Single, no property, modest salary, looking to invest ~£50k
Discussion
I wonder if anybody more knowledgeable can offer some advice?
I've had a steady job for over 6 years, currently with a salary of £33k which is unlikely to increase significantly in the next year or two.
I recently worked abroad for 15 months and as a result I now have £50k sitting around.
I have £7k owed to me being paid back at approximately £1k per month
I've got £5k in stocks and shares, currently at a small loss but likely to recover
Regular outgoings are very modest, £200 'rent', £15 phone, I own an old but well loved car which is generally cheap to run. £4-500 per month on miscellaneous / recreation. Typically saving a grand a month out of my salary at the moment.
I do want to go racing next season for which'll eat pretty much all of my disposable income for seven months of the year but there's no risk to my assets.
So I have to invest. Being single and with my salary a small flat in my area at around £200k is on the limit of my calculated affordability. I'm not particularly motivated to move out in the next year or two, I'm primarily looking at this as an investment
So where to invest?
As a first time buyer I understand I'll struggle to get a buy to let mortgage, even if I did have 75-80% LTV?
I could buy a flat and live in it, but I’m not really excited by this prospect as I’d be cash poor / unable to race
If I can’t get a BTL I could invest my cash elsewhere- my tolerance to risk is… low to medium…
Bosh £15k into an ISA (I’ve used none of my tax free savings so far)
Bonds?
Savings account?
Peer-to-peer lending?
I will top up my stocks and shares account perhaps with another £3-5k but I want to be conservative with this
What would you do?
My gut feeling is that assuming I can't secure a BTL mortgage (I haven't made any enquiries yet but from what I've read online...), I should probably fill up an ISA, top up my S&S account, then split the rest of the money between maybe a bond, some peer-to-peer, a normal savings account, keeping back a slush fund of £3-5k.
I've had a steady job for over 6 years, currently with a salary of £33k which is unlikely to increase significantly in the next year or two.
I recently worked abroad for 15 months and as a result I now have £50k sitting around.
I have £7k owed to me being paid back at approximately £1k per month
I've got £5k in stocks and shares, currently at a small loss but likely to recover
Regular outgoings are very modest, £200 'rent', £15 phone, I own an old but well loved car which is generally cheap to run. £4-500 per month on miscellaneous / recreation. Typically saving a grand a month out of my salary at the moment.
I do want to go racing next season for which'll eat pretty much all of my disposable income for seven months of the year but there's no risk to my assets.
So I have to invest. Being single and with my salary a small flat in my area at around £200k is on the limit of my calculated affordability. I'm not particularly motivated to move out in the next year or two, I'm primarily looking at this as an investment
So where to invest?
As a first time buyer I understand I'll struggle to get a buy to let mortgage, even if I did have 75-80% LTV?
I could buy a flat and live in it, but I’m not really excited by this prospect as I’d be cash poor / unable to race
If I can’t get a BTL I could invest my cash elsewhere- my tolerance to risk is… low to medium…
Bosh £15k into an ISA (I’ve used none of my tax free savings so far)
Bonds?
Savings account?
Peer-to-peer lending?
I will top up my stocks and shares account perhaps with another £3-5k but I want to be conservative with this
What would you do?
My gut feeling is that assuming I can't secure a BTL mortgage (I haven't made any enquiries yet but from what I've read online...), I should probably fill up an ISA, top up my S&S account, then split the rest of the money between maybe a bond, some peer-to-peer, a normal savings account, keeping back a slush fund of £3-5k.
All I would say is please, please, please don't see BTL as a "magic answer" to investment.
IMO the ISAs deserve serious consideration, bearing in mind you can invest about £31,000 during the next 6 months. Within ISA you can spread your investments between share funds and bond funds to suit your appetite for risk.
By the way, I wouldn't touch peer-to-peer with a barge pole although I know some people swear by it.
IMO the ISAs deserve serious consideration, bearing in mind you can invest about £31,000 during the next 6 months. Within ISA you can spread your investments between share funds and bond funds to suit your appetite for risk.
By the way, I wouldn't touch peer-to-peer with a barge pole although I know some people swear by it.
I won't hear a bad word said against the Mail on Sunday again, especially after they were so nice to me in this piece from the other week. 
http://www.thisismoney.co.uk/money/diyinvesting/ar...
Other options are always available, but in the first instance, if you want to invest, you can either go down the DIY route or the robo advice route I guess. Make sure you have your capacity for loss and appetite for risk squared away and if you need the money anytime soon, park it in a decent savings account instead. Know your objectives, minimise costs and steer clear from esoteric stuff unless you know exactly what you're doing.
My service (sorry) is a hybrid robo service which will present you with a very nice report in minutes, detailing your risk/loss capacity, and suggest a basket of passive funds for on average c.0.79% per annum all in and 0.5% initial, including DFM, advice, funds, reporting, rebalancing, platform etc etc. Other choices available of course, and plenty of others in that article.
http://www.thisismoney.co.uk/money/diyinvesting/ar...
Other options are always available, but in the first instance, if you want to invest, you can either go down the DIY route or the robo advice route I guess. Make sure you have your capacity for loss and appetite for risk squared away and if you need the money anytime soon, park it in a decent savings account instead. Know your objectives, minimise costs and steer clear from esoteric stuff unless you know exactly what you're doing.
My service (sorry) is a hybrid robo service which will present you with a very nice report in minutes, detailing your risk/loss capacity, and suggest a basket of passive funds for on average c.0.79% per annum all in and 0.5% initial, including DFM, advice, funds, reporting, rebalancing, platform etc etc. Other choices available of course, and plenty of others in that article.
Just some advice ref racing.
As people seem to tell all sorts of lies about the cost, people saying they do a season for £5K. Utter tosh. If you do a full season in a decent series.
Assuming you own and run the car yourself, regardless of series it will cost you £7-800 a race weekend all in. Tyres, pads, oil fuel.
This assumes nothing major breaks. You need at least £1k for stuff that breaks gets damaged etc.
Add to that hotels etc.
Add testing which you need to be competitive and you need another £400 a weekend.
I would say your 1k free isn't enough. This year I spent, 7k. and I only did 3 weekends and I do everything myself. Lots of bad luck but still!!
If you need someone to run the car, for a full transport prep support you are looking at £1200 per weekend +Vat +extras. they will charge you for everything away from the track.
Seen lots of people come and go this year as they miss calculated what it would cost. You wouldn't believe the amount of money sloshing about in Racing.
Not trying to put you off just being a realist.
My car is for sale
As people seem to tell all sorts of lies about the cost, people saying they do a season for £5K. Utter tosh. If you do a full season in a decent series.
Assuming you own and run the car yourself, regardless of series it will cost you £7-800 a race weekend all in. Tyres, pads, oil fuel.
This assumes nothing major breaks. You need at least £1k for stuff that breaks gets damaged etc.
Add to that hotels etc.
Add testing which you need to be competitive and you need another £400 a weekend.
I would say your 1k free isn't enough. This year I spent, 7k. and I only did 3 weekends and I do everything myself. Lots of bad luck but still!!
If you need someone to run the car, for a full transport prep support you are looking at £1200 per weekend +Vat +extras. they will charge you for everything away from the track.
Seen lots of people come and go this year as they miss calculated what it would cost. You wouldn't believe the amount of money sloshing about in Racing.
Not trying to put you off just being a realist.
My car is for sale
For 50k you could buy a small flat outright in a city like Leeds / Manchester / Liverpool that should rent for 450/500 pcm.
That would almost entirely offset your current living costs which would be nice.
Other than that, ISA is a good shout, 15k in a fund of your choosing. If you invest 15k now, you'll also be able to throw in another 15k in April.
Depending on your risk tolerance, 5k-10k or so in P2P (asset backed platforms) you are likely to get good returns, but as others have warned need to be prepared to lose it all in a worst case scenario.
Some people will be along soon to tell you to open 33 accounts with various banks to get 3% interest, but i personally wouldn't bother!
That would almost entirely offset your current living costs which would be nice.
Other than that, ISA is a good shout, 15k in a fund of your choosing. If you invest 15k now, you'll also be able to throw in another 15k in April.
Depending on your risk tolerance, 5k-10k or so in P2P (asset backed platforms) you are likely to get good returns, but as others have warned need to be prepared to lose it all in a worst case scenario.
Some people will be along soon to tell you to open 33 accounts with various banks to get 3% interest, but i personally wouldn't bother!
Ginge R, compelling idea, not something I'd head of before yesterday, but if I go down the road of making financial investments instead of in property I'll likely put some money on the robots.
Bertrum, thanks for the reminder, having run three and a half seasons in Caterham Grads 2010-13 I'd agree with your figures. This time is a little different as instead of owning the car myself, my Dad wants me to build and prep this old Elan he has- he'd foot the parts bill for the build and it'd remain his car so long as I do the work and then I'd just pay the racing costs. I was considering a historic Formula Ford for a couple of years but there's no guarantee that I could get all / most of the money for the car back in a hurry at the end.
Property elsewhere in the country- I'd be a first time landlord with the added complication of doing it remotely. The idea of buying a place and renting it out for now is that when the time comes I'd be able to move in myself. If only I could buy a place outright down here! Alas, £200k+...
Bertrum, thanks for the reminder, having run three and a half seasons in Caterham Grads 2010-13 I'd agree with your figures. This time is a little different as instead of owning the car myself, my Dad wants me to build and prep this old Elan he has- he'd foot the parts bill for the build and it'd remain his car so long as I do the work and then I'd just pay the racing costs. I was considering a historic Formula Ford for a couple of years but there's no guarantee that I could get all / most of the money for the car back in a hurry at the end.
Property elsewhere in the country- I'd be a first time landlord with the added complication of doing it remotely. The idea of buying a place and renting it out for now is that when the time comes I'd be able to move in myself. If only I could buy a place outright down here! Alas, £200k+...
Ozzie Osmond said:
All I would say is please, please, please don't see BTL as a "magic answer" to investment.
Can you expand on this? I would guess that a lot of people underestimate the amount of work required to keep it ticking over and the risk of losing money through vacant property? What else?trowelhead said:
For 50k you could buy a small flat outright in a city like Leeds / Manchester / Liverpool that should rent for 450/500 pcm.
£450 pcm = £5,400 p.a. After landlord's expenses on agent's fees, VAT, service charge, insurance, routine maintenance etc let's call that £4,000 p.a.What rate of tax do you pay? Remember this extra income may push you into the 40% tax bracket even if you're not already there,
- after 40% tax you would have £2,400 p.a. Or £200 a month. (At 20% tax it's £267 a month.)
Significant repair bills? Void periods between tenants? Tenant who decides not to pay? Tenant who trashes the place?
So what happens to your investment once the place starts getting trashed or they stop paying rent?
I've seen enough to know that some people just don't care about rented accommodation. There's similar risks to stock market investing in that you're liable for repairs, may not get paid and if it all goes pear shaped and the place gets trashed you can't then rent out for several weeks or months.
It's a cynical view and I know that but i've seen my dad's rentals end up badly before so it would put me off.
I've seen enough to know that some people just don't care about rented accommodation. There's similar risks to stock market investing in that you're liable for repairs, may not get paid and if it all goes pear shaped and the place gets trashed you can't then rent out for several weeks or months.
It's a cynical view and I know that but i've seen my dad's rentals end up badly before so it would put me off.
Ginge R said:
I won't hear a bad word said against the Mail on Sunday again, especially after they were so nice to me in this piece from the other week.
http://www.thisismoney.co.uk/money/diyinvesting/ar...
Other options are always available, but in the first instance, if you want to invest, you can either go down the DIY route or the robo advice route I guess. Make sure you have your capacity for loss and appetite for risk squared away and if you need the money anytime soon, park it in a decent savings account instead. Know your objectives, minimise costs and steer clear from esoteric stuff unless you know exactly what you're doing.
My service (sorry) is a hybrid robo service which will present you with a very nice report in minutes, detailing your risk/loss capacity, and suggest a basket of passive funds for on average c.0.79% per annum all in and 0.5% initial, including DFM, advice, funds, reporting, rebalancing, platform etc etc. Other choices available of course, and plenty of others in that article.
Out of interest which one are you? I may look at something for the new year. http://www.thisismoney.co.uk/money/diyinvesting/ar...
Other options are always available, but in the first instance, if you want to invest, you can either go down the DIY route or the robo advice route I guess. Make sure you have your capacity for loss and appetite for risk squared away and if you need the money anytime soon, park it in a decent savings account instead. Know your objectives, minimise costs and steer clear from esoteric stuff unless you know exactly what you're doing.
My service (sorry) is a hybrid robo service which will present you with a very nice report in minutes, detailing your risk/loss capacity, and suggest a basket of passive funds for on average c.0.79% per annum all in and 0.5% initial, including DFM, advice, funds, reporting, rebalancing, platform etc etc. Other choices available of course, and plenty of others in that article.
CRB14 said:
So what happens to your investment once the place starts getting trashed or they stop paying rent?
I've seen enough to know that some people just don't care about rented accommodation. There's similar risks to stock market investing in that you're liable for repairs, may not get paid and if it all goes pear shaped and the place gets trashed you can't then rent out for several weeks or months.
It's a cynical view and I know that but i've seen my dad's rentals end up badly before so it would put me off.
You can take our a rental guarantee insurance that pays if the tenants don't. Better to rent to an established couple if possible for 2 sources of income.I've seen enough to know that some people just don't care about rented accommodation. There's similar risks to stock market investing in that you're liable for repairs, may not get paid and if it all goes pear shaped and the place gets trashed you can't then rent out for several weeks or months.
It's a cynical view and I know that but i've seen my dad's rentals end up badly before so it would put me off.
I wouldn't personally rent to the lower end of the market for the above reasons. Although it is not an absolute guarantee, a decently referenced young working person/couple would be less likely to trash the place. Their deposit would cover anything minor.
CRB14 said:
Out of interest which one are you? I may look at something for the new year.
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