I turned a £5,000 inheritance into a £500,000 business – it changed my life

When Anna-Louise Stewart quit her £85,000-a-year job to spend more time with her children, she hadn’t worked out all the details of how she would cover her living costs. Luckily, a few months later she received a letter that would change her entire life. It was 2020 when Anna-Louise, 48, heard from an attorney in America. It said her great uncle, who had lived in Santa Monaco and died a decade earlier, had left her £5,000. An heir hunter in the US had tracked down one of his investments, found the beneficiaries, and Anna-Louise was due 50 per cent. Shorts She said: “I couldn’t believe it. I was amazed.” Anna-Louise and her uncle had once been incredibly close, spending a lot of time together when she lived in New York from age 25 to 27. After she moved back to the UK, he would send her postcards from his travels around the world. “He was a lovely man, but I never expected him to leave me anything,” Anna-Louise says. It wasn’t long after that she turned the inheritance into a successful business. Anna-Louise Stewart as a child with her great-uncle Chris, who left her money after his death Anna-Louise, who lives in Crondall, Hampshire, with her husband Luke, 46, decided to quit her job working as a sales director for luxury fashion brands to spend more time with her sons Barney, 13, and Arthur, 11. “I just couldn’t do it anymore. The kids were tiny and I was leaving every morning before they woke up and getting back after they’d gone to bed,” she says. But soon after, the Covid lockdown was implemented and Stewart started making soaps with her sons to keep them occupied “and to encourage them to wash their hands!”. Enjoying the activity, at Christmas, she put pictures of her Chuckle Soaps on Facebook asking if anyone would like to buy them as gifts – 200 people replied. When Anna-Louise started selling the soaps at local markets, sales snowballed. She received 2,000 orders when they were featured in a newspaper Christmas gift guide. It was around this time that she learned about her inheritance and decided to use the cash to build a “soap studio” in the garden. “We bought a flatpack from eBay for £2,750, built it ourselves, insulated it and fitted it out,” she says. Today, Anna-Louise has turned her £5,000 inheritance into a business with an annual turnover of £500,000, with her soaps stocked in Anthropologie, Rick Stein and around 25 independent stores across the country. She has used some of the profits to pay private school fees for Barney, which the family would not have been able to afford otherwise. “Starting my own business was incredible; I feel so proud of myself,” says Anna-Louise. “I think it’s really important when you inherit money that you use it wisely. Uncle Chris was a kind, lovely man who created an extraordinary life for himself, and has now given me the opportunity to have an extraordinary moment too.” ‘I invested my inheritance’ When Rahim Hassanali received a ‘living inheritance’ from his mum, he invested the money Rahim Hassanali, 43, from Wood Green, North London, used £15,000 given to him by his mum to invest for the first time last year. Rahim, a senior manager at a charity, was gifted the money by his mum, who wanted to start passing on her wealth while she was still alive. He put £7,000 into a cash ISA, £6,000 into a stocks and shares ISA, and invested £2,000 in individual shares through the app Plum. “I’m saving up to buy a house, but I also want to do some travelling,” says Rahim. “Once I started, I would top up the accounts by £500 a month, so my savings and investments have grown from that initial sum to about £33,000.” He adds: “My only regret is not putting more money in my stocks and shares ISA because the return is so much better than the cash ISA, but I know I need some cash savings too.” How to make the most of an inheritance More people are thinking about how to pass on their wealth. But it’s not just those passing on their assets who need to give it careful thought – anyone receiving a windfall should take time to consider how they can best put the money to work. Many financial advisers suggest leaving the money untouched for a few months, especially if you’re dealing with grief. Jo Summers, from the Jurit law firm, says: “One of the biggest mistakes people make after receiving an inheritance is feeling they have to make decisions straight away. “Unless there is an urgent financial need, taking some time to reflect is often the best approach. An inheritance usually follows the loss of a loved one, which isn’t the ideal time to make major financial decisions.” It’s worth assessing your own finances first. Consider paying off unsecured debts, like credit cards or loans, and think about what your long-term plans or needs are. Some people may want to use the cash to clear a mortgage or loan, but check if there are early repayment charges first. Depending on the size of the inheritance, you might want to split it across different goals. You could use some to build a rainy day savings fund, some for a holiday, and some for a long-term goal such as a house extension. Using the cash to boost your pension pot could be a smart choice. MoneyHelper has an online calculator to help you see if your retirement savings are on track. Over-50s can book a free consultation with Pension Wise to discuss their retirement options. More people may also be set for a “living inheritance”, where relatives pass on wealth while they are still alive. This can not only be tax-efficient, but means they get to see the money being enjoyed by their loved ones. There are a number of ways you can pass on wealth while you’re still alive. The annual gift allowance lets you give away up to £3,000 a year, without it being liable for inheritance tax, for example. Under the seven-year gifting rule, you can give away larger sums, and they will not be liable for inheritance tax as long as you live for seven years after making the gift.