Investment direction for a 19 Year old

AlexShizza

I posted to these forums over a ago explaining my situation and looking for advice and here i am again!

Im currently 19 years old and am looking to invest the savings i have accumulated over the years, i am most interested in the buy to let property market as i see it to be a great way to get a return on your money, granted it may take a long time to really see the real benefits but i feel its a smart road to head down. I have spoken to my bank and if a can get the required LTV on my choosen property this will be an option for me.

I have saved up until this point just shy of 9k and am now earning a decent enough wage to hopefully hit 10k within a next few months, I will not have enough on my own to go ahead and buy to let but family members will give me financial support which i will repay at a later date.

I am very interested in business, constantly coming up with new business ventures but my risk adverse attitude tends to steer me towards to safer path. i would love to invest the money in myself a start something where i can work for myself but this will not pay as well as I would hope.

My question to you is this, is my chosen route a good way to go or should i look at other ways to invest and see a return on this money?

brendon

You cannot use family members' funds to get a mortgage. Unless you can buy a house outright, your buy-to-let dream is just that -- a dream. But that's not to worry, because there's hardly any money in buy-to-let and I personally wouldn't invest in it.

i would love to invest the money in myself a start something where i can work for myself but this will not pay as well as I would hope.

Why not? What ideas do you have? Don't worry about taking risks. If there's any point in your life you should be taking risks, it's at 19 years old.

I think your best option, at £9k, is a good savings account or current account until you can clearly define your goals.

AlexShizza

well the money would be given to me, so i can use this money from family. I don't see why that would be an issue?

as for ideas i would like to open a mini golf course and/or start a wood work shop where i would make a sell any number of items

El_Selb

Since you're risk averse, look into passive investing. As per advice given to me elsewhere in this forum a year or two ago, read Tim Hale's 'Smarter Investing' and check out the articles on the Monevator website.

jimjames

AlexShizza wrote: »

well the money would be given to me, so i can use this money from family. I don't see why that would be an issue?

as for ideas i would like to open a mini golf course and/or start a wood work shop where i would make a sell any number of items

Are they giving you all the money for a house? If you need a mortgage they won't normally lend unless you have your own house.

BTW if you're risk adverse why are you looking at btl? Share based investment is no more risky and is far less hassle than managing tenants.

AlexShizza

Ill be looking at a £100,000 house/flat and i will have 10k which i will have 2 family members match which will then be enough to meet the required LTV and pay legal fees.

Ive looked into property and as long as you have good tenants and a good rental agreement i thought it would be a great way to invest?!

Im open to looking at new ideas, what would i be looking at with Share based investment ?

jimjames

AlexShizza wrote: »

Ill be looking at a £100,000 house/flat and i will have 10k which i will have 2 family members match which will then be enough to meet the required LTV and pay legal fees.

Ive looked into property and as long as you have good tenants and a good rental agreement i thought it would be a great way to invest ?

Like I say I think you'll have difficulty getting a mortgage.

I don't think it's a great investment when prices are high and you could lose tenants and have no income while you get new ones plus initial startup costs.

Have a look at monevator.com for info on investment.

Archi_Bald

You have mentioned a couple of the BTL risks, namely "as long as you have good tenants and a good rental agreement ". You have an influence over the latter, but not the former. You also have no influence over vacant periods that you might have, and you do need to comply with a lot of regulations as a landlord. Insurances, taxes, solicitor and accountants costs, repairs and renovations, and possibly agency fees are costs that are often overlooked. You don't appear to have allowed for any of this.

You would most likely be better off for now if you split your funds into something like

1. an ememergency fund (e.g. what would you live off if you lost your job?)
2. a pension fund (your employer should be offering a works pension now, or very soon)
3. savings for holidays, presents for family and friends, car, clothes, entertainment etc
4. longer term savings for your own accomodation
5. longer term savings for your BTL dream

You are doing well with your savings but throwing them all at a BTL would be massively risky. No prudent investor would commit themselves to having all their eggs in one basket.

newuser78

I agree with both jimjames and Archi Bald - I was in a similar position with BTL many years ago and actually lost thousands of pounds.

At your age, I would look at long-term investment and continue with savings. Time is on your side.

ManofLeisure_2

A few years ago I invested a sum of money in a technology fund and in 6 mths my money had doubled. I had a friend who was an 'experienced' investor and he told me to jump ship. I payed no heed to his advice and during the next few months watched my investment shrink. In my naevity I thought the fund would bounce back - but it didn't:(. I pulled out having lost half my investment. Fortunetly that was only £1500, but had I listened to the chap with experience, I would have left with £6,000. It was a lesson well learned, and from that point in time I've never invested money into a venture which I didn't have a good understanding of. My advice to you, would be to take time to research the 'many' areas in which you could invest your savings. If you are drawn to buy-to-let, read as much as you can about it, and speak to others who have embarked on this venture

Best of Luck

Archi_Bald

ManofLeisure wrote: »

My advice to you, would be to take time to research the 'many' areas in which you could invest your savings. If you are drawn to buy-to-let, read as much as you can about it, and speak to others who have embarked on this venture

Best of Luck

Really good suggestions.

Also, don't listen to anyone who pushes BTL and sells property, or property finance, either for a living or privately, directly or indirectly.