What to do with £50,000

Flakjack

Hey Guys,

My grandmother has kindly left me £50,000 in her will, a sum which I'll recieve later this year once the estate is settled.

I'm 31, I have a £35k salary and my partner currently spends the days looking after our twin sons (meaning that I'm supporting the whole family on my salary).

We have around 7k of debt (mostly car and credit cards) and I have around 60k to pay on my mortgage.

I'm hoping to use the money to secure some degree of long-term financial independence for my family, my current plan is to:

- Pay off car loan and credit card debt (£7k)
- Buy a cheap overseas property to run as a rental/Air BnB and to run photography trips out of (£20k)
- Invest £1000 into cryptocurrency (after significant research)
- leave £500 in standard bank account as an emergency fund
-Invest the remainder into ISAs (approx £13k)

Is this reasonble? Would paying off my mortgage be a better plan? Any other suggestions?

masonic

Hopefully it won't take a significant amount of research to enable you to remove one of those items from your list.

xylophone

- Buy a cheap overseas property to run as a rental/Air BnB and to run photography trips out of (£20k)

Invest £1000 into cryptocurrency (after significant research

:eek:

You're a braver man than I am, Gunga Din.

Get rid of the debt, (£7000) emergency fund in interest paying current accounts (TSB/TESCO) joint and sole - up to £15000, then consider a gift to the JISA for each child, lump sum off the mortgage,
stocks and shares ISA and continue to contribute monthly?

https://www.vanguardinvestor.co.uk/investing-explained/invest-with-us?gclid=EAIaIQobChMIr8SfibLb2wIVFvhRCh1zDgOiEAAYASABEgIUqfD_BwE

http://monevator.com/using-vanguard-lifestrategy-funds-life/

AimHigh

Personally I would say that £500 is probably a bit low for an emergency fund, especially with (at least?) 2 children to support. I think people tend to recommend around 6 months of expenses to cover any unexpected bills (boiler/car breaking) or unemployment etc.

Edit: that being said, there is often some debate around keeping that much in pure cash given it's not often needed so may be worth putting it in easy access savings/regular savers rather than just a current account.

When you say say invest 13k in ISAs do you mean cash ISAs or S&S ISAs?

beckysheffield

Where is the Airbnb? Because it sounds quite low...

Terry_Towelling

Are you after financial independence or security?

Cryptocurrency (about which I know next to nothing) is seen as high-risk and something that could even be outlawed in some areas - not something to base a secure future on presumably.

Definitely clear the car and card debts.

£500 as an emergency fund doesn't seem like a lot - did you mean £5K? - perhaps try for 6 months worth of bills as an emergency fund (in an interest earning account).

Is £20K enough to buy somewhere overseas and run as a business? If marketed well (at a cost) you could probably get some seasonal income from it but there would be costs associated with buying, running and administering such a business. Also you have a full-time job and two children to raise with your partner - will you have the time, or do you intend to quit work and run your business full-time instead?

You probably didn't mean to imply anything in your original post but everything sounds very single-handed in your financial world. What does your partner feel about your plans? Is the mortgage all yours? Is the house all yours? What would you do if you lost your job or if your relationship failed? If your relationship is solid and you believe it is sure to stand the test of time (and child-rearing) you first need to make sure you both have some legal right over the property (if you don't already, that is).

Apologies if you feel I am straying from the point into areas that are none of my business but some things need to be sorted before branching out too far into areas that carry significant risk.

Whether you need to put money into ISAs or other types of investment/accounts is a moot point but if you don't need to worry about taxation on interest/gains just yet you may be able to go for better-paying accounts.

Pensions is another area where you might be able to improve your family's stability and receive a wodge of tax-relief into the bargain.

Reducing the mortgage divides opinions on this forum. I definitely would because it has an immediate effect on your financial well-being. Others will tell you to invest/save and use the gains/higher interest return later. You haven't said what your mortgage rate is but if you are typical of many others asking the same question on this forum you'll be on a low(ish) rate for a few years and then subject to an uplift. Perhaps, servicing more of your mortgage debt at a lower interest rate would be sensible from a family-security point of view and would cushion you to some extent if rates rise later in the term.

Call me a conservative killjoy (or any other name you fancy - sticks and stones) but I think you should be looking closer to home with this windfall and think about branching out when it's stabilising effects have got you on a more solid footing. Don't risk too much with just one income and two children to bring up.

Best of luck with whatever you decide.

kidmugsy

Flakjack wrote: »

My grandmother has kindly left me £50,000 in her will ...
I'm 31, I have a £35k salary and my partner currently spends the days looking after our twin sons (meaning that I'm supporting the whole family on my salary).

We have around 7k of debt (mostly car and credit cards) and I have around 60k to pay on my mortgage.

I'm hoping to use the money to secure some degree of long-term financial independence for my family, my current plan is to:

- Pay off car loan and credit card debt (£7k)

Almost certainly a good idea.

Flakjack wrote: »

- Buy a cheap overseas property to run as a rental/Air BnB and to run photography trips out of (£20k)
- Invest £1000 into cryptocurrency (after significant research)

Rather you than me. But then you may be qualified by interest and expertise.

Flakjack wrote: »

- leave £500 in standard bank account as an emergency fund
-Invest the remainder into ISAs (approx £13k)

Nah. I agree with an earlier view: keep far more cash and get 5% on it - that will (surely?) exceed the interest rate on your mortgage loan. Take ample time to consider whether investing, rather than saving, is for you. Meantime, do you contribute enough to your pension at work to get the max employer contribution? If not that would perhaps be where to start investing.

Also calculate whether paying off some of the mortgage would give you access to lower interest rates on your mortgage loan next time you renew your mortgage. If so you may want to overpay at renewal time, so again hold back cash and get the best interest rate you can on it.

Zorillo

I also have twin sons, and if £50k fell into my lap I'd be building an extension to house their toys in.

traineepensioner

Flakjack wrote: »

Hey Guys,

My grandmother has kindly left me £50,000 in her will, a sum which I'll recieve later this year once the estate is settled.

I'm 31, I have a £35k salary and my partner currently spends the days looking after our twin sons (meaning that I'm supporting the whole family on my salary).

We have around 7k of debt (mostly car and credit cards) and I have around 60k to pay on my mortgage.

I'm hoping to use the money to secure some degree of long-term financial independence for my family, my current plan is to:

- Pay off car loan and credit card debt (£7k)
- Buy a cheap overseas property to run as a rental/Air BnB and to run photography trips out of (£20k)
- Invest £1000 into cryptocurrency (after significant research)
- leave £500 in standard bank account as an emergency fund
-Invest the remainder into ISAs (approx £13k)

Is this reasonble? Would paying off my mortgage be a better plan? Any other suggestions?

Not advice but this is what I would do.....:o
-Clear any high interest debt.
-Increase pension up to max employer contribution.
-Build up safety net of at least 6 months income in the highest interest accounts you can find.
-Use your ISA allocation for a diversified, multi asset fund (DYOR)
-Research child savings/isa/lisa accounts and allocate a sum of money for the twins.

Thrugelmir

Will the OP return to expand upon their choice of investments? Or is this another one post wonder. Increasingly of which there any many.

victoria263937

Hi, i personally would pay off any existing debts andpay even just a small lump sum off the mortgage just to knock off a few years and definitely have at least 6 months in the emergency account for bills, we are currently going into month 7 of husband being on sick after an accident, luckily we have managed to get an interim payment from the insurance company as it wasnt his fault but if it was something else and he was just off with ill health we would be screwed. I would also put a small amount in a savings account for my daughter, just something to start her off when shes older.

We will be having this discussion next year when husbands claim is settled