Moneymakeover €50k inheritance - advice?

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vincentgav

Registered User
Messages
113
Age:
38
Spouse’s/Partner's age:
41

Annual gross income from employment or profession:
€63,000
Annual gross income spouse:
€62,000

Type of employment:
Full time, permanent, professional.

Expenditure pattern:
Trying to save, doing ok, own home around 4 years.

Rough estimate of value of home
C. €500,000
Mortgage on home
€320,000

Other borrowings – car loans/personal loans etc
€5400 per annum.

Do you pay off your full credit card balance each month?
Don’t have one.

Savings and investments:
€5,000 savings only.

Do you have a pension scheme?
Yes, I pay €500 per month, employer matches 7%. Half of that is AVC, I’m considering upping this next year but cost of living gone up.

Do you own any investment or other property?
No.

Ages of children:
None.

Life insurance:
No.

What specific question do you have or what issues are of concern to you?
I’m looking at getting a lump sum of €50k, from my neighbour, Lord rest him. I helped him for a few years, took him shopping the odd Saturday morning, cut his grass, etc, he’s left me a sum, after tax it’ll be around €50k. The house etc goes to his son.

This wasn’t expected, I’m confused as to what to do with it.

I have a pension, I’m paying into that regularly, but as my Dad reminds me, his pension dried up a lot after the crash. I’m reluctant to throw it all into the pension for reasons of access, etc.

I know I can’t leave it as cash. I don’t want to pass up the opportunity to grow this into wealth, I’m convinced this amount must be a good starting point.

I’ll never come across anything like this again, how can I grow this lump sum? What are some good suggestions?
 
vincentgav said:
Other borrowings – car loans/personal loans etc
€5400 per annum.
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What is the nature of these borrowings?
Remaining term(?), balance(s?) and interest rate(s?)?
Almost certainly you should use the lump sum to clear such loans.

Next might be maximizing your and your spouse's pension contributions and maybe paying the mortgage down.
 
Wow, what a lovely gesture from your neighbour, they must have really appreciated all of the things you did for them
The obvious suggestion like what @ClubMan suggests would be to clear the term loans and lump sum to the pensions and or pay down a bit of the mortgage, maybe keep a small amount as a emergency fund or just throw some or all of it into a ETF, so many options
You could also look at any improvements to the house you've been thinking about that might need doing but haven't had the funds

But one thing I would do is buy something to remember this person by, if it was me I take a couple of grand and buy a piece of art or an ornament,
or something for the home like a really good set of delph or cutlery or even a set of Le creuset cook ware, if you have a garden, a nice patio set
I'm not just suggesting things that you would get years if not a lifetime of enjoyment from but every time you use them you'll remember the kindness and generosity of the neighbour that most people will have forgotten about
 
Cervelo said:
Wow, what a lovely gesture from your neighbour, they must have really appreciated all of the things you did for them
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Thank you, I am speechless to be honest, I couldn’t have ever thought it was coming. He was a pal, during the summer I’d get him a few cans of Guinness and we’d sit in the garden, chatting. It meant as much to me, to be honest. The son was gracious with me about this all thankfully, I did feel a bit guilty, but then I only saw him there twice in the last 4 years.

That’s probably good advice to clear the loans, however I can handle them for now. My reason being here is if I simply vanish it into debt clearance and pension, then where do I go? Yes it’ll help, but maybe that’s a tad too safe to play it?

I’ve never been that ambitious but a friend who is a big investor thinks I should seize the opportunity, he mentioned ETFs. Is it as simple as getting an app, or should I talk to someone?
 
vincentgav said:
That’s probably good advice to clear the loans, however I can handle them for now. My reason being here is if I simply vanish it into debt clearance and pension, then where do I go? Yes it’ll help, but maybe that’s a tad too safe to play it?
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It makes little financial sense to have €55K in cash and to be borrowing at the same time. Unless, perhaps, the interest costs are marginal. But you haven't clarified the nature of your borrowings (e.g. remaining balance, term and interest rate).

Pension contributions are a very tax efficient long term investment. And the long term tax free compounding is hard to beat. Assuming that it's invested appropriately - usually high or all equity fund or index tracker.

There are lots of existing threads on non-pension investment options such as ETFs, shares, unit linked funds etc. You should probably do a search for and read some of these.
 
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Sorry, it’s 2 years left, car loan and home improvement.

There’s €12k there in the balance, I think 9% or just below.
 
Haha, thanks. Truth is my neighbour was sound, he was very funny and he was no trouble, I always liked chatting to the old timers anyway, hearing how it all was.

I think the debts is the main thing, then the pension. Maybe I’ll get myself something as recommended here, thanks all for reading and the input, I appreciate everybody’s busy mind yourselves!
 
vincentgav said:
Sorry, it’s 2 years left, car loan and home improvement.

There’s €12k there in the balance, I think 9% or just below.
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You should clear this and you'll save probably a couple of grand in interest that you avoid paying. That's like a return of 17% on €12K which is somewhere between hard and impossible to beat over a short period of time.
 
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Two acts of lovely kindness when you often only hear negative stories around inheritance. Agree with a poster above who mentioned you should buy something tangible in memory of your friend.
 
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