What should I do with this money?

Hey there,

So I'm leaving for the US to do a postgrad course (5 years) in August, and I've recently come into £5,000. I am wondering what do do with it. I am 24, have no savings, and will probably do the following:
  • use £2k to pay off my overdraft and credit card
  • take £1k with me in $ to get me going before my scholarship comes through
  • leaving me with £2k
So my options are, take it with me to the US (good exchange rate at the moment) or save/invest it here. I have a reasonable tolerance for risk, but being overseas I won't really be able to actively manage my investments (and £2k isn't enough for this to be worth it anyway?)

I was thinking I might:
  1. Put £1k in the best cash mini ISA I can find
  2. Put £1k in a mutual fund, perhaps an index tracker
What do you think? I was considering putting it all in a stakeholder pension, but I'd like to keep at least some of it accessible, and I'm not sure if I'll come back to the UK at the end of my course.

Cheers,
rubuhoe

Replies

  • CLAPTONCLAPTON Forumite
    41.9K Posts
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    clear any debts

    save the rest in a accessible savings account

    forget about investments or pensions

    only issue is whether you take it to US or stay here.
    unless you have a UK address you can't open an ISA so if thats your preferred choice then open the ISA before going to US.

    I believe that US have internet facilities so its trivial to manage the situation of saving in the UK while living in the US
  • rubuhoeikanaikarubuhoeikanaika Forumite
    262 Posts
    Part of the Furniture 100 Posts Combo Breaker
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    CLAPTON wrote: »
    clear any debts

    save the rest in a accessible savings account

    forget about investments or pensions

    only issue is whether you take it to US or stay here.
    unless you have a UK address you can't open an ISA so if thats your preferred choice then open the ISA before going to US.

    I believe that US have internet facilities so its trivial to manage the situation of saving in the UK while living in the US


    I'm going to be a non-resident alien in the US so my UK income won't be subject to US taxes, and I'll always have a British address.

    I am leaning towards leaving it in the UK, half in a cash mini ISA. But I'm unsure what to do with the other £1k - can anyone suggest an investment like this?
    1. £1k is worthwhile
    2. Doesn't require active management
    3. A fair amount of risk is fine - after all, I unexpectedly came into this money, so I won't be too broken-hearted if I lose a chunk of it
    I won't have the chance to save much in the US on my fellowship (maybe £25/month, tops), so I'd like this £2k to be the foundation stone of my pension/nest egg. I know it's not much but hey I'm only 24, and I'm gunning for the long term return, so moderate-high risk is fine.

    Cheers,
    rubuhoe
  • cookie9cookie9 Forumite
    764 Posts
    Part of the Furniture 500 Posts Combo Breaker
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    £1k is a worthwhile investment but only if you have enough savings in other accounts. As you will only have £1k in an ISA in my opinion it would be better to build up your ISA account before looking at other investments. Once you are no longer a student you can look at building up your savings then start looking at investments.
    MFW 91 op 2014 £410/1000
    MFW 91 op 2015 £4051/4000
    MFW 91 op 2016 £4040/4000
    MFW 91 op 2017 £812/4500
  • I'm going to be a non-resident alien in the US so my UK income won't be subject to US taxes, and I'll always have a British address.

    I am leaning towards leaving it in the UK, half in a cash mini ISA. But I'm unsure what to do with the other £1k - can anyone suggest an investment like this?
    1. £1k is worthwhile
    2. Doesn't require active management
    3. A fair amount of risk is fine - after all, I unexpectedly came into this money, so I won't be too broken-hearted if I lose a chunk of it
    I won't have the chance to save much in the US on my fellowship (maybe £25/month, tops), so I'd like this £2k to be the foundation stone of my pension/nest egg. I know it's not much but hey I'm only 24, and I'm gunning for the long term return, so moderate-high risk is fine.

    Cheers,
    rubuhoe

    Contact a local Independent Financial Adviser (IFA).

    You can invest into a high risk strategy in a stocks and shares ISA.

    JoeK
    I am an Independent Financial Adviser.
    Anything posted on this forum is for discussion purposes only. It should not be considered financial advice. Different people have different needs and what is right for one person may be different for another. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser who can advise you after finding out more about your situation.
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