Where to put a lump sum so it retains its value

B

Billoben

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

Key Post - Basic information required for the "Money Makeover" forum

It can be difficult, but please try to use a meaningful title in your thread For example "27 year old with mortgage arrears". You will get a much better and much more coherent answer if you give as much information as possible in your first post. For example, if you give your mortgage rate, it...
www.askaboutmoney.com
 
Billoben said:
But year on year it will value due to inflation – somewhere close to 4%.
Click to expand...
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!
 
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