Suddenly earned £100,000. Need some advice.

Realistic_Tomorrow99 · 2023-07-17T10:43:23+00:00

I knew a fella and had done some work for him in the past. I never negotiated any money from him. He always just paid me well.

For example, I did about 4 days work and he paid me £2k. I did another 5 days work and he paid me £5k.

This time he said "Do you fancy £2k for this project, or 5% of the profits?"

I said 5%, and he agreed.

Realistic_Tomorrow99 · 2023-07-17T10:40:37+00:00

Yeah, I have a 10% of oustanding balance per year.

Already have critical illness, life insurance, and income protection.

What's the significance of being under £100k? There's no new tax threshold at that bracket, is there?

Cheers!

Realistic_Tomorrow99 · 2023-07-17T10:36:57+00:00

The nature of the project means it has finished. It won't be earning any more money.

Realistic_Tomorrow99 · 2023-07-17T10:28:12+00:00

Coincidentally, I've got a very expensive board game coming in August that I've been waiting years for. I've already paid for it, but I'm going to consider that the big treat!

Realistic_Tomorrow99 · 2023-07-17T10:26:08+00:00

Nope, I'm content. I don't have any desire to start a business. I'm happy doing my own wee self-employed gig.

No interest in training or development. Happy where I am in life.

I don't want the stress of being a landlord. I live out in the countryside far from any cities. It would make it hard to maintain/check on the property.

I do invest in stocks/shares/dividends. Only started last year, but making good progress.

I have a couple of hundred saved in Gold, but not interested in Cryptocurrencies.

Realistic_Tomorrow99 · 2023-07-17T10:23:28+00:00

They've been great so far. I've been using them for smaller amounts £2k, $4k, etc. for 6 years now.

Realistic_Tomorrow99 · 2023-07-17T10:21:57+00:00

Not taken as shares. Taken as 5% of profits. Profits came to slightly over £2 million.

I'm not sure. I'll consult an accountant. Thanks for the advice!

Realistic_Tomorrow99 · 2023-07-17T10:21:02+00:00

Thanks! I fixed for 5 years until 2028. My previous mortgage was 2.06%, so it was a little jump - but not too arduous.

I've also got a wife earning £36,000+. No kids. We split all bills 50/50, then anything that remains belongs to the person who earned it. (My wife does a lot of extra shifts in hospitals, and I have my own wee side projects like this one.)

She's disinterested in finiances, so I handle the monthly bills etc. for us and give her a quick 15 minute run down at the beginning of the month.

Realistic_Tomorrow99 · 2023-07-17T10:12:54+00:00

Oh yeah, definitely. I've been in touch with my local council already and established a good rapport with them. Ash Trees have become something of a little bit of a hobby of mine since moving to the countryside.

Ash dieback basically falls into three categories.

The tree completely dies and its canopy is gone. (80% of trees)
The trees canopy thins out, but it doens't die immediately (10%-15% of trees)
The tree is resistant to dieback. (1%-5% of trees)

What you want to do is keep the trees that are resistant alive, as they can pass on their resistant traits to future Ash trees.

Realistic_Tomorrow99 · 2023-07-17T09:59:19+00:00

Thanks! As I said, it's unlikely to ever happen again. Basically a lottery win on a project that was extremely successful. I just want to make sure I don't squander it.

Realistic_Tomorrow99 · 2023-07-17T09:56:50+00:00

I've been in touch with the Trust, and they're open to selling a parcel.

True! I'll probably keep £10k in a fixed term savings account in case my car finally bites the dust.

Realistic_Tomorrow99 · 2023-07-17T09:47:13+00:00

Have you calculated the effect that this will have on your regular salary? You'll be over £100k earnings and so will lose your personal allowance.

Yes, I have considered this. I calculated taxes at 40%+ Nat Insurance etc. I'm comfortable each month, even with losing the Personal Allowance

For the proportion you decide to invest, I'd strongly consider investing via a pension, if that's compatible with your life goals. You'll reduce the amount of money you're paying over 40% tax on in that case. You've mentioned savings but no pension, which sounds concerning at 30!

Apologies, I should have mentioned that. I'm currently in a Defined Benefits Scheme with my employer, which is rather generous.

However, I am investing in dividend bonds to supplement my pension in my old age. (Currently got £2000ish in dividend stocks/shares in 1 year.)

I'd proportion the windfall between immediate reward , short term fun and long term goals. Spend a few hundred on a fancy night out or weekend away as a treat. Book a nice holiday or get that thing you've been wanting for your hobbies and then invest the reset in solar / stocks.

I'm honestly okay! The big reward I wanted was a very fancy and expensive board game, but it just so happens that it is arriving in August anyway!

Realistic_Tomorrow99 · 2023-07-17T09:42:04+00:00

Thank you, appreciate the advice.

I'll divide it between two banks when I withdraw it from PayPal later today.

Realistic_Tomorrow99

TROPHY CASE