Best Way To Invest Money At 23.

Doshwaster

sevenhills said:

Hexane said:

I have a similar amount of cash sloshing around for dissimilar reasons but for equivalent likely timescales, and I'm putting as much of it as I can in regular saver accounts, to get superior amounts of (effective) interest to Premium Bonds, but with effectively the same zero risk.

With Premium Bonds paying 1% in prizes, it's quite possible that inflation will rise above 1%, so there is a large risk of losing money.

Leave money in cash and there is a 100% risk of losing value due to inflation.

At 23 I wouldn't be in a rush to buy as you don't know where career, relationships and life in general will take you. £45k is a healthy pot to have at that age (it took me into my 40s to have that much saved) but I'd probably keep around £10k in a rainy day fund in case you are out of work and the rest I'd put into cheap Vanguard tracker for the next 5-10 years. In the meantime, move out of the parental home and have some fun. If you can't enjoy yourself at 23 then you'll never have a better chance.

MaxiRobriguez

I don't think buying a house at 23 is necessarily a bad move even if you need "flexibility".

I did it - and I bought a property that could be sold on easily if I needed it to be, and also rented out if I wanted it to be. In the end I owned it for 6 years, and spent four of those working in other parts of the country, but my employer paid for various hotels so I didn't need to rent the place out.

Hexane

sevenhills said:

Hexane said:

I have a similar amount of cash sloshing around for dissimilar reasons but for equivalent likely timescales, and I'm putting as much of it as I can in regular saver accounts, to get superior amounts of (effective) interest to Premium Bonds, but with effectively the same zero risk.

With Premium Bonds paying 1% in prizes, it's quite possible that inflation will rise above 1%, so there is a large risk of losing money.

Indeed, that's why looking for better return (but still without investment risk) is worthwhile. In 2020 I was still getting 5% on some regular savers, this year I'm still getting 2.75% on some regular savers. Such rates aren't currently available to new customers, but waiting until they are is likely to mean a very long wait.

csgohan4

You shouldn't put all your money into investments, you need to hold some back for emergency money which would be reasonable in a PB or savings account, inflation would be irrelevant if you have your money locked away which is currently in  a loss and you need a big ticket item bought like a car, boiler e.t.c

eskbanker

sevenhills said:

Hexane said:

I have a similar amount of cash sloshing around for dissimilar reasons but for equivalent likely timescales, and I'm putting as much of it as I can in regular saver accounts, to get superior amounts of (effective) interest to Premium Bonds, but with effectively the same zero risk.

With Premium Bonds paying 1% in prizes, it's quite possible that inflation will rise above 1%, so there is a large risk of losing money.

It's also quite possible that interest rates will also rise, giving savers other options, so using an easy access product like Premium Bonds doesn't commit anyone to anything, and funds can readily be shifted elsewhere if/when something better turns up.  Likewise, the PB rate could change (the effective rate is actually more like 0.9% anyway), but when not committing to fixed term products, people need to make decisions on current (and planned) rates rather than hypothesising about what might happen in the future.

Eco_Miser

sevenhills said:

With Premium Bonds paying 1% in prizes, it's quite possible that inflation will rise above 1%, so there is a large risk of losing money.

To emphasize, there is absolutely no chance of losing money with Premium Bonds.

There is a possibility that the money won't buy as much in future as it does now, but that holds for any savings or investments.

If inflation increases, but the PB prize rate doesn't, it's easy enough to withdraw the money and put it somewhere paying more - if there is such a place, if not you might as well keep the Premium Bonds.

barnstar2077

Doshwaster said:

sevenhills said:

Hexane said:

I have a similar amount of cash sloshing around for dissimilar reasons but for equivalent likely timescales, and I'm putting as much of it as I can in regular saver accounts, to get superior amounts of (effective) interest to Premium Bonds, but with effectively the same zero risk.

With Premium Bonds paying 1% in prizes, it's quite possible that inflation will rise above 1%, so there is a large risk of losing money.

Leave money in cash and there is a 100% risk of losing value due to inflation.

At 23 I wouldn't be in a rush to buy as you don't know where career, relationships and life in general will take you. £45k is a healthy pot to have at that age (it took me into my 40s to have that much saved) but I'd probably keep around £10k in a rainy day fund in case you are out of work and the rest I'd put into cheap Vanguard tracker for the next 5-10 years. In the meantime, move out of the parental home and have some fun. If you can't enjoy yourself at 23 then you'll never have a better chance.

I disagree, I bought my house at 24, it was the best financial decision I ever made.  House prices drop occasionally, but over time houses just become more and more expensive.  My house is worth triple the price I paid for it almost twenty years ago.  If I had waited much longer to buy I would have had a bigger deposit, but then I wouldn't have been able to get a mortgage on the remaining amount.

[Deleted User]

sam9 said:

I'm almost 23-years-old, living with my parents, and I'm looking to move out before I'm 26. I have over £45k saved, with £6k in a Barclays Help-To-Buy ISA and the rest is in Premium Bonds and my bank.

I want to invest my money in the best, but also, safest way possible. My parents have suggested I open a L-ISA and put £4,000 (max amount) into it each financial year, and open several Cash-ISA's and put money in there as well. However, I'm in a bit of a dilemma, because I want to open a L-ISA, but I'm aware that I can't use both a L-ISA and HTB-ISA for my first home. Whether I should keep my HTB-ISA open and keep adding money in or leave it alone - I don't know what to do? It seems a waste having over £6k in my HTB-ISA account, knowing I won't use it if I use a L-ISA for my first house instead. But I've been putting money into that account for the past 3/4 years, so I feel like all that time was a waste of money.

If anyone has any suggestions or the way forward they would go if they were in my posotion, that would be great. I have thought of buying and renting out a flat, but I'm unable to do that during the Covid pandemic. I have posted on here before about this, but I'm just trying to get my head around the different options I have and take in any suggestions.

Thanks,
Sam

You should buy some bitcoin. Few percent of your portfolio is enough, or 1% if you cautious, that's what mainstream consensus is nowadays.