What to do with a big inheritance

[fortheloveofmoney]

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.

Buy a small property - it doesn't have to be your forever home. It will make a big difference to your life being rent free/small mortgage. You can rent it out when you travel.

I inherited a similar amount a few years back, and wasted several grand on a FA who advised me to invest all of it in shares (which didn't do well) which I later sold and then bought a second property. So I agree with PPs that a FA not necessary for an amount like this.

I would seriously look at a possible property slump before buying a property if you are not going to live in it yourself.

Why would you then buy a property now if you could buy the same property a year from now at either the same price it less

Humble brag? Losing your mother at 25 (same age I lost mine) - quite three opposite of a humble brag.

Financial advisor if you don’t want to buy. Simple as that. But get recommendations for a good one

Independent Financial Adviser. You'll know all of your options and can then make an informed decision

I am so sorry for your loss op. I think in your shoes I would take £175k to buy a property- I live in the SE also and within 10 miles of me it would be enough to buy something outright. I am not sure what your living situation is at the moment but you could rent it out and it should at least cover the maintenance etc whilst hopefully going up in line with the rest of the property market.
You could then split the remaining to go travelling- that would be £12k and would be enough to travel for several months in Asia, Africa or Central America. The remainder I would then keep as an emergency fund (£5k) and the rest towards retraining in something.

Firstly

Make sure you understand what investments you make

Put the legwork in and do your research. None of it is that difficult but it does require sitting down and studying it 😅

Look on MoneySavingExpert

See an FI

Visit local banks and see what they offer - you will get free advice and it will help you understand what's on offer

Don't do premium bonds - see MSE above for details. They have changed. Read up about them

Don't tell anyone or as few people as possible

Retraining would be good

You've hopefully got another 80 years of life so think long term!!!!

Depends where you live but a house or flat might be good??

Personally I'd only use a little for travelling Or a treat - maybe £5,000. Might be tricky depending if you want to travel alone or with friends. If you have spare cash and they don't then it could be awkward.

Don't tell any prospective boyfriends!! 😉

I'm very sorry about your Mum.

Sorry about your mum.
At 25 and not enjoying your job, I'd stash most of it but absolutely go travelling. I went travelling several times in my mid - late 20s and they were the best times if my life in many ways. You can do it cheaply in many countries. Where do you want to go?
You could literally go now and then come back and retrain.
Buying is a good idea, however, no need to buy outright, you'll just have a fab deposit to put down - depending on where you live.
Its definitely enough money to enjoy some of as well as being sensible which I'm sure your mum would want you to do.

I agree, keep it quiet btw!

Condolences on losing your Mum. 25 is young to lose a parent these days . You say you hate your job. What about seeing a life coach or someone similar to see what your options are in terms of changing career or doing training that will get you a job you enjoy? I think it would be better to do that and then decide if you still want to travel. As other posters say, Premium Bonds are a safe way to put money away. You can afford the maximum investment so your chances of winning are higher. Martin Lewis says premium bonds are not not the best way of saving (and has done the sums to show he is right) but they are simple and easy to manage. Do you have a pension? All very boring but obviously it’s important to make the most of this amount, even if you do do a bit of travelling etc.

YY to not telling friends. I had one particular friend who knew, (they asked some very bold questions while I was half-mad with grief, and knew the amount in question) and we no longer speak because they were thoroughly taking the piss.

If you don't want to buy a house to live in I wouldn't buy a house (£200k would buy a period 3 bed in a nice area here but our last such house didn't increase in value over 15 years of ownership so beware, everywhere is not like London, our S&S over the same period did much better). Speak to the FA and have a mix of investments: some S&S, some bonds, some cash, a LISA etc. Keep 5 % to fritter on travel or a new car or retraining or whatever your Mum would like you to enjoy. DH got a small inheritance from FIL and we spent it taking the DC to a place FIL loved, think doing something in memory of your Mum is important too.

When you are ready to settle down then buy a property.

I inherited 350k at the end of last year, when I was 25. Honestly, buy a property. I travelled for about 3 months and then bought, I don't want to settle forever where the house is but it's 100% a load off knowing you have that stability, and you can rent it out, or sell it come the time you want to move, use it for a bigger mortgage, use the spare money for travel or hobbies or just living.

Its a huge privilege that most people will never get, to own a home outright. If rather have had my grandmother alive and well, it's not an easy feeling, and I'm so sorry for your loss, but if a house is an end goal for you, at any stage no matter location, it would be the best advice I could give you. I pissed away a lot of it before I bought.

Sorry for your loss op

I wouldn't get premium bonds they are very secure but don't offer much return.

If you don't want to buy a house I would split the money up with some in riskier investments and others in more safer lowing paying ones.

I'd be tempted with some of the money to try flipping (buying rundown property renovating it and selling it) a few houses so I could grow the money. However we've done this with our own houses and you do need experience to know how much work something will take and can easily underestimate how much it will all be.

As others have said split it up so you are covered if the bank goes bust. I would do that now and then give yourself a deadline when you are going to decide.

Wow, I was not respecting this many responses! Thank you so much everyone for taking the time out to give me such helpful advice and sympathy too

I've put every reply in a word doc and divided comments into property, careers, savings, investments, travel and general advice. I plan on taking my time to decide what to do and I don't want to rush anything, but I've got an idea... I think I'm going to set up a couple of meetings with different banks about the best account/s to keep the money in and put £10k aside for travelling and any experiences I might like to have this year. I'm also going to quit my job and do as much volunteering as possible as hopefully it'll give me a clearer idea of what I might like to do? It's a really rough plan but it means I'm not committing to anything and the money is safe while I consider investing it in property. Because of where I live, I will likely need a mortgage to afford a place, so I don't plan on buying a property until I find a job I'm happier in.

I'm going to carry on working as normal until the end of Jan, possibly Feb, so I'm not making any rash decisions. The only thing I'm 100% sure of is that I want to find a career I enjoy and make my Mum proud. I know she would want me to be happy but I want to treat her money with respect too.

If anyone has any opinion on my current plan then please feel free to let me know! but once again a huge thank you to everyone for sharing your thoughts and personal experiences too.

And @torthecatlady @Greenpop21 @2018SoFarSoGreat @Flowerpot26 @lovemenorca I'm so sorry to hear that you've also lost your lovely Mums and @Flyingunicornsmyass your grandmother too, it's devastating and it doesn't matter how long you had with them, it's never enough time.

Definitely enjoy some of the money travelling, you can't put a price on those experiences. I'm sure your mum would want that for you and who knows you might end up settling somewhere completely different. Good luck 👍

Hi OP. While 200k is a lot of money, it won’t keep you forever unless you buy a home or make some shrewd investments.

Buying a home is arguably a safer investment as you can get income from it or pay off the mortgage on it while you travel and then come back to (hopefully) a home that is worth more than when you bought it.

Property is key here imo. You don’t need to spend it all - if it was me I would decide if I wanted to travel or not and if I did, I would put down enough deposit to pay the mortgage and have some left over (ie put enough down so that the repayments are small but you can charger higher rent).

If you squander this money on cars or shopping or holidays I would bet good money on you being 30 and feeling deep regret. A home you can sell if you want to move and the money is, generally speaking, still there, or increased. If for some economic reason it decreased in value, you still have a home.

On 20k a year you’d be a long long way off a decent home without this money. Use is wisely!

Also very sorry for your loss xx

I’m sorry for your loss - but your plan sounds very sensible - so be happy and I wish you all the best 💐

Personally I would invest in property as that's what as made me the most money over the years. I would also save some for travel/holidays as that's what most of my spare money goes on.

Have a look on money saving expert and ask there. There are lots of posts about inheritances. I’d reiterate advice about taking stock, reading up on investing and not being too hasty. Please also don’t tell too many people. There will always be someone that will try and take advantage and it may skew your friendships.

£200k must sound a lot but it isn’t enough to set you up for life so as tempting as it may be to splurge or to live off the money for a while, you may well run the money out quicker than you think. Your plan to find a career you like sounds sensible and a positive use of some of the money but I’d be wary about just volunteering. It would be very easy to deplete a big chunk of money through day to day living especially if it takes a while to find the dream job.

Hiya OP, im so sorry for your loss. I lost my mum at 24.

Wih all honesty, I would take a small chunk - say £5-10k and go travelling for a year or two. You could work abroad, teach, have some incredible experiences and figure yourself out.

With the other £190-195, I would look at buying a property for sure. Im not sure where you live. Ideally it would be a property near you or in an area you know. There are many areas when £190k could get you a nice flat or even a house. Cardiff, Newcastle, Lincoln, Leicester and places near Gatwick for example. Places like this will only go up in value. If you were to buy a property outright, then you can count on the income until you choose to sell your home.

With a flat, there will be maintenance and general upkeep costs to consider.

I inherited my mothers home and have rented it out now for many years. It is 3 hours away from where I live. I like knowing that on top of what ever I earn, I always have an income from the home. There is a bit of faff with hmrc returns etc, but the security it gives you is life-changing. I have left jobs, knowing I have an income to pay my bills ( I was renting at the time). I have travelled and known money would be coming in to the bank whilst I was away for 3 months.

It really depends what you want to do. It is a lot of money. You are making the right choice to see a financial advisor.

I’m so very sorry for your loss.

If I were you, I’d keep 10-15% of the money, and use the rest to buy a place where you could easily find a job in your field (if you have no ties to the area you live in), or a place to rent out if you do. It would provide an income and some security for your future, whatever you decide to do. I’d probably look in to the possibility of splitting it and put down a hefty deposit and taking out a btl mortgage if the numbers stacked up, depending on location etc, so I could keep at least one providing an income for the rest of my life, especially if you want children at some point.

The other 10-15% I’d split down the middle, one half to Savings as a rainy day fund, and the rest I’d spend on whatever will bring you joy, and give you some space to process your grief.

Sounds mostly sensible however....

Put 50k in premium bonds while you wait. You can access it whenever you want and it's a safe place. Safer than the bank. And you might just make some extra off it and get lucky. You can do this now on your computer!!

Whilst peoples advise is sensible re property it does depend where you are. A lot of places are stagnating and you need to be careful, we are due a drop. Also if you do get a property don't get one that's been done up, get one you can do something to and add value. Easy to make several thousand right there esp if you aren't working, and research the area and past prices on rightmove and haggle!!

Maybe Buy yourself something nice, jewelry, bag, something. A present to keep from your mum.

Don't pay for advise, it's not enough money I'm afraid.

Depending where you live.. buy a house and travel. 100%

I would buy a terrace house somewhere nice and rent it out to help when were old, I would move house now, we'd have quite a decent deposit from the sale of where we live now so would possibly be able to buy with cash then it would mean we could save quite a bit without mortgage payments, a holiday and just save the rest.