What to do with £70,000

andrewm1981 · 7 October 2016 at 12:37AM

Hi,

As I mentioned earlier, I really would look if you can at a 2-bed, but you might have to think about a slightly longer commute. Somewhere out of the centre a little but with half decent connections. That way you can rent a room out (ticks your box about living with people), you can keep an eye on the regent, and the rental income is tax free. Plus gains on house price etc are all yours to keep.

Switch to buy-to-let. Firstly wave goodbye to 20% (income tax), plus management charges, plus anything over £11k profit when you sell will be charged at 20% too. Tax man will munch away at a lot of your money. The most tax efficient thing you can do... Is own your own property. Plus you can keep an eye on your housemate, and make sure they don't trash the joint!

_CC_ · 7 October 2016 at 3:23PM

fireblade28 wrote: »

Stocks and Shares. Save until you get 350K. Put in a dividend tracker and retire living of the interest. At 7% that would give you a salary of around 25k per year to live of. Assuming you don't have children.

And watch it shrink in value year after year...

bigfreddiel · 7 October 2016 at 8:57PM

Pay an IFA about £2,000 or maybe £4,000 to advise you on how to invest your money, then get them to implement the plan and pay them an annual fee to look after it and give you a report, that would be about £1,000, maybe a bit more.

Job done.

Make sure you explain your expectations and oblectives

Eco_Miser · 8 October 2016 at 2:41AM

_CC_ wrote: »

And watch it shrink in value year after year...

It shouldn't - investments generally increase in value over time, although there's no guarantee, and they fall in some years; not that that matters much so long as the dividends (not actually interest) keep increasing in line with inflation.

smjxm09 · 8 October 2016 at 5:35AM

I was not brave enough to go down the buy to let market no doubt due to watching too many episodes of Can't Pay Won't Pay where tenants rake up 5 figure sums of rent arrears leaving the landlord paying a mortgage and then legal fees and Bailiff fees to get someone evicted.

I would go with the thought of buying a property to live in, renting for life has to be the worst idea as even if you can afford it now retirement will creep up when your income will take a savage hit. As standard mortgages are 25 years you don't want to leave it too long to get on the property ladder and with a mortgage paid off before retirement your long term future will be better.

Do you have to live where you are? You can commute into central London from somewhere like Luton in around 40 minutes. Don't dismiss towns like this as it has one of the highest rising house prices in the UK but where £200,000 will still buy you a nice house in one of the better areas.

Jackthedog · 8 October 2016 at 10:38AM

Buy best you can in whatever area you can get most from. Take in lodgers if needed to eke out money. Property highly unlikely to be cheaper in long term. Renting really is a mugs game if you can afford to buy.

Actively manage your cash! Read up and spread it around different things. Invest time in this process. Avoid 'savings' accounts from banks and building societies. Avoid advisors etc... just read and research a bit and never believe anybody offering a service or tip at face value! Including me!

Put some in regular bank accounts bearing interest (3-4%), bank regular savers (up to 5%) deals, get some different bits in various p2p (4-12% EG Saving stream Assetz Capital, Bondmason, Zopa etc). Invest in your Isa allowance (stocks/funds or bonds .....decent shares companies should yield a solid 3-5% ) Manage your tax affairs careful the minimise liability. Keep cost of utilities/insurance etc down to minimum. Invest interest and savings so that they compound. Give yourself 5 years plus and you will be amazed how your money grows....

SailorSam · 8 October 2016 at 10:45AM

I'd buy if it were me. Even if you can only just buy and get something small, better than spending silly figures on rent.
Buy to let ? Well you're still buying, and there has been lots on the news lately that landlords are starting to get out of the business, and new ones not coming in. So there must be problems there.

surfer9 · 8 October 2016 at 5:05PM

Thanks again for your further replies.....

I guess buying is the answer to where to plough these savings....

Buying is something I've always wanted to do. What is making me hold back is:

1. I live in a house share - I like living with others.

2. House prices are expensive in my area. £200,000 for an old, small flat does not appeal to me. Though I have seen some flats in reasonable areas that I have liked. So when I am organised enough to buy - I think I will come across something that I'm happy with.

3. My job situation is a bit unconventional. I work for a company 5 hours a day as well as run a small business. The income isn't consistent and has been dropping off over the past 12-18 months. Though I still make a reasonably good amount of money per month. I'm not sure I'd be totally comfortable getting a mortgage based on my current job situation though. I will likely need to look into finding full time employment.

4. My working life is pretty easy. I'm more than financially secure. So I am very very comfortable right now. I can buy whatever I like whenever I like. I can have a gamble when I like, go out for a meal and eat what I like, buy clothes and more clothes. This would all disappear if I was to get a mortgage. Life would become more stressful. I'll likely be working a full day. I'd be worrying about paying off bills. It's nice to not have all that stress.

5. I don't necessarily see renting as a waste of money. I pay £540 a month. That covers Sky TV, Internet, insurance, council tax, Gas/Electric/Water, maintenance etc etc.....If I was to buy a house I'd be paying around the same amount of money for all of that anyway. But I do understand that house prices increase and that's where renters lose out as time passes by.

Going forward:

That said - I want to buy.

I need to get my finances in check. I need to look into full time employment. I ideally need a model girlfriend to buy with - that would make it a lot easier to buy. And I need to always be on the look-out for that property I'm happy with. I think end of 2017 may be the time I get on the ladder.

bigadaj · 8 October 2016 at 5:40PM

If you can buy then you can rent out one or more rooms for company and extra income.

If you don't have a conventional job then getting a mortgage might be more difficult, not impossible but potentially more expensive and maybe through a broker for example.

Not sure where you get the rent versus service costs comparison though, dependent on the property and that is highly variable, then I'd guess what you list is probably around half your rent on average.

bigfreddiel · 8 October 2016 at 7:50PM

You really need to seek advice from a qualified person, see an IFA. No one on MSE is allowed to offer any advice, so please take my suggestion, ignore everything said so far and get yourself an appointment with a qualified IFA.

If you can buy a property and haven't something is telling you it's not the right thing to do, so don't. See an IFA asap.

Good luck fj

What to do with £70,000

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free