Spend it, Save it or invest it? That is the question?

nowhere

Hi,

I have recently received a lump sum of an inheritence about £125K.

Looking at the current saving accounts and ISA's schemes it doesnt seem they offer much of a return.

I have paid off all loans and c/c, but still have a mortgage of around £150k.

Should I :-

Spend it?- You only live once, treat the family, enjoy the holidays and buy a nice toy or 2.

Save it?- Nothing like sitting on some savings for that just in case of emergency fund, interest rates are very poor at the moment

Invest it:- Not an area of my expertise, maybe pay off the mortgage quickly or buy some Gold as it appears to be doing well. I would worry about fluctuations going up and down. Also having access to money quickly helps pay off those bills you forget about, car insurance etc.

Any advice would be greatly received.....

What would you do?

:beer:
NW.

bryanb

Pay down the mortgage!

torbrex

pay the mortgage, it worked for me

claireabelle_2

I'd do all three! Pay a large chunk off the mortgage (£100k?), have three months' income in an emergency fund and then definitely have a nice holiday. If the mortgage is paid down and you don't reduce the term, your payments should drop, too?

xtinataguba

id refer save it! it is always better to have a savings. specially on emergency cases. we would've have know what will happen in the near future. but its alright to spend, but not so much. save at least 70% of it.

dealer_wins

If it were me I would also try to take in to account what I thought the person who left the money to me would want me to do with it.

Consumerist

What rate are you paying for your mortgage? If it's more than you can get in savings then paying off some of it sounds like good sense (if the lender will allow it).

Investing can bring better returns but think of the risks. That said, £125k should get you a fairly diversified portfolio.

gadgetmind

I'd use some to get a cash buffer (£25k?) pay the rest off the mortgage, but then start dripping what I've saved on mortgage payments into some investments for the future.

Exactly what kind of investments depends on your age and current pension provision.

Linton

As gadget says, but, assuming the interest rates are say 3% or less, pay off half of the mortgage keeping the repayments the same, and then put more into investments: his & hers pensions and/or S&S ISAs. OK, I will allow you £5K for a good family holiday.

nowhere

Thanks for all your comments. It looks like the majority seem to side with paying off the mortgage.

A very sensible bunch.

Dealer wins makes a good point.

I would ideally like to get a bigger house. Should I use the money or the house as my collateral

opinions4u

nowhere wrote: »

Thanks for all your comments. It looks like the majority seem to side with paying off the mortgage.

What rate are you paying on it?

I would ideally like to get a bigger house. Should I use the money or the house as my collateral

Do you mean borrow more? If paying off the mortgage is the right thing to do, borrowing more isn't.