50k - BIZFACE®

googler · #1 18th August 2008, 17:06

I've been trying to word this in such a way so as not to appear smug. I apologize if I come across as such. I don’t have much in the way of debt - I have student loans totaling £15k, and a £1000 credit card debt (10 month 0% credit card - my first and only credit card, and only obtained to buy a laptop). I'm not worried about the credit card as I've budgeted to pay that off. Likewise with the student loans - this is being taken from my salary at source. I started my degree in 1998, so was amongst the first year to be hit by tuition fees - but they don’t cause me too big an issue. Although I wish I hadn't wasted the money on a degree... but that’s an entirely different topic. Since graduating I've had a string of naff jobs to supplement my income as a freelance illustrator/designer, but a few weeks ago was head hunted by a design firm who like my stuff. I've been given a salary of £25k per year, and have been told that next year I could be on more. This week I also inherit at least £50k - tax free. What should I do with it? Sounds crazy I know, but I honestly haven’t any idea. For the first time ever I'm earning a good income, doing a job I like without having to deal with target orientated, paper pushing, and power suit plonkers. My salary takes care of all I need. I drive a 10 year old banger. I don’t own a house (currently renting). I've £1000 on that interest free card. I'm not married, don’t have children, and don’t have anyone dependant on me. That’s basically my situation. I don’t need the £50K for anything as such... it would be nice to have a new car. But I don’t really need one. I've been advised by a mate of mine to buy a house with it - but with interest rates set to rise next week. Would I be better off keeping that £50K in the bank, and making it grow, and then doing something with it?

kath · #2 19th August 2008, 20:00

Hi Googler,

You have a fairly high-class problem here dont you!!

The decision around what to do with your surplus funds depends on:

- what you want from the money (long term growth or regular income or abit of both)
- the amount of risk you are willing to accept when investing it
- your earning potential/credit rating
- the way in which your personal circumstances may change over time (for example, you may want to get married in 2 years and use half the money then)
- the interest rates that you are paying on the debts you have (if may be best to clear some of these debts, if the rates you are paying outstrip what your money could earn you in interest elsewhere)

There are almost limitless options for your funds, the most obvious investments are:-

- property (either for living in or renting out, your ability to obtain a mortgage for the remainder of the property cost will be relevant here of course)
- clear some debt
- bonds/shares (managed funds or otherwise - your attitude to risk will be key here)
- business venture (your own, someone elses, a partnership etc - again , think about risks involved)
- long term/short term savings accounts (preferential rates for no withdrawals and fixed deposit periods etc)

If you do decide to leave the money in bank accounts for a few years until you have decided what to do with it, make sure you use your annual ISA allowance to receive as much interest tax free as possible.

kath

Terence O Mahony · #3 22nd August 2008, 00:01

Great blog, shame no-one has seen it.

kath · #4 26th August 2008, 22:49

Thanks Terence - I think this whole thread may have been posted to the wrong section (along with a couple of others in here too).

I'll see if maybe they can get moved!

Kath

#5 27th August 2008, 07:08

hi ..

nice blog... good to find the useful information....

Cheers