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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:
Greenpop21 · 02/01/2020 17:06

So sorry for your loss. I lost my DM when I was 44 and that was bad enough. I think you don’t have to make any decisions yet. Take your time and wait until you feel a stronger urge in whatever direction. Good luck!

TheReef · 02/01/2020 17:07

Congratulations 🥳

I'd always recommend buying a house, there's something to be said about always always always having a roof over your head. Even if it's not in an area you're not sure you'll stay in.

Greenpop21 · 02/01/2020 17:09

Please stop congratulating!Shock

lalafafa · 02/01/2020 17:09

Dont go near premium bonds, waste of money. Park it for 6 months then have a think. I received a reasonable amount from my DF’s estate in cash. I’ve splurged quite a bit. I’m due another large amount when his house is sold, I’ll invest that.

Disfordarkchocolate · 02/01/2020 17:11

I'd take my time. At my age, that amount would be amazing. At your age and after the loss of your Mum it's much more complicated. I think a good 6 months to think things over would help, perhaps a good holiday or two. Think about career, do you have a good career path, if not use this money to get there. If you can use it earn more in the future it will be a great investment of your Mum's love for you.

AnotherEmma · 02/01/2020 17:18

I'm very sorry for your loss Flowers

This depends on house prices where you live, but if you can afford it I would suggest that you buy yourself a 1-2 bedroom flat that you can live in now. If you later decide to go travelling or move, you could always rent out or sell the flat.

I wouldn't spend it all on that though, perhaps £10k or so on travelling (not sure how long it would last, maybe 6 months if you're careful with budget and do a bit of work as you go along??) and also some of it on something to treat yourself and remember your mum whenever you use it - this could be a watch, a piece of jewellery, a piece of artwork, a DSLR - whatever you're into.

Lastly, if you want to make a career change, you could use the money to fund any studies or training that are needed. Only if there's a likely job at the end, though.

These are big decisions and you don't need to decide straight away. Perhaps you could put it in a high interest savings account for now, get some bereavement counselling and give yourself plenty of time to decide.

Flowers
lpchill · 02/01/2020 17:22

If you live in an area that would buy a 3 bed semi for that money I would invest in a property and have lodgers for the other two bedrooms- you can rent out rooms under a certain amount a year tax free. I would do the travelling especially first then look to maybe study to get a better job. The money from the rent would help offset

FagAsh · 02/01/2020 17:23

So. Sorry OP, you must be devastated at such a young age. You're living through my worst fear. Flowers

Marinetta · 02/01/2020 17:23

I think that this money gives you the opportunity to retrain/ gain additional qualifications so you can find a job you enjoy. I don't know what you want to do but you could go to university, pay for additional training, work part time to allow you to explore the areas that interest you in your free time, take the plunge and find a new job knowing that if it doesnt work out you can just quit as you aren't dependant on the income.

Myimaginarycathasfleas · 02/01/2020 17:26

So sorry for your loss OP.Thanks

I don't know if his helps but as a parent I'd want my DC to have the security of a home first and foremost, so I'd hope they would invest in property. I'd hope they could use the income from it, or the rent they were saving, to do the fun things that they wouldn't previously have been able to afford.

What do you think your DM would have wanted for you?

CanIHaveADrink · 02/01/2020 17:31

I would do nothing atm.
And then take time to think about what you really want to do with your life.

£200k is a lot of money. It can buy you a house outright where I live. But it’s also not that much money, and certainly not life changing amounts that will allow you to stop working for example.
So take your time. Ask yourself what you would love to do if money was no object. What sort of job would you like? Where would like to live etc...

Also remember that buying a house doesn’t mean you can’t move ever again.

RebelWithVerySharpClaws · 02/01/2020 17:34

Its a good sum of money but not life changing. If you stop working it will only keep you for a few years. If you are in the UK property is a great investment, you don't have to live in it.

SynchroSwimmer · 02/01/2020 17:44

ISA - Put this years full allowance into a Stocks and Shares ISA, now, before April year-end, then add the same amount again in April at the start of the next FY.

Property - buy a small family home as a rental/investment/income generator - possibly easier to sell later, than a flat might be...bigger demand from families.

Like the great idea upthread of using 6 k for 6 months travel and volunteering (if I was young again I would go and work for Neilson Beachclubs for a summer beach season...Croatia or Greece) while I planned my future.

Beware who you tell, or if friends and you feel you have to divulge something, make it a much lower, modest/different figure (I had a “friend” approach me speculatively for funding to open a business after a sudden bereavement, and another soliciting a loan - despite there being no notable inheritance! - I found if people have your inheritance information, they will have their own subconscious judgements about it and it colours their own thoughts about you)

Lastly, maybe the most relevant, make a list of all the things you liked to do, enjoyed, played at, did well at and thought about as a child - revisit those things and think about how they could be built into your ideal future life.
(e.g. I was chuffed when my Dad taught me to swim and then built my confidence in water - and now in middle age a major part of my life is happily “exploring swimming pools of the world”

Sorry, that’s not a humble brag, just an example of realising only at age 40, that the things I like in life, were the things I actually liked when I was very small.

2018SoFarSoGreat · 02/01/2020 17:48

OP I lost my mum almost a year ago. I'm 61 - and I'm still reeling from it.
Flowers and a hug, if you'd like one.

Please don't do anything rash. You are not in the right state of mind to make big decisions. Park that money in a safe place for now. Perhaps a holiday would be good - a new place, somewhere that allows you to just be you, and feel safe and comforted.

I worry that if I were to go anytime soon it would mean a huge life changing inheritance for both my DC. Lovely as it sounds, it is a big responsibility and so easy to misuse, during the worst of the grieving times.

FreyaMountstuart · 02/01/2020 18:06

Be sensible and safe with most of the money - premium bonds / isa / bond whatever.

Then go travelling you don’t need that much money (£10k - plus access to a bit more as a fall back). You can get a one year Commonwealth visa for Oz, New Zealand and I think Canada - you can work with these visas. My DC1 did this and had a ball - and also had some interesting jobs which added not detracted from his CV (he has also spent 50% of his time ‘on holiday’ all over the world).

Good luck, take care and have fun! Nobody wishes they’d spent more time in work!

Henlie · 02/01/2020 18:11

As many others have suggested, I would be buying a property to either rent out in its entirety- which will give you an immediate return on your investment.

Or buy a property to live in with at least two bedrooms and then rent out a room.

Good luck with whatever you do Op. So sorry for your loss.

CheddarGorgeous · 02/01/2020 18:21

Just a word of warning re investing in property. It does require active management and is an illiquid asset.

Can you combine travelling with working abroad so you have fun/experiences but also get some work experience?

Dubya · 02/01/2020 18:27

Sorry for your loss OP Flowers. It does afford you the chance to make some changes if you hate your job. In honesty I would go travelling for a few months and get clarity on what you want to do, perhaps there are other jobs you will enjoy more that you haven't considered yet; and even if not, you won't be in a worse position career wise if you are really unhappy where you are. If you wanted to study you have a while to decide for entry in Sept. I would definitely take some time and not be in a rush to decide what to do with it, earmarking a large portion of it to go towards a house whenever you decide you are ready to buy would probably be sensible.

ruralcat · 02/01/2020 18:34

Buy A house. It doesn't have to be the one for you. Something cheap to rent out so you've always got a monthly income. Although 200k seems a lot to you it will disappear very quickly so I'd be cautious about spending too much of it on throwaway things. A long holiday and perhaps a luxury item you wouldn't have considered buying before.

Oakeyy · 02/01/2020 20:56

I'm sorry for your loss. I think travelling would be great for you, combine it with some volunteering to build skills, perhaps discover a potential career, adds to your CV and will allow you to meet people. You never know where you might end up. Take a good chunk, say 10k and travel slowly, overland, south East Asia (cheap) and maybe even working in Aus/NZ. Easily pass a year, or more, on that money. Then see where you stand. Quite a hassle buying a house to let (if the tenants are not great etc) just wait a year and you might feel differently, or feel like buying and settling somewhere. Obviously put the money somewhere it will build interest. Santander 123 account could be a good current account for interest rates whilst you're away. Or another decent current account.

Flowerpot26 · 02/01/2020 21:33

I'm really sorry about your mum. I'm 35 and lost mine 4 months ago. I was left 100k, so been having the same thoughts as you. Alhough I'm married with a baby.
I'm desperate to escape and travel and have some head space but I'm not able to with my commitments.
I would just take a step back, breathe. Travel and try to smile again. Think about what you want to do your so young you can retrain as anything. I would try to make the money work for you by investing in your self and career, also you could probably put a really big deposit down on a house when you know. Take care xx

Thesuzle · 02/01/2020 21:46

Yes sorry for your loss also. But I would advise that you do not go telling all and sundry in real life about this money, it will bring out the worst in some people and you are rather young to be burdened with all that hassle.
I would not waste a fee on a Financial advisor.
I would, 10k or so premium bonds.
An ISA
Some stocks and shares but only those in the top 100. You have years to play the long game in the stock market.
Career investment is a very good idea,
A bit of travelling but not years at a time, everyone I know who did this found it very hard to settle to anything after
Buy a flat
Good luck and happiness (your Mum would wish it so)

AnotherEmma · 03/01/2020 07:42

I find it very ironic that so many people are telling the OP not to "waste" her money on a (qualified) financial adviser while just dishing out random financial advice!

ivykaty44 · 03/01/2020 07:57

Friend of my dds has just had a gap year priced up, with accommodation and flights - one way round the world it’s around the £3k mark and an I terrain ticket included at the end

I travelled for 11 months when I was younger, it was always a talking point in job interviews when I was younger and never looked upon as negative

If I was in your shoes

I would put the money into 4 Different accounts paying as much interest as possible

Think 2% is about top rate you’ll get

I wouldn’t see a FI as they are making money for themselves regardless of whether you do that’s my opinion and I’m sceptical 🤨 but if you do go down that route ask for time

Go and travel for a year, see then what you want to do, as travelling may give you other ideas

House prices don’t always rise, so there is not a rush to buy property at the moment

I’d keep 80% of my inheritance untouched and go and have fun

If people in RL ask, you inherited £20k

Sorry for your loss

GOODCAT · 03/01/2020 08:26

Sorry about your loss.

I would keep it in liquid assets so bank accounts, premium bonds until I had decided what to do.

In terms of making the most of it overall I would invest in my career first and foremost. I would use the rest to buy a house once ready to do so. I would also set aside some money to travel, but would fit that in around studying or an apprenticeship or whatever you need to do to land that new career. You will find a useful gap somewhere before you buy a house.

Overall though take your time. It is absolutely fine to sit on it for as long as you want. It is better to do that than to rush in during a very difficult period.