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Advice for a 20y/o student

ETeeth
Posts: 1 Newbie
Hi, thanks for reading!
I am currently a first year dental student at University (so theoretically have another 4 years worth of University study before I start work as a dentist) .
I have just over £10K that I have accumulated over the years and want to put it into some sort of savings - it's currently sat in a current account gaining no interest.
If possible, I would like to make some sort of earning from it ( I don't know if this is enough money to do so though).
I have been looking at funds, stocks/shares and also ISAs. I like the idea of stocks or funds but don't know the best way to go about doing this.
I think ideally, I would like to have funds which are managed - but I am not sure if the cost of management will be proportional to the yield.
I don't mind investing for the long term, I am hoping that I will have a decent and stable income once I graduate so I won't need to rely on savings.
Any thoughts would be much appreciated, Thanks.
I am currently a first year dental student at University (so theoretically have another 4 years worth of University study before I start work as a dentist) .
I have just over £10K that I have accumulated over the years and want to put it into some sort of savings - it's currently sat in a current account gaining no interest.
If possible, I would like to make some sort of earning from it ( I don't know if this is enough money to do so though).
I have been looking at funds, stocks/shares and also ISAs. I like the idea of stocks or funds but don't know the best way to go about doing this.
I think ideally, I would like to have funds which are managed - but I am not sure if the cost of management will be proportional to the yield.
I don't mind investing for the long term, I am hoping that I will have a decent and stable income once I graduate so I won't need to rely on savings.
Any thoughts would be much appreciated, Thanks.
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Comments
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You'll probably find a lot of people on here encouraging global index trackers for the long term, probably held in pension accounts.
However, I think in your position I'd look at using the £10k to pay down your student loan assuming you have one. As a dentist you are all but guaranteed to end up paying it all back over your lifetime anyway, at the higher interest rate of what is currently 5.4% - which will likely go higher once central bank base rate is increased again.
I don't think you'll do much better than that with stock/bond investing, and you'll probably find you don't need to save the money in a low interest rate bank account for potential property purchase after you finish your studies as you'll be able to quickly build a savings pot when you start work, which will be higher paid than most normal folk can dream of, and with the bonus of not being a PAYE taxpayer.
Good luck.1 -
When I was a 20 year old student investing for the long term was the last thing on my mind.
It depends what you want to do with the money really. The start of a deposit for your own property perhaps? Even if this is what you want it for then you should only really invest it if you're not planning on buying a property for at least 10 years. A LISA might be a good idea, either invested or saved.
I wouldn't worry about a pension at this stage in your life, I would worry about that once your career has started.0 -
To be honest, with four years of study ahead of you, I'd be tempted to keep it in a savings account for now. If you don't need it while studying, it will give you more options when you graduate. But LISA and student loan repayments are the most sensible alternatives, depending on your priorities. You can always review your financial situation again mid-course and start feeding the LISA for example if things are looking okay financially."Real knowledge is to know the extent of one's ignorance" - Confucius0
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At this stage of what should end up a very comfortable life, relax.
You've crossed a couple of hurdles; choosing a good career, getting in to Uni and realising you have to think about future finances. Put it all away for now in Premium Bonds with prizes reinvested, it can all be done instant access online.
Then in between partying, studying and getting laid, find out about best ways to put by for the future.Here at Digger Mansions we have all our retirement savings in gold, something you have plenty of time to find out about. We even have a box of scrap with our replaced gold crowns, a once popular way for a dentist to save a bit 'off the radar' over their career.
Best of fortune..._0 -
Although as said above , you are a bit young to be worrying too much about investing for the future , especially with a well paid career ahead of you.
However having some knowledge of personal finance at any age is no bad thing and as you move on after Uni, this gets more important . So no harm in asking questions, reading the personal money sections of The Guardian; The Times; DT etc and read through this forum from time to time .Here are a couple of 'starters for 10'
https://www.moneysavingexpert.com/banking/
https://www.moneysavingexpert.com/search/#stq=student loan&stp=1
https://www.moneyadviceservice.org.uk/en
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