A student with £25k...

BooSmile

Hi all,

I'm currently a first year university student with £57k of savings from my previous business, but now that I have sold the business on, I don't know what to do with the money left over. I'll be spending quite a bit of money on luxuries for myself and family, such as cars etc and I'll be left with approx £25k.

But what do I do with this left over money? I feel as if it is such a big waste just sitting there in my account. I'm not interested in anything which is high risk, so it must be safe.

I actually did consider not 'wasting' any money on luxuries, but even then, I wouldn't have enough to buy a house. I don't currently have a job, so I have no income, therefore I can't exactly take out a mortgage, and my parents do not want a mortgage under their name... So I think the house option is out of the window?

I did consider investing in a new business idea, but I simply do not have the time anymore - That's the reason for the sale of my previous business.

I currently have just over £57,000 in my current account and I've simply left it sitting there for the past 4 months. So I NEED to put this money into good use.

Could anyone give any advice on what to do?

CLAPTON

insufficient inofrmation

how long will you be a student
what are your outgoings
what other income is there in the family
what are your job prosepcts when you finish at uni

summerstudent

Have you thought about buying a large house (4 bedrooms+) near your university and renting the other rooms for the duration?
You may be able to get a mortgage like this and depending on where the uni is, how much the house costs etc. You may find that by graduation you have taken enough in rent to clear the mortgage.

My uncle did this when he went to uni at bristol. When he graduated he owned the house outright.

atush

With university fees of around 9K per year, and living costs of 7-10K I think you made a mistake of spending the money on luxuries. you won't get 2 years out of the 25K left, if you aren't working.

You wont get a BTL mtg with only 25K, no income and no contingency funds esp as you will owe tuition in September. A total nonstarter.

BooSmile

CLAPTON wrote: »

insufficient inofrmation

how long will you be a student
what are your outgoings
what other income is there in the family
what are your job prosepcts when you finish at uni

• I will be a student for another 3-4 years, depening on whether I do a Masters degree or not - Most likely will be doing a Masters degree...
• Outgoings are minimal. To say the least, I craved and still crave success academically and in business, so my social life hasn't been the best during the past few years, which means outgoings are small. Even if that improves, I still will have my student loan/grants/bursaries to pay for part of these.
• Income comes from both parents, and it's more than enough to keep us alive and whilst still having some luxuries.
• Job prospects are apparently quite good for Engineers, according to the University. So it shouldn't be too bad when I come out of University... (I hope)

summerstudent wrote: »

Have you thought about buying a large house (4 bedrooms+) near your university and renting the other rooms for the duration?
You may be able to get a mortgage like this and depending on where the uni is, how much the house costs etc. You may find that by graduation you have taken enough in rent to clear the mortgage.

My uncle did this when he went to uni at bristol. When he graduated he owned the house outright.

I didn't know you could get a mortgage like that. Any ideas on where I could get some more information regarding this?

BooSmile

atush wrote: »

With university fees of around 9K per year, and living costs of 7-10K I think you made a mistake of spending the money on luxuries. you won't get 2 years out of the 25K left, if you aren't working.

You wont get a BTL mtg with only 25K, no income and no contingency funds esp as you will owe tuition in September. A total nonstarter.

I'm on the old fee pricing, so only £3k-something a year. My living costs are nowhere near £7-10k, more closer to £3.5k a year.
As said, I still have loans, grants and bursaries which pay for everything University wise - Already got through 1 year of uni, and I still have quite a bit of the loan, grants and bursaries left so I should be fine.

You may have mistaken on the spending part.. I haven't actually spent my savings on luxuries yet.. I still have £57k in the bank.

xylophone

In the bank earning no or low interest? As you say, that seems pretty pointless. Wasting money buying unneeded luxuries? Also seems pointless.

You want the money to be safe? Presumably you mean that you do not wish to take any capital risk. There is, of course, the risk of inflation.

In these circumstances deposit accounts of one kind or another seem the only solution. You could consider an ISA - you'll likely be a taxpayer one day even if you are not now.

http://www.money.co.uk/savings-accounts.htm

Don't forget the R85 if you are a non-taxpayer.

With regard to the house, I doubt you'd get a mortgage without a parental guarantee and even if you could, do you want the hassle of being a landlord?

atush

I still will have my student loan/grants/bursaries to pay for part of these.

What rate are your student loans? paying otnerest hen you don't need to so you have debt for longer isn't always a good idea. But grants and bursaries are different so fine on that.

And check into your Masters plans. It was my understanding that you will be on the new higher fees for your Masters as it counts a a whoe new degree.

You worked hard I assume for that money so no problem in buying a car etc. But I would not spend today what you will need tomorrow and then finding that via debt. So I see no reason you 'need' to spend more than 30K of it?

Good choice on the engineering. I have 3 boys in or soon to be in Uni and I was hoping one would pick that but no luck. But I will have a lawyer for my trouble ;-)

gadgetmind

BooSmile wrote: »

Income comes from both parents, and it's more than enough to keep us alive and whilst still having some luxuries.

Try not to rely on that any longer than is necessary. It's easy to turn into a zoo lion, dependent on meat being thrown at them and lacking the urge to hunt.

Job prospects are apparently quite good for Engineers, according to the University. So it shouldn't be too bad when I come out of University... (I hope)

Engineering covers many camps. We're desperate for *good* computer science and electronic engineering grads, but mech eng (and others) might well be harder.

Regards your planned spending, either don't do it, or do it very wisely. I blew a lot of money (earned myself, not gifted!) at a very young age and wish I hadn't.

As for the degree, that's your choice. However, if you have the brains and drive to run your own business, do you really need to study full time rather than just getting stuck into working life?

I did complete my degree even though I started a business in my final year, but I do question my earlier priorities. Degrees were worth more back in the early 80s, but even so my certificate went into a drawer and never came out again.

Only you can decide.

bmwboi99

my advice would be to keep the money mostly in the highest rate fixed rate bonds/deposits until u graduate uni as u may want to invest in another business if u r finding it difficult getting a job.

You cant start a multi-million pound business, with no start-up capital

i have some money and was thinkin about living cost wen i go to uni in sep, but then i realised ill have nothing left, when i cud just be careful with my grants and loans etc and then id have something to start up my own business with when i graduate

guitarman001

What kind of engineering are you doing? It's fun but you;ll never be rich from it. Starting salaries are typically higher than most jobs but as you get older those other jobs will likely take over in salary terms. I do IC design (electronics). Pay is poor in the UK compared to Europe and the US. If you're doing something more mechanical/civil/electrical based then get off to Oz.