I'm 22 years old, what's my best option for saving/investing?

TheProdigalSon

Hi all,

I posted earlier and had a fantastic response, have been thinking about where I stand financially because I literally get my wage paid every month and have no worries, no bills other than utilities and already, I own my home outright simply through sheer determination and a willingness to stick to both my budget and my goals. I earn around £24,500 after tax and live in Scotland, have thought about moving into property but I'm very much a newbie with regards to this and think that for the time being, it might just be too big a step to take.

I have however been lending with Zopa for a little while now, and my return of invetsment has been 10.25% on anything that I've lent which to me, is pretty good. I also have a Cash Isa paying 3.51% but I can't pay anymore money into it as I've already maxed it out for this financial year, bank has given me an extra bonus of 0.50% on my £5,100 this year as a sort of thank you for putting in the full cash amount for 2010/2011. I then have another, below average savings account with my bank that pays a very poor 0.10% and this is what worries me because I have around £85,000 or so in this account and it's literally doing nothing for me.

I'd like to think that I'm a very financially responsible person and thus far have avoided taking on any form of credit, have none at all as I don't believe in that sort of thing, was left a large amount of money in a will but other than that everything I have is from my own hard work. I want to secure my future and have a good, solid plan set up for my savings/investment so that my money can grow and I can just keep saving and not having to worry about if I'm on the right path or not.

Thank you very much for your time

Consumerist

TheProdigalSon wrote: »

I then have another, below average savings account with my bank that pays a very poor 0.10% and this is what worries me because I have around £85,000 or so in this account and it's literally doing nothing for me.

While you are thinking about your long-term plans, you could start by moving the £85,000 to a savings account which pays you a decent rate of interest.

You can find some help here.

masonic

There are quite a number of options open to you and a lot will depend on how comfortable you are investing your money in areas where there is an element of risk involved. You've had some success with Zopa and you've seen that you can be well rewarded for taking on some risk (of default). The question is whether you are comfortable moving more of your money into riskier asset classes (e.g. stockmarket based investments), or if you want to stay in cash but maximise your returns?

For the first option you have a choice between getting some independent financial advice, or doing a fair bit of reading and research and decide (or not) to choose some investments yourself. For the second option, you could consider using index linked savings certificates and fixed rate accounts, which stand a good chance of outperforming the average savings account.

With a clearer idea of what you are willing you consider, your attitude towards risk (i.e. how much your investments could fall in value before you would become seriously worried) etc., you'll get a better quality of response.

fairtrade

TheProdigalSon wrote: »

Hi all,

have been thinking about where I stand financially because I literally get my wage paid every month and have no worries

It depends whether you want to make money now or for the long term. If it is for the long term then sort out a pension.

dawyldthing

I would say your doing jolly well, I wish i was doing that well as i'm around your similar age to you. Theres some longer term investiments I think that can get you 4.5% before tax which are over 3 years and theres no risk, but other than that i would say your doing great!

opinions4u

TheProdigalSon wrote: »

I have however been lending with Zopa for a little while now, and my return of invetsment has been 10.25% on anything that I've lent which to me, is pretty good.

Keep it as a useful sideline. Don't make it the heart of your portfolio.

I then have another, below average savings account with my bank that pays a very poor 0.10% and this is what worries me because I have around £85,000 or so in this account and it's literally doing nothing for me.

https://www.theaa.com/savings pays 2.8% with easy access. That one's a no brainer.

I want to secure my future and have a good, solid plan set up for my savings/investment so that my money can grow and I can just keep saving and not having to worry about if I'm on the right path or not.

See an IFA. Track one down at www.unbiased.co.uk. There are various tax breaks that you can exploit and a massive range of other investment plans that you can access to develop your financial portfolio.