What to do with my money? Please help!

NBE97 · 3 January at 2:32PM

Hi all,

As the title says really, I have some money saved up and I am unsure as to what to do with it. I am 28, live alone and have achieved this with no help from family etc by working hard and struggling along the way.

I have a mortgage with £48,500 left on it. I am overpaying the maximum I can on this but avoiding the overpayment fees, If I continue with this I will be mortgage free by 38.

I have premium bonds which are there for a rainy day and to see if I can possibly win anything on this.

now the question is, do i save this money in a savings account, at home in a safe or invest? I have no idea where to start with the latter.

or is an air bnb/ buy to let the sensible thing to do here?

ideally i would like as stress free life as i can possibly get and would like to have something to give my nephew when he is 18 to give him the start I never had in life. he is only 2 at the moment so plenty of time.

My car is paid off so no debt there and all bills are up to date and no credit card debt.

All advice and opinions welcome,

thank you

NBE97

Yorkie1 · 3 January at 3:11PM

Well done on what you've achieved so far!

More information is needed please:

How much money are you referring to that you would like views on?
Where is it saved (if not in PB)? At what interest rate?
Do you have a pension? If so, how much is in the pot?
What (approx) is your income?
What is your mortgage interest rate at the moment, and when does any fix end?
How much do you have in PB? How many months' expenditure does it reflect?
What is your attitude to risk?
Do you want to lock money up, or access it if needed?
What makes you think about property as an investment? Do you have experience as a landlord?

If you look through various threads on this board and the Property renting etc board, you'll see quite a few posts from people who have mentioned investing in rental property. Often the advice is to steer well clear, given the increasing regulatory landscape and increase in tenants' rights.

elsien · 3 January at 3:51PM

I would suggest that stressfree and Airbnb buy to let tend not to go together in the same sentence as a rule.

Eyeful · 3 January at 4:06PM

You do not say if you work for someone or are self employed. Or if you have a pension.

Hope This Helps You

1. Any money needed within 5 years should be in a Bank/Building Society account covered by the FSCS up to £85K.
Some people use Premium Bonds as you are doing.

2. Use tax shelters where possible
(a) Pensions; You are given "free money" by the government & do not pay tax on it, at least until you take it out.
: (b) Cash ISA's or Investment ISA's: You avoid having to pay tax & filling in self assessment forms.

3. INVESTING means putting your money at risk.
You hope to get more out than you put in, but this this not guaranteed

4. Think of investing in the stock markets as a game.

Long term (say at least 10 years) its called "investing" odds of winning = HIGH.

Short term (say few days/weeks) its called "speculating" or "trading" odds of winning = low

5. You can make investing as simple or as complicated as you like.
Those who want to sell you stuff, like to make it look complicated so they can charge you lots & make you think you really need them.
The simple way is best, is easy to learn & understand, keeps cost down & puts you in the drivers seat.

The Simple method of investing boils down to this:
First watch this video: https://www.kroijer.com/
Read this: https://www.biglawinvestor.com/meet-the-gotrocks-family/

Now consider:-

(a) Low Cost Global Multi Asset Funds (for Cautious types & those that want more Control)

A ready made portfolio, where you pick the share/bond split, you are most comfortable with.

Example: https://www.hsbc.co.uk/investments/products/hsbc-global-strategy-portfolios/#balanced

(b) Passive Low Cost Global Index Tracking Funds or ETF's (for the Adventurous with a very long time frame)

Here its shares = 100%. It may produce the highest return but is the most risky.

Example: https://www.trustnet.com/factsheets/o/kldq/hsbc-ftse-all-world-index

(c) Use Target Date Funds. For explanation & examples, looks here:
https://www.vanguardinvestor.co.uk/investing-explained/what-are-target-retirement-funds
https://www.ii.co.uk/ii-accounts/sipp/sipp-investment-ideas/target-retirement-funds

7. Remember:
Fees & charges are important, the more you pay out, the less money ends up in your pocket.
Do not try to time the market, you will most likely get it wrong
There will be market crashes, it comes with the territory. Do not do what newbies most often do, "jump ship" never to return. Or return at the next market high just before it crashes again.

8. If you want more information, look up "James Shack" on You Tube & read these:
https://monevator.com/passive-fund-of-funds-the-rivals/
https://monevator.com/best-global-tracker-funds/

9. If you want a stress free life, I suggest you avoid the buy to let idea.