Page 3 | £50k now or £75k in 5 years?

WrendaleCountryDogs · 2023-01-15T13:39:25+00:00

If you were given the option of being given £50k now, or waiting 5 years and being given £75k, what would you choose?

MrsDanversGlidesAgain · 15/01/2023 16:58

HolyZarquonsSingingSeals · 15/01/2023 14:59

Either you are an incurable optimist or we should all be subscribing to your investment blog.

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I was thinking the same and actually sat and worked it out in Excel. Getting on for 9% growth a year needed over 5 years with interest compounded. If that poster can get that sort of return on investment she should offer her services to a few financial companies - I reckon she could name her price.

GolfEchoRomeoTangoIndia · 15/01/2023 17:05

75K in 5 years. I don't need the money right now, and it's the equivalent of over 8% compound. If any bank were offering that I'd bite their hands off.

That's not to say that people who would take the smaller sum of money now are all misguided. If it would give you the deposit to stop renting, or pay off debt then obviously it might be the right choice.

Thesealsknowsheismagic · 15/01/2023 17:09

Would entirely depend on my financial situation right now.

MrsDanversGlidesAgain · 15/01/2023 17:11

If any bank were offering that I'd bite their hands off

If anyone, bank or not, was offering that I'd be very wary indeed.

HiccupHorrendousHaddock · 15/01/2023 17:13

£50k now. It would clear the mortgage, be ample for our contribution for youngest through uni and we could face the future with no debts or financial obligations.

The removal of stress would be wonderful, and with poor health I’m making no assumptions about being here in 5 years. Although I hope to.

Deeandra · 15/01/2023 17:13

Now please!

BernadetteRostankowskiWolowitz · 15/01/2023 17:15

In 5 years time our mortgage balance will he at or around 70k, so I'd wait. Mortgage free and 5k for a holiday.

weathervane1 · 15/01/2023 17:17

In a pension scheme at 10% growth annually (which is cautious apart from the past twelve months), £50 would become close to £80 in five years. The real answer may come down to the immediate need vs being able to afford to lock it away for five years.

Citylab · 15/01/2023 17:17

Don't forget inflation. If inflation averaged 5% £50,000 would be worth £64,000 in 5 years.

GolfEchoRomeoTangoIndia · 15/01/2023 17:23

MrsDanversGlidesAgain · 15/01/2023 17:11

If any bank were offering that I'd bite their hands off

If anyone, bank or not, was offering that I'd be very wary indeed.

Well yes, I'd only go for it from a very secure bank indeed because it would look too good to be true.

weathervane1 · 15/01/2023 18:20

Inflation works the other way, £50k now would buy less in five years time.

NoSquirrels · 15/01/2023 18:30

Hmm, tricky because £50K now would be extremely useful to me. But an extra 50% in 5 years is a hard thing to say no to. Not sure!

Coffeetree · 15/01/2023 18:30

Personally, I'd take the 50k now because paying off my mortgage now would save me the interest and give me disposable income to save/invest.

Otherwise, I'd hold out for the larger sum.

Original poster

WrendaleCountryDogs · 15/01/2023 21:29

It's my niece who has this decision to make. It's an inheritance but very complicated. There is £50k available to her now or there will be £75k in 5 years. There is no option of taking £50k now and getting another £25k in 5 years.

Niece is 22, recently married and expecting a baby. Her husband was left a 1 bed flat by his dad when he passed which is where they are living. Flat is fairly spacious and is big enough for 1 child as there is a small dining room which can be turned into a bedroom. However it wouldn't work for 2 children. So they either take the £50k and move now or wait 5 years and get £75k.
Unfortunately due to complicated circumstances she needs to decide fairly quickly.

OP posts:

cstaff · 15/01/2023 21:35

If they can manage to wait for 5 years I would encourage that. Once they are not in dire straits then I would encourage them to hold out.

thecatsthecats · 15/01/2023 21:43

50k now.

I'm retraining, and it would ease the pressure on employment whilst studying. Excellent prospects for my career switch (tech), which would mean I could save the other 25k from earnings.

thecatsthecats · 15/01/2023 21:47

WrendaleCountryDogs · 15/01/2023 21:29

It's my niece who has this decision to make. It's an inheritance but very complicated. There is £50k available to her now or there will be £75k in 5 years. There is no option of taking £50k now and getting another £25k in 5 years.

Niece is 22, recently married and expecting a baby. Her husband was left a 1 bed flat by his dad when he passed which is where they are living. Flat is fairly spacious and is big enough for 1 child as there is a small dining room which can be turned into a bedroom. However it wouldn't work for 2 children. So they either take the £50k and move now or wait 5 years and get £75k.
Unfortunately due to complicated circumstances she needs to decide fairly quickly.

In these circumstances, assuming no debt and owning the flat outright, then I'd say 75k is five years.

The baby will be with them for the first months, they can save a lot due to the lack of rent, and buy a good house with the 75k plus savings.

Or they can rent out the flat if needed, and rent a larger flat when they have the second baby.

SwedishEdith · 15/01/2023 21:50

Oh, if she's only 22 then deffo wait for another 5 years.

evemillbank · 15/01/2023 21:59

£50k now. That will cover, just, the stamp duty on our next move. I'd be delighted

HaroldeVwilliam · 15/01/2023 21:59

Is wait 5 year's but id like to know why she has to wait?
Is it's cast iron clad that she would get 75 in 5 year's? ..

Two small are fine in a flat. Wait 5 year's but if there is the slightest chance of it not happening then take it now

NoSquirrels · 16/01/2023 07:59

WrendaleCountryDogs · 15/01/2023 21:29

It's my niece who has this decision to make. It's an inheritance but very complicated. There is £50k available to her now or there will be £75k in 5 years. There is no option of taking £50k now and getting another £25k in 5 years.

Niece is 22, recently married and expecting a baby. Her husband was left a 1 bed flat by his dad when he passed which is where they are living. Flat is fairly spacious and is big enough for 1 child as there is a small dining room which can be turned into a bedroom. However it wouldn't work for 2 children. So they either take the £50k and move now or wait 5 years and get £75k.
Unfortunately due to complicated circumstances she needs to decide fairly quickly.

Oh, so young - she should wait.
In 5 years they’ll be ready to move, if they plan another, but there’s a lot to be said for living cheaply (free flat!) with your first baby. They presumably wouldn’t have another baby until year 2-3 earliest, at which point the baby would be in with them for a year.. I think it’s better to wait. DC1 would then also be at school age so a good time to move.