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Original poster

Just won £50000, what to do ?

45 replies

CollegeDoctor86 · 15/10/2020 04:33

My first post on here, as i value the wealth of knowledge of the mumsnet masses. This is not a humble brag, but a genuine ask for advice. Myself and DH have been fortunate enough to have come into some money £50000, such a wind fall was completely unexpected but very much welcomed. We are very unsure what the best thing to do with it would be as it was unexpected.
At present we are committed to our long term financial goals and have been saving and are very focused. DH works in the city and is fortunate enough to earn just over 140k a year, I work in a small local hospital and take home about 2/5th of that. We are both in our mid 30s and have no DC at present. We have a mortgage of 180k and savings of 50k in 2x ISA ( maxed out ) and shares.
We know we are very lucky to be in this position but really not sure if we should use the money to pay down the mortgage or use it to buy a buy- to-let property. We have always wanted to venture into owning another property to rent. We are just not sure if this would be the most sensible use of the money. We don’t plan to buy another car, or go on holiday with it as we are pretty strict on it being used to add wealth. I am just wanted to know what the mumsnet hive think might be the most sensible,
a) buy to let b) stocks and shares c) pay down the mortgage with the entire amount. ( bearing in mind this is not our forever home) d) save

OP posts:
beautifulmonument · 15/10/2020 04:43

Invest in stocks and shares to make it grow. Look at diversified indexed funds. They have low fees and over the long term tend to outperform managed funds.

Property is much more hard work with loads of fees and costs along the way and means all your money is in one basket. Being a landlord is a pain in the butt.

Coldwinterahead1 · 15/10/2020 04:46

I'm sure if your DH works in the city he must have plenty of colleagues who could advise him on how to invest them money.

QueenoftheIceAge · 15/10/2020 05:07

He earns £140k a year and you can’t work out what to do with a measly £50k? How about give it to charity?

Mustbe3ormorecharacters · 15/10/2020 05:12

Combination of B C and D.
Also ignore QueenoftheIceAge.

Mumsnorthernmonkey · 15/10/2020 05:16

lols

Aramox · 15/10/2020 05:34

Pay off mortgage. Why pay interest when you don’t have to?

HeronLanyon · 15/10/2020 05:38

Pay off anything/everything costing you in interest payments.

Frenchfancy · 15/10/2020 05:38

Pay off the mortgage. With those earnings you can always remortgage later if you want a buy to let.

Silvercatowner · 15/10/2020 05:52

I'm partly with @QueenoftheIceAge - a nice holiday then give the rest to charity.

Lulooo · 15/10/2020 05:59

Congratulations on the windfall, first of all.
I'm also with QueenOfTheIceAge. Between you, you make almost £200k a year and so £50k isn't exactly a life changing amount for you. It's of an bit odd question for someone on your salary, tbh.
But if really if a genuine question, then I'd pay off part of your mortgage. On your salary, I'd pay of the remaining £130k of the mortgage in a couple of years too.

Original poster
CollegeDoctor86 · 15/10/2020 07:22

Thanks alot for yor suggestions and advice. Our hearts were set on buying a buy to let property, when reflecting on our reasons i think we just liked the idea of being landlords. It seem though, this may be more of a headache then anything.

OP posts:
Original poster
CollegeDoctor86 · 15/10/2020 07:23

It's likely we'll sit on the money for a bit longer and consider the options you all have kindly discussed here.

OP posts:
AgnesNaismith · 15/10/2020 07:28

I'm also with QueenOfTheIceAge. Between you, you make almost £200k a year and so £50k isn't exactly a life changing amount for you. It's of an bit odd question for someone on your salary, tbh

Absolute bollocks.

I would sit on it at the moment too OP, see what happens to house prices etc over the next few months.

EnjoyingTheSilence · 15/10/2020 07:32

That’s the trouble. Lots of people like the idea of being a landlord with absolutely no idea of how to be one.

Why not speak to a financial advisor rather than ask a bunch of strangers if you’re that stuck.

Joeytribbianiz · 15/10/2020 07:33

Frankly I wouldn't become a landlord - too much hassle and risk if it goes wrong.

I'd look to use about half of it to pay off the mortgage early and then save the rest - whether that's in a low-risk stocks and shares ISA or an index fund.

AugieMarch · 15/10/2020 07:35

I’d sit on it a while and consider options more fully. I’d be inclined to do as the first poster suggests and invest in an index fund, but perhaps you could adopt a balanced approach, investing some of the money and paying down the mortgage with some.

If an investment property is really what you want then you could start looking around (I personally hate the idea of being a landlord because of the hassle of the human factor - index fund for me!!).

Perhaps also consider if you want to start a family sometime in the next few years as that may affect your decision - you may want to move house, save for private school, save to facilitate an extended period off work, or not want to deal with being a landlord while navigating two careers and young children.

Newuser123123 · 15/10/2020 07:36

Holiday of a lifetime
Buy forever home
Have children

Life is short

NoSquirrels · 15/10/2020 07:36

It’s got much harder to make money from BTL, and is considerable hassle, frankly. I’d pay down my mortgage and invest in stock market.

CountFosco · 15/10/2020 07:38

Don't buy to let. Since you've already maxing out S&S ISA I'd both up your pension contributions this year and reduce your mortgage.

HeronLanyon · 15/10/2020 07:41

I ‘blew’ some of an inheritance on a holiday of a lifetime just before coronavirus made itself known. Will always be grateful I did that, then. Life is too short and unpredictable not to if it is affordable without endangering family finances / better priorities.
Having said that not sure any holiday of a lifetime is possible right now nor for the foreseeable (?) if it is please tell me how because I’ve decided a lifetime is too long for just one.

Pipandmum · 15/10/2020 07:46

I am a landlord, currently with five let properties. It can be great until you get a rogue tenant who refuses to pay rent and/or becomes a nuisance for neighbours and/or damages your property. If you buy right the maintenance can be low and you get an income plus capital growth. There isn't much day to day work. But it is important to do lots of research first. I don't tend to get a mortgage on my rentals as there is little if any tax advantage.
Or, albeit with nterest rates being so low, depending on your current mortgage, I might pay off some, but I'd think what I'd be tempted to do is buy a second home where you could do holiday lets. This would not necessarily earn alot of money but could cover the mortgage payments and you could take holidays there yourself. This would lovely if you do eventually have children too.
As you dont 'need' the money, you could alternatively invest in a new business. You must be prepared to lose it though. But there are many budding entrepreneurs for whom that cash would be a huge help. Again research would be needed but I'm sure there are organisations that do pair investors with businesses.

LadyLoungeALot · 15/10/2020 08:03

I'd put £25-30k into the mortgage or savings, and blow the rest on stuff you really want.

TheTeenageYears · 15/10/2020 08:20

As you already own a home and particularly because you say it isn't your forever home BTL is a bad idea. As a home owner already there is a 3% stamp duty surcharge on the whole purchase price on any subsequent property you purchase - not too bad at the moment if you could complete by 31st March as it's likely to be the only stamp duty payable. However, once you also own a BTL, the home you live in, should you wish to move, also becomes liable for the additional 3% surcharge on the full purchase price and the house you live in is likely to be a much more expensive property than the BTL. The alternative is to form a company and but the BTL in a company name but that brings it's own set of issues/hassle/cost.

BlueJava · 15/10/2020 08:23

I'd take it straight off the 180k mortgage, the 50k will save you a lot of money in interest over time.

bluelamps · 15/10/2020 08:28

I have just managed to get out of being a landlord having been one for the whole of 11 months.
I will never ever be a LL again.

Anyway glad I got that off our chest.
We are similar demographic to you. We personally always leave £50k in the bank for rainy days. Of which a rather big rain cloud came our way this year so it is always good to have accessible cash as well as investments. We don't pay off the mortgage with it as we can afford our mortgage and would rather have the cash right now but I understand people doing this.

Are you planning to have dc? If so, consider school fees if you plan to go down this route and putting the money towards future fees, school is the one thing if anyone falls into financial hardship that is not so easy to just say oh well we will have to get rid of school because dc tend to get attached to school and it's very disruptive to pull them out.

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