How would you handle a large inheritance at 18?
Discussion
When we were about 16, I remember one of my oldest mates telling me about some money he was going to inherit from an Aunt. He never said how much so I figured it was a few £k and never thought any more about it.
Neither he or his parents were particularly wealthy and looking back, I was always a little puzzled how he always seemed to afford the latest phones and fancy trainers and stuff despite not working much but nothing really showy so I just assumed his parents were helping him out.
I recently found out it was significantly more than that - more like £200,000 - and he had full access to it when he turned 18!
It turns out what he actually did was put almost all if it into a savings account and took a small income from it, until in his mid-20s he had enough to buy a house.
I thought that was incredibly sensible for an 18 year old and it got me wondering what I'd have done in that situation. My Dad was quite financially savvy so I suspect I'd have just asked him for advice, but I doubt I'd have been able to resist buying myself something big - probably a Lotus Elise
What about you? Anyone experienced this?
Neither he or his parents were particularly wealthy and looking back, I was always a little puzzled how he always seemed to afford the latest phones and fancy trainers and stuff despite not working much but nothing really showy so I just assumed his parents were helping him out.
I recently found out it was significantly more than that - more like £200,000 - and he had full access to it when he turned 18!
It turns out what he actually did was put almost all if it into a savings account and took a small income from it, until in his mid-20s he had enough to buy a house.
I thought that was incredibly sensible for an 18 year old and it got me wondering what I'd have done in that situation. My Dad was quite financially savvy so I suspect I'd have just asked him for advice, but I doubt I'd have been able to resist buying myself something big - probably a Lotus Elise
What about you? Anyone experienced this?
Not on that level, but in 1997 one of my housemates inherited £25K at the age of 21. The first thing he did was buy a MK2 Golf GTi for £5K and then spent the rest on going to Star Trek conventions, buying Star Trek memorabilia and transformers.
That was a very decent house deposit back then, but he had blown the lot within a year and then managed to run up a massive debt on credit cards.
When I asked him how he managed to do this his response was "I'm just not very good with money". To put £25K in perspective, that was two years take home pay for me at the time.
That was a very decent house deposit back then, but he had blown the lot within a year and then managed to run up a massive debt on credit cards.
When I asked him how he managed to do this his response was "I'm just not very good with money". To put £25K in perspective, that was two years take home pay for me at the time.
Not quite the same, but back in my early 20's when I was still living with my parents I managed to save up around £10k. Ended up using it to buy a Ford Focus. Back in 2004 that would have been a very nice deposit on a flat, or at the very least I could have used it to buy something more interesting 
My two brothers and I inherited about £100k each when we were 18 from an Aunt and Uncle who died in fairly quick succession.
Aside from spunking £8k on a fairly new Ford Cougar (I know!) and perhaps another £5k on computers and general s
te, I was generally pretty good with it. Mainly because I knew how disappointed everyone would have been if I’d wasted it. I ended up spending a good chunk of it on flight training to become a commercial pilot and the remainder went into a deposit on a house. It was a decent investment and has paid off but generally I’m a pretty boring person anyway so doubt I’d ever have done anything too exciting with it. I consider myself to be very fortunate and life would have been very different (not bad, just different) without it.
My brother, on the other hand, went out and bought a flat in London fairly early on. He realised there was money in buying a dump, doing it up, living in it for a short while, selling and repeating. He’s just sold his current place for over £4 million. He doesn’t work - fair play to him.
I know a lot of people who’ve inherited large amounts of money when young and, with the exception of one friend who wasted maybe six figures on cars and casinos, all of them have been responsible with it. The only common trait I can see is that everyone is well educated and well adjusted - if that makes sense.
Aside from spunking £8k on a fairly new Ford Cougar (I know!) and perhaps another £5k on computers and general s
te, I was generally pretty good with it. Mainly because I knew how disappointed everyone would have been if I’d wasted it. I ended up spending a good chunk of it on flight training to become a commercial pilot and the remainder went into a deposit on a house. It was a decent investment and has paid off but generally I’m a pretty boring person anyway so doubt I’d ever have done anything too exciting with it. I consider myself to be very fortunate and life would have been very different (not bad, just different) without it. My brother, on the other hand, went out and bought a flat in London fairly early on. He realised there was money in buying a dump, doing it up, living in it for a short while, selling and repeating. He’s just sold his current place for over £4 million. He doesn’t work - fair play to him.
I know a lot of people who’ve inherited large amounts of money when young and, with the exception of one friend who wasted maybe six figures on cars and casinos, all of them have been responsible with it. The only common trait I can see is that everyone is well educated and well adjusted - if that makes sense.
You lot need to talk to my ex wife.
In her 50s and she inherited £250,000 a year and a half ago and it's all gone. Now she can't even afford the mortgage payments.
Everyday I wake thinking how that kind of cash would allow me to ease right back on work and even have some sort of retirement.
In her 50s and she inherited £250,000 a year and a half ago and it's all gone. Now she can't even afford the mortgage payments.
Everyday I wake thinking how that kind of cash would allow me to ease right back on work and even have some sort of retirement.
Never had an inheritance of any kind myself sadly;)
But I think that most people who do inherit are pretty sensible with the money, as this thread suggests. The young are not always - or even mostly - foolish.
Our perceptions are skewed because you only ever hear about the spendthrifts. '18 yr old inherits £1m and blows it all on property and a balanced portfolio of investments' isn't much of a headline;)
But I think that most people who do inherit are pretty sensible with the money, as this thread suggests. The young are not always - or even mostly - foolish.
Our perceptions are skewed because you only ever hear about the spendthrifts. '18 yr old inherits £1m and blows it all on property and a balanced portfolio of investments' isn't much of a headline;)
croyde said:
You lot need to talk to my ex wife.
In her 50s and she inherited £250,000 a year and a half ago and it's all gone. Now she can't even afford the mortgage payments.
Everyday I wake thinking how that kind of cash would allow me to ease right back on work and even have some sort of retirement.
I am 50 in a few months, that amount of money would make a massive difference to my life right now. That would allow me to be mortgage free and massively reduce the amount of fIn her 50s and she inherited £250,000 a year and a half ago and it's all gone. Now she can't even afford the mortgage payments.
Everyday I wake thinking how that kind of cash would allow me to ease right back on work and even have some sort of retirement.
ks given in my life.I'd probably work for another five years or so in this job knowing that as soon as I think "That's it, I am done" I could leave and just do something part time with the minimum amount of responsibility possible.
I know the parent of one of my daughters friends has lost both his parents over the last couple of years and they have recently moved to a much bigger house.
I suspect there are a lot of people out there who cannot afford a house who are waiting for an inheritance to allow them to buy.
My grandparents (on my dad’s side) both became terminally ill at the same time, and were also due to die during my parents getting divorced.
They really didn’t like my mum , so rather than
leave money to my dad and have my mum get 50%, they left everything to me and my siblings. I was about 13 at the time.
Was about £70k when they died, had grown to about £120k by the time I got it.
Couldn’t access anything until I was 21, and most of it was all in shares from various companies my grandad had worked at (GlaxoSmithKline, British American Tobacco)
I did however get an annual few thousand pounds from dividends. That helped me buy my first car, and do some travelling.
Cry me a river, but that inheritance gave me a slightly odd relationship with money.
My dad was working class from morecambe, first one to go to uni and do well. He regularly told me “it’s your money so you can do what you want with it. But just know that is generations of your families hard work, graft, and sacrifice, so it would be very disappointing if you were stupid with it”.
Hence me then feeling a lot of guilt associated with spending any of it. Still find myself to this day making strange choices in supermarkets, always scanning for the cheaper per 100g item, even though I’ve got a successful job and no money concerns and would definitely enjoy the higher priced item more.
Anyway, I didn’t blow it. Although as it was in shares I did get interested in investing, and then promptly lost about £20k on bad AIM investments.
By the time I’d got settled enough to think about buying a place, the housing market had changed from it being able to buy a house, to being able to help with a flat. Gave me a good step up, but I wish I’d known then, what I know now.
They really didn’t like my mum , so rather than
leave money to my dad and have my mum get 50%, they left everything to me and my siblings. I was about 13 at the time.
Was about £70k when they died, had grown to about £120k by the time I got it.
Couldn’t access anything until I was 21, and most of it was all in shares from various companies my grandad had worked at (GlaxoSmithKline, British American Tobacco)
I did however get an annual few thousand pounds from dividends. That helped me buy my first car, and do some travelling.
Cry me a river, but that inheritance gave me a slightly odd relationship with money.
My dad was working class from morecambe, first one to go to uni and do well. He regularly told me “it’s your money so you can do what you want with it. But just know that is generations of your families hard work, graft, and sacrifice, so it would be very disappointing if you were stupid with it”.
Hence me then feeling a lot of guilt associated with spending any of it. Still find myself to this day making strange choices in supermarkets, always scanning for the cheaper per 100g item, even though I’ve got a successful job and no money concerns and would definitely enjoy the higher priced item more.
Anyway, I didn’t blow it. Although as it was in shares I did get interested in investing, and then promptly lost about £20k on bad AIM investments.
By the time I’d got settled enough to think about buying a place, the housing market had changed from it being able to buy a house, to being able to help with a flat. Gave me a good step up, but I wish I’d known then, what I know now.
Greshamst said:
My grandparents (on my dad’s side) both became terminally ill at the same time, and were also due to die during my parents getting divorced.
They really didn’t like my mum , so rather than
leave money to my dad and have my mum get 50%, they left everything to me and my siblings. I was about 13 at the time.
Was about £70k when they died, had grown to about £120k by the time I got it.
Couldn’t access anything until I was 21, and most of it was all in shares from various companies my grandad had worked at (GlaxoSmithKline, British American Tobacco)
I did however get an annual few thousand pounds from dividends. That helped me buy my first car, and do some travelling.
Cry me a river, but that inheritance gave me a slightly odd relationship with money.
My dad was working class from morecambe, first one to go to uni and do well. He regularly told me “it’s your money so you can do what you want with it. But just know that is generations of your families hard work, graft, and sacrifice, so it would be very disappointing if you were stupid with it”.
Hence me then feeling a lot of guilt associated with spending any of it. Still find myself to this day making strange choices in supermarkets, always scanning for the cheaper per 100g item, even though I’ve got a successful job and no money concerns and would definitely enjoy the higher priced item more.
Anyway, I didn’t blow it. Although as it was in shares I did get interested in investing, and then promptly lost about £20k on bad AIM investments.
By the time I’d got settled enough to think about buying a place, the housing market had changed from it being able to buy a house, to being able to help with a flat. Gave me a good step up, but I wish I’d known then, what I know now.
Interesting post. Do you wish you'd spent a bit more of it when you were younger? They really didn’t like my mum , so rather than
leave money to my dad and have my mum get 50%, they left everything to me and my siblings. I was about 13 at the time.
Was about £70k when they died, had grown to about £120k by the time I got it.
Couldn’t access anything until I was 21, and most of it was all in shares from various companies my grandad had worked at (GlaxoSmithKline, British American Tobacco)
I did however get an annual few thousand pounds from dividends. That helped me buy my first car, and do some travelling.
Cry me a river, but that inheritance gave me a slightly odd relationship with money.
My dad was working class from morecambe, first one to go to uni and do well. He regularly told me “it’s your money so you can do what you want with it. But just know that is generations of your families hard work, graft, and sacrifice, so it would be very disappointing if you were stupid with it”.
Hence me then feeling a lot of guilt associated with spending any of it. Still find myself to this day making strange choices in supermarkets, always scanning for the cheaper per 100g item, even though I’ve got a successful job and no money concerns and would definitely enjoy the higher priced item more.
Anyway, I didn’t blow it. Although as it was in shares I did get interested in investing, and then promptly lost about £20k on bad AIM investments.
By the time I’d got settled enough to think about buying a place, the housing market had changed from it being able to buy a house, to being able to help with a flat. Gave me a good step up, but I wish I’d known then, what I know now.
I ask because my daughter will inherit a fairly modest 'chunk' from her grandma in a few months (ca 100k) so I am thinking about how best to advise her on what to do with it, so your post piqued my interest.
Joey Deacon said:
Not on that level, but in 1997 one of my housemates inherited £25K at the age of 21. The first thing he did was buy a MK2 Golf GTi for £5K and then spent the rest on going to Star Trek conventions, buying Star Trek memorabilia and transformers.
Had he not heard the phrase, Live Long and PROSPER? I do think that is a brilliantly dorky way to spunk £25k though!Greshamst said:
Hence me then feeling a lot of guilt associated with spending any of it. Still find myself to this day making strange choices in supermarkets, always scanning for the cheaper per 100g item, even though I’ve got a successful job and no money concerns and would definitely enjoy the higher priced item more.
This is an interesting point.Nothing wrong with demanding value for money I am exactly the same even though I can well afford the more expensive stuff I find enjoyment is not necessarily always linked to price of which cars are a prime example. But I like a bargain. Prime example of this is Martin Lewis who sold out for c£85m? But who still demands value. And why not he is no mug and hates being ripped off. Much joy can be had from driving a cheap snotter as compared with a £300k car as another example.
It is intetsting that often those who can least afford stuff are the very ones who invariably are quick to piss their money against the wall and often on the usual overpriced tat then bleating for handouts when they are skint.
You were probably brought up on thrift by your parents....as was I. This is deeply engrained and there is absolutely nothing wrong with that I wouldn't have changed it in any way and if you have a similar viewpoint it wouldn't matter if you had £25m in the bank you probably wouldn't go out and buy a ridiculously ott footballers house and have a Pagani on the drive or blow the lot on a Chav lifestyle such as the infamous Michael Carrol did pissing away a £10m lottery win like many others to impress his fair weather chums during his self proclaimed King of Chav lifestyle binge.
: LennyM1984 said:
Had he not heard the phrase, Live Long and PROSPER? I do think that is a brilliantly dorky way to spunk £25k though!
It would have been a lot more that £25K as he ended up with significant credit card debt as well.I only ever knew his as Wes, it was only after I lived with him for a while that I learnt this wasn't actually his real name. He answered to Wes as apparently he looked like Wesley Crusher, a character in Star Trek the next generation.
He spent some of this inheritance on purchasing the complete set of VHS tapes of the next generation. He didn't like the covers so he spent months and months creating his own and printing them out on his inkjet printer.
My room was next door to his, my main memories of that year were his printer constantly going, or his PC saying "Working" as he used it as he had installed a Star Trek theme to Windows.
As I said, £25K was a lot of money to someone like me who was in their first job out of uni and you could easily buy a house for £100K
dontlookdown said:
Interesting post. Do you wish you'd spent a bit more of it when you were younger?
I ask because my daughter will inherit a fairly modest 'chunk' from her grandma in a few months (ca 100k) so I am thinking about how best to advise her on what to do with it, so your post piqued my interest.
Hmmm, I mean it did help out massively in just providing a level of safety blanket to life, and a few thousand a year is quite a lot at that age, so rather than splurging on anything in particular, it just helped everyday life. I ask because my daughter will inherit a fairly modest 'chunk' from her grandma in a few months (ca 100k) so I am thinking about how best to advise her on what to do with it, so your post piqued my interest.
I also didn’t feel like I’d earned it, so unlike a lottery win or work bonus there wasn’t that feeling of “I can do whatever I want with this”.
I’d recommend trying to encourage your daughter to be sensible with most of it, but maybe set herself a 10% or whatever of fun money that she puts in a separate account, that she can splash no questions asked.
The rest gets saved/invested and she gives herself 4% or so every year until she needs to do something with it. That way she splashes a bit, gets a bit annually, saves a bit.
dontlookdown said:
Interesting post. Do you wish you'd spent a bit more of it when you were younger?
I ask because my daughter will inherit a fairly modest 'chunk' from her grandma in a few months (ca 100k) so I am thinking about how best to advise her on what to do with it, so your post piqued my interest.
I'd love to be in a position where I considered £100k a modest chunk! I ask because my daughter will inherit a fairly modest 'chunk' from her grandma in a few months (ca 100k) so I am thinking about how best to advise her on what to do with it, so your post piqued my interest.
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