly enough. My own car may also have to be sacrificed soon enough due to space reasons alone, as it is a pure luxury that I have to find a reason to use (we did 700 miles in it over the long weekend just gone, a Wedding near Newton Abbott was a good excuse, we took the long way home via Lands End of course!) as it doesn’t move without a reason, and the GF’s eldest is 17 in 3 months and will need to be able to park on the drive whatever underpowered rotbox he gets the privilege of driving in, otherwise he won’t be able to get insured on it!

We do need to redecorate the house at some point, but beyond a lick of paint and new carpets (which is probably £1500 in materials and a few weeks of our time), I’m not spending anything else on this house as it has been purchased as a stepping stone… Our longer term goal being to rent this one out when her kids have flown the nest, and to buy somewhere more suited to the 2 of us in the countryside and with a an even bigger garage for bike storage and workshop.

Thoughts…? The idea of investing in anything that requires me to lock the funds in, also scares me, just in case I needed them for whatever reason… It’s one thing to have to sell a car a little sooner than expected, it’s something entirely different to miss out on the house of your dreams because you had all your capital tied up in an investment for 3-5 years that was only yielding 5% ROI anyway…

the stock “coke and hookers“

Some times the old ways are best.

NSI & I income bonds account.  1.1% paid monthly instant access let it sit until you need it.   Keep adding to it (is uses direct bank transfer) if you want to.

Offset mortgage? Are those still a thing?

That way you’re lowering your payments, or paying more off the capital sum every month and you can still do it 50/50 and not upset the status quo.

Sold my house and now living in a rental waiting to have a new one built. Depends on your level of risk (speak to an IFA) or just put it into Premium Bonds and hope you get lucky.

Reduce mortgage, it will save you both lots so swallow the pride of 50:50.

Pension – you could put it all in?

Savings – I’d be tempted by a stocks and shares ISA.

SRAM ELECTRONIC gearing etc then flog on for what you bought it for 😜

By an awesome guitar.

Find a forum for financial advice? Or spend it on bikes…. the time taken to write all that could have been well spent elsewhere. However, if you need emotional support we’re all here for you.

How much/little are you prepared to risk?
If none then NS&I or premium bonds.
If a little, say £2-5k…bank shares as they’re very cheap or Fundsmith; there’s a view that bank shares are cheap for a reason but I can’t see this gov allowing any of the high street banks collapse and dividend payments which are currently suspended will resume – possibly next year. Fundsmith won’t go pop – look at the investment portfolio.
Other than that, hope your good fortune continues.

Stocks and shares ISA. You can pretty much choose what you do in terms of risk and it’ll perform way better than a savings account.
My ISA was a net loss at the start of lockdown, now it’s 12.5% up.

Of course you could always withdraw the profits you make and use them to fund something a little more exciting if just having an ISA seems a bit dull.

ISA’s can go down as well as up, I’m not a financial advisor etc etc etc.

Some one way cables for the stereo?

Find someone else with similar amount if cash and buy a small buy to let together?

Shares.

If you put it anywhere (savings) at less than inflation you simply lose money.

Personally – lock it away and forget you had it. Then in ten years, take a peek.

Think about dumping a chunk into pension. Maybe not all of it, but then if you’re saving money each month perhaps a good chunk. You’ll get the tax benefit they easy too.

Find a forum for financial advice?

There has been, in the past, a huge amount of good advice given on this forum for a variety of different things, including finance. Also, it’s probably far easier for me to explain to a group of people on here my thoughts and concerns, and that my only real concern is bikes (imagine going on a forum where someone is telling you to sell all of your bikes except for one, as nobody can ride more than one at a time. I don’t need that kind of negativity in my life!) or possibly travel… Or why I don’t feel the desperate need to put a brand new £40k motor on the driveway that will never get used, just to keep up with the Jones’!

By an awesome guitar.

And do what with it (assuming you meant “buy” and not “by” here…)…? Cos I sure as shit can’t play one!

Find someone else with similar amount if cash and buy a small buy to let together?

I think I’d rather burn it than add any more stress in my life, getting financially involved with other people with different financial aims and goals to myself! It’s stressful enough owning a house with my GF, and she’s so chilled out that as long as she has more money (even £1!) left in her bank at the end of this month than she did at the end of last month, she’s happy. I have traditionally been pretty bad with money, but gave myself an enforced kick up the arse about 6yrs ago to sort things out in the vain hope that one day I could buy a house etc. Well done that, reaping the benefits, and now trying to move onwards and upwards even more without getting distracted and returning to my old ways… 😂

Stocks and shares ISA. You can pretty much choose what you do in terms of risk and it’ll perform way better than a savings account.
My ISA was a net loss at the start of lockdown, now it’s 12.5% up.

I’ve got one. Not much money in it though. Did have about £2k in it, got a bit jittery with all the Coronavirus talk on the news, and took it all out just before the stock market crashed… Just as well too, would have lost over 10% overnight! Slowly been putting a bit back in (Standing order of £10 a week) into it since the economy has started recovering. Im only about 3% up, but at least I wasn’t over 10% down!

Offset mortgage? Are those still a thing?

Great shout! I didn’t know they still existed… Seems to be that could make a lot of sense.

Only downer I can see is the crap interest rates on most of them. I guess I will need to shop around.

If none then NS&I or premium bonds.

Looks a good shout, even if I only put a couple of grand in there. I like the fact that you can put more in, or take it out with ease.

I’ve got one. Not much money in it though. Did have about £2k in it, got a bit jittery with all the Coronavirus talk on the news, and took it all out just before the stock market crashed… Just as well too, would have lost over 10% overnight! Slowly been putting a bit back in (Standing order of £10 a week) into it since the economy has started recovering. Im only about 3% up, but at least I wasn’t over 10% down!

If you’re freaking out over the fact that you could have lost £200 on an ISA, take the absolute lowest risk option available with your £20k

Buy 20 grands worth of stainless Rolex sports watches if you can find any.

If you’re freaking out over the fact that you could have lost £200 on an ISA, take the absolute lowest risk option available with your £20k

Not freaking out, but isn’t the whole point about money that you have but aren’t spending as it’s sat in an account somewhere, that it should’ve gaining interest and not losing value…? I can make it lose value by spending it on things, and at least I’ll have some enjoyment from it. There is zero enjoyment to be derived from money if it’s sat in an account somewhere, so it has to create a return or literally, what is the point in having it…? 🤷🏻‍♂️

Besides, it’s not the absolute value… It’s that it would have been a 10% loss overnight. Many people had a lot more in savings, and they’re still not back to where they were prior to lockdown now!

There is zero enjoyment to be derived from money if it’s sat in an account somewhere

£20,000 credit is better than £20,000 debt. That’s where I derive pleasure from having money sat in the account. My only concern would be having money losing value due to inflation, I don’t need to make large returns because I’m not that materialistic. So if I were you I’d find somewhere where your money doesn’t lose value from inflation…but then I’m not you so you could spend it on a once ion a lifetime experience (learn to fly for instance)…or find a deserving charity…or employ someone for a year to pick up litter as a part time job in your local area, amongst a huge array of other options.

Personally I’d go stocks and shares ISA, probably get the highest return that way, although there is always risk with shares in the short term at least. They generally always recover any losses over time as long as you have a reasonable spread.

So… Got to ask

You live with your GF, she has 2 dependants, earns less and generally has less money.

You earn so much more that you under-speed by £1k a month.

Perhaps reading a bit too much between the lines, even with a £20k surplus, you’d rather not pay down your mortgage, because the reduction in monthly payments (which will only increase your, already, hansom disposable income) would benefit your GF as much as you.

I really don’t know if I envy you, or pitty you.

My Wife is magnetically opposed to money, her appetite to spending knows no limits, it’s turned me into a ghoul, I bitch and moan about how much we spend, she moans about how much I moan and calls me “tight and miserly” – I explained that if we had loads of money in savings and ran a surplus every month, she’s be right, but we don’t and I have to battle constantly so we don’t over-spend more than we already have. Now than then, I worry about the state of my mental health, I never used to be like this, I wonder if I’m over-reacting, so I shut up, smile sweetly and let her carry one – 2 weeks after our salaries (which are very generous btw) are paid, we’re broke again. A couple with 2 kids and £90k+ a year income shouldn’t have to worry about buying food at the end of the month.

Anyway, with that off my chest.

Assuming you love her and you’ve no plans to kick her to the kerb at any point, just pay down your mortgage, take advantage of the historical low rates and fix it for as long as possible and gift your GF with a slight reduction in her monthly expenditure.

If that’s a bit too much like charity for you, then just reduce the term until the payments are roughly the same, it’s generally the best investment you’ll ever make.

Put some of it into an ISA for rainy day money.

Personally I’d go stocks and shares ISA, probably get the highest return that way, although there is always risk with shares in the short term at least. They generally always recover any losses over time as long as you have a reasonable spread.

Wouldn’t argue with that either.

The way to make money is to buy stuff when it’s cheap and sell it when it’s expensive, but our attitude to risk usually means we only want to buy in when things are booming.

P-Jay – you sound like a candidate for a joint Bills account which you both pay into to cover Bills and food on the 1st of the month – then the both of you do whatever you like with your own remaining money in your own accounts.

They way she can spend what she likes out of her bank account and take responsibility for her own wages and spending whilst you manage yours.  It would seem it might remove some stress from your relationship perhaps.

Offset mortgage or 50/50 split, pension and gold.

P-Jay – you sound like a candidate for a joint Bills account which you both pay into to cover Bills and food on the 1st of the month – then the both of you do whatever you like with your own remaining money in your own accounts.

They way she can spend what she likes out of her bank account and take responsibility for her own wages and spending whilst you manage yours. It would seem it might remove some stress from your relationship perhaps.

It’s a long and slightly bitter story, but we had that, it sort of worked… I even off-set it because I earn more, but it was actually me that **** that up so we went for a full joint account, which I sort of regret now.

Just remember how much effort it took to save those 20k. That alone should stop you from spending it wildly.

got a bit jittery with all the Coronavirus talk on the news, and took it all out just before the stock market crashed… Just as well too, would have lost over 10% overnight!

I took a massive hit at the start of the corona bollocks (just over 20% loss around April)….however, I’m back up at over 13% where I was in March.

How about buying € then wait a few months and buy GBP. I’ve a feeling there might be a bit of movement in GBP imminent. I’ve just sold a house in France and left the proceeds in euro for that very reason. Bit black or red but looks like there’s some logic behind it.

If none then NS&I or premium bonds.

Looks a good shout, even if I only put a couple of grand in there. I like the fact that you can put more in, or take it out with ease.

shove it into premium bonds, while you decide what to do long term. I’d be thinking of mortgage so that both of you benefit long term, but agree that would be problematic if you split.

I took a massive hit at the start of the corona bollocks (just over 20% loss around April)….however, I’m back up at over 13% where I was in March.

Which funds are they, out of interest? I also saw a 20% hit at the bottom, and it’s just about back up to net zero now, and that’s with a reasonable amount of topping up after the lowest point. Vanguard Lifestrategy btw.

Mboy, I’d agree with the others – if the risk of losing 10% of £2k frightened you, surely the only option would be pay down the mortgage and share your good fortune with your gf. My partner and I are very well matched on income and outgoings so 50:50 works fine. If I had that much of a surplus and she had none, I don’t think I’d feel good about sticking to 50:50.

Get married, that will cover it

Paid my mortgage off with my 20 k last week, hurrah.

Open a Vanguard ISA, stick it all in a Lifestrategy fund (probably the 80 one), and try to forget about it.

Tax free earnings and it should have be well north of £100k by retirement age.

Offset mortgage or 50/50 split, pension and gold.

I’ve heard Silver is the new Gold…  (IANAE)

2nd votr for vanguad
Probably an all market tracker fund with very very low managemnt costs
In fact i would do 12k off mtg, then put say 200pcm into a vanguard fund for pound cost averaging reasons, keep some for rainy day money.
Treat gf to a holiday at center parcs
Then drip feed into pension funds with the aim to get 3 below 10k as you can close out small pensions fully once over 55. I a n a i f a but this seems semsible to me

Why Sir, THIS is your lucky day, you can be a man if the future! I just happen to have some spare capacity to design you a bespoke monorail. Send me the 20k and I’ll get right on the preliminary design, I take it sir would like laser lights on his monorail? Of course you would!

If OP earns enough to pay higher rate tax then a private pension and enough contributions to use a good bit of the 40% tax reluief is a no brainer.

IE if in England earning £60k then £10k pension payments can get the 40% relief.

Other than that once a rainy day fund is in place to cover the unexpected say £10k I’d stick everything else in low cost trackers. Assuming any big moves lik new house etc is 5 or more years out.

the stock “coke and hookers“

Some times the old ways are best.

Get with the times daddio, the modern stock STW answer is to buy a half decent mid-range wind-up wristwatch of some sort.