How to deal with a large windfall of cash
Discussion
I’m a regular poster on here, but I’d wanted to keep this thread separate.
It’s likely I will be bought out of my company in the next few weeks for around £5m.
It’s a huge amount of money for me at the age of 38.
Even though it hasn’t happened I’m feeling rather strange. I’ve always worked hard for the buses and to no longer be part of is going to be difficult for me to deal with.
I am involved with a couple of other businesses so my focus will be to develop those to big level.
The reason for this thread is to reach out to people who have been fortunate to suddenly come into a lot of money or are quite well off as I don’t know:
1. How to manage that amount of money
2. How to ensure I don’t blow it
3. Ideas or experiences for investments etc. I would love to be able to use the capital to generate income and not deplete the capital.
I would really appreciate and advice and input.
Well done, enjoy the reward for your hard work.
But why wait a year?
Illness can strike at any age, I was given 5 years to live when I was 21. (proved them all wrong luckily)
And secondly, beware of financial advisers.
Some will just point your cash in the direction of what gives them the best commission.
My advice, just enjoy it.
But why wait a year?
Illness can strike at any age, I was given 5 years to live when I was 21. (proved them all wrong luckily)
And secondly, beware of financial advisers.
Some will just point your cash in the direction of what gives them the best commission.
My advice, just enjoy it.
Five million is £83,000 a year for the next 60 years that'll bring you to 98 years old.
Minus whatever you spend of course.
So if you spend two million now you'll still have £50,000 per year to live on until you're 98.
Plus interest, and minus tax of course.
So unless you plan on being really extravagant you'll be ok?
Minus whatever you spend of course.
So if you spend two million now you'll still have £50,000 per year to live on until you're 98.
Plus interest, and minus tax of course.
So unless you plan on being really extravagant you'll be ok?
Trevor555 said:
Well done, enjoy the reward for your hard work.
But why wait a year?
Illness can strike at any age, I was given 5 years to live when I was 21. (proved them all wrong luckily)
And secondly, beware of financial advisers.
Some will just point your cash in the direction of what gives them the best commission.
My advice, just enjoy it.
Thank you. Waiting for it all to go through.But why wait a year?
Illness can strike at any age, I was given 5 years to live when I was 21. (proved them all wrong luckily)
And secondly, beware of financial advisers.
Some will just point your cash in the direction of what gives them the best commission.
My advice, just enjoy it.
Stick £1M in a SIPP via someone like HL.co.uk get 40% tax relief on it and leave it to grow for 20 years. Buy a few luxury holiday let’s where you could be easily making £20k a year plus have the capital growth a free use of them yourself out of season. Buy some property in London where prices will outstrip growth elsewhere.
Otherwise open another business doing the same thing again, it obviously works for you.
But mainly enjoy it, it’s what we all strive for so why not.
Otherwise open another business doing the same thing again, it obviously works for you.
But mainly enjoy it, it’s what we all strive for so why not.
I’m the same, down to the age and amount. I wonder if we are departing the same business :-)
I had a reasonable windfall a few years ago out of the same business, and my advice would be:
- Don’t do anything with the money or make any big life changes for a while. We made some quick decisions such as buying an inappropriate house and regret them slightly now.
- Steer clear of financial advisors or anything too exotic. I wasted a bit of money through speculative investments because I felt I had to put the money to work. I’m mainly in Vanguard life strategy 60/40 now and sleeping more soundly at night. I will be drip feeding into there to avoid market timing.
- Be prepared for feelings of anticlimax. I chased the almighty dollar for years, then when I had it I didn’t really feel any better, so went through quite a low period reevaluating whether I had made the right decisions in life. Now I’ve got the money I’m actually less materialistic as it doesn’t really change your life that much.
Well done on the achievement. Not many people get to this stage. It’s a huge amount of sacrifice to get there.
I had a reasonable windfall a few years ago out of the same business, and my advice would be:
- Don’t do anything with the money or make any big life changes for a while. We made some quick decisions such as buying an inappropriate house and regret them slightly now.
- Steer clear of financial advisors or anything too exotic. I wasted a bit of money through speculative investments because I felt I had to put the money to work. I’m mainly in Vanguard life strategy 60/40 now and sleeping more soundly at night. I will be drip feeding into there to avoid market timing.
- Be prepared for feelings of anticlimax. I chased the almighty dollar for years, then when I had it I didn’t really feel any better, so went through quite a low period reevaluating whether I had made the right decisions in life. Now I’ve got the money I’m actually less materialistic as it doesn’t really change your life that much.
Well done on the achievement. Not many people get to this stage. It’s a huge amount of sacrifice to get there.
elanfan said:
Stick £1M in a SIPP via someone like HL.co.uk get 40% tax relief on it and leave it to grow for 20 years. Buy a few luxury holiday let’s where you could be easily making £20k a year plus have the capital growth a free use of them yourself out of season. Buy some property in London where prices will outstrip growth elsewhere.
Otherwise open another business doing the same thing again, it obviously works for you.
But mainly enjoy it, it’s what we all strive for so why not.
Thank you. Otherwise open another business doing the same thing again, it obviously works for you.
But mainly enjoy it, it’s what we all strive for so why not.
I think I can only put £40k per year? I might be able to go back a couple of years.
dmahon said:
I’m the same, down to the age and amount. I wonder if we are departing the same business :-)
I had a reasonable windfall a few years ago out of the same business, and my advice would be:
- Don’t do anything with the money or make any big life changes for a while. We made some quick decisions such as buying an inappropriate house and regret them slightly now.
- Steer clear of financial advisors or anything too exotic. I wasted a bit of money through speculative investments because I felt I had to put the money to work. I’m mainly in Vanguard life strategy 60/40 now and sleeping more soundly at night. I will be drip feeding into there to avoid market timing.
- Be prepared for feelings of anticlimax. I chased the almighty dollar for years, then when I had it I didn’t really feel any better, so went through quite a low period reevaluating whether I had made the right decisions in life. Now I’ve got the money I’m actually less materialistic as it doesn’t really change your life that much.
Well done on the achievement. Not many people get to this stage. It’s a huge amount of sacrifice to get there.
Thank you. I want to try and do nothing major for a year.I had a reasonable windfall a few years ago out of the same business, and my advice would be:
- Don’t do anything with the money or make any big life changes for a while. We made some quick decisions such as buying an inappropriate house and regret them slightly now.
- Steer clear of financial advisors or anything too exotic. I wasted a bit of money through speculative investments because I felt I had to put the money to work. I’m mainly in Vanguard life strategy 60/40 now and sleeping more soundly at night. I will be drip feeding into there to avoid market timing.
- Be prepared for feelings of anticlimax. I chased the almighty dollar for years, then when I had it I didn’t really feel any better, so went through quite a low period reevaluating whether I had made the right decisions in life. Now I’ve got the money I’m actually less materialistic as it doesn’t really change your life that much.
Well done on the achievement. Not many people get to this stage. It’s a huge amount of sacrifice to get there.
Speak to an IFA
That is the number ONE piece of advice on this forum https://forums.moneysavingexpert.com/forumdisplay....
They are regulated, obviously it will cost you and is there is a list out there of IFA's.
That is the number ONE piece of advice on this forum https://forums.moneysavingexpert.com/forumdisplay....
They are regulated, obviously it will cost you and is there is a list out there of IFA's.
Are you clearing £5M, or will you have to deal with HMRC after?
The suggestion of £1M in a SIPP is unfeasible immediately from a standing start, and appears to be ignorant of the lifetime allowance and subsequent tax charge. Oh, and just how s
t an idea using HL would be too...
Which is why real financial advice is a good idea.
I sold my IFA firm for a lot when 35. Tried retiring, learning golf was dull, travelling was OK, argued with the wife a lot and she ended up with half of it (!) most friends (self employed especially) had to work, so it wasn’t that much fun tbh!
I was wary of recycling cash into things that would take up time, so also grew some other businesses with a view to later exit. Some have gone well, others less so. I’m still very comfortable financially, which has made motivation for always pushing everything to the max a challenge, and I intended to learn from all of them, and probably haven’t capitalised on that as much as I could have done. Ie some have done well, but not as well as they could have done.
I am now older, with kids, which brings constraints. They want for nothing despite me desperately trying not to spoil them, but wanting to spend time with them while they want to spend time with me (!) is something i prize above any work I’ve done.
I have friends who are properly loaded- 9 and 10 fig net worths, and most either don’t have kids through express choice, or just ignore them bar leaving them occasional expensive gifts their staff have bought for the kid as time is rarely set aside by the individual. I just can’t do that. Yesterday I could have been at any number of things, events, fancy restaurants, whatever. I spent two hours jumping in puddles with my youngest. Utterly priceless.
Which is a long way to me saying time is the one thing we all struggle with, now you’re financially secure, make sure you use it wisely.
The suggestion of £1M in a SIPP is unfeasible immediately from a standing start, and appears to be ignorant of the lifetime allowance and subsequent tax charge. Oh, and just how s
t an idea using HL would be too...Which is why real financial advice is a good idea.
I sold my IFA firm for a lot when 35. Tried retiring, learning golf was dull, travelling was OK, argued with the wife a lot and she ended up with half of it (!) most friends (self employed especially) had to work, so it wasn’t that much fun tbh!
I was wary of recycling cash into things that would take up time, so also grew some other businesses with a view to later exit. Some have gone well, others less so. I’m still very comfortable financially, which has made motivation for always pushing everything to the max a challenge, and I intended to learn from all of them, and probably haven’t capitalised on that as much as I could have done. Ie some have done well, but not as well as they could have done.
I am now older, with kids, which brings constraints. They want for nothing despite me desperately trying not to spoil them, but wanting to spend time with them while they want to spend time with me (!) is something i prize above any work I’ve done.
I have friends who are properly loaded- 9 and 10 fig net worths, and most either don’t have kids through express choice, or just ignore them bar leaving them occasional expensive gifts their staff have bought for the kid as time is rarely set aside by the individual. I just can’t do that. Yesterday I could have been at any number of things, events, fancy restaurants, whatever. I spent two hours jumping in puddles with my youngest. Utterly priceless.
Which is a long way to me saying time is the one thing we all struggle with, now you’re financially secure, make sure you use it wisely.
Edited by Croutons on Sunday 16th June 22:12
My advice - speak to an IFA (or two) and also get some accountancy/tax advice. Presuming you’ve been running a business for a few years, your current company accountants (if you like them) May be in the best position to advise.
For me I would say don’t make any major lifestyle changes (big house etc) to begin with but also at the same time don’t lock up your money for a year. set aside a certain amount to “play” with - almost literally. Have fun! You’ve earned it! Buy a car you’ve always wanted, a nice watch, treat your family to an amazing holiday.
You will feel amazing for a few days or even weeks after the sale. You’ll have fun checking your bank balance and logging in to online banking. But after then you will probably be thinking - what next?
After a similarly sized exit I’ve been getting involved in a few businesses through EIS. Using deferred capital gains can be a really powerful way of using your tax allowance. I do wish I’d have rented my main property instead of buying it outright, even if for a year to see what we “wanted” out of a bigger house though. I have a couple of BTL properties for a small amount of income and I have most of my money invested in moderate risk funds. It’s nice to have the toys but sleeping soundly at night knowing we’ll be “ok” no matter what happens is a nice position for the family to be in. Keep a control of your spending and set a budget for the household.
Funnily enough my 3 year non compete expired 6 months ago and despite not wanting to end up in the same industry... I’m almost back to where I started again (but this time much better funded...) and I couldn’t be happier.
For me I would say don’t make any major lifestyle changes (big house etc) to begin with but also at the same time don’t lock up your money for a year. set aside a certain amount to “play” with - almost literally. Have fun! You’ve earned it! Buy a car you’ve always wanted, a nice watch, treat your family to an amazing holiday.
You will feel amazing for a few days or even weeks after the sale. You’ll have fun checking your bank balance and logging in to online banking. But after then you will probably be thinking - what next?
After a similarly sized exit I’ve been getting involved in a few businesses through EIS. Using deferred capital gains can be a really powerful way of using your tax allowance. I do wish I’d have rented my main property instead of buying it outright, even if for a year to see what we “wanted” out of a bigger house though. I have a couple of BTL properties for a small amount of income and I have most of my money invested in moderate risk funds. It’s nice to have the toys but sleeping soundly at night knowing we’ll be “ok” no matter what happens is a nice position for the family to be in. Keep a control of your spending and set a budget for the household.
Funnily enough my 3 year non compete expired 6 months ago and despite not wanting to end up in the same industry... I’m almost back to where I started again (but this time much better funded...) and I couldn’t be happier.
Just to add, a lot of what you end up doing will depend on your financial goals - do you need an income now, do you want one in 10 years, how much do you want to pass on to your kids? What's your tax situation? How much cash do you need on hand to fund your lifestyle? Do you have a pension? Do you intend to live in the UK forever? etc.
F155M said:
I’m a regular poster on here, but I’d wanted to keep this thread separate.
It’s likely I will be bought out of my company in the next few weeks for around £5m.
It’s a huge amount of money for me at the age of 38.
Even though it hasn’t happened I’m feeling rather strange. I’ve always worked hard for the buses and to no longer be part of is going to be difficult for me to deal with.
I am involved with a couple of other businesses so my focus will be to develop those to big level.
The reason for this thread is to reach out to people who have been fortunate to suddenly come into a lot of money or are quite well off as I don’t know:
1. How to manage that amount of money
2. How to ensure I don’t blow it
3. Ideas or experiences for investments etc. I would love to be able to use the capital to generate income and not deplete the capital.
I would really appreciate and advice and input.
But you managed your business so well and made it worth so much?It’s likely I will be bought out of my company in the next few weeks for around £5m.
It’s a huge amount of money for me at the age of 38.
Even though it hasn’t happened I’m feeling rather strange. I’ve always worked hard for the buses and to no longer be part of is going to be difficult for me to deal with.
I am involved with a couple of other businesses so my focus will be to develop those to big level.
The reason for this thread is to reach out to people who have been fortunate to suddenly come into a lot of money or are quite well off as I don’t know:
1. How to manage that amount of money
2. How to ensure I don’t blow it
3. Ideas or experiences for investments etc. I would love to be able to use the capital to generate income and not deplete the capital.
I would really appreciate and advice and input.
When I read the thread my first instinct was that if you play around with a compound interest calculator on £5m you don't need a massive or especially risky return to have a very comfortable lifestyle.
I'd have thought that biggest challenge would be optimising where the money is around allowances, wrappers, tax and all that stuff.
I'd have thought that biggest challenge would be optimising where the money is around allowances, wrappers, tax and all that stuff.
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