WwYD with this inheritance?

[BarrenFieldofFucks]

We/DH are shortly to be inheriting. Approx £125k in the next few weeks and then same again thereabouts in a few months after probate etc.

Current scenario is that DH works, I'm shortly getting back into work after nearly 9 yrs out. Starting as a TA but may go back to teaching or child minding. He has a well paid career but doesn't love it any more, and is thinking of retraining or buying a small business.

We have a moderate mortgage of around £130k which is less than 50% of the value, and need to extend in the next few years as the kids get bigger.

We have seen a local business that is well known for sale for approx half the inheritance, but it would be very labour intensive and a bit of a risk.

One idea is to pay off the mortgage and extend, paying off all other debts and putting say £10k in a rainy day fund somewhere and that's that, inheritance done but limited outgoings, security etc, greater flexibility for dh to do something new and can borrow against house in future if needed.

Or, I wondered about paying down the mortgage etc as above but leaving about £50k out, in an offset mortgage or similar, so there is a fund there for any business opportunities.

All of these are nice and safe, which appeals. But we don't know of we should be thinking bigger/riskier? Investing any? Buying a BTL?

What would you do with a substantial (to us) inheritance?

I’d pay off the mortgage. Being mortgage free is life changing in itself. Then when you have the second instalment you could think of extending, some investments etc. I’d get proper advice but certainly wouldn’t be making any quick decisions ie buying businesses etc.
Let it sink in over a few months.

Here's a really good (American though) financial podcast where one caller has the same dilemma:

affordanything.com/195-ask-paula-i-make-168000-per-year-and-spend-5000-per-year-whats-next/

If I were in your position I'd pay off the mortgage, but that maybe says more about my attitude to debt than your situation.

That's where our instinct is taking us. If we had reduced outgoings he has far more flexibility to potentially retrain or whatnot. I'm late 30ies and he is mid 40ies, so we have years of work ahead.
Thanks for the link, I'll have a look.

Having your own business is hard hard work, DH’s is s real strain on us all.

I would pay off your mortgage and enjoy life more for a few months with your new extra monthly sum ?400ish and then see how you feel.

I'd do the extension and pay off any non mortgage debts first, or just move to a larger house. After that you'll know what you've got to play with in terms of DH starting his own business or buying one, or paying off your existing mortgage.

Pay off mortgage

Don't buy a BTL

Don't buy a business which you already feel would be a negative experience.

Pay off mortgage

Pay off the mortgage and save the rest. I was a business owner for 12 years and the work is relentless. If the business struggles, that amazing inheritance you are so lucky to have will be gone in the blink of an eye. Your husband should get a new job, not take on a risky business venture.

We were in a similar position. We paid off the mortgage although that was only about 40k, due to have an extension and I have been able to take a less stressful job which has meant a better work/ life balance.

I'd definitely pay off the mortgage and possibly get an extension if I were you. Would this give your DH the chance to look for a less stressful job or reduce his hours?

Pay off the mortgage and do the extension. If you only have to pay your living costs, then your DH could retrain?

It must be such a relief to pay the mortgage off - can't imagine the freedom!

Pay off mortgage and set aside some to help your children.

I don’t think I’d be risking substantial amounts of money on a business. Maybe allocated a few grand if your husband wants to start small and grow it from there.

I imagine that with your equity in the house, you probably have a very low interest rate so I’d probably keep the mortgage (or maybe paid it down a bit).

I’d use most of the money to invest. For example, you could probably do with more money going into your pension? Even if you don’t work, you’ll get a government top up. Given your age, you’ll also be eligible for a Lifetime ISA (free money there too). So I’d gradually feed money into those as well as stocks and shares ISAs. If you’re not very knowledgeable, you could consult a IFA.

What experience have you got with the business?
If you paid the mortgage, what percentage of your income would be needed to cover the total outgoings left?
Could your dh change employment? Work part time and you still have enough money to enjoy life - don’t forget your income decreases and so does your tax bill..