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Original poster

What to do with a big inheritance

79 replies

fortheloveofmoney · 02/01/2020 16:23

I've just inherited 200k. I knew roughly what I'd be getting but I earn 20k a year so this is literally life-changing for me. I'm planning on seeing a financial advisor but I don't just want sensible advice about pensions, investing and mortgages.

What would you do? I'm 25 but I don't want to buy a house because I hate my job and I'm not sure where I want to "settle down". I suppose if I hadn't inheriting anything I'd be doing the normal thing of moving where the jobs are, working my way up the career ladder and slowly figuring out what my life would look like, but I'm also very tempted to just sack the job off and go travelling, but then this would leave me with crap career prospects when I eventually came home.

I don't think there are any "wrong" answers so feel free to tell me what you'd do, whether it's advice or a fantasy. I am so privileged to be in this financial position but at the end of the day my beloved mum is dead and I'd do anything to have her back.

OP posts:
Original poster
fortheloveofmoney · 02/01/2020 16:27

Reading this back I'm worried it sounds like a massive humble brag, I really hope it doesn't come across like that. I'm so sorry if it does or if this is the wrong place to ask, it's just the reason I'm posting is that I don't have any close friends I could trust with this and I daren't tell any family members.

OP posts:
OnlyFoolsnMothers · 02/01/2020 16:27

I'd purchase a property- if I went off travelling or relocated Id rent it out. I say sort the bricks and mortar before worrying about investments that could go either way.
Maybe take a portion to train in something you would like to pursue a career in?

beelzeboob · 02/01/2020 16:29

This reply has been deleted

Message withdrawn at poster's request.

Pipandmum · 02/01/2020 16:30

You still will be working your way up the career ladder etc.
I would take the weekend to really think about what you want out of your life - what career would you love to have. (Or say travel to a place you've always dreamed of and do some deep thinking there). Then use the money to get yourself trained or educated in order to do it. The rest of the money I'd put into some sort of ISA or account that earns decent interest so you can eventually use it for a deposit on a property or to set yourself up in the new career.

beelzeboob · 02/01/2020 16:34

This reply has been deleted

Message withdrawn at poster's request.

torthecatlady · 02/01/2020 16:35

Firstly I'm sorry for your loss, I lost my mum at around the same age and it's awful.

Hopefully someone will come along with some helpful advice for you.

I think you're being sensible about seeing a financial advisor as although it's a lot of money it would be quite easy to squander it over the years and not have a lot to show for it at the end.

If you're managing your bills well at the moment, I would personally look into ISA's and put it all away (maybe keep a small amount in an accessible account for emergencies).

Although you've mentioned that you don't want to buy a house due to your career and moving around, have you considered buying a small property to rent out in the meantime?

What do you think your mum would've liked for you? My dad died earlier this year and although he would've liked for me to have financial security to live mortgage free, he would have also liked for me to enjoy the money such as going on a holiday. Probate is still ongoing, but we will pay off our small mortgage and book a holiday to remember my dad as he was passionate about travel.

peachypetite · 02/01/2020 16:36

I would have a think about what you want to do career wise and retrain?

ThePittts · 02/01/2020 16:37

Maybe premium bonds, think you can put a lump sum of £50k in and it is easily accessible

Kannet · 02/01/2020 16:38

Just don't make any rash decisions. Take your time and make sure your mind is clear. The first tear or so after a bereavement can be a very confusing time

Goawayquickly · 02/01/2020 16:42

Personally I probably wouldn’t see an FA but stick 50k in premium bonds and most of the rest in a mix of an ISA and highest possible deposit account, maybe a one year bond for a bit extra. Probably 10k on a nice holiday/car or pay off any essential bills or make essential purchases.
The money would definitely be earmarked for a house and out of salary I’d try to add to it for stamp duty/furniture.

I’m sorry for your loss.

mclover · 02/01/2020 16:44

Go travelling for 6 months. Come back and retrain in something that will pay me better long term in a location I'd like to live in. Rest I'd save and then buy a property when ready.

user1471449295 · 02/01/2020 16:46

So sorry for your loss OP.

I agree with Goawayquickly

converseandjeans · 02/01/2020 16:46

Premium bonds
ISA
Set up pension fund
Spend £20k on a year out travelling - you will never get that opportunity once career kicks in

It might be worth looking at buying 1 bed flat too - prices just keep going up & unless you buy in a dodgy area you won't lose money & may make some?

TalbotAMan · 02/01/2020 16:49

At 25, £200k won't keep you for the rest of your (expected) life, unfortunately. The best you can do is make your life that bit easier going forward.

Your choices boil down to save or spend. The best way to save at the moment seems to be to buy a property, as neither bank deposits or stocks and shares have been giving great returns. That said, £200k won't buy you much of a house in most of the country these days.

You could use it as a cushion so you can retrain for a job in which you'll be happier. You could treat yourself, but if you do then, as they say, when it's gone, it's gone.

LizB62A · 02/01/2020 16:49

I agree, no need for a FA at the moment.
Stash it away in Premium Bonds, ISAs, £5k into a Halifax savings account to get into their monthly draws.
Set a limit for your "gap year" or whatever you end up doing.
Then, if you're still unclear, see an FA then - you might even have worked out what you want to do then Flowers

Puppy78 · 02/01/2020 16:51

Rather than travelling if you hate your job could you retrain? Rather than taking 6 months out, I'd take a week somewhere that will give you time to think about your future. You could even invest in a coach or careers advisor to help you think about what might work.

I'd also look at potentially buying a rental property with some of the money and talk to a financial advisor about what to do with the rest so you can use it as a deposit at some point.

holly40 · 02/01/2020 16:51

So sorry for the loss of your mum.

Personally, while it is a fair sum of money it isn't a huge amount in the grand scheme of things - if you do want to buy a house eventually. I'd keep it in an account where it will earn some interest, and use only the interest to pay for luxuries such as travel.

On 20k p/a getting a decent mortgage won't be easy and I'm not sure where you are in the country but £200k wont go v far for a nice home. I wouldn't want to frit any

HunnyMummy1993 · 02/01/2020 16:51

Sorry for your loss OP.

I have one thought here and that’s DONT rule out property. I had the chance to buy when I was in my 20s and didn’t because I wanted to travel.

I did travel, I spent 3 yrs abroad, working my way round Europe and the Far East and met several people who were using the profit on a rental to supplement their travels. The plan was to give notice to the Tennant at end of the travels (in each case the Tennant was happy that this was a short term thing —eg students) and go back to U.K. having somewhere to stay whilst they considered their next move. I know one did sell the property and bought one in a better location. Tbh the stress of setting up again on my return would have been eased if I’d known I had somewhere to go.

So, yeah, I regret not buying something. Took ages to get on the property ladder when I returned.

holly40 · 02/01/2020 16:53

Btw. I am 29 now. I inherited £ and bought a house when I was 24. I have now bought a second. It can be a good investment and allow you more flexibility in the long run!
Sorry to sound so boring 🙈🙈

filka · 02/01/2020 16:54

Depends on what part of the country you are in, but with £200k you could probably buy a 1 bed apartment which could earn you rent of around £800-900 per month. Although taxable, it's extra money which you can add to your salary, bank for a rainy day, use for holidays etc.

And the value of the house whilst it may go down as well as up, should always stay in line with the property market generally.

Really this is a small business, so best to treat it like that. My advice would be to use an agent to manage everything for you. They will charge a higher (tax-deductible) fee (typically 10-12%) but it's worth it for the lack of hassle. They also have access to contractors to do maintenance.

Good luck with your windfall.

Purplewithred · 02/01/2020 16:57

Lock up half for future property purchase or whatever.

Sack off the job and travel for 6 months, but ideally do some volunteering while you're at it so you have something to talk about at interviews further down the line.

invest a little bit in private career counselling. Between the travelling, volunteering and career counselling find a career you will really enjoy.

Spend some retraining to fulfil that career.

Spend £10k on something really extravagant. DSIS and I have a small shared pot from our Mum, and every couple of years we have a lovely weekend away somewhere really nice or go shopping and buy an expensive handbag or pair of shoes or go out for an expensive meal with it. Mum would be delighted.

Babybel90 · 02/01/2020 16:58

Remember to spread it across a couple of banks as you’re only protected up to £85k if the bank goes bust!

I’d probably have a really nice holiday somewhere exotic then use the rest to buy a property and focus on moving up the career ladder. As you won’t have rent or large mortgage payments I’d start paying into a pension now.

ym10146 · 02/01/2020 17:01

Sorry for your loss.

Don't rush. Take your time to work out what you want to do. Like you said, it's a life changing about of money for you and you won't get it again.

Long term property is a good one, even if you don't want to live in it, get something just as an investment that can hopefully give you a return long term but also a monthly income. Pension and ISA's.

I'd definitely travel, you have the option to have flexibility, but you don't have to spend loads to have an amazing time.

Enjoy.

currentlyavailable · 02/01/2020 17:02

Where I live 200k would buy you a 3 bed semi in a decent area. I'm in the south east. So that amount of money would be life changing for me also!

I think do a bit of everything you want! Definitely go travelling, you will only regret not doing it and it's harder as you get older and gain commitments. But I would also seriously look at property too!

Babymamamama · 02/01/2020 17:05

Buy the house for sure. You don't have to live in it you could always rent it out. Stock market too risky and interest rates too low to make investing an option.