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  • atush
    atush Posts: 18,731 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    So at the moment I am saving as much as I can to build a fund to buy a property that I can rent out. I Want to do this as soon as possible as so I can get the mortgage paid off so every month it will be cash in the bank. but its knowing when to buy. I can't buy a 1 bed where I want to for less than £150,000 at best.

    Good thing you are here, because that my friend is the worst investment strategy ever.

    You still need a place to live, so renting somewhere, and renting out your own place is bonkers. BTL is for after you own your own home and have some other investments and savings.

    Second, with a BTL , you DO NOT pay off the mtg as soon as possible- as that mtg is tax deductable against the income. So you clearly don't understand the business model in BTL.

    Third, you get the best rental returns in areas of high rental demand from near major hospitals, or Universities and on properties under 100K (or even 50K) in areas where most don't own their own homes but rent. those getting 10%+ yields are those that bought at 60K, put in 10K or so renovating, and then rent a property that cost them 70K but is worth 80K or more. Or for those with the skills in the trade required to attain HMO status and are renting rooms seperately to students after a high code refurb.

    Back to the drawing board for you my friend.
  • 100saving
    100saving Posts: 314 Forumite
    ok all taken on board. currently and for as long as I want I will live at home with the parents thats why I can save £950 a month. I live in london and will not be renting ever!!!

    my plan is to buy somewhere rent this out for 2-3 years and then use the capital I would have in this property to buy somewhere to live or rent depending on where I am at that point in my life.

    I don't want people taking the !!!!. I don't know it all thats why I am asking advice from people that have been there or know more then me.

    So lets ask this question instead, you can read what I am doing now and what I have now. what would you do?
    Age: 24 / London/Ireland / Salary €49,000 / 1 London BTL (8% yield) / Total savings pot £12k+
    Lloyds Club CA £5,000 @4% / FD Regular Saver £3,600 @6% (12 of 12) / TSB Classic CA £2,000 @5%
    Clydesdale Direct CA £1,000 @2% / Santander ISA £700 @0.5% / Premium Bonds - £100
    Halifax Reward CA (£5 per month) / Santander 1|2|3 CC (cashback)
  • AlwaysLearnin
    AlwaysLearnin Posts: 904 Forumite
    Part of the Furniture 500 Posts Name Dropper Mortgage-free Glee!
    You appear to have some rather romantic notions. Understandable perhaps - if you can't have dreams at 22 then when can you?! However, be aware that for every person that makes it good with high risk plans, there are quite a few that lose out.

    I'm not trying to discourage you, but I would just suggest that you make sure you go into anything with eyes wide open, by researching the subject(s) and making sure you understand what you're getting in to. Might not sound glamourous, but hopefully it'll help you avoid being one of those that loses out.
  • innovate
    innovate Posts: 16,217 Forumite
    10,000 Posts Combo Breaker
    100saving wrote: »
    what would you do?

    I would do some reading. Then some more reading. And then a bit more reading. And some thinking and working out the pros and cons of all the potential alternatives for myself thrown in all the way. For about 3 or 4 months, may be longer. Then I would make a short, medium and long term term plan on what I (and only I) want to do, not what some stranger on an internet forum said.
  • 100saving
    100saving Posts: 314 Forumite
    ok thanks does anyone know where i can get some good stocks and shares ISA tips/help i know a little but not a loads.

    my investment knowledge is lacking i know this! but i could lock some of my money away in this if the possible returns are right.
    Age: 24 / London/Ireland / Salary €49,000 / 1 London BTL (8% yield) / Total savings pot £12k+
    Lloyds Club CA £5,000 @4% / FD Regular Saver £3,600 @6% (12 of 12) / TSB Classic CA £2,000 @5%
    Clydesdale Direct CA £1,000 @2% / Santander ISA £700 @0.5% / Premium Bonds - £100
    Halifax Reward CA (£5 per month) / Santander 1|2|3 CC (cashback)
  • AlwaysLearnin
    AlwaysLearnin Posts: 904 Forumite
    Part of the Furniture 500 Posts Name Dropper Mortgage-free Glee!
    These forums provide a lot of information. Another excellent site is http://monevator.com/.

    Smarter Investing by Tim Hale is a widely recommended book on investing, but I would try briefer (and cheaper) resources like 'Monkey with a Pin' and 'Slow & Steady Steps' first as a taster/introduction, so as not to get too bogged down.

    All of these focus on a more passive approach, but that's something you should understand too.
  • innovate
    innovate Posts: 16,217 Forumite
    10,000 Posts Combo Breaker
    These forums provide a lot of information.


    Absolutely. There is a huge amount of information on here - - that's where I would have started. I would then have come across monevator et al.
  • badger09
    badger09 Posts: 11,575 Forumite
    Part of the Furniture 10,000 Posts Name Dropper
    Another vote for Tim Hale's 'Smarter Investing'

    Latest edition 2009 so doesn't consider impact of QE, but as basic reading for newbie investors I'd say its invaluable and a real eye opener. I bought it (not very MSE, but will pass on to my son) but you can borrow it from the library.

    100saving its great that you're thinking about saving and investing at your age. I hope you don't mind a couple of tips from a seasoned 'saver' but inexperienced 'investor' (who could be your granny :eek:)

    1) don't put all your eggs in one basket

    2) cash savings, even in ISAs, will be eroded by inflation

    Good luck!
  • A lot of people have exceptionally romantic notions about how investing works, people work really hard to save huge amounts of money and then discover that unless you're willing to risk it you're never going to see large returns unless you wait many decades.

    The best thing the average person can do is focus on earnings. Earnings is something you can control directly, it's something you can increase with effort and it's without risk.

    £20,000 in a bank account earning 3% interest per year would make you roughly £600. If you are took a weekend job alongside your main job at minimum wage (12 hours per week) for a year you would earn just under £4,000. If that weekend job paid £10 per hour you would make over £6,000 per year, that's 10x what you'd make with £20,000 sitting in the bank.

    Saving and investing is absolutely a sensible financial decision and something you should absolutely do, however if your goal is to make as much money as possible (instead of just make the money you have work as best it can for you) then increasing your earnings through training, promotions and a secondary job is the way to achieve that.
  • 100saving
    100saving Posts: 314 Forumite
    so just an update:

    I have just opened the FD 6% saving account so have started paying the MAX £300 a month into it. i am looking to get the max £94 at the end of the 12 months. my Barclays Monthly Savings ends in jan 2014 so i will still be putting in the MAX £250 each month, then after that move the money to a better account that pays more. At the moment i am getting 3.20% on it so thats not bad.

    The rest of my income is going into my ISA (2.25%) looking to fill that in the next 2-3 months but the rate i am getting on the FD and Barclays accounts is paying more so i want to keep them up.

    so my end of month saving pot will have gone up by about £950ish
    Age: 24 / London/Ireland / Salary €49,000 / 1 London BTL (8% yield) / Total savings pot £12k+
    Lloyds Club CA £5,000 @4% / FD Regular Saver £3,600 @6% (12 of 12) / TSB Classic CA £2,000 @5%
    Clydesdale Direct CA £1,000 @2% / Santander ISA £700 @0.5% / Premium Bonds - £100
    Halifax Reward CA (£5 per month) / Santander 1|2|3 CC (cashback)
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