If you were 23 and had £230k, what would you do?

LR67

Living_proof wrote: »

I would consider myself unbelievably lucky and place any immediate cash in a high interest account whilst I considered my options and educated myself. I would acknowledge that I had a head-start on my peers and would look at maximising my assets whilst giving money to the poor and less priviliged - what goes around comes around.

Very sensible idea. OP you should consider this advice as it's so easy to squander money, especially at 23.

shireknight

I would buy a nice house in full so you have somewhere to live mortgage free, a reliable car to get to and from work and then semi-retire spending the next 50 years only doing jobs that you enjoy doing -you can't ask for a better life than that.

Eco_Miser

innovate wrote: »

230,000/45 = 5,111. Not that I think anyone could possibly live comfortably of that sort of money in 2015, but have you ever heard of inflation? How much buying power do you think £5K will have in 45 years time?

Dividing the amount available by the years needed and claiming the result is the annual amount available? That's disingenuous. Properly invested, £230,000 should be providing 4% (£9200 pa inflation linked) forever.

Ifts

berbastrike wrote: »

I have no clue what career to do, I was top of grades at school, but tempted to become a postman right now!

Unless you've gone ahead and done it in the last day or two, but I thought you were self employed and wanted to pack in your business because you never get a day off and its really stressful at times.
If it was a successful business that cleared £80K this year I find it strange you want to jack it in and are tempted to become a postman.

Could you not just keep the business going and employ one/two members of staff to run the business and free up your time. That way you would be creating a job or two for the unemployed and would also let you have some time off.

But then again who needs to work if you have the cure for the ageing process and can reverse it (I'm sure you stated you were older than 23 in one of your other posts)...

guymo

Eco_Miser wrote: »

Properly invested, £230,000 should be providing 4% (£9200 pa inflation linked) forever.

This would require two things:
1) a good answer to the OP's original question about what to do with the money
2) a fair dose of luck. The 4% rule isn't seen as a banker these days; see for instance Wade Pfau's work. http://wpfau.blogspot.fr/2013/06/asset-valuations-and-safe-portfolio.html

The sustainable withdrawal rate for a 30-year retirement, 40% stock allocation, and a 10% accepted failure rate is 2.8%.

So you have to replace £9200 by £6440, "forever" by 30 years, and accept a 10% chance that you'll run out of money in that time. For a 23 year old I doubt that's acceptable.

duchy

I thought it was more obvious ......buy house that needs a good spruce up.....use that spare time to renovate ......sell for a profit ...... Or rent out if you have the mind set ........ Buy a second house ........repeat.

If you don't know what you want to be when you grow up yet then you may as well do something with your time to grow your money until you a decide or b grow it enough to retire

standinman2009

At 23 Id spend it ,you've plenty of time ,to make more ,a round thw world firstly ,and have a nice long gap year ,then with whats left either buy a place or put down a deposit on one ,as i get into the later part of my life ,shudder at the very young not living a bit ,life is fairly grim !

standinman2009

At 23 Id spend it ,you've plenty of time ,to make more ,a round the world trip firstly ,and have a nice long gap year ,then with whats left either buy a place or put down a deposit on one ,as i get into the later part of my life ,shudder at the very young not living a bit ,life is fairly grim !

makeyourdaddyproud

ViolaLass wrote: »

If you don't pay any NI, you won't get the State Pension (and I assume you're not claiming benefits!).

What an absolute load of rubbish that is.

Ever heard of the minimum income guarantee?

botkin

berbastrike wrote: »

You have no job, no house.

Would this be the best plan:

Buy a house for £100k to live in.

Buy another house for £100k to let

Put £30k in savings

I think this is actually a pretty good plan, but I'll go ahead and flesh it out a bit.

Buy a 4 bed house for 100k yourself up north, somewhere like Manchester or Liverpool. Let out the other 3 rooms.

Buy another 4 bed house for 100k nearby and let it out. Manage the property yourself to save on agency fees.

Invest 15k in a stocks and shares NISA (the new ISA, available from July). I would adopt a dividend growth strategy, so buy the likes of Unilever, Tesco, etc.

Top up your NISA to 30k next year.

So overall you have 200k in property and 30k in shares. Should be enough to live on, just about.