I’m in my 30s and recently got divorced. This is the first time I’m managing my own finances. While I’ve always earned an income, previously my ex-partner managed the finances. I received a sum of money in the settlement of the divorce and I’m not sure what’s best to do with it. I’m currently renting, so I was thinking maybe I should buy a property. I don’t really know anything about investing or real estate, but I need a place to live, and hopefully it would also be a good investment. Where should I start?

Firstly, when you come into a lump sum of money, don’t be in a rush to do something with it. It can sometimes be a good idea to avoid doing anything at all for a few months so you don’t make any rash decisions.

Port-divorce, it’s best to not rush into any rash financial decisions you could regret.Credit: Simon Letch

Secondly, let’s talk about property. It can be tempting to think that since you have a lump sum of money, buying a property is a good idea.

However, just because you can now afford to do that doesn’t necessarily mean you should. There are a few things you mentioned that make me think you might want to slow down a little.

Many people think that buying a property automatically makes it a good investment, so why spend money on rent if you can just buy a home which doubles as an investment?

It sounds like you’re wanting to buy a Ferrari before you’ve even learnt the basics of how to drive.

This mentality makes sense when you look at how property prices have performed over the last few decades. Anyone would be forgiven for thinking that buying any property is a good investment that would eventually lead to significant gains in the form of capital appreciation.

This isn’t how property works. Not every and any property makes for a good investment. So just because something ticks your boxes for being a good home doesn’t mean it will automatically tick the boxes for being a good investment.

QOSHE - I just got divorced. What should I do with the settlement? - Paridhi Jain
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I just got divorced. What should I do with the settlement?

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24.04.2024

I’m in my 30s and recently got divorced. This is the first time I’m managing my own finances. While I’ve always earned an income, previously my ex-partner managed the finances. I received a sum of money in the settlement of the divorce and I’m not sure what’s best to do with it. I’m currently renting, so I was thinking maybe I should buy a property. I don’t really know anything about investing or real estate, but I need a place to live, and hopefully it would also be a good........

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