Unemployed Graduate 100k dilemma; share your life experience

jpuphill

Hello
I will try to include all relevant information here and I hope that if you have advice from first hand experience you may share as I am in a little pickle.

I am a UK citizen, unemployed graduate, with modest assets as follows

100k Cash (Savings and Investments have just matured 3k in a blue chip stock 5k H2B ISA 15k of collectables (Physical assets in storage) (Yes I know I have rising outstanding student debt of 40k plus)

I wanted to work in disaster relief through the navy but I am disqualified from the forces on medical grounds. Now I have a good degree that could lead lots of places, I have applied for 100+ jobs but most do not get back to me as I have zero work experience. I was offered a job in Shoreditch but being raised in the countryside it was too much of a jump and I had a mini breakdown after trying to get a room/closet/tent to live in but to no avail so I had to drop out of the position before it commenced. I am prepared to relocate and work in urban areas but after witnessing the housing problem in Zone 1 and ruling out working there that's about 60% of the good graduate job market gone and the remainder is dispersed over the whole UK.

Everything I have I have got through hard work so I know the value of what I have (Except a 10k lump my estranged grand-dad gifted me when I met him for the first time). I started selling food and drink out of my PE kit bag when I was 14 which grew into a tuck shop for about 30 daily customers. Then I moved into fashion reselling on eBay and at uni I began collecting vintage things which led me into buying / selling a lot on ebay in the past 3 years.

My family is basically just my mum, and I have no prospect of inheriting anything which drove me from a young age to be financially independent and I have never relied on anybody else.

I have always used short term fixed savings account for past 5 years, not knowing that the interest rates would continue to decline like they have so a year ago I invested into S&S isa and then I taught myself to understand markets and equities. So I then began to leverage more and more risk and capital in a trading account and fell into the trap of day trading at the open. I weened myself of of this and invested in miners so made an extra 4k after some rough weeks when commodities took a dive and I couldn't bear to look at my losses.

My problem is I haven't had much life experience, haven't been on holiday in 7 years, no friends, living at home with my mum (who is poor and often borrows from me), so I get the blues often to say the least. I look at my savings and wonder how I can use it to make a significant change to my life because atm they cause as much stress as if I had nothing.

Given what I've learned and read, under normal circumstances I would invest 80-90% in trackers maxing out my ISA for this year and next. But I am pessimistic about the prospects of global markets in the coming 18 months (debt bigger than pre-2008, p/e ratios of 20-25 seeming normal, Brexit, Trump, BoE ECB FED incompetence) as the markets seem totally disconnected from the news and rising tensions over US/Russia/China/NK. So you might say I should hedge this if I believe it, buy gold ETF and short the Dow but I felt this way 6 months ago and the bubble has gotten bigger and bigger so now I'm not inclined to either invest for the long term or short in the coming year.

I don't really have a need for money, I don't like buying stuff but if I have to I use charity shops / eBay. I like walking and riding my bike but I also want to learn a craft in my spare time so will likely buy some tools and books but ultimately my use for money is food and petrol (soon to be electricity in the next 5 years as I will convert my car to electric motor). Part of me would like to get into classic motorsport but I would need 100k salary to contemplate this seriously so for now I don't care. Short term I want to move out and have fun being a twenty-something but I don't know what to do. I have been considering buy to let as a serious option, looking at rightmove twice a week in the black country for sub 150k properties and have gone to a couple of viewings, even being nutty enough to consider auction properties but I feel like the growth potential is modest at best and the risk of a downturn on a sizeable investment makes me nervous.

I can buy a place of my own if i get a part time job, I can start a business, I can spend it and travel etc. The possibilities seem endless that it is paralysing. Sometimes I lie awake at night angry with myself for not leaving and being wild and free and seeing where spending it and buying the experiences that I want would take me. (Sailing expedition to the south pole I think is likely)

I would really like any input if you have something worthwhile to share, if you have had a similar problem what you did in your youth, what books you read to influence a decision, what you would do in my position, all ideas appreciated

If I went to an IFA the first question would be, what is your financial goal? To which I have no answer. I don't know what I want in life except to be content and able to help others. Knowing I have a pile of potential that is being eaten away by inflation makes me stressed as I know that leveraging it with my proactive attitude could yield big. Hopefully this will make an entertaining thread that is a little different from the usual 'can i get tax relief on ... ?'

cashbackproblems

I would focus on getting a job and your career started first, a good degree nowadays doesnt mean much especially if its not taregted to a specific profession. Maybe you need to do further training or work experience first

I would invest some of the 100k in funds and max your h2b isa and s+s isa. If holding for 5yrs+ you will ride out any ups and downs with a tracker such as vanguard 60/80. It depends how much risk you wish to take, i keep 3 months in cash and invest the rest

System

You clearly haven't learnt the first rule about being in the markets if you want to come ahead and that is that time spent in them is crucial. The longer you're in the markets the less likely you are to come out at a loss. A downturn over the next 18 months should be seen as an opportunity to pile more money in whilst everything is on sale. The gains from that then compensate the losses from your earlier investments.

I can buy a place of my own if i get a part time job

Where I live now you could buy a house outright in cash and still have over £50,000 of your stash left.

As for the student debt, ignore it. Anything left owing will be written off after 30 years.

You want to do disaster relief? Well there is absolutely nothing stopping you other than yourself. You can sign up to a NGO as a volunteer right now, go do that for a couple of years after sticking your £100k in an index tracker so it can sit there earning cash whilst you're away. You'd then have time to find out if it really is for you, even if it isn't you then have some experience to put on a CV and you've a stash to come back to when you return to the UK.

jpuphill

I really don't feel comfortable committing a large stake in funds as I am not confident that 5 years will see significant growth, this reflationary bubble pumped up by central banks isn't sustainable. If there was signs that earnings are starting to increase significantly and if the base rate wasn't so low then I would be less deterred by the levels of debt, we still haven't recovered from '08 crash. It took 16ish years for the FTSE to break out above the dot-com high, looking at the bullish DOW I am not confident it will be above 22k in 5 years, given MSCI world index is majority US and other global funds are similarly, it feels like diversified funds are overexposed to a US decline. I don't like how global political tensions seem to have pushed the VIX to a near all time low, the markets seem disconnected considering NK have repeatedly launched missiles in aggression and the US just flew bombers over the Korean peninsula.

That is a brief summary, I appreciate that I am totally under experienced but until I read something that convinces me otherwise I would only want to commit to 20k in an S&S ISA / LISA combo with safe growth funds like Vanguard etc.

You clearly haven't learnt the first rule about being in the markets if you want to come ahead and that is that time spent in them is crucial.

I do fully appreciate this, I have made mistakes but got away with it but I won't repeat this, if I had a job I would be maxing out pension and ISA for as long as possible as I know my older self will thank me when the state pension age is beyond life expectancy.

But here is my thinking; I have to move out soon regardless of employment or not so that will mean relocating and finding somewhere to call home-ish. Given rent is so high for people my age compared to earnings (broadbrushing here but; av 700 pcm vs 25k gross salary, that's 8.5k from take home 19.5k or 44% of net income, which doesn't include pension contributions) I figure that buying a house of some sort is a good move which means I shouldn't invest a large stake as I see a large purchase in short term. A house gives me options, either saving on not having to rent / a buy to let investment / rent out a room for tax relief, if my circumstances change which will give me an income regardless and a safety net. This is my rational but inexperienced mind speaking here, I haven't taken advice as I am so vague with my goals and no one I know is financially literate so it is only in past 9-12 months I have begun to really take things seriously.

As has been highlighted getting a job is important and I have worked really hard at this for a year but it is such a draining exercise reading generic jargon vacancies, sending in CV and then being rejected over and over that I am losing motivation. Tips for staying positive are welcome...

Because the prospect of buying a house is such a large move (considering I don't know anyone who owns their home) I thought I would post here honestly so my mistakes can be picked apart and examined. Any one want to tell me the following is a bad idea? -

20-30% in funds within ISA wrapper / 50-60% on mortgage (personal or b2l depending on circumstances in short term) / remainder in cash (approx 3-6 months of mortgage and expenses, kept in high interest savings 1.5%!! wooohooo)

This is a general sketch and leaves me a little exposed if house prices fall (seems low risk in 5-10 year period), I really want to hear a wider range of advice on how to approach this if anyone has been in a remotely similar position. I see this sort of plan leaving me with lots of options as I don't have a defined life plan this is a good idea.

jpuphill

Where I live now you could buy a house outright in cash and still have over £50,000 of your stash left.

Stoke-on-Trent, south wales valleys, county durham, liverpool ? My understanding is these areas are less likely to offer growth and more likely to decline if the economy worsens ie. they are cheap for a reason and unlikely to be exposed to state infrastructure investment. It would be nice if they were bargains and in 10-20 years they reach closer to the national average but seems risky

My main area of interest is Brimingham / worcestershire / black country. I know some areas well and like lots of the towns there. Furthermore earnings in the wet midlands seem to be higher than average and house prices are lower than average which seems like a good bet for growth. On the plus side it has all the major infrastructure and no matter where you are it is hard to find somewhere less than 2 hours from central London which is better than some parts of the south east commuter towns

If anyone wants to tell me to move to Brum, get a job, live at large and enjoy my savings then go ahead, or more importantly vice versa, if I should be moving to Germany to escape Brexit or something else

Eco_Miser

I started selling food and drink out of my PE kit bag when I was 14 which grew into a tuck shop for about 30 daily customers. Then I moved into fashion reselling on eBay and at uni I began collecting vintage bicycles which led me into buying / selling a lot on ebay in the past 2 years.

Everything I have I have got through hard work

So why haven't you got a proper(ish) business by now?

remainder in cash (approx 3-6 months of mortgage and expenses, kept in high interest savings 1.5%!! wooohooo

Savings accounts are the last place to keep savings - first use multiple current accounts and regular savers (5% down to 2% on a few thousand each) - OK, being unemployed may make some of these difficult, but having £100k should help - I've opened such accounts with just the income from my investments, of similar size then.

A house gives me options, either saving on not having to rent / a buy to let investment / rent out a room for tax relief,

Don't buy to let, until you have your own housing sorted. The others are good, but you will need to decide whether to go for a small cheaper house/flat just for yourself, or a larger one to rent out a room. Don't worry about getting superior growth out of your residence - the savings in rent and freedom to do more or less what you want with it are the important points.

I really don't feel comfortable committing a large stake in funds as I am not confident that 5 years will see significant growth, this reflationary bubble pumped up by central banks isn't sustainable.

You don't need significant growth. So long as the overall return (including dividends) is better than you would get in cash, you'll be better off. Of course you might be even better off by investing in your own business, or in getting a career-specific qualification.
You're still young, if the market crashes you can afford to wait for the recovery, or even walk away and start again. Have you read Monevator?

I agree with Tarambor - don't worry about the student debt, and if you want to do disaster relief, find a suitable NGO and volunteer.

haven't been on holiday in 7 years,

Why not? You can afford one, if you really want one. No need for it to be expensive.

But I am pessimistic ...
I really don't feel comfortable ...
... I am not confident ...

That's a continuous theme throughout your posts. You're a graduate, you've earned over A HUNDRED THOUSAND POUNDS as a small business entrepreneur (are you including that on your CV?), you've identified an area with higher earnings and lower house prices, why aren't you exploiting all this?
Are your skills sellable over the internet? If so you could live anywhere with a broadband connection.
Stop finding reasons to fail, and get on with it.

spiritless

You're young just once. Take some time to see the world, to work in disaster relief. Do something that you can't do when you're older, when you've got other obligations.

And then don't discount the jobs in London. I get that the housing was an issue but life experiences also often build friendships and those friendships could support you a bit through those challenges.

It's an exciting time for you, don't be weighed down by what you 'should' do.

atush

Stop. Think.

What is your degree in? What can you do ie work??

Employment is first.

Can you do what you want to do, if you are not medically stable? What limitations do you have?

Why is your mum poor when you have 100K? Do you live with her? Is that how your finances are intertwined?

You want to have fun, understandable. You want to invest, understandable.

But investment means the money should be invested for at least 5 years, but 10 ideally. Will you need the money before then?

If yes, then you should not invest all fo it, maybe some (such as your S&S isa allowance).

3k in a blue chip stock

why one share? Collective investments are less risky

5k H2B ISA

Good, what did you invest in?


15k of collectables (Physical assets)

What assets?

jpuphill

So why haven't you got a proper(ish) business by now?

Are your skills sellable over the internet?

I have just done this part time and I don't like spending all my time on the computer / phone. Besides I don't know what skills I have that are marketable.

Why aren't you exploiting all this?

Stop finding reasons to fail, and get on with it.

I am somewhat paralysed by myself, I am not drawn to anything, I don't have a passion to direct my creativity, everything is just idling and I feel my potential starting to dissolve as job applications are so fatiguing when I'm getting nowhere. I've made money out of something that can't be scaled up, the majority of the market is eBay and while some other sellers now have a physical shop, it isn't the job I want to do, just a hobby. If I made it full time then turnover could be 60-70k max after a few years which shows I'd be better off in employment.

You're young just once. Take some time to see the world, to work in disaster relief. Do something that you can't do when you're older, when you've got other obligations.

And then don't discount the jobs in London. I get that the housing was an issue but life experiences also often build friendships and those friendships could support you a bit through those challenges.

It's an exciting time for you, don't be weighed down by what you 'should' do.

I have applied for one NGO but like the Navy as I have severe food allergies they couldn't progress my application. I would very much like to have friends and experiences in London but I can not work in Zone1/2 as it is today, I was born and raised amongst sky larks, hills, sheep, horses, stitch-wort and otters, I am a pastoral man with romantic ideals and Euston / Victoria Line / 1200 pound pcm rooms are not a substitute.

Furthermore, I don't know what I couldn't do when I'm older though, I feel like travelling is something I'd do because I'd regret not doing it later on but I don't want to go really

Can you do what you want to do, if you are not medically stable? What limitations do you have?

I have had depression, in varying severity since I was 17, that is the limitation on everything, it isolates me and tells me I'm worthless. I try my best to counter it / accept it / push it into something good, but on top of everything else things can get too much (like London incident, took 3 weeks to recover properly) before someone says I should focus on solving this before anything else, I have already. 4 years in counselling and some groups and some medication, it is something I have accepted to live with and now it is damage control / managing it. I am stable enough to function day to day in work.

Stop. Think.

What is your degree in? What can you do ie work??

Employment is first.

I have a top degree in Mechanical Engineering so I can work in nearly any sector, Financial, Research, Science & Technology, Engineering, Management. I think I have approached everything as best I can, First I had a list of jobs I wanted but after rejections I changed the tactic to applying for anything that wasn't on my black list to expand my potential but to no avail. This will all likely sound odd as on paper it seems I'd be a good fresh intern for some company, I believe I am anyway but the truth is, even after writing bespoke covering letters to entry level positions I often don't even get a reply. I think it is the absence of work experience, when I was studying I thought being a self-starter would be a plus on my CV but now it seems like a part time job would've been less effort and greater end reward, how I laugh at my longer ambitious self :rotfl:

spiritless

Keeping your mental health in a good place is certainly priority. Have you considered more local voluntary work? Broaden horizons by getting a wider skill base, contacts and maybe it might lead to a next step career wise.

My husband and his family and my son are all on the autistic spectrum. Intelligent people, crippled by what they should do and what they feel they aren't doing. Finding a balance of dealing with people to widen their support network and to highlight potential open doors to other career directions and allowing them down time to process stuff has been difficult as an outsider but once the balance was found, they have each begun to flourish with things that just weren't considered before.

You sound like you've come a long way. Don't lose sight of the fact you're doing a fantastic job.

jpuphill

Thank You

There have been a few volunteering posts I was slightly interested in but none are in sectors I want to work in so it didn't seem worthwhile. Furthermore most local volunteering things are full / at capacity