30k to Invest -need around 70k

Mrmorden21

Hey

I have been given 30k by a family member, provided I ''do something useful with it;''. I have always wanted to become a pilot and while 30k is not enough, its a damn good start. As a basic cost, I need around 70k for pilot training however, I would ideally like around 85-100k in order to leave my current 18k a year job to train full time.

Now im not a home owner, I just pay rent. I make around 1300 a month, with out goings of 160 for my car(6.5k left to pay off), 300 for rent, and a £500 credit card to pay off (£25 per month as well as a 3k student overdraft to pay ( currently £60 per month in interest). On top of that I just have the usual out goings - council tax, bills etc.

So the question is, how to I maximise this 30k to make the biggest return for what I need? Im pretty sure I read thats before investing its best to pay off all debts etc. I did some investing in uni, but not enough to feel comfortable with. I have a rough idea what Im doing but would like to hear especially from anyone who has ever been in a kind of similar situation who made it happen? I dont want to wait 10 years if possible, but i appreciate it does not happen overnight.

Thanks

wriggly

Realistically, it will take over 10 years to turn £30k into £70k-85k using any reasonably safe combination of investments. Any less time than that, and you are almost certainly looking at a high-risk investment that may lose you everything.

If you really really want to become a pilot, perhaps spend the £30k to get some basic training, then look for a company who will employ you and pay for the rest of your pilot training.

Mrmorden21

Hey

Thanks for that. I suppose I can realistically wait 5-6 years and have a total of 50k or so. That gives me 5 years to save from monthly incomes which i could use for risker investments. The problem im having ( and I guess lotf of people do ) is working out the best investments for my situation. I just dont trust financial advisors, as I have heard some horro stories. Can you advise me of any good websites/companies to consult?

Thanks

Chris

dtsazza

Mrmorden21 wrote: »

Im pretty sure I read thats before investing its best to pay off all debts etc.

This is definitely true. If you've got debts at 12% interest, say, then paying them off is equivalent to earning 12% interest on your money, tax free, and with 100% security of both capital and return. That's quite simply unbeatable with any kind of investment or saving (I'd say the break even point is around 3-6% depending on personal appetite for risk, which almost all debts are likely to be over).

Of course the important part is to remember not to go back into debt afterwards. If you've maxed out a credit card, paying it off and then going on some more buying sprees will just have been a waste of your capital. I'm not saying that you're likely to do this, but this pattern is one of the reason why a lot of consolidation loans don't/didn't work.

I did some investing in uni, but not enough to feel comfortable with. I have a rough idea what Im doing but would like to hear especially from anyone who has ever been in a kind of similar situation who made it happen? I dont want to wait 10 years if possible, but i appreciate it does not happen overnight.

I'm afraid you'll need to have quite a lot of patience if you want 133% returns on your money. Here's a quick list of how long it would take at various rates of return:

• 3% (best instant-access savings) - 28.6 years
• 5% (typical 5 year fixed rates) - 17.3 years
• 7% - 12.5 years
• 9% (very rough historic equity return given lots of assumptions) - 9.81 years
• 11% - 8.1 years

And don't forget that this doesn't take inflation into account - while RPI is broadly irrelevant to this case, it's not inconceivable that the £70k course will cost £80-90k in 8+ years time.

If we were talking about £50-60k things might be different, but I'm afraid the short answer is that there's no simple way to double your money in a short-medium timeframe. That's not to discourage you from investing - if you can get 7-10% returns on your capital that's great while it's being held in waiting - it's just that it can't work miracles.

As such then, you can either accept the 10+ year wait (remembering that returns on investments are not guaranteed), or look at this as a way to provide a little more than half of the costs, and try to come up with the rest of the money from elsewhere. Wriggly has a good suggestion regarding sponsorship - you may be able to look at career development loans, or getting a grant from a charitable trust that supports young pilots, etc.

In the worst case, you might look at cutting down on day-to-day expenses and putting small amounts into savings yourself - £2 a day would add up to a lot of money over multiple years, for instance. Though in this case, the target is quite a large one that you might feel the ongoing sacrifices aren't giving you enough feeling of achievement.

p00hsticks

Mrmorden21 wrote: »

Hey

my car(6.5k left to pay off), 300 for rent, and a £500 credit card to pay off (£25 per month as well as a 3k student overdraft to pay ( currently £60 per month in interest).

So basically, by the time you've cleared your debts (and as dtsazza says, that's probably a sensible thing to do, as it;s highly likely that they will be costing you more than you could make by investing), your £30k will have become £20k.

And you say you need four or five times that ....

How much of your current income do you reckon you can add to that each month to make the pot grow ?

Mrmorden21

with out debts, I could invest 500 per month pretty easily.

kidmugsy

Is being a pilot likely to be lucrative in the brave new world we are sliding into?

calypso_rhapsody

A few years ago a chap who worked for me left to train as a pilot ... i vaguely recall that he was able to obtain a specialist bank loan for part of the training fees (though that was in the heady days when having a commercial pilot's licence virtually guaranteed a good salary - not sure it will still apply). It might be worth speaking to some training schools to see if there are similar schemes available nowadays. I also recall that he went to the USA as the cost of training was cheaper than in the UK.

Don't really know much about this but maybe both those ideas are worth researchiing?

GRM

Have a good look around http://www.pprune.org

atush

On Trip advisor Melbourne FL board we've had a thread recnetly running about a one year training place in Pilot school there. I am not sure, but I got the impression the UK pilot was being sponsored or helped by his company to learn? In any case, you could see how far that amt of money would take you over there (but don't forget to facotor in living costs etc.).

oldtoolie

Why do you want to be a pilot? If it is to get a secure well paid job you might want to do some research. For instance, this story is about the USA but is it different in Europe?

http://www.guardian.co.uk/world/2010/jan/11/pilot-exhausting-hours-wages