Large inheritance due - how best to use it?
Large inheritance due - how best to use it?
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Discussion

Riley Blue

Original Poster:

23,205 posts

256 months

Saturday 27th October 2012
quotequote all
I'm due to receive a large inheritance in the next few months, in the order of £80,000, possibly more. I have £115,000 outstanding on my mortgage and my gut instinct is to pay a chunk of it off, perhaps £50,000. In the current economic climate, is that the best thing I could do with that amount of money?

CaptainSlow

13,179 posts

242 months

Saturday 27th October 2012
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I guess it depends on what your mortgage rate is. The answers will be different if you're paying 10% or 1%. Also, any early redemption charges?

markcollings7890

130 posts

168 months

Saturday 27th October 2012
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430

Stuart70

4,166 posts

213 months

Saturday 27th October 2012
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355

Grandad Gaz

5,283 posts

276 months

Saturday 27th October 2012
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You are retired and still have a mortgage?

Need I say more? wink

PurpleMoonlight

22,362 posts

187 months

Saturday 27th October 2012
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What interest rate are you paying on your mortgage?

Maybe you earn more interest on the cash than the interest you are paying on the mortgage.

SMGB

790 posts

169 months

Saturday 27th October 2012
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Its a difficult one with the upside down economy we have now. You will get buttons if you keep it as cash and if you put in other assets like property or the stock market you could take a bath if interest rates are finally forced up as the govt loses control of inflation. The steam may go out of classic cars as well.
Given the spread between what you willl get on deposit and what you are paying on the mortgage I would pay a chunk of that off. It's a great feeling to get that millstone off you neck. When our deeds arrived in the post we walked up to the pub at 11-30 AM and had a drink to celebrate Chancellor of the exchequer fcensored you day. Still worth what it cost a decade on.

Riley Blue

Original Poster:

23,205 posts

256 months

Saturday 27th October 2012
quotequote all
Grandad Gaz said:
You are retired and still have a mortgage?

Need I say more? wink
The mortgage is in my partner's name as she still works but I consider it 'ours'.

craigb84

1,494 posts

182 months

Saturday 27th October 2012
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Everyone says that property is the best investment for cash. I disagree. I can't ever see the days where property prices are double / treble that of today's prices. Certainly not like they have for the generation before me who have basically messed everything up.

Personally I'd pay some off the mortgage to reduce the interest you pay the banks but not too much. As for the rest I'd be putting £20k into an appreciating classic car that you can use and with the rest just enjoy life. Go to Vegas, go traveling, whatever. It's boring just having money sat in account that will ultimately be de-valuing.

KingNothing

3,345 posts

183 months

Saturday 27th October 2012
quotequote all
Riley Blue said:
The mortgage is in my partner's name as she still works but I consider it 'ours'.
[cynical PH'er mode]

Don't pay the mortgage off, the house will be in her name, so when she kicks you out and moves in the milk man you've got no recourse.

[/cynical PH'er mode]

randlemarcus

13,646 posts

261 months

Saturday 27th October 2012
quotequote all
KingNothing said:
Riley Blue said:
The mortgage is in my partner's name as she still works but I consider it 'ours'.
[cynical PH'er mode]

Don't pay the mortgage off, the house will be in her name, so when she kicks you out and moves in the milk man you've got no recourse.

[/cynical PH'er mode]
[tonker mode]
Slap an eighty grand second charge on it in your name, and pay seventy nine grand off her mortgage
[/tonker mode]

spikeyhead

20,528 posts

227 months

Saturday 27th October 2012
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Invest some for the future
Save some for a rainy day
Spend what you have to spend
and piss a little


so using teh above

buy some shares, supermarkets and utilities are paying good divis at the mo
put some in an account to offset the mortgage
you needn't use any of it for this one
and buy yourself a new toy.

groak

3,254 posts

209 months

Saturday 27th October 2012
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Buy a pension type annuity with it, get paid a (ever decreasing in inflation eroding value) pittance till you croak, then it'll just vanish and you won't have the dilemma. Sensible!

tighnamara

2,856 posts

183 months

Saturday 27th October 2012
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groak said:
Buy a pension type annuity with it, get paid a (ever decreasing in inflation eroding value) pittance till you croak, then it'll just vanish and you won't have the dilemma. Sensible!
Yawn Yawn...
You don't like pensions, think everyone has the picture by now.

groak

3,254 posts

209 months

Saturday 27th October 2012
quotequote all
tighnamara said:
Yawn Yawn...
You don't like pensions, think everyone has the picture by now.
Wouldn't mind being a supplier/provider. Probably some good returns to be made there. Not so sure being a customer's got much to commend it, unless, of course, you're great at investment or some santa's putting up the cost.

Quietlybonkers

22,509 posts

174 months

Sunday 28th October 2012
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As George Best suggested (I think it was him) spend some of it on wine, women and song and waste the rest.

Seriously, life's too short, so enjoy it. Just bought my first TVR at 59 and am doing track days and having a lot of fun polishing it.

The rest of my inheritance is going towards a deposit to buy a bigger house with a grand-dad and granny annexe, so that we can live with the kids and grandkids. That way we all get to enjoy the grandkids' childhoods instead of our daughter and her husband working silly and opposite shifts just to pay the bills, and nobody enjoying the one chance of a life time to watch them grow up.

burwoodman

18,718 posts

276 months

Tuesday 30th October 2012
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tighnamara said:
Yawn Yawn...
You don't like pensions, think everyone has the picture by now.
What is good about them? The sellers make plenty. the buyers make nothing. Actually negative real returns in most cases.

jdw1234

6,021 posts

245 months

Tuesday 30th October 2012
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Just pay down the mortgage the entire amount unless you can get a risk adjusted return aftre tax in excess of your mortgage interest.


groak

3,254 posts

209 months

Tuesday 30th October 2012
quotequote all
burwoodman said:
What is good about them? The sellers make plenty. the buyers make nothing. Actually negative real returns in most cases.
Ah but that's because you don't UNNERSTAN' them. A pension's really just a tax-free wrapper...you're confusing it with the underlying investments it contains....(yap yap yap ad nauseamus...) laugh

TwigtheWonderkid

49,166 posts

180 months

Tuesday 30th October 2012
quotequote all
burwoodman said:
tighnamara said:
Yawn Yawn...
You don't like pensions, think everyone has the picture by now.
What is good about them? The sellers make plenty. the buyers make nothing. Actually negative real returns in most cases.
Not this old rubbish again. Most insurance policies don't benefit the customer financially, but that doesn't mean they don't benefit the customer in other ways. That's what so many people just don't get, you know the price of everything but the value of nothing.

I've insured my house buildings for 30 yrs. Never had a claim, and know that I probably never will. How many houses burn down? Very few. But...because i have house insurance, I can go out, go on holiday, enjoy my life. Without house insurance, I'd never go out, and have buckets of water in every room, just in case of fire. So, it's money well spent. It buys me security and freedom.

An annuity gives a guaranteed income for the rest of your life. So you don't have to worry about using up all your money. Sure, most people won't reap a financial benefit, and will die before exhausting their input, hence making the insurer money. I realise that. I expect them to make a profit, they wouldn't do it otherwise. But I might just live to 106, and if I do, I won't be potless. It's the reassurance I'm paying for.

Am I the only one who sees this? Sometimes I wonder!