Page 3 | What would you do with 100k at 24?

Densol57 · 30/11/2023 20:21

Thatswhy11 · 30/11/2023 20:16

@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!

Yes
I own several properties with million plus equity and bought a house for my son to live in coincidently with £100k deposit

We are in London ( and a seaside house in Kent ) so its vastly more expensive here

£100k sounds a lot but in the property market it really isnt wherever you are in the UK. A good deposit on a house where you want to live is 100% in my view.

Thatswhy11 · 30/11/2023 20:26

@Densol57 so because that's your circumstances you think that's what the majority of people have? Must be why your so tone deaf coincidently..

Notcookie · 30/11/2023 20:29

BarbaraofSeville · 30/11/2023 18:11

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.

Agree with all of this. Don't waste your money on an IFA who will say exactly this (if you're lucky and get a good one).

Densol57 · 30/11/2023 20:30

Thatswhy11 · 30/11/2023 20:26

@Densol57 so because that's your circumstances you think that's what the majority of people have? Must be why your so tone deaf coincidently..

No but it means I CAN offer decent advice to the OP ( the whole purpose of her post). I bought my first house at 18 - I do actually have experience to offer advice. Do you ?

Thatswhy11 · 30/11/2023 20:32

@Densol57 yes I offered advice upon living in that area. So please pipe down thinking you are better than anybody else. I just stated that 100k is a decent amount of money and it's not common to get inheritance of that amount at a young age...so what are you getting shirty for???

reluctantlogin · 30/11/2023 20:34

Was amusing myself with the notion of house versus BLT ( bacon lettuce and tomato)…. Seriously just get a place to live and use the lot for a deposit on that home.

Jewelspun · 30/11/2023 20:37

www.forbes.com/uk/advisor/investing/how-to-invest-100k/

Look at all your options.

I would be wary of rushing to buy a home if you are living with someone who is at odds with buying a home and does g appear to want to better himself. He sounds like he's going to be an albatross around your neck at some point.

Forget buy to let.

Densol57 · 30/11/2023 20:38

Thatswhy11 · 30/11/2023 20:32

@Densol57 yes I offered advice upon living in that area. So please pipe down thinking you are better than anybody else. I just stated that 100k is a decent amount of money and it's not common to get inheritance of that amount at a young age...so what are you getting shirty for???

Great you offered your local advice - all helps the op 👍🏼
But then you jumped on me
Have a nice day

MissConductUS · 30/11/2023 20:42

Jewelspun · 30/11/2023 20:37

www.forbes.com/uk/advisor/investing/how-to-invest-100k/

Look at all your options.

I would be wary of rushing to buy a home if you are living with someone who is at odds with buying a home and does g appear to want to better himself. He sounds like he's going to be an albatross around your neck at some point.

Forget buy to let.

This was really good, and also makes my points about diversification and having some financial investments.

BobBilby · 30/11/2023 20:42

If your partner doesn’t want a mortgage then make sure any house is in your name only OP and don’t get married!!

WeAreBorg · 30/11/2023 20:43

DaisyDoor · 30/11/2023 18:18

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

Hahaha I was about to post something v similar to that 😂

Absolutely no need for an IFA. Emergency fund, deposit on a cute 2 bed semi, put a bit in S&S ISAs and then buy shoes! And of course ditch the man

JesusMaryAndJosephAndTheWeeDon · 30/11/2023 20:49

I wouldn't buy a BTL or stretch yourself for a forever home. Buy a sensible but nicer house with no bigger mortgage than you have now.

Invest the rest.

Make sure you increase pension contributions and save if you are able to reduce your mortgage or become mortgage free.

AnotherEmma · 30/11/2023 21:02

Bluesprinkles12 · 30/11/2023 08:21

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?

Option 1, by a million miles. Buy yourself a house that you can see yourself living in for 5+ years. It's an investment but it's also your home and you will be able to enjoy it and make it yours.

I think you'd be mad to go for option 2. You'd live in a house that's smaller/cheaper/not as nice as what you could afford, and you're setting yourself up for the additional expense of moving in a few years (buying and selling houses is not cheap! stamp duty, conveyancing fees, etc). A BTL is not a great investment IMO, it comes with a lot of responsibilities and you have to manage it and pay tax etc.

Buy yourself a nice house, make sure you get the solicitor to set up a watertight written agreement to say your boyfriend lives there but can't claim any share in the property, get him to pay half the bills and half the mortgage interest - but nothing towards the repayment part of the mortgage.

rwalker · 30/11/2023 21:07

Put it in a fixed rate bond for 12 months you’d get about £350 a month after tax interest
in that 12 months explore all options

don’t do BTL grief written all over it and contrary to popular belief very little money in it

Hitchens · 01/12/2023 07:24

Feliciacat · 30/11/2023 08:27

Financial advisor is the best advice. DH and I got lifetime advice from one. It was £4k but if you’ve got £100k then that’s arguably worth it. They can advise on income, pension and investments. One thing is that they often cannot advise on mortgages as that’s a specialism (or that’s what he said). So if property is your main concern, a mortgage broker could be good.

having £100k and giving £4k to a financial advisor doesn't sound that smart to me.

Hitchens · 01/12/2023 07:33

Bluesprinkles12 · 30/11/2023 08:21

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?

The advice is generally going to be the same as for everyone else in terms of overall finances. Save up 6 months of expenses as your emergency fund, make sure you are contributing to your company pension to get the max employer contribution.

Sounds like you are in a promising position with your employment, however nothing is ever guaranteed. It sounds like what you actually want advice on is whether to buy a cheaper/smaller house with the expectation of upgrading later or buying a larger one now with the expectation to stay there long term. No one can really advise you what to do, that is going to be a choice for you. Buy the house that meets your needs now and for the next few years, try not to over extend yourself beyond what you have to. If you can get a 3 bed house then that will give you an element of future proofing if you do end up having children, but also won't be too much house if that takes longer than you expect to happen.

Having £100k puts you in a great position. Personally I'd take £20k of that put it aside as your emergency fund and to cover costs of buying the house. With the rest you need to look at how much you really want to tie up in the house, you technically have £80k left, which in some parts of the country will be a 50% deposit and others a lot less.

You don't mention any debt so assume you don't have any, but if you have any credit card debt or personal loans I'd pay those off. Student loans I'm not familiar with but I expect that is much lower %.

Howpo · 01/12/2023 07:46

Jeez Some very boring people on here.

I advised my DD to go travelling when she inherited just over 80k, she took 2 months unpaid leave and had a great time in Europe, NZ and Australia, back working now, still enough left over for a house deposit.

Feliciacat · 01/12/2023 07:54

Hitchens · 01/12/2023 07:24

having £100k and giving £4k to a financial advisor doesn't sound that smart to me.

Show quote history

It is if you make far more than £4k back in investments. That’s what I meant. Of course the basic numbers of 4 and 100 don’t sound good but you get a lot back for your money and that’s why it’s so expensive to get financial advice. £4k is the cost for lifetime advice for a couple too. It’s cheaper for less time or just one person.

wildwestpioneer · 01/12/2023 07:56

I'd use it as a deposit to buy a house and then with the money I'd be paying into a mortgage/rent I'd put into a pension each month.

IncompleteSenten · 01/12/2023 08:00

It's hardly boring to plan for your future financial security.

You're only young once this is true but you're only old once too and if you haven't fully prepared then it's going to be a very very tough time.

My parents had an enjoy yourself while you're young, you can't take it with you attitude. They spent the last 10 years of my dad's life in abject poverty, up to their eyes in debt. He died at 64 and he was the lucky one because my mum is entirely reliant on me and my sister. I've just finished paying for her roof to be fixed because she has black mould from a roof that's been leaking for years and I'm saving up to put central heating on her house because she's got no heating or hot water. She's only got the plug in heaters I bought her to put her on while I save up the thousands it's going to cost me to install central heating in her home. She's freezing cold and desperately unhappy and now all that live for today stuff means nothing and she is broken and full of regret.

So I'll always advise people to be 'boring' because I see what not being boring costs you in the long run.

Yeah, have some fun when you can but people for god's sake make sure you plan for a secure retirement first. The years go by faster than you think.

BarbaraofSeville · 01/12/2023 08:07

A financial advisor, if they're any good/reputable, will tell the OP to make sure she's ticked all the boxes here:

https://ukpersonal.finance/flowchart/

Unless you already own property outright (or are still on a sub 2-3% mortgage) and have £100k+ to invest, there's really very little benefit in paying an IFA to tell you what you can easily learn by spending a little time reading on the internet.

Of course the OP could take time out and go travelling. But it's probably not an option in the short term on her graduate scheme.

She should probably also needs to make sure that she actually wants to stay in the area where she is now before buying a house. But seeing as she has a good job there and housing is affordable on her income with the deposit she has, I don't see a need to relocate. And if she did, she could probably rent the house she owns out and rent elsewhere. But seeing as renting is usually expensive and insecure, there's usually little downside to buying, for those who can afford it.

The Flowchart - UKPersonalFinance Wiki

A starting point for your financial planning journey in 8 steps, from the wiki for Reddit's /r/ukpersonalfinance!

https://ukpersonal.finance/flowchart

Original poster

Bluesprinkles12 · 01/12/2023 08:15

I have already travelled pretty extensively and plan to continue to do so in the future but I can easily do that with the money I currently earn. I go on at least 3 nice holidays a year so I don’t really feel the need to use any of that 100K to a holiday if I’m honest.

I also already own a car, only a little 2011 Fiesta but it has been a reliable car that I know has been looked after. I don’t really drive it much anyway.

Some good advice though,I think what I’m going to do is what many people suggested already which is put around 20k into an ISA and use the rest on the deposit. I will probably go for 3 bed semi atm to not have to move in the near future and maybe get a dog with the money too. I will have to think about what’s the fair way to split all the expenses with the boyfriend, especially any improvement work on the house. Right now we split everything 50/50 which might look slightly different if we move into a house owned by me

OP posts:

JasonMurrayMint · 01/12/2023 09:11

I would consider putting a chunk (25000) into a SIPP , might have to do it over 2 tax years depending on cs pension contributions, because while the cs pension is excellent I think it is quite inflexible in when you can take it, you might enjoy the flexibility of being able to leave work a few years before you can draw your work pension. 25000 invested for 30 years could be very helpful.

Also, I would buy something nice to remember the person by, piece of jewellery or art or something.

determinedtomakethiswork · 01/12/2023 09:19

If he would be happy to rent, then I would continue to charge him rent, the same amount that he's paying now and I would give him a contract and his own room. I wouldn't want any money towards house repairs. I wouldn't want him to do any DIY. I would treat him exactly like a tenant. I would let him put his money where his mouth was. He sounds a bit thick though and I doubt he's someone you'll stay with for good.

StamppotAndGravy · 01/12/2023 09:28

We bought a small house with my lump sum because we weren't sure where life would take us. We then used the massive reduction in housing out-goings to pay off our student debts. We're actually still in the small house (partly because we're too lazy to move!) and now have very expensive holidays and are paying into pensions. The very small mortgage has given us the chance to experiment with our careers and take time out when needed, which is an amazing luxury. We're now considering stepping up with a lot of equity, but I'm really not convinced that more bedrooms are worth committing to a few thousand mortgage per month forcing us to work full time for the next 20 years.