Author Topic: What to do with an inheritance?  (Read 2609 times)

livesimplecolorado

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What to do with an inheritance?
« on: December 03, 2014, 12:21:10 PM »
Hi, I am in the process of waiting for an inheritance. The dollar amount will be enough to completely pay off my mortgage and then some...

The question I have is, is that the best choice or would it be a better choice to sock the money away in some mutual funds for a few years?

The idea of living free and clear of a mortgage makes me want to do a happy dance.

catccc

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Re: What to do with an inheritance?
« Reply #1 on: December 03, 2014, 12:30:59 PM »
Ah, the perennial question, pay of mortgage or invest...

What's your mortgage interest rate?  If it is pretty low (< 4%?) than maybe you should just invest the inheritance. 

It really depends on the interest rate, and just how hard having a paid off house will make you dance.  I mean, if you are going to dance like nobody's business, maybe you should just pay off the mortgage, math aside.

sandandsun

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Re: What to do with an inheritance?
« Reply #2 on: December 03, 2014, 01:51:20 PM »
We paid off the mortgage even with a 3.75 rate... It was an emotional decision, as mathematically it would likely have been better to invest, but I have never regretted it.  Something about having no mortgage that makes it totally worth it- plus, you have ultra-flexibility if you need to relocate for some reason...

MgoSam

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Re: What to do with an inheritance?
« Reply #3 on: December 03, 2014, 02:55:50 PM »
Weighing in, but I would also have a plan where you want to invest your money. You stated that the amount will be enough to pay off the inheritance and then some, so I do advise you to have a plan for that "some," ie, find out where you would like to invest it. All too often someone comes into money and unfortunately it slowly (or suddenly) trickles away...

1967mama

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Re: What to do with an inheritance?
« Reply #4 on: December 03, 2014, 03:05:44 PM »
Have you thought about paying off half of the mortgage and investing half? I've heard Gail Vaz-Oxlade (Canadian financial guru) give this advise before, when folks receive a sizeable tax refund.

livesimplecolorado

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Re: What to do with an inheritance?
« Reply #5 on: December 03, 2014, 07:09:45 PM »
Thank you, my mom passed away over a month ago. It was not unexpected as she was 83 and in poor health but it was so sad just the same. The saddest part for me was that she never got to enjoy any of her money while she was alive which would have made me happier than inheriting it.

Several years back (about 9), my husband inherited a large sum of money when his mother passed away. We had a lot of debt back then and the money did keep trickling away. We were able to keep a small amount of it but the reality is that unless you have a game plan it is so easy to just tap into money and spend it.

I guess I did answer my own question, paying off the house is an emotional decision and I am leaning toward that route.

Thank you for your responses.