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How to invest 100k inheritance

(47 Posts)
Wombatsliketoast Sat 08-Jun-13 09:39:05

I am soon to inherit in the region of 100k from my late father and wonder where/who I should go to for honest guidance on how to use it effectively. IFA? building society?

I'm in my 50s - have a fixed interest only mortgage of £90k on a tiny, tiny rate; a good occupational pension for later; hardly any savings; and I don't earn much, though enough to keep me ticking over.

I want to use this money wisely. but historically I'm not good at financial decisions so don't want to mess this up.

orangepudding Sat 08-Jun-13 09:41:59

I would pay of the mortgage.

orangepudding Sat 08-Jun-13 09:42:17

Off not of

Bluebell99 Sat 08-Jun-13 09:45:04

Fixed interest only mortgage? No question, I would pay off the mortgage. How were you planning to pay for the flat when the mortgage term ended?!

FiftyShadesofGreyMatter Sat 08-Jun-13 09:51:30

Pay off the mortgage. You will be extremely unlikely to ever get a better return from investing it that you will save from paying off your mortgage.

Paid off mortgage, can't fuck that up!

BackforGood Sat 08-Jun-13 10:20:06

Have to agree with everyone else - you have a mortgage of £90K that you are not paying off, and you have a lump sum of £100K that you are not sure what to do with. It's a no brainer from where I'm sitting.

musicalfamily Sat 08-Jun-13 12:01:58

Agree with everyone else - pay off the mortgage and then put the remaining 10k in an ISA.

Lonecatwithkitten Sat 08-Jun-13 13:17:53

Pay off mortgage, put 10k in ISA and then save the mortgage payment each month.

specialsubject Sat 08-Jun-13 13:18:46

make sure you have enough savings accessible to cover expenses if you lose your job tomorrow. Pay off the mortgage with the rest.

then an ISA - either a cash one at a derisory rate or long term in the stock market...which is currently very high..

savers are dirt at the moment, there's almost no point.

Notmadeofrib Sat 08-Jun-13 15:21:40

How are you (before the inheritance) planning to pay off your mortgage? Is there another vehicle that is earmarked for this?

If that is already sorted then you may have other options, if not well .... you know the rest. The interest rate on your mortgage is kind of irrelevant really if you are looking at low risk options.

rockybalboa Sat 08-Jun-13 15:31:13

90k interest only mortgage and 100k inheritance? Why would you do anything other than pay off your mortgage?!?

Pay off mortgage and any other debts.

Have lovely holiday.

Shop around and see the best interest rate you could get for long term investment, whether it's an isa or a bond.

TheRealFellatio Sat 08-Jun-13 15:55:01

Buy somewhere else with the cash, (do your research for a decent area with a reasonably vibrant economy and good demand for rental) and rent it out for a nice monthly income. If you make sure you keep the house in the long term then any capital gains (which there are bound to be eventually if you have time on your side) can be used to pay down your mortgage later.

Use the rental income to pay down your current mortgage at a faster rate than normal.

specialsubject Sat 08-Jun-13 17:37:03

but of course! Why didn't I think of that?

you won't make a fortune as a landlord and it is not necessarily true that there will definitely be a capital gain, but the place should be inflation proofed and it is an income that is retirement and redundancy proof.

budget carefully though and take the advice of a reputable letting agent. The hard bit is finding one. :-)

RedHelenB Sun 09-Jun-13 12:38:23

Till the flat gets trashed & ends up costing more than you'd get in rent. The only sensible thing to do is to pay off mortgage & then start saving what you would have paid in mortgage payments.

TheRealFellatio Sun 09-Jun-13 14:24:26

that is a very defeatist attitude Red! that is why you have landlord's insurance and take a deposit, and get references on your tenants! It happens occasionally but if target the right kind of tenant there is no reason why it should end up that way.

BackforGood Sun 09-Jun-13 14:33:24

But why would the OP want to take on the hassle of becoming a LandLord, when she already has a steady job, is in her 50s, and now has a chance to be mortgage free, plus have a bit left over for a few great holidays or new car or 'savings' or whatever she is comfortable with ? confused
She already said in her OP that she's historically not been good at financial decisions, so it doesn't sound like a person who would want the hassle of starting up a business - with the opportunities, but also all the possible pitfalls that brings - when she's probably counting the years until retirement ?

RedHelenB Sun 09-Jun-13 14:48:40

Exactly Back - with the agents fees, insurance etc she may be lucky to make enough to pay off her mortgage. plus have the aggro of doing so. I have friends who rent a flat & it is far from being a bed of roses! £100,000 won't buy much of a flat either, even in the North.

Notmadeofrib Sun 09-Jun-13 15:17:32

People think buy a BTL is the answer to everything. With no CG (very likely) the yield is often less than could be secured in a bank account and the risk is much more.

Lilymaid Sun 09-Jun-13 15:29:42

I recently received an inheritance from my DF.
First thing I did was pay off our mortgage (we'd had a mortgage for more than half our lives and freeing ourselves from those monthly payments and knowing we owned our house outright is worth any possible small loss of investment income).
Secondly, we started up some sort of savings for the money we were not paying out as mortgage - do that straight away before you get used to having the extra income each month and it starts disappearing.
Thirdly, use up your 2013-2014 cash ISA limit by investing some of the remaining inheritance in that (£5760).
Fourthly, have a nice holiday or put the remaining money towards something you've always fancied buying.

Fairylea Sun 09-Jun-13 15:31:56

Absolutely pay off the mortgage.

Then have a wonderful once in a lifetime holiday. Sod the rest on being sensible! No way!

TheRealFellatio Sun 09-Jun-13 18:16:32

All points taken, but can I just remind you that the OP asked for the best way to invest her money?!

ie. make something on it!

specialsubject Sun 09-Jun-13 19:11:35

at the moment rates are so terrible that BTL should almost certainly yield more than a savings accounts. Rates are now about 2% BEFORE tax. Inflation is much higher than that.

So the money needs inflation proofing. There are no dead certs but a mix of stock market investment and BTL is the only possible way.

The BTL will need landlord's insurance for the property and contents (including malicious damage), legal expenses insurance in case of tenants who won't leave, rent guarantee for those who won't pay.

yes, it is hassle. Work always is.

RedHelenB Mon 10-Jun-13 07:18:48

She actually said use, not invest.

RedHelenB Mon 10-Jun-13 07:19:59

In her post I meant. Does seem daft having a mortgage when you don't need to.

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