What would you do with 200k?
Discussion
Serious replies only please, a 'friend' who is in his late teens has come into approx 200k recently, He noticed that quite a lot of you are finance experts or work in that field and asked me if i would post on here to get a variety of opinions rather than listen to a bank who don't give him much choice, for example should he buy a house outright and live mortgage free the rest of his life? or invest in shares it and rent etc. as he has little financial knowledge
He is a serious petrol head and wants to put aside an amount of money for a nice car, his age however means he can't insure anything too quick, something RWD and classy would be his taste, what amount would you put aside for a car? He has a nice new car at the minute and won't likely change for a year or so
Cheers,
The Moose.
He is a serious petrol head and wants to put aside an amount of money for a nice car, his age however means he can't insure anything too quick, something RWD and classy would be his taste, what amount would you put aside for a car? He has a nice new car at the minute and won't likely change for a year or so
Cheers,
The Moose.
Dave_ST220 said:
I would seriously wait and see what happens to the housing market-he could get the house of a lifetime & live mortgage free!!!
Yep. This.If you don't have a mortgage, you could save up fairly quickly for a decent car. Or buy a slightly cheaper house and get a better car now, although if you already have a reasonably new car I wouldn't bother.
I would say get a house, then finance a car with the money that would have been used to pay for a mortgage.
edit: However I think the usual wisdom is that you should be investing in property using other people's money, but owning outright does give a lot of security and flexibility in what to do with their income.
edit: However I think the usual wisdom is that you should be investing in property using other people's money, but owning outright does give a lot of security and flexibility in what to do with their income.
Edited by Gareth79 on Wednesday 1st July 12:21
t on PH like I do. 
Assuming he doesn't need accommodation himself, I would without a doubt buy the biggest house/flat I could get for my cash, and then rent it to the council.
Pretty much a guaranteed income.
Two cases that I know of recently:
1 bed flat above a shop bought for £115k in New Malden, 10k spent on it converting it into a 2 bedroom, rental income of £1250 per month.
1 bedroom starter home bought for £165k in a not so nice area of Molesey, is going to yield an income of £800pm.
Maybe some left over for a nice car and insurance
Pretty much a guaranteed income.
Two cases that I know of recently:
1 bed flat above a shop bought for £115k in New Malden, 10k spent on it converting it into a 2 bedroom, rental income of £1250 per month.
1 bedroom starter home bought for £165k in a not so nice area of Molesey, is going to yield an income of £800pm.
Maybe some left over for a nice car and insurance
haworthlloyd1 said:
Tuscanless Ali said:
Assuming he doesn't need accommodation himself, I would without a doubt buy the biggest house/flat I could get for my cash, and then rent it to the council.
Pretty much a guaranteed income.
Two cases that I know of recently:
1 bed flat above a shop bought for £115k in New Malden, 10k spent on it converting it into a 2 bedroom, rental income of £1250 per month.
1 bedroom starter home bought for £165k in a not so nice area of Molesey, is going to yield an income of £800pm.
Maybe some left over for a nice car and insurance
no way!Pretty much a guaranteed income.
Two cases that I know of recently:
1 bed flat above a shop bought for £115k in New Malden, 10k spent on it converting it into a 2 bedroom, rental income of £1250 per month.
1 bedroom starter home bought for £165k in a not so nice area of Molesey, is going to yield an income of £800pm.
Maybe some left over for a nice car and insurance
the flat will be smashed to pieces and may not get the rent then don't forget the tax, insurance, running costs, letting fees etc etc all for a few hundred quid a month.
as for the £165k property in a not so nice area - £9600 per year then pay tax on it?
I wouldn't bother renting out property like this
What else would yield that sort of return? Plus you have an unencumbered property that is (Hopefully) increasing in value
Serious answer has already been given. See a financial adviser. However, getting one that suits is not always as easy as you might think and it is not all about good or bad. Of course you don't want a bad one but what is important is to find one that you can actually gel with and be comfortable. The advice yo are going to get is not a short term thing. Individuals and circumstances change and strategies need to adapt. You can't just buy a bunch of 'investments' and then forget about them. You will neeed to have some kind of regular contact with the adviser to make sure what is going on with the investments is still suitable for circumstances. Hence the need to find someone you feel you can work with over the longer term.
So, talk to more than one and don't rush to make a decision. If you want some recommendations of people in your area, let me know. Having been an adviser for 27 years I know quite a few good ones around the country (as well as a few not so good!).
Once you've had some feedback from advisers, then you could always post then suggestions here for feedback. The responses may or not be helpful but would definitely play Devil's Advocate for you to give you new questions to ask the advisers about their recommendations.
So, talk to more than one and don't rush to make a decision. If you want some recommendations of people in your area, let me know. Having been an adviser for 27 years I know quite a few good ones around the country (as well as a few not so good!).
Once you've had some feedback from advisers, then you could always post then suggestions here for feedback. The responses may or not be helpful but would definitely play Devil's Advocate for you to give you new questions to ask the advisers about their recommendations.
Thanks for the advice everyone
@mrmr96: Thanks, but he's not a silly boy and knew that there are a few financial experts on here and wanted to see their views
@Tigssy: He is only 18 and in his last year of school, he plans to go to university and become a teacher but has a part time job at the minute
@ukshooter: Thanks very much, he fully intends too YHM regarding location
Thanks for all replies
@mrmr96: Thanks, but he's not a silly boy and knew that there are a few financial experts on here and wanted to see their views
@Tigssy: He is only 18 and in his last year of school, he plans to go to university and become a teacher but has a part time job at the minute
@ukshooter: Thanks very much, he fully intends too YHM regarding location
Thanks for all replies
Agree with ukshooter - see find and see a good financial advisor that you get on with - they are like hens teeth. With that kind of capital, used correctly and with some luck, could mean he'd never really have to work if he didn't want to.
Personally, I'd not get a house to live in until after uni. I would be in halls/rent and get myself 3 or 4 rental properties with £150k - with the aim of low capital gains, but provide good income to pay for my time at uni and build up savings from.
I'd lock £30k in 1-5 year bonds so I couldn't spend any of it on a whim.
For a car, I'd look at something that is now a classic sports car - they pretty much all much RWD, cheap(er) to insure at 19 and they help with getting some
Or I'd look at a kit car, but if you need it to work, then a classic is generally better as you will still break down, but be dry
I'd look at something that would mean 20k would get me a nearly mint car (but not so good I worry about leaving it anywhere) and keep it on the road for 3 years with increased security (a lot of pikies target uni student's cars to nick).
To be honest, I'd actually start look with a total budget of 10 grand but end up spending 20.
After uni I'd try to get a job.
If the job market is still bad (unlikely as an NQ teacher), at least I'd still have the rental income and my bonds would be maturing to tide me over.
If I get a secure job, then I'd get a house that does just what it needs to do for 3-5 years with a mortgage from my teaching income, continue to lock away most/all of the income from the rent and roll over my bonds. I'd look to expand my property portfolio and start looking at the stock market to self invest.
In 10 years time I'd hope to have a really good passive income (just under twice my salary), a large chunk of cash/near cash capital and a lot of equity. I'd also have a nearly-full-time job managing all of that money so I'd just teach part time and only in the places I want to as I really don't need the money from work
If I want to buy and run a couple of nice cars, I can and if I wanted to sell some of my portfolio to buy quite a nice home without a mortgage, I could.
In 30 years time I'd hope to have an income that would allow me to retire and only do stuff I want for the rest of my life and enough capital to own my really nice homes outright and pay the gardener, maid, cook, etc. At this point I'd be worrying about inheritance tax, and wish I'd seen a good financial advisor earlier on to sort it all out as I went along
Personally, I'd not get a house to live in until after uni. I would be in halls/rent and get myself 3 or 4 rental properties with £150k - with the aim of low capital gains, but provide good income to pay for my time at uni and build up savings from.
I'd lock £30k in 1-5 year bonds so I couldn't spend any of it on a whim.
For a car, I'd look at something that is now a classic sports car - they pretty much all much RWD, cheap(er) to insure at 19 and they help with getting some
Or I'd look at a kit car, but if you need it to work, then a classic is generally better as you will still break down, but be dry I'd look at something that would mean 20k would get me a nearly mint car (but not so good I worry about leaving it anywhere) and keep it on the road for 3 years with increased security (a lot of pikies target uni student's cars to nick).
To be honest, I'd actually start look with a total budget of 10 grand but end up spending 20.
After uni I'd try to get a job.
If the job market is still bad (unlikely as an NQ teacher), at least I'd still have the rental income and my bonds would be maturing to tide me over.
If I get a secure job, then I'd get a house that does just what it needs to do for 3-5 years with a mortgage from my teaching income, continue to lock away most/all of the income from the rent and roll over my bonds. I'd look to expand my property portfolio and start looking at the stock market to self invest.
In 10 years time I'd hope to have a really good passive income (just under twice my salary), a large chunk of cash/near cash capital and a lot of equity. I'd also have a nearly-full-time job managing all of that money so I'd just teach part time and only in the places I want to as I really don't need the money from work
If I want to buy and run a couple of nice cars, I can and if I wanted to sell some of my portfolio to buy quite a nice home without a mortgage, I could.In 30 years time I'd hope to have an income that would allow me to retire and only do stuff I want for the rest of my life and enough capital to own my really nice homes outright and pay the gardener, maid, cook, etc. At this point I'd be worrying about inheritance tax, and wish I'd seen a good financial advisor earlier on to sort it all out as I went along
Tuscanless Ali said:
What else would yield that sort of return? Plus you have an unencumbered property that is (Hopefully) increasing in value
A reasonable number of blue chip sharesTuscanless Ali said:
Plus you have an unencumbered property that is (Hopefully) increasing in value
That are not way overpriced, unlike property.NoelWatson said:
Tuscanless Ali said:
What else would yield that sort of return? Plus you have an unencumbered property that is (Hopefully) increasing in value
A reasonable number of blue chip sharesTuscanless Ali said:
Plus you have an unencumbered property that is (Hopefully) increasing in value
That are not way overpriced, unlike property.Tuscanless Ali said:
NoelWatson said:
Tuscanless Ali said:
What else would yield that sort of return? Plus you have an unencumbered property that is (Hopefully) increasing in value
A reasonable number of blue chip sharesTuscanless Ali said:
Plus you have an unencumbered property that is (Hopefully) increasing in value
That are not way overpriced, unlike property.NoelWatson said:
Tuscanless Ali said:
NoelWatson said:
Tuscanless Ali said:
What else would yield that sort of return? Plus you have an unencumbered property that is (Hopefully) increasing in value
A reasonable number of blue chip sharesTuscanless Ali said:
Plus you have an unencumbered property that is (Hopefully) increasing in value
That are not way overpriced, unlike property.Tuscanless Ali said:
NoelWatson said:
Tuscanless Ali said:
NoelWatson said:
Tuscanless Ali said:
What else would yield that sort of return? Plus you have an unencumbered property that is (Hopefully) increasing in value
A reasonable number of blue chip sharesTuscanless Ali said:
Plus you have an unencumbered property that is (Hopefully) increasing in value
That are not way overpriced, unlike property.NoelWatson said:
Tuscanless Ali said:
NoelWatson said:
Tuscanless Ali said:
NoelWatson said:
Tuscanless Ali said:
What else would yield that sort of return? Plus you have an unencumbered property that is (Hopefully) increasing in value
A reasonable number of blue chip sharesTuscanless Ali said:
Plus you have an unencumbered property that is (Hopefully) increasing in value
That are not way overpriced, unlike property.Tuscanless Ali said:
NoelWatson said:
Tuscanless Ali said:
NoelWatson said:
Tuscanless Ali said:
NoelWatson said:
Tuscanless Ali said:
What else would yield that sort of return? Plus you have an unencumbered property that is (Hopefully) increasing in value
A reasonable number of blue chip sharesTuscanless Ali said:
Plus you have an unencumbered property that is (Hopefully) increasing in value
That are not way overpriced, unlike property.NoelWatson said:
Are the council guaranteeing that there will not be any rate cuts if/when the Gunment have to cut back massively on spending?
? I doubt there will be a cut, it's a separate issue which really makes my blood boil at the best of times.Edited by Tuscanless Ali on Thursday 2nd July 17:26
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