What would you do with 100k at 24?

[Bluesprinkles12]

So I’m soon to inherit £100k, but I’m wondering what’s the best thing to do is.

Im an average earner £33k a year right now and on a graduate scheme with guaranteed promotion in 2 years where my salary will go up to at least £55k. For context I live in North West and currently do not have kids but plan to in the future.

Im weighing my option at the moment and wondering what the best option is:

Buy a nicer, forever home for myself with a bigger deposit down

Buying somewhere a bit cheaper with an upgrade in mind later down a line and a bigger mortgage but also putting money down on a BLT

Any other options?

At your age I would buy the long term house. Moving is extremely expensive.

I would then prioritise not stretching myself too much so I could make as big contributions to my pension as I could. Due to the tax relief a pension should always outperform the property market.

Scrap the BTL idea, you don't have enough for that as well as your own house, and they can be a liability if you get stuck with a bad tenant, repairs etc.

Have a careful look at houses, what you can get with some of the money and your salary. There's a hell of a lot of new builds in parts of the NW, which is pushing down prices of existing stock, issues with not enough school places...theres quite a bit to think through. This may determine how much you then think you should sink into a house vs pensions and isas. Obviously the more you can put into long term savings early the better.

There’s a money flow chart somewhere, that sets out steps to achieve before moving to the next one.
you do need rainy day money, so six months expenses , bills, rent/mortgage and food and petrol costs, in an instant access account or even Premium Bonds as the return is quite good now

then pension, sounds like this is covered in your job

then investments, but have a clear plan and allow enough time. At least five to ten years. Your house buying is here as houses are an investment. Your partner has odd views, as owning your own home is secure and prevents evictions. But keep it well in budget and don’t overcommit to a huge mortgage

some fun, holidays, new clothes, new car

something to remember your relative , jewellery, a piece of art, a watch.

dont buy a BTL, the responsibility of a landlord is too high these days

and don’t marry him, he will have half your wealth in the blink of an eye

I would buy a modest sized house, with a mortgage low enough that allows you to save into a 5% ISA.

Yes, moving is expensive but at 24 you have no idea whether your career will take you to another area, whether or not you will have kids etc, and running a big house is expensive. Higher council tax, insurance, heating, maintenance etc.

Make sure your DP does pay a fair share. Not just bills. It costs money to maintain a roof over your head, the mortgage interest etc, wear and tear, and he will essentially be your lodger.

Keep an eye on him though. What if you wanted a family and needed a 4 bed house… is he going to maintain his ‘no mortgage’ stance?

Keep a good solid savings regime going. Once you are on the higher salary It might be as well to start a private pension the tax advantage will be particularly beneficial then.

and don’t marry him, he will have half your wealth in the blink of an eye

This. Do not marry him unless he has assets of equal value. There are different ways of looking at what happened to his Mum and a woman left without adequate equity after a divorce is one of them!!

Comfortable 2 or 3 bed house that you could add value to in a decent location. Don't max out your mortgage but don't buy something that might be hard to sell again.

And don't ever marry him if you're not on the same page.

Yes, absolutely don't marry him. The idea that you HAVE to be married to have kids for your protection is not applicable when you are bringing in 100k and have a high earning potential from such a young age.

I'm so glad my friend never married her useless partner (she wanted marriage, he didn't). She had a good job with pension from the age of 21 and he was minimum wage with no pension. He cheated and they only had the house to split. Thank god he wasn't entitled to anything else.

His stance on mortgages is a massive red flag OP. As someone who was the victim of a cocklodger Id think really carefully about your future. He wants somewhere to live but wants you to take on the mortgage and risk. Id find that trait highly unattractive. A waster. Do not marry someone like this. His level ( low ) and yours are completely different. Does he not understand that rents can increase and have to be paid for life ? A house will increase in value and eventually be paid off.

At your age buy yourself somewhere nice to live and focus on advancing your career as you are.

You definitely do not want a BTL ( and you dont have the funds for one )

I think the advice is still sound in the long term but not so sound if people might want to move within 2/3 years as then they might make a loss.

Just echoing don't get a BTL. I'm counting down until I sell my two.
I would:
Buy a house with manageable mortgage
Max out tax free savings

Thank you everyone, this is some very decent advice.

I will probably reach out to financial advisor to get some professional advice.

I can't see the need to talk to an IFA tbh. Just buy a house to live in, and use £70/80k of the money as a deposit, keeping some back for fees, emergency fund, work on the house, or other big purchases like a car.

In the meantime put the money in the best paying savings account.

If you're not in a rush to buy a house, look at fixed rates for a higher interest rate and make sure you have a LISA as the government will top it up.

Don't buy a do-er upper unless you enjoy doing DIY or dealing with contractors.

Make sure your credit file is in good shape and get a credit card if you don't have one. Use it for some of your normal expenses and pay off in full every month to demonstrate responsible use of credit.

If you can get a 'forever home' great, but bear in mind that a larger house will come with larger bills, so you might want to something smaller for now that's conveniently located. With a decent salary and deposit, you'll have lots of choice.

Honestly, people on MN would tell you to see an IFA if you found a tenner in an old handbag 😭

If you buy in the North West you can get a decent size house with that deposit OP. I wouldn't bank on a 2 year promotion you just never know!

Thanks, I thought it was just me thinking it was a bit unnecessary.

Definitely not a BTL. It's no longer a good ROI.

Buy a house suitable for now, not forever. Larger houses come with bigger bills and more maintenance.

Consider the issue that you have with very different attitudes towards money than your bf, and how that may play out in the long term with marriage and children. If he's not paying into a pension you could end up financially supporting him for decades in retirement.

It's a bad idea to have all your wealth in a single asset, like real estate.

https://www.investopedia.com/investing/importance-diversification/

Consider putting some of the money in a low-cost, diversified index tracker fund like these from Vanguard. Another problem with tying up all of your money in real estate is that it's illiquid. You can't get some of the money out if you need it in an emergency. Investing in financial assets gives you liquidity.

https://www.vanguardinvestor.co.uk/investing-explained/what-are-lifestrategy-funds

I would put some of it in a pension as you get tax relief on that (easiest via salary sacrifice). Especially if your employer matches or part matches contributions - sounds like you are at a professional services firm and many of them do this. That’s free money.

I would use some of it to max out your annual stocks & shares ISA allowance for the next few years.

I would buy a property BUT I would very strongly consider not buying anything until you have your qualified salary and can get/afford a higher mortgage. Also that will allow time for market to settle - personally I expect a dip over the next couple of years. And by then you will know better where you want to live.

I would not try to buy a forever home in your mid 20s. Buy something that will suit for say 5 years, but it’s very hard to predict further than that at this stage in life.

I absolutely would not do a BTL. Financially they don’t make sense any more and the regulations on landlords are going up and up.

I assume you are debt free but if not - pay off any debt first.

This 👆

Don't ask strange people on the Internet. Ask someone who knows what they're doing.

Buy a house that suits your needs now but has the land and layout to extend later if you need to. I bought a 2-bed and have extended to 3 bedrooms and an extension downstairs by releasing equity. Much cheaper than moving and I've only had a house the size I wanted/could afford at the time.

Trivial I know, but how many 'BLT's could you buy for £100k? My favourite Marnie, but even I might get tired of them.
Yes, I know.....should be BtL (buy to let, I assume).

At 24, if you plan to stay in your area then I’d buy a house to live in. Presumably 100k will go a very long way towards a decent 2-3bed house, and you can have a good quality of life on your excellent salary without having to pay a high rent and save up a deposit. Overpay the mortgage and invest in an ISA and pension and you’re setting yourself up for a good financial future. Then if you do want a bigger house in the future if you have a family then you can move up the ladder.

agree be careful of the boyfriend and protect your assets.

I was in a similar position to you this year. I put everything into savings until I found a house I could see myself in for the next 5 or so years. I didn't feel the need to see an advisor. I maxed out my contributions for a LISA each year I had it open. And put a 50k lump sum into a 95 day notice account as I knew I was actively looking for a property. Bought 5k in savings bonds and the rest spread out between instant access accounts and a stocks and shares ISA.

I'm putting 80k down on a house, spent 6k on a car. I put £50 a week from my salary into savings and move anything that's left from last payday into one of the savings accounts.

The main takeaway for me, was ensuring I'm still actively saving. It's so easy to spend 100k. Once it's gone, it's gone.

Another thing, I didn't go for a doer upper, although it previously would've saved money I know how hard it is to get work done at the moment. Cost of materials, supply chain issues and actually finding tradesmen to take on the work put me off to be honest.

Ha ha ! Yep
People calling £100k "wealth" 🤣
Dont get me wrong its a decent chunk of change for a 24 yo, but really its just a decent house deposit

@Densol57 your response is just as laughable did you or do you happen to have had a 100k house deposit even if you are much older? I know I certainly don't and won't!