What would you do if you came into a large sum of money ?

[Amy8]

As the title suggests , I’ve come into a large sum 500k + and being someone who hasn’t come from money but has worked really hard I wasn’t expecting this , I don’t know what to do! I know I know , first world problems- I want to do the below

• invest in property maybe move
• pay off mortgage
• give to some to close family and charity (a cancer charity close to my heart)
• pay dd school fees (she’s only 4) and was considering private - the money allows me to do both above

or

• spend on holidays and new cars, an extension we’ve needed And leave most of the above (not charity bit),

What would you do ?

Pay off mortgage and use the rest for school fees (if you were already considering private) and invest the rest.

I really wouldn't invest in property.

Look at the vast number of threads on here where it's gone wrong with tenants.

I wouldn't spend the money on private education either. I would buy a house in an area where there are really good schools instead.

I’d pay off the mortgage, set aside enough for school and uni fees and invest the rest.

Pay off mortgage and save the rest towards retirement and child's future needs

Clear debt
pay off mortgage
invest in a high yield fund, your money should double roughly every 7 years look up the effect of compound interest and the rule of 72
lock money away. Just spending £15 a day on non essentials comes to over £5k a year. So easy to fritter away without ever really trying!
if you want to go indie for schooling, invest and look in 7 years time when she is ready for secondary.

To start with nothing. Put the money somewhere safe, getting a bit of interest and stop and breathe. I'd say this to anyone but especially if you've come into it unexpectedly.

Then sit and work out amounts and your priorities. Sadly 500k can disappear quickly these days.

How much is your mortgage? Do you live your place, would you stay there regardless? If you'd move where to, how much are houses there?

School based on answers to above. So does moving give you state options? What are the prices of private and how have they been increasing over recent years? What are secondary options like, as is there a good combination of state and private for primary vs secondary? Who is your DD where would she be happy? Will you have more kids?

Investing in property can be great for return but being a landlord is increasingly a pain in the arse, do you have the time and inclination to be one? Speak to a couple of financial advisors or find one highly recommended by friends. There are other options for investment that don't come with the workload of owning a property.

Huge number of questions and frankly answering them may raise more but take stock of your situation before you decide anything.

Sorry just saw you wanted to give some to family. Honestly - tell no one. Money ruins relationships. Just sit on your hands and work/pension/etc as normal. Just knowing you have a huge backup will bring a lightness in your life.

Avoid paying as much tax as you can, so put £50K in Premium Bonds and £20K in an ISA. Pay off mortgage, have a few nice holidays and invest the rest. Generally I agree with a PP that money ruins relationships - will the money you’re planning on giving really feel like enough to those people? Will other people resent you for not giving money to them (and so on).

I'd pay off mortgage. This would free up quite a bit of money to pay for school fees anyway if you're continuing working.

If you want to move. Maybe move and pay cash. But i wouldn't go crazy on the size of new house. Somethinf nice and maintainable.

Anything left over i'd save. Maybe get advice of a financial advisor. I'd want to keep some for pension years to allow me to retire early.

I'd also have some fun money. So keep some aside for a few nice holidays, maybe a car.

Retire!

I wouldn't do anything for at least six months, and I definitely would not tell anyone you have inherited this money. You need time to think, and the reality is £500k is not that much money in the grand scheme of things. You need that money for you and your future and your child.

Don't rush into any decisions. Don't tell people. Take a pause, put the money into savings accounts whilst you take the time to research and make a good plan.

Initially either put the money into NS&I (fully backed up by the government) or split into different savings accounts (less than 85k in each so your money is safe if the bank fails). Plan to spend about 6 months deciding what to do.

You've listed lots of things you might do which will use up a big chunk of your pot. Extension or new house, private school fees, family gifts, holidays. Think carefully about whether you want to spend the money, or invest it so that your pot grows and you can spend the growth rather then depleting the pot.

Investing can mean the stock market, or property, or a mixture of both. The meaningful money website and YouTube videos have a lot of information about sensible long term investing. They also offer paid for courses to learn. Definitely do several months of research first, don't rush into any decisions. Even if you prefer to use a financial advisor you should research investing first to be able to identity good advice from bad!

I would only invest in individual properties if you have knowledge and experience in this area, and time and energy for this.

1. Pay off mortgage/debt
2. Have 6 months of family income in savings/investments. It is very freeing (a fuck it bucket if it will). If your boss is difficult one day there is security in having the money.
3. School fees.

The rest holidays/ extension/ just reducing the pressure.

Mortgage-free house and school fees, no question.

Congrats OP and enjoy it 😊

Eliminate any debt from your life before making any big spends.

I’ve also heard that if you win the lottery you are told not to make any big lifestyle changes (moving house, etc) in the first 6 months. Maybe pay off your debts and then sit on the money for a while while you work out your priorities. If property - Would you rather work ft and buy a turnkey or drop hours and buy a fixer upper?
what would make you happy really?

definitely invest, now is a good time. Stocks are low (due to election) so will only go up up, good time to put in!

thanks.
editing to say I don’t know why I put thanks at the bottom like I was writing an email 🤦🏼‍♀️ sorry! From a sleep deprived mum!

I would pay off my mortgage and I'd probably make sure I travelled somewhere nice each year and keep the rest invested because I haven't got a pension and it's too late to start one.

Def pay off your mortgage, its an incredible feeling and massive security. Then use your full ability to pay into your pension (you can backdate 3 years to use the full amount you can contribute and get basic rate of tax added - this does need some advice though). Then full ISA for this year for you and dd, and a full premium bond holding (its safe and pretty much instant access plus tax free).
Then put the rest £85k at a time into the top performing savings accounts (look on Money Saving Expert and Money Supermarket and don't do anything else for 6 months to a year while you settle into having this amount and can make considered decisions as this will impact the rest of your life and your dds life if managed well. Def don't give it away immediately or commit to an extension or moving. Maybe have a nicer than usual holiday so you feel like you've benefited

How much mortgage do you have left? I would pay that off and keep a years expenses in an accessible ISA and invest the rest but not in housing. Also what is your pension provision like?

I would laugh and sing and run into a fountain and dance in my living room in glee.

Congratulations on your windfall!

I’d buy a house in a really nice area with good schools.

If you are happy with your current house and location, then buy a bigger house or do the extension.

I wouldn’t necessarily pay off your mortgage if there isn’t much left on it. You might already have paid off the majority of the interest anyway.

Personally I’d pay for private if the state schools aren’t great which I’m presuming they aren’t when you are already considering private.

Then save some in your name and some in your daughter’s name for a house deposit. The reassurance you will have from knowing you have money on hand will be lovely.

Pay off the mortgage (check for any early redemption penalties and compare to how much interest you'd otherwise be paying). Then put the money that you would have been paying the mortgage with aside each month or increase your pension contributions.

Then invest the money somewhere that you could earn a decent rate of return.

If, for the sake of argument, you could put £250k away and earn 5% on it, it would get you £12,500 a year, which would make it last longer when paying school fees.

I would do something though to make it feel like you've "treated yourself" with it though too, whether that be a family holiday or a nice piece of jewellery that you'd never usually buy yourself.

But mostly, don't feel guilty about coming into the money!

Retire

Retire from full-time job. Literally would not even give notice...I would just not go back. end of.

Pay off mortgage. Set aside most of the rest for school fees and university. Have a nice holiday.

In your situation
Pay off mortgage/other debts
Save some for school fees/further education
Do the extension if it would add value to your life
Invest some
Put some aside for a fabulous holiday and/or something you really want (I would get a campervan and explore the UK)