18K Lump Sum Received - what to do?

helpwithmoneyplease

Just wondering, any advise on what I should do after receiving 18K lump sum? Pay off the mortgage, invest in an ISA, put some away for the children? Help? Trying to find the best option possible.

xylophone

An emergency fund earning as much interest as possible is always useful - you can use high interest current accounts for this.

Do your children have CTF/JISA? You might wish to contribute?

You might wish to contribute a lump sum to your pension?

If you are paying more on the mortgage in interest than you can earn in interest, and there is no penalty for early repayment, you could consider paying off a lump sum.

You could consider a stocks and shares ISA.

You have plenty of choice......

Sam_J12

It is impossible to know without knowing a bit more about your finances and attitude to risk. If you don't need the money for another 10 years then I would probably shovel it all into a stocks and shares ISA before paying off the mortgage, as this will likely give you better returns in the long terms compared to avoiding the mortgage interest.

bigfreddiel

You need to prioritise each option and decide which is most important to you and your family.

Once you know the 'what to do' you just need to figure out the best way of doing it.


Cheers fj

kidmugsy

If you are paying higher rate tax, a pension contribution to let you avoid it might be wise. But first get yourself an emergency fund of, say, six months' worth of outgoings. Remember that next year you will be able to earn £1k p.a. of interest free of tax (£500 if a higher rate payer).

JeDi

It really depends on your situation. If you don't know anything about financial markets but still want to get more profit than from a regular bank account, you can look for mutual funds or ETFs. Index-funds are good because of their low commission, but they also bring very modest return on your investment. kidmugsy has a great point on the emergency fund, and I also agree with Sam_j12. Stocks are great in terms of profit but you need to know how to choose them. If I were you I would do the following:
1) Set aside an emergency fund — this can go to your savings account
2) Invest part of the money into a very reliable asset (equities may be)
3) Decide which part of the money you are ok to risk and use that for a riskier and thus more profitable investments (stocks, currencies, etc.)
I started stock trading with a small amount of money and invested a lot of time into my financial education as Kiyosaki advises. Currently I'm half way to financial freedom but there is still a lot to learn...Take your time and don't rush to put the money anywhere before you feel confident, but also don't be afraid to make mistakes — this is how we learn!

bigadaj

JeDi wrote: »

It really depends on your situation. If you don't know anything about financial markets but still want to get more profit than from a regular bank account, you can look for mutual funds or ETFs. Index-funds are good because of their low commission, but they also bring very modest return on your investment. kidmugsy has a great point on the emergency fund, and I also agree with Sam_j12. Stocks are great in terms of profit but you need to know how to choose them. If I were you I would do the following:
1) Set aside an emergency fund — this can go to your savings account
2) Invest part of the money into a very reliable asset (equities may be)
3) Decide which part of the money you are ok to risk and use that for a riskier and thus more profitable investments (stocks, currencies, etc.)
I started stock trading with a small amount of money and invested a lot of time into my financial education as Kiyosaki advises. Currently I'm half way to financial freedom but there is still a lot to learn...Take your time and don't rush to put the money anywhere before you feel confident, but also don't be afraid to make mistakes — this is how we learn!

All fine but why mention currencies?

It's fine to make mistakes and we all do, however forex trading is a great way to lose money for ten average punter.

Also the idea of stock picking is controversial, most people would stick to funds until they had significant amounts to investment unless they wanted a little play/ gambling money in the side.