Looking for advice for savings

[watchesandwhisky]

I have a new job, (first time I have had a fixed income in years) and I am able to save about 15k a year.

I have no house/ no mortgage - and at 37 years old me and my partner are STILL living with my parents - I am pretty ashamed to admit that but its the truth. I am determined to get out ASAP but realistically its going to take a few years maybe more... We don't want to get trapped in the rental trap. and end up with no property to rely on when we need to retire. I could move out next week and pay rent but then what am i going to do when I am to old to work? will be screwed. The long suffering parents are great about it and can see what we are trying to do, very supportive - but I think I need to get out within a couple of years for thier sake so they can have a well earnt retirement , I think I will just go into rented if I cant get a mortgage like everyone else has too. 

I have circa 15K in savings spread across multiple assets (no cash) - plus a 2020 car fully paid (sensible car - honda jazz) 

We have opened lifetime ISAs and can get a 20% topup on anything we deposit, however can only be used to buy first house or for retirement or there is a 25% penalty on withdrawals. 

Money in the bank seems useless, but if house prices keep increasing we may never get accepted for a mortgage. 

If you was in my situation how would you allocate savings? I dont want to speculate on crypto - I already have some. 

Im thinking shove everything on premium bonds till the end of the tax year, then withdraw and max out Lifetime ISA and hope for a correction in property prices one day but I really dont know. 

Open too all suggestions!

Edited May 1, 2021 by watchesandwhisky

[MrB]

I would try to find a well regarded INDEPENDENT financial advisor and ask them. (I added the caps there. Very important to get impartial advice)

Seriously, it's a nice conversation to have on this forum, and plenty of us could give you advice, but at the end of the day, you need someone who you can tell in confidence all of your needs and requirements and goals and get good, professional advice in return.

Edited May 1, 2021 by MrB

[watchesandwhisky]

Honestly MrB I know there is some damn clued up people here, I cant help but feel a financial advisor might be just wasting money. If i had a ton of cash to protect I probably would do, I think most would laugh at me right now lol.

Edited May 1, 2021 by watchesandwhisky

[pricha]

Hi, if you need a car then you need a car. But i got rid of mine 20 years ago and to be honest never looked back . Luckily i live close to work , but i reckon over the years i have saved thousands of pounds. I can't think of a bigger waste of money. 

Edited May 1, 2021 by pricha

[watchesandwhisky]

Just now, pricha said:

Hi, if you need a car then you need a car. But i got rid of mine 20 years ago and to be honest never looked back . Luckily i live close to work , but i reckon over the years i have save thousands of pounds. I can't think of a bigger waste of money. 

Car is essential for my work due to location, too right they are an expense though...I went for the most reliable low running cost car I could find to keep costs down as much as possible over the next decade. 

[pricha]

Just now, watchesandwhisky said:

Car is essential for my work due to location, too right they are an expense though...I went for the most reliable low running cost car I could find to keep costs down as much as possible over the next decade. 

That's a shame . Motorists are an easy target for the government. I am very lucky i know , some people have no choice .   

[sixgun]

There are an increasing number of people who are living in multi-generational accommodation. This was quite normal in the past but has developed a bit of a stigma. We hear the smear that someone or other is living in their mother's basement. Personally i don't see a problem with it. 

It is still a bit too early for me to recommend Kinesis but i am mentioning it.
i have posted about it on the forum before as some people will no doubt know.
This is a gold and silver currency system. It is just about starting to take off. On 6th May the Indonesian post office will officially launch their involvement which is based on the KAU. the gold side of the Kinesis money system. The Indonesian government views this as a project of national importance.
i am hoping the first yields will be paid out in the next few weeks. There are several different yields which come from the fees for using the system. 
You can hold value inside the Kinesis Monetary System as gold and silver and get a yield for simply holding the metal in the system.
At some point this year the KEM token will be launched where each KEM is title of ownership over 1 carat of emeralds. These will pay a guaranteed 4% yield paid in KAU's (gold).

There is quite a bit more to this and as i say it is still a bit too early for me to properly recommend it - when the system starts spitting out yields then it will be different.
The bonuses are the yields are paid in KAU and KAG, gold and silver plus there is a debit card, so you can spend your tokens anywhere there is a VISA sign.

[FlorinCollector]

HI. If saving for a house and you can save 15k per year. Then 2 years in the LISA you will have a large deposit. I guess you live in England so it will be more expensive than here in Scotland. Most places these days look for 5% deposit a bit less lately due to covid but it will come back. Having 30k deposit should well cover that? 

Also if you plan to move out in the next 2-3 years then all of your savings should be allocated to cash. Its too short a time frame for any level on investment. Id say 100% cash until you have the house. 

[AuricGoldfinger]

Hi @watchesandwhisky Pretty good advice there from @JosephM. I would do as you suggest. Make full use if the Lisa allowances and save to the fullest in premium bonds.

Yes you aren’t necessarily earning great returns on premium bonds but your looking at a 2 year time frame which is very short. Any form of investment requires a long term view point so don’t waste your time speculating on anything other than your goal. Saving for a property.

£15k a year is a great amount to be able to save, give it a couple of years and you would have a very respectable deposit. I know from dealing with you myself you like to have a finger in a few pies but you have to keep focussed if moving out is your main goal. Set a target - £50k seems reasonable if you have £15k and can save £15k a year, just go for it. Sell anything that isnt nailed down, try and get a side hussle and save anything you can to reach your one and only target. Ignore your other financial goals for now.

All the other interests can come later, you have plenty of time to pursue other interests but just make scraping £50k together your only one for now. If it means selling current liquid assets i would honestly do it. Don’t save a deposit and wait for a crash, buy smart and stick with your decision. If prices crash you would just be selling/buying into the same market anyway. The best way of timing the market is time IN the market 😉

Thats how i attack my goals. Don’t flit between them, just have one, hammer it and move on to the next.

Good luck, i hope this is helpful!

[CadmiumGreen]

Could go work for a PMC for a couple of years in most undesirable locations...paid room and board with nothing to spend your hard earned hazardous duty pay on, bank over £100K over that time and start life anew when you’ve achieved your goal.

Not career or financial advice, just some out of the box thoughts, because we know what’s in the box.

Meant to mention, I am really proud of you, @watchesandwhisky, and the direction you are looking at with your stabile income, plans for the future and overall physical and mental preparedness seen over the last few months!!

Edited May 1, 2021 by CadmiumGreen

[MickB]

35 minutes ago, CadmiumGreen said:

Could go work for a PMC for a couple of years in most undesirable locations...paid room and board with nothing to spend your hard earned hazardous duty pay on, bank over £100K over that time and start life anew when you’ve achieved your goal.

 

Only if you're trained in that field of work and your missus don't mind.

Premium bonds are a safe bet.

[CadmiumGreen]

3 minutes ago, MickB said:

Only if you're trained in that field of work and your missus don't mind.

Premium bonds are a safe bet.

Yeah, a couple of limfacs at play with that scenario...premium bonds definitely safer.

[Pete]

In your position you need to ignore risky investments. The higher the return then usually the higher the risk. Sticking in cash i.e. premium bonds is the simplest suggestion if you will need your cash in say the next 2 years. Mortgage rates currently are the lowest they have ever been. Rents are about the same outgoings as mortgages but you are giving your monthly money to a landlord so getting on the property ladder as soon as possible is a good thing. However, this depends on where you live which relates to cost and value and how secure is your job and if you lost your job could you easily get another whilst remaining in your home without having to sell. Property prices in many towns are rising faster than people can save because of demand so building up a deposit often means the height of the bar is getting higher than you would like. Unfortunately a lot of properties are being sold to people with money and assets in order to rent so first time buyers find it tough. The best advice I can give is to see if your parents can help you secure your first home rather than wait a couple of years to build sufficient deposit. As for location - a castle needing renovation on about 200 acres of land recently sold in Scotland for £180 grand which might get you a parking space in London.

 

[Paul]

As a black sheep of society, your question gets asked every so often, folk never seem to suggest to investing in "YOURSELF " 

and is always the best answer in my opinion

* Get that next skill, take that next course, a more skilful YOU makes YOU stand out from the crowd & be more more valuable to other employers

* Invest in a gym membership or personal trainer to improve YOUR health.  If you are able to live & work an extra x10+ years due to better lifestyle will earn you £100,000s+

* Invest in YOURSELF learning how to cook. learn batch cooking. learn how to cook great food for less.  learn how to cook the food that is good for you. your family & extended social circle will thank you for it. learn to not have to rely on fast food or processed food 

* Invest in YOURSELF with private health tests and food allergy tests to check you are not deficient or lacking or you are not eating stuff that is bad for you or affecting your day to day function/performance. Invest in water purification for your home, cleaner water with the extra oogly-booglies removed your body will thank YOU for it every day

* Invest YOUR time better, listening to audiobooks instead of watching football or soaps

* Invest in yourself every day with meditation and positive direction & choices = FREE but how many folk do it

* Invest in a pack of "post it notes" to say what you want from the day, week, month and where you want top be.  Visual affirmations daily make them far more likely to happen/succeed 

* Invest in YOUR business - Purchase the better camera to take better shots, Get the higher PSI pressure washer for your business, to do dirtier jobs easier and faster, invest in learning niche marketing or FB ads

* Invest in marketing YOURSELF further with a bigger social network on LinkedIn. Improve YOUR social circle. Your life will resemble the folk YOU are closest to. Investing your time with losers will result in loser results

* Invest in improving YOUR house to lower utility bills & costs, invest in a ultra efficient boiler to lower your energy costs

* Invest in DOING rather than saying, the path to success is not a straight road and it is the mistakes you make along that road that make you succeed when you choose to learn from them 

* Invest in the highest speed internet so YOU can do YOUR job faster

* Invest in YOUSELF by becoming a "people pleaser", don't be a money ££ chaser leach.  Seek greatness/ By being a people pleaser, solving peoples needs & problems, make something or service that is faster/easier/tastier/smaller/better/nicer/softer/cheaper/shinier than your competitor(s).  By being a "people pleaser", money will naturally gravitate to you & happily THROW money at you by simply solving peoples needs better than the next

Note every suggestion has YOU in the the content.

No-one is doing this for YOU - YOU are doing it for YOU 

Investing £5,000 in yourself and self-betterment, will brings dividends many multiples of value far higher than having it sat in a 0.00001% bank, in premium bonds or a useless yellow metal  

[watchesandwhisky]

Wow what great responses, thank you everyone for taking the time to do that! 

Paul those are some great ideas, An actually I have invested in my fitness this last year, I dropped 6 stone and gained muscle, it was actually doing that - that enabled me to apply for this job , its really physical, im walking about 17/18k steps a day and moving heavy stuff like paving slabs and bags of gravel a lot of the time, I could not have dreamed of doing that before so its very true. I actually sort of do another one and thats bulk buying special offers for my lunch. 

I don't have the time to further invest in skills really, my work is so hard I go into low power mode the moment I get home, But I am enjoying it, and I think that enjoying your job is so important - I can see myself doing it long term even though its hardly above minimum wage. I just love being out in the van being my own boss. My partner is at home doing the self employed stuff, shes actually doing some of the other points so I think we are quite well covered overall. 

Pete thats very true and its whats concerning me, prices are rising faster each year than I can earn, its as simple as that. But I hope with a decent deposit i can get somewhere, my parents could lend me a sum of cash, but not enough and I do not yet have the work history to be approved - , they are letting me live here rent free (just pay 50 a month towards some bills) that alone is going to make the difference of what I can save. essentialy my entire wage is saved and live from partners self employed earnings. 

Cadmium - thank you I really appreciate the kind words, I am trying hard to get stuff done as I know its now or never really and I want to make sure im not a never person! 

Auric I think thats a great plan, 50K seems a great deposit and goal - in 18 months I have a "help to save" plan maturing too so that will add 7k. I will go with that and get selling some of my other investments, whisky, watches ect...

Joseph, the 5% deposit I can easily do, the part I am struggling with is as far as i can see places only lend 5X salary, and our combined salaries are about 22k - giving a 110k mortgage tops - Im in Bournemouth , prices are pretty steep.. But who knows, maybe they will start lending more than 5x salaries - My lisa provider is skipton building society, I went for them for the cash lisa even though their interest is a bit lower than alternatives because they are also mortgage providers, and I hope it will raise our change of getting a mortgage if they can see how well we save the sizable deposit. 

Sixgun, very true, it is much more common now! still embarrassing though, kenesis sounds interesting but really need to stay cash on this one.

Edited May 2, 2021 by watchesandwhisky

[Pete]

2 hours ago, watchesandwhisky said:

Im in Bournemouth , prices are pretty steep.. But who knows, maybe they will start lending more than 5x salaries - My lisa provider is skipton building society, I went for them for

Crickey !!!!
I thought that's about the going rate for one of those coloured B&Q garden tool sheds with the 2 deck chairs on the beach ??

[watchesandwhisky]

2 minutes ago, Pete said:

Crickey !!!!
I thought that's about the going rate for one of those coloured B&Q garden tool sheds with the 2 deck chairs on the beach ??

Na they cost way more I think 300k upwards! 

[shawy2510]

I think the Lisa is your best bet & cash in the bank. I have just read through the comments & all are very good ideas. I did notice that you said the combined income is 22k between you & your partner? Is that correct as it seems pretty low unless you are both on part time. The banks are being pretty reserved right now due to lending but in a couple of years it should hopefully be better.

[watchesandwhisky]

Thats net pay but yep, gross would be 28k combined approx - I am 40 hours per week fulltime, approx 20k gross, she is self employed but 8k is about it. Going to just save like mad and hope for the best I think! 

Edited May 2, 2021 by watchesandwhisky

[Paul]

@watchesandwhisky two very worthy books i would really recommend to you to read to reshape your mental outlook on life, jobs, earning and potential are by MJ De Marco "The Millionaire Fastlane" and "Unscripted"

They are not preachy or some flash in pan get rich quick scheme 

It turned my mindset & direction in life full circle and for the better. Sadly we are all programmed to be one of the herd, working for someone else with always with a ceiling on potential earning power.

A phrase to bear in mind with your current situation, "if you always do, what you've always done, you'll always get what you've always got"  

These books teach you to reshape this outlook and give you every reason to bring success into your life

[Bullionaire]

@watchesandwhisky I know most of your money will be going to house savings, but I would make sure you pay into your works pension scheme (don't opt out). Need to get that compound growth working for you asap to have a decent sum in retirement to live off.

[sixgun]

@Paul

 

[Stacktastic]

The main pont in this thread is to move out in an affordable way I think as you seem to have everything else sorted. 
You live in bournemouth which is not only a student city but also a very seasonal tourist city. 
To me that signifies that a lot of landlords properties might be vacant for a parts of the year. 

Have you thought of the following: 

renting out a whole house in your name & subletting the rooms. 
Maybe you can get one with a decent garden and section off a large area for you both.
Ideally a private arrangement where the person is happy its been managed properly & getting a bit of profit also. 
I have done this myself and rented out 4 other rooms including the living room as a bedroom. 

Managing property as an air B&B agent.
I know a lot of people manage mutiple properties for one or many clients. 
They may have properties with several rooms and give you one for free. 
Or you will be making so much profit it will pay for the rent on a nice house. 

Trailer park housing.
There are some lovely places near you, towards Ringwood & edge of the forest. 
You have said your strong and fit, so offer to be a free handyman in exchange for accommodation. 

Wait. 
I cant see house prices getting much more, a housing price collapse is inevitable at some point. 
But that might also include an increase in rates?? 

Buy and flip properties, whilst living in them. 
Take the profits and buy a home in cash after a few years. 

Buy a house that has an annex or space to create a separate building and rent it:
Even a large shed can be transformed into a 'chalet'. 
I have stayed in many very strange garage conversions & even a hut built into a hill over the years!! 

Longer term solid dwelling lets are preferable.
Maybe build two of them or two in one - make them plush, but compact. 
Charge £700 a month and thats your mortgage paid - job done! 
Parking included, side access so you dont even have to see them. 
Direct debit = free money with next to no effort (vs air b&b). 

Rent a room or two in your own house. 
I used to do this with one room and they were largely paying my interest only mortgage!! 
You need to not have kids and be very cautious who you let live with you!!! 
I tended to favour girls as they are tidier, quieter & more thoughtful. 
But one other guys left at 6am, came back 9pm and went away every weekend!!
Dont allow couples, its a pain in the ass. 

Make more money. 
As has been suggested do side hustles that dont take up too much ongoing time.
Like online courses, drop shipping, buying and selling things that people throw out (regular dump runs). 
Affilate links, services on Fiverr etc.

Farming - Microgreen production is massive cash cows selling to local restaurants. 

Set up or buy into a business that you dont actively have to manage much. 
Vending machines for example. That will pay for your rent. 

Build a camper van: 
You can easily do this with £15k and immediately have an asset worth in excess of £35-40k. 
You can live in it for free & save up money in the process. Long wheelbase Sprinters can be quite large! 

Build a cabin in someones garden, field or convert a garage. 
Easy to do, cheap, might not need planning and fun. You can also grow your own food and live off grid. 
Maybe even your parents house? Sling them a bit of cash or even the produce you grow?? 

As long as your not in the way they will be glad of the income & extra value to thier property, when you move out. 

I am sure you have seen these two, but you have all the answers you need here: https://www.youtube.com/c/MoneyUnshackled/videos 
 

 

 

 

Edited May 11, 2021 by Stacktastic

[pricha]

On 03/05/2021 at 07:26, Bullionaire said:

@watchesandwhisky I know most of your money will be going to house savings, but I would make sure you pay into your works pension scheme (don't opt out). Need to get that compound growth working for you asap to have a decent sum in retirement to live off.

I took out a AVC on my work pension in 1999 . Nothing huge, £3 a week and my employee doubled it. It's current value is £10,000  approx . My mate took one out out in 1992 , 7 years earlier than me. Hes is now worth £30,000 . I am kicking myself,  but it shows the power of compound growth .

Edited June 6, 2021 by pricha

[watchesandwhisky]

Some amazing ideas here, thank you everyone! I would say this is a new path for me now - I want to get some basic experience with this job and then maybe in time do my Category C license. 

My pension is I pay £50 a month and company tops it up buy a further £30 - I am going to keep that up as I am 38 soon and have no pension provision at all, it wont be much but better than nothing!