26 years old with £35k

Delta_Tango93

Hi everyone, I inherited £30k at 18 from my grandpa's passing, but haven't ever looked at it for my personal gain.
I've spent and repaid myself around £15k in the past 5 years on my elderly parent's (they're 70 this year!) house repairs, which I had to fight to do - they won't accept any payment from me. I live at home, and because of these large payments, potential future large payments and their extremely kind yet stubborn ways, don't pay rent/bills, which I'm eternally grateful for, but also feel really bad about).
Finally, despite my arguments against this, my parents last year put my name on the house due to recent news of health problems - I can't and won't describe all the emotions and thoughts as they're too extensive for this forum. It does mean I wasn't valid for the help to buy first time buyer ISA, and it bumps tax/fees up when it comes to buying a place of my own. Don't misconstrue these as complaints, I'm just stating the facts.

I've been quite emotional and in denial over having the money instead of my grandpa, but after all these years, I've realised now that it's time I move on, try to make something of my own life and do him proud.

I don't really know what I want in life, I have little direction. All I've ever done in terms of paid work is photography (6 years' pro experience) and all I know for the future is that I need full independence, strength to overcome what life throws at me, to be there for my family/extended family and to have a better social life.

Travelling the world has been a gut instinct since I was 10, but have tried to intellectualise, analyse and avoid this, "to live in the real world, get a job and be secure. Savings will dwindle down fast, and there's no turning back once it's gone" -(my parents, family, friends and society.) Also because I have been needed around for my family, which I take pride in.

As for a support network, I have none in photography despite all these years, but I do have 4 uncles, all property developers - 1 in France. They're coming to a point where they don't want to do it anymore for health reasons. I've helped them out in the past with their projects, have learned how to brick lay, plaster, install lighting, plumbing and window installation - I loved doing this, but not willing to spend £1000's to get a qualification for something I can already do.

I've been scanning endless forums and reading everyone's advice, and 2 suggestions that appealed to me are:

- a fixed rate ladder suggestion, putting £5K into each of a 1 year account, 2year account....5 year account. Then I'd have access to £5K + interest each year which I could either use or reinvest in another 5 year account. Leaving me with £10k to travel the world potentially.

- buy-to-let, around £20-30k, leaving £5k-£10k to dip in. (I'd want to pay an agency to deal with repairs and maintenance so that I can actually travel and not be tied down)

I'm now a freelance photographer, as I burned myself out working for a company that doesn't treat its staff well, or pay a decent wage, and figured to invest the time, energy (and a small amount of savings <£5k) in myself instead.

I know it's only up to me, but I'm on here asking for advice, any other suggestions that I may have overlooked in my over-analysis, or just some reassurance even. I have no one to turn to, for a completely unbiased point of view.

Sorry for all the context, but I think it's important.

Thank you for your time, and wishing you all the best!

David

MaxiRobriguez

Firstly, inheritance isn't a sin, just a natural part of life. Many people receive much more than you did, some will receive none, but either way it's nothing to be ashamed about. It is what it is.

You firstly need to work out what the immediate future holds for you. If you are desperate to travel the world then you have to realise you're going to burn most of that money and you're going to come back starting from scratch. That's OK if you really want to do that, but it makes rebuilding wealth more difficult. It's your call, only you can decide this, my only suggestion would be if you decide to do it, start this year rather than wait, so that you can get it out the way and come back to the working world and have some sort of career forged by the end of your 20s. You'll want this because your earnings can start to ramp up somewhat significantly in your 30s, but they won't if you're not earning because you're travelling.

If you're not actually convinced about travelling then you need to work out whether moving out and having your own place would be higher up the priority ladder. This is likely to the next "to do" thing anyway, so work out some scenarios around it. Living rent free and having the capacity to save 80-90% of income is wonderful but the main purpose of it is to be able to get on the ladder. At some point you'll want your own gaffe I expect. If that is now or in the next couple of years you're going to want to protect your capital, so savings accounts or premium bonds.

If you're really not bothered about moving out (lets say you like where you live and wouldn't move out even after inheriting the place properly) and you decide not to travel, then that allows more possibilities on what to do with the money. I would suggest you don't use it for BTL purposes as, with respect, you come across a little naive both in terms of the wider world and the financial one. That's not meant to be disrespectful by the way, just BTL isn't an easy game and the tax regime around it isn't conductive anymore, and just being able to do up property doesn't mean you will excel in it. It would probably make more sense if you're at this point to consider putting the money into a SIPP - get a tax boost from it and have it invested in a global equity tracker for the next 40 years, and get the benefit of compound returns without having to do anything to achieve that. Top it up with additional savings you make from not paying rent (whilst also keeping enough aside to be able to afford deposit if you do choose to move).

Alternatively, you may want to consider using the money to start your own photography business. It would go a long way to doing so if you had a decent business plan, and if the business does well then you have the ability to fund SIPP/mortgage via that over the long run. Bit riskier this one, but potentially much bigger pay-off.

Good luck.

xylophone

Finally, despite my arguments against this, my parents last year put my name on the house due to recent news of health problems

Not, one hopes, in the hope/expectation of avoiding having to pay care fees?

If a parent has to go into care and one remains in the house, it is disregarded anyway - however, if both had to go into care or one died and the other had to go into care, you could be looking at a challenge from the LA - just a thought to bear in mind.

https://www.ms-solicitors.co.uk/community-care-law/deprivation-of-assets/

Username999

I'd put £5000 into a SIPP and buy a SP500 Tracker.
Invest time and effort in finding a good partner.

Oh and forget BTL, that boat sailed long ago.

Username999

And check out Noraly, who is travelling around the world.

https://www.youtube.com/results?search_query=itchy+boots

ruperts

If you've got even a flicker of desire to go travelling then you should definitely go otherwise you'll regret it. You're young, you've got no real responsibilities, plenty of money in your pocket and enough time to completely rebuild from scratch if needs be. It's a no brainer.

Maybe as a professional photographer you could look at funding or part-funding your travels by taking photos while travelling. I gather it's a very competitive industry, but surely worth a go.

Delta_Tango93

"Not, one hopes, in the hope/expectation of avoiding having to pay care fees?"

No, it's agreed upon with solicitors etc/legal. My parents spent a lot of time over making sure and double checking it's all above board.

If it wasn't, and was a plan to avoid having to pay potential future care fees, I wouldn't have posted about it!

Delta_Tango93

Travel, SIPP, SP500 Tracker, Premium bonds and then eventually look into my own place once the travelling is done.
Thank you everyone for your advice! I'm not sure what SIPP, SP500 Tracker, premium bonds are exactly, so some extensive research is needed!

MaxiRobriguez

Delta_Tango93 wrote: »

Travel, SIPP, SP500 Tracker, Premium bonds and then eventually look into my own place once the travelling is done.
Thank you everyone for your advice! I'm not sure what SIPP, SP500 Tracker, premium bonds are exactly, so some extensive research is needed!

SIPP is a self-invested personal pension. It's a vehicle rather than investment. People favour it over an ISA for an example because it allows you to avoid income tax at the point you put money into it, which means more initial money to allow compound returns to work their magic on.

S&P500 is a stock market index that contains the largest 500 companies in America. A bit like our FTSE100. You can buy a tracker fund which basically just buys the same 500 companies that are on said index and then you get whatever gains or losses the combined 500 companies achieve. It's a cheap way to get exposure to a lot of companies. However - I would go one further than the poster who suggested an S&P500 tracker and say you should look for a global stock market index tracker - because concentrating your investments in one market gives you concentration risk.

Premium Bonds aren't really an investment. They're a safe place to keep your cash that are similar to savings accounts but instead of a paltry 0.1% interest rate your money is used as a ticket to enter regular lottery draws, albeit unlike other lotteries you don't lose the money you put in (so you're swapping guarantee of 0.1% interest for a small chance at a much larger prize).

But yep - more reading definitely would help you get a firm grip of some ideas and may shape the ideas of what you decide to do with your life over the next 5 years!