Where to put a lump sum so it retains its value

[Billoben]

Hi, happy Christmas

I have a small inheritance sitting in my bank account. I understand I am vey lucky to have this and not need to touch it. But year on year it will value due to inflation – somewhere close to 4%. So give it a few years and that becomes a significant loss.

My question is, is there any recommended saving/investment vehicle. The assumption here is my goal is to try to retain its value in the medium term (3 to 10 years). I’m flexible and of course happy to get a higher return but am somewhat risk adverse.

 

[moneymakeover]

Is your pension maxed out? If not add to that.
State savings are guaranteed. 3% after 5 years. If your 4% inflation is correct then you only lose 5x4 - 3 =17%


Apart from above, you could buy an etf index for example spy 500 via for example degiro.

That has performed
16% in 2020
29% 2021
But after 45% gains in two years is there any steam left in that engine?

 

[Marc]

Hi, happy Christmas

I have a small inheritance sitting in my bank account. I understand I am vey lucky to have this and not need to touch it. But year on year it will value due to inflation – somewhere close to 4%. So give it a few years and that becomes a significant loss.

My question is, is there any recommended saving/investment vehicle. The assumption here is my goal is to try to retain its value in the medium term (3 to 10 years). I’m flexible and of course happy to get a higher return but am somewhat risk adverse.

You should complete the money makeover questions. It’s impossible to provide any useful advice in a vacuum

 

[joe sod]

Is your pension maxed out? If not add to that.
State savings are guaranteed. 3% after 5 years. If your 4% inflation is correct then you only lose 5x4 - 3 =17%


Apart from above, you could buy an etf index for example spy 500 via for example degiro.

That has performed
16% in 2020
29% 2021
But after 45% gains in two years is there any steam left in that engine?

Remember etf taxation in Ireland though, even if you make 45% gross the government takes 41% of that every 8 years, so you only be left with 25% net gain approximately. Still it's better than leaving it in a deposit account as governments are effectively stealing that by stealth anyway with negative interest rates. Negative interest rates are still there even though we have high inflation and ECB still talking about inflation being "transitory"

 

[Sue Ellen]

Hi billoben,

Welcome to AAM.

As recommended by Marc above it would be best if you were to complete the money makeover list of questions and you may get better advice from that:

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www.askaboutmoney.com

 

[NoRegretsCoyote]

But year on year it will value due to inflation – somewhere close to 4%.

I don't rule this out, but current high rates of inflation are unlikely to persist over say 5 years. I say unlikely not impossible.

I can't find the euro rate without paid-for subscriptions, but market expectations for US inflation are only about 2.5% annually over the next ten years.

Otherwise you need a money makeover. A "small" inheritance could be anything from €3k to €300k!