£100k windfall
Discussion
I'll keep this short,
Close friend won £100k last night on a scratch card. He's 21, has never earned more than 20k a year, has no dependencies or mortgage, wants to invest but has no idea where to start. He's currently thinking about buying an articulated lorry as he's got the correct licenses.
Ideas?
Close friend won £100k last night on a scratch card. He's 21, has never earned more than 20k a year, has no dependencies or mortgage, wants to invest but has no idea where to start. He's currently thinking about buying an articulated lorry as he's got the correct licenses.
Ideas?
Sparkzz said:
I'll keep this short,
Close friend won £100k last night on a scratch card. He's 21, has never earned more than 20k a year, has no dependencies or mortgage, wants to invest but has no idea where to start. He's currently thinking about buying an articulated lorry as he's got the correct licenses.
Ideas?
NO NO NO NO NO NO under no circumstances buy a lorry. far too much money wasted, Close friend won £100k last night on a scratch card. He's 21, has never earned more than 20k a year, has no dependencies or mortgage, wants to invest but has no idea where to start. He's currently thinking about buying an articulated lorry as he's got the correct licenses.
Ideas?
Work for someone bang a big chunk down on a house and have a good holiday.
but that's me.
Where is he going to park the lorry!?
If I was in his position I'd be speaking to a mortgage broker personally and seeing what he can get. Depending on where you/he lives, considering he has under £20k salary, all of that money could be taken up by a house very easily (he won't be able to get a big mortgage is what I'm getting at here). Although with that sort of win he should enjoy a bit still too, maybe a bit on a car or whatever he's into.
Investing it and getting a 5% return is losing if he decides to get on the property ladder in 5 years time and the prices go up 30% or so.
If I was in his position I'd be speaking to a mortgage broker personally and seeing what he can get. Depending on where you/he lives, considering he has under £20k salary, all of that money could be taken up by a house very easily (he won't be able to get a big mortgage is what I'm getting at here). Although with that sort of win he should enjoy a bit still too, maybe a bit on a car or whatever he's into.
Investing it and getting a 5% return is losing if he decides to get on the property ladder in 5 years time and the prices go up 30% or so.
House.
People say enjoy it - i can guarantee the best way to enjoy it is to have 1/2 the mortgage of your peers. Borrowing 100k over 25 years makes you pay back a lot more - like 150k or something. Being careful now, and NOT blowing 10k being flash / daft will effectively mean he has the equivalent to 15k to blow when he's older.
People say enjoy it - i can guarantee the best way to enjoy it is to have 1/2 the mortgage of your peers. Borrowing 100k over 25 years makes you pay back a lot more - like 150k or something. Being careful now, and NOT blowing 10k being flash / daft will effectively mean he has the equivalent to 15k to blow when he's older.
Some Gump said:
House.
People say enjoy it - i can guarantee the best way to enjoy it is to have 1/2 the mortgage of your peers. Borrowing 100k over 25 years makes you pay back a lot more - like 150k or something.
Borrowing £100k at 6.5% over 25 years means that you pay back circa £200k!!People say enjoy it - i can guarantee the best way to enjoy it is to have 1/2 the mortgage of your peers. Borrowing 100k over 25 years makes you pay back a lot more - like 150k or something.
Ginge R said:
Do absolutely nothing, ideally forget all about it, for at least a month.
+1.Ginge speaks the truth. Sit it in as higher yielding accessible account as he can find and then think long and hard about what he wants it to do for him.
There's no point in rushing the decision.
Jasandjules said:
If possible, 30k down on a flat. Then a buy to let mortgage. Rent out.
DO this again. Then he has two flats earning income.
40k left as a float, maybe 3k on a nice holiday. Some in the bank for any time the flats are not occupied...
This, 10000%. Buy his own house, buy 2 more flats around the 70k range on buy to lets and make sure the rent more than covers the mortgage. Cant lose really, come 15 years time that £100k will be £300kDO this again. Then he has two flats earning income.
40k left as a float, maybe 3k on a nice holiday. Some in the bank for any time the flats are not occupied...
lewisf182 said:
This, 10000%. Buy his own house, buy 2 more flats around the 70k range on buy to lets and make sure the rent more than covers the mortgage. Cant lose really, come 15 years time that £100k will be £300k
I may not be the world's biggest star at arithmetic but I'm struggling to follow that.One of my touchstones is that as soon as people say "you can't lose" it's time to run away!
What would I do? Put it towards buying my own house. And if I already owned my house I'd be looking at Sidicks post above.
Jasandjules said:
If possible, 30k down on a flat. Then a buy to let mortgage. Rent out.
DO this again. Then he has two flats earning income.
40k left as a float, maybe 3k on a nice holiday. Some in the bank for any time the flats are not occupied...
Before getting my BTL I remember one of the mortgage stipulations being you have to be earning £25k pa minimum to get a BTL mortgage...probably depends on the provider though.DO this again. Then he has two flats earning income.
40k left as a float, maybe 3k on a nice holiday. Some in the bank for any time the flats are not occupied...
He is 21,
unless he is Richard Branson level of business savvy, he should not be putting his money into a depreciating asset (lorry). If he does, he needs to pay for a feasibility study and a business plan to avoid losing his dough.
His idea might work out and his 100k will allow him to earn 15k more p.a. sure, but bare in mind that at 6.5% interest (something you would likely get in an average buy to let) that has Future value of £-14,702. assuming he can sell his then 10 year old truck for 20k (that's 10,654 in today's money) so a net loss of £4000 for all his troubles as well as this whole world of business risk and running costs and labour... My estimates may be a bit off, but even with a big error margin in my calculations it sounds like a big big mistake to do what he is planning on doing...
unless he is Richard Branson level of business savvy, he should not be putting his money into a depreciating asset (lorry). If he does, he needs to pay for a feasibility study and a business plan to avoid losing his dough.
His idea might work out and his 100k will allow him to earn 15k more p.a. sure, but bare in mind that at 6.5% interest (something you would likely get in an average buy to let) that has Future value of £-14,702. assuming he can sell his then 10 year old truck for 20k (that's 10,654 in today's money) so a net loss of £4000 for all his troubles as well as this whole world of business risk and running costs and labour... My estimates may be a bit off, but even with a big error margin in my calculations it sounds like a big big mistake to do what he is planning on doing...
At 21 with a class 1 I'm guessing he's never earned more than 20k p/a doing trucking because he's recently qualified and / or lacks experience?
At that age I'd be more inclined to tell him to invest some of it in himself than throw it all down on a house. If he's not earning a good clip doing it as a driver, what's to say he'd be any better suited to being an owner operator which comes with way more crap to deal with along with the higher income?
At that age I'd be more inclined to tell him to invest some of it in himself than throw it all down on a house. If he's not earning a good clip doing it as a driver, what's to say he'd be any better suited to being an owner operator which comes with way more crap to deal with along with the higher income?
Gassing Station | Finance | Top of Page | What's New | My Stuff