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?

Buy a house you'll enjoy living in, and save the rest. Unless you really want to "make your money work", in which case speak to a financial advisor.

Personally I'd rather get a house I'm happy in, and enjoy feeling secure in it, rather than looking to invest and make more money etc - I wouldn't like the uncertainty of that, or having my money tied up in it. I'm a bit suspicious of financial advisors, because I've been to a few and they've not been great, but I may have just been unlucky.

But if you want to turn your money into more money then investments are the way to go - just get good advice from someone who knows what they're talking about.

It is if you make far more than £4k back in investments

Big “if” here. If you can find an IFA who can guarantee to beat the market by more than 4%, then yes great idea- in fact, give me her number 😂

£100k is a lovely sum to have but OP’s situation isn’t complicated, or rather the complications aren’t ones an IFA can help with (boyfriend etc). In OP’s shoes I’d do the obvious- 6 months’ net salary in a high interest easy access account, 20k in a S&S ISA (cheap global tracker), remaining £70k-ish for a deposit, and get proper advice from a solicitor (not IFA) about the boyfriend. She could also use a LISA while she’s thinking about it all (nb counts towards the ISA limit).

I don't know where in the NW you live, but £100k deposit plus 4 x your salary wouldn't buy a forever home in my part of Yorkshire.

However, a home with plenty of equity in it will give you security and financial stability in the long term. So I'd buy the best home you can afford, in the nicest area you can stretch to, but keep aside a small portion of the money as savings/liquid investments for a rainy day.

I definitely wouldn't go down the BTL route in your position.

Buy somewhere you'll enjoy living in, that allows you to continue to have a 20something lifestyle and a reasonable commute to work.
Dont think of a forever home, as forever looks a lot different at 30 or 50 to 24.

Best of luck.

I assume you've had a bereavement, sorry about that.

You absolutely do not need a financial advisor to tell you what to do with a sum like that. At most you need a "whole of market" mortgage broker to help set out your best options.

If you're reasonably settled in your job and where you want to live, I would personally use most of this money to buy a long term home, at comfortable repayments, and keep some back for emergency fund, rainy day fund, home improvements, furnishings etc. Then use any income you can save from having lower mortgage payments to gradually invest in your pension and ISA.

Spending 4% of her inheritance on financial advice (that she simply doesn't need) would be a dreadful decision. Why is everyone on MN so obsessed with IFAs?

Plus the OP has a civil service pension, so that angle is covered and an IFA can't even advise on the one aspect that the OP does need, ie a mortgage and ensuring that her DP doesn't end up entitled to a share of her property if he doesn't buy with her.

Perhaps IFA is the 'big job' that many Mumsnetters and their DHs do, and they need to keep earning the big commissions?

I agree that an IFA is not needed in this situation.

It’s like the constant ‘get married, it protects women! ‘ without any context of an individual’s circumstances.

I would urge caution at your age. We came in to a similar sum of money a little older than you and went on to buy a modest home probably a couple of years earlier than we would have otherwise. Unfortunately that was just before the 2008 crash. Jobs moved and we ended up having to do unnecessarily long commutes (when we would have just moved rentals) and were restricted by the property until we eventually sold it a few years later (at a loss). Property ownership can be a ball and chain around your ankle of you get it wrong.

I’ve never bought a house or had any savings so I didn’t know any of this. I just knew that DH paid £4k for a Financial Advisor and it seemed good. Then again, he’s mortgage free and had over £100k to invest. I thought Financial Advisors would be good for anyone and that good advice could be given for any circumstance.

For a lot of people, IFAs won't tell them anything more useful than they could find out for themselves using online resources and common sense.

Also, if your DH is mortgage free, and has money to invest, why have you never had any savings? Do you really have nothing in your own name? It's more tax efficient to spread investments and savings when you're married, so most married couples would want to use both ISA allowances, both personal tax allowances etc.

So why give incorrect advice about something you seem to know little about?

Going to an IFA ill prepared without any basic idea as to what would be best for you seems to be a recipe for paying a lot of money unnecessarily, or taking products that have the most favourable terms for them, not you (I don't think IFAs get commission any more for this very reason, but it's certainly an explanation why so many people are constantly on short term mortgage fixes, because it earns the mortgage adviser a nice fee every 2 years, not because people benefit from short fixes, sometimes they do, but often they don't).

@IncompleteSenten Good point, there always has to be a balance and it looks from the OPs reply she has it, so fair play to her.

Stick on a house, as Mark Twain said "Buy land, they're not making it anymore"

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

If you purchased a house and borrowed £170k at 7.5% over 25 years, you would repay £376,784. If you purchased a house and borrowed £150k you'd repay o same basis £332,457. So its a difference of £44,327 if you borrowed £20k more. Id not put £20k in an ISA as it will ultimately cost you £44000, to me that doesn't make sense.

for expenses if you were to share a house with your dp - look to see how much houses rent for in the same area. Then ask he puts in either 50% if he wants it to be equal, or between 35%-45%if you agree on a discount/mates rates. and then also argree to have a bills account for both to put in the same amount to cover 50% of the bills each. Any decoration, refurbishment would be down to you.

You've also got to compare how much the ISA would make in order to see what would make best long term financial sense

The ISA will also grow - even if OP doesn’t ever add to it again she’ll be on about £50K in 25 years assuming a low-average return. She could also access the money if needed and it’s just more balanced not having all your money dumped in your house

I agree with this and I AM an IFA 😂