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 ?

Definitely pay the mortgage you will save thousands and thousands in Interest and be secure for life.

Stick 16k thousand in an ISA per year for good interest. Open a lifetime ISA if your young enough and put 4k a year in that to earn 25% extra on top for retirement.

Don't waste money on cars the devalue so quickly, if you want a nice car use pcp and spend your old mortgage money paying that.

1 holiday of a lifetime for you all.
Set an amount for investment and Stick to it, do your homework before you invest and be prepared to lose it so not to much.

Personally I'd buy a few houses aswell 1 for each child in the future and plan to keep them long term. I'd buy outright if possible and then if the rent stops flowing it's no biggie just evict them. Get renters insurance for any damage/ unpaid rent. Then once the kids are grown they get a full house each.

Stick it in an interest account... 5%... means every year you make 25k.

Do that until you're say 50. Then retire.

Mortgage and school fees
spend 10K on a holiday

School fees from reception to y13 will wipe out quite a chunk.

How much is left on your mortgage?
What is your pension provision?

Pay mortgage down.
Get ISA.
Perhaps move to an area with a fantastic state school as private school is going to become prohibitively expensive, taxed and openly discriminated against.

@Mummy2024 where are you buying a few houses for 500k?!

Buy a bungalow.
Give some to my parents and siblings.
Get a more suitable car.

Kier Starmer will take the rest as it's not been worked for, at least by me.

You could get 3 2 beds where I am for about 3 hundred k. North West. Flats you can get for 70k

MrsKwazi
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.
I have people in my life that work their ass off and live paycheck to paycheck because they help people out, pay care fees etc, there is no way I wouldn’t land at their house and tell them I could give them some breathing space!!!

I’d sell my current home and buy a better one for cash. Upgrade our 13 year old car. Then pause and start thinking about what’s left.

And I live In one of the most expensive areas aswell further north you go cheaper it gets

It depends on your circumstances I guess. I'm retired so I'd probably give some to my son and daughter, take close friends on a nice holiday and maybe move house.

I wouldn't give sums of money to family members -
A - they don't deserve it
B - whatever amount you gave them wouldn't be enough and they'd quibble over why someone else got more than they did

Then I'd blow the rest on some really nice holidays

I'd pay off the mortgage, buy a new car and book a really nice holiday for me and my two kids. I'd also pay for contractors to do all the jobs in my home that I struggle to do. I'd set aside maybe £3k for a splurge on personal items. The rest would invest for pension purposes. It must feel overwhelming but I hope it's life changing for you!

Oh and pay off my daughter's student loan and invest part of it for house deposits for when they are both ready.

They should use a lifetime ISA if under 40 before using standard Interest accounts. A massive 25% interest accessible upon retirement. Can only deposit 4k a year though and stops at age 50

We live very frugally but pretty good on a combined wage of 50k up north with 1 dependent and 3 adult kids. I would definitely put some aside for the kids. We would absolutely sell up and move to a better area and if younger kids, one with better state schools. Couple of little new cars. Couple of good holidays. 50k would do that. A bigger house here... easily done for 250k. We could do lots and still have a good bit of change left

No, you wouldn’t make that much because of the tax on the interest to be paid.

Re investing in property - social media is awash with wannabe influencers telling everyone to buy up buy-to-let properties. What they don’t talk about is how illiquid, tax inefficient and time consuming this is. I use a financial advisor in a big firm, and when I mentioned the possibility of investing in property, he told me that out of a hundred or so partners in his firm, only one has direct investment in property. And they do this for a living…

Pay off mortgage.
Pay off any other interest-accruing debt.
Sort out schooling fees.
Treat yourself to That Thing You Always Wanted But Couldn't Afford.
Top up pension / pension credits (your future self will thank you for this).
Put the rest into savings as a rainy day, emergencies fund.

Remember that you don't have to spend it all at once (or at all)!

I would invest in ethical investments, apart from anything else.

Clear all credit cards, loans, debts.

Either pay of mortgage and extend (if you like the area, neighbours etc) OR move, such that save losing job and having to move there's no reason to move even once retired and you need a live in carer.

I would then install solar + battery, ground source heat pump, insulate and triple glaze so as to make the house running costs as minimal as possible (you'll thank yourself later).

Top up pensions.
Speak to a financial advisor, Invest some in a growth fund, some in safe funds, and a little in easy access should you have to eg buy a car.

Buy something as a treat preferably one that will gain in value eg gold, jewellery - I just bought a couple of original paintings I really love from a lady who has very very recently been recognised for her talent, so her prices will go up but haven't soared just yet - she has just won a commission which will draw even more attention to her work once complete. I was toying with the idea of buying one but decided on two as I'm sure a sound investment and what's more I can enjoy her artwork on my wall, knowing it's likely they'll gain in value in the longer term.

I would have a little splash, nice holiday this summer for example.

Not tell anyone.

Think , gather info, plan

Probably:
Move to a house that suits in a nice area with access to everything I need, local shops, public transport, good schools, easy for work. Go mortgage free but not buy a house in excess of my needs.

Pay attention to my pension. Put in a sum, or plan to redirect mortgage payments into pension. Look into the tax benefits of paying into a pension .

Look for a good junior ISA for Dd and put a wodge in there for her in the future. Maybe put a full whack of Premium Bonds in her name. Or yours - for now, you can liberate them later.

Look at ways to best save for and fund for school fees if this is what you really want to do…or to have the money as a backstop if you get in a mess with state options.

Look at best way to manage the rest. Savings accounts: rates are high atm but you will be taxed on interest over £1000 (£500 if you are a high rate tax payer), ISAs are tax free. Premium Bond winnings are tax free.

In cash savings minus tax you could be making £20k Pa at current interest rates on £500k.

How much is your mortgage? What balance?

Concentrate on long term security, contentment and ability to fulfill ambitions.

Retire and move to warmer climes.

pay off mortgage and retire

I'd speak to an independent financial advisor- they will talk through your goals and what you want out of life and then advise you the best way to use the money to achieve the life you want. Not very expensive (might even be free if you're a member of a union or similar) and absolutely worth it to know your money is helping you reach your goals