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 ?

I'd buy a house by the sea with a couple of little outbuildings I could develop and let out (our mortgage is already paid off so we could sell this and put towards it)

We got an inheritance

We paid off any debts
Went on a long overseas holiday with our kids
Bought a larger car that we needed for cash
Upgraded things around the house that needed upgrading
Put some money aside for each child
Paid off school fees
Paid off our mortgage but left the money in our offset account so if we needed to access it for anything we still could

"Stop and breathe". Great advice. Don't do anything in a rush. Put the money in NS&I where it is secure, enjoy the interest for a few months, and make your own decisions.

Put it all in a savings account for now so that it’s working for you while you ponder.

Personally my priority would be the mortgage (and any other debts), then invest a chunk in a long-term investment for secondary school fees - bear in mind you’ll probably need to allow £125k for this (5-7 years of fees, uniform, trips, etc), so maybe invest £100k with the plan of it rising to cover the rest over the next 7 years. Of course if you want private at primary too that’s going to cost even more.

If you don’t have a pension I’d also be looking at investing something for yourself too. Whilst it’s nice to help out family, etc you shouldn’t do it to the detriment of your own, and your immediate family’s future.

Mortgage and school fees/uni/house deposit fund for DC
And some fun. Set some aside for an amazing family holiday when DC are old enough to enjoy it.

Travel for now bliss

I don't know how long it's been since you came into the money but for me I'd sit and wait, firstly to let it sink in I'd now actually got that amount and secondly so I don't make any knee kerb decisions.

My end goal though would be to be mortgage free in a location where I really did want to be.

I would pay off debts and mortgage, put aside money for an emergency fund like the 6 months suggested, then invest.

This

( but a nice holiday too)

I don’t have DC so mine would be

Pay off mortgage (10% of your amount)
Have a FABULOUS extended holiday
Save/invest the majority
Continue to have fabulous holidays for the foreseeable future.

Depending on your mortgage and how much private schools are around you...they might wipe you out even with £500K.

Near me the 'good' local private is £26K a year for day. £26K x 7 = £182K if you add trips/uniform/extra circs you're probably closer to £200K That's senior school only. The 'average' privates are £18K a year. So closer let's say £150K over seven years including extras etc.

With that in mind, I wouldn't give any to charity or friends/family - you'd be surprised how quickly people become grabby when they realise you've inherited money. It's grim.

Personally...I'd pay off the mortgage. Then if I had more than £300K left, I would stick £200K away for daughters education (up to uni - she can get a job at uni like everyone else) and then do £50K on house improvements/holiday and bung £50K in premium bonds.

Play it safe.

Edit: £50K in premium bonds...not £50 😀

There is a lot to be said for being mortgage-free. Do that, give some money to your chosen charity, and put a stiffish chunk into a fund for your dc for education or to help them get a foot on the property ladder. Don't forget that you may end up with more kids, so bear that in mind too.

Spend some on cheap but fun things, and top up your pension.

Haha I just couldn’t , I love work

Thank you all

youre all so sensible ! Speaking to an advisor and taking it from there. I am a landlord already but on a ridiculous leasehold place - still mortgaged , this helps and then I need to sell and perhaps invest in a freehold but not all of it

premium bonds sound interesting and ISAs seem a good option.

I don’t really need to move and moving doesn’t guarantee entry to best states as they are all massively oversubscribed where I am - the private schools are small, independent and this may just cover the increase in VAT fears i had, locking over 100k on top of that gives options into secondary / uni

I won’t be telling people as I’ve seen money and jealousy do this to other people -

it really is amazing when I think about it how it can easily disappear

make your money make money is what I’ve always known. With way less! So will work to that principle

but I may have just booked a luxury summer holiday too :)

If you want to make more on property I would highly suggest buying up north prices are cheaper and you can use the rental yields to build up money for more. When they don't need repairing that is lol 😆 rents are less here but still extortionate haha but with no interest to pay on a mortgage that would even itself out. If i were to come into the money you have it's what I'd be doing with it without a doubt

Which towns ? I was thinking midlands as i am north London based

If you are putting it in savings accounts remember to spread it out across banks, the ones where your savings are protected, £80k per bank ( to allow for interest before the protected limit is reached)

Buy a house for my brother who's struggling.

Buy a bigger house with a bigger garden. Let’s say I’d need £300k

Put a decent lump away for each of my three kids for a house deposit. £150k in total

Plan some nice holidays. £50k

Based on what you’ve said I wouldn’t spend it on private school fees. That’s just my personal opinion. Enjoy experiences and a nice home with your child instead. Good luck!

Further north is even cheaper, Liverpool,wigan, widness. Blackpool is cheap but I wouldn't recommend it because its also fairly deprived. Liverpool is really good for rental because it has 2 universities and the housing is relatively cheap to buy. It has major teaching hospitals so doctors need properties and it has the dental teaching hospital so dentists aswell. If you own the properties outright and your renting to proffesionals or students you can be fairly confident of getting the rent and good tennants. It's what I would do, but it means buying either close to the hospitals or universities or somewhere in between but on transport routes to both

Given your distant location it maybe worth using a rental agency to over see the property, do 6 monthly checks handle applications, deposits etc for a share of the yield. But you could build up quite a large portfolio in a relatively short amount of time.

This is a really sensible breakdown of spend , yes I imagine attitudes on private schooling dictate a lot on spend here - even on being a landlord

what’s happening to me !

I'd have a nice holiday then split the rest between my 3 DC and foster son and 2 DGS's. I've got enough for me and so has DH. No point letting it just sit in the bank when the younger generation could use it.

This is just one example... right in the city centre. All the buy to let landlords are selling up 😆

https://www.onthemarket.com/details/14482308/

There are cheaper ones aswell but they may need a bit of work.

As I said in my edit though given your distant location I'd definitely use an agency to look after everything vetting tennants, deposits rents etc for a share of the yield.

It’s really not enough to be paying off mortgages and school fees and uni fees and still expect to have some left.

get some decent financial advice. I inherited more than that. I cleared the mortgage and had a holiday and the rest is invested, still more than yours. It dropped in value after Covid and is currently about 10% up on the year.

i would be reluctant to spend much of the capital unless you have a decent pension and ate confident you’ll keep it going.

being mortgage free leaves you with much more spare cash monthly and keeping the rest gives you choices but unless your schools are terrible I wouldn’t pay school fees

Where did you invest ?

i should add my resident mortgage is 150k and my buy to let covered , school fees 200k
im a high earner too and there’s other savings , so just how to play it - thinking tax implications too