If you were just starting out

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    If you were just starting out

    Just interested in how to advise a 20 year old who is just starting out in the real world. They have left school and got an average full time job and can still live at the parents rent free for as long as they like.
    What would your first financial aim be? Would all your savings go into a deposit for property one? Would you buy a residence or investmentt first? Would you pay into a pension or buy some shares?
    ​​​​​​Or would you invest in education to aim for a high paid job?
    thoughts appreciated!

    #2
    My advice to any 20 year old would be to have as good a time as possible and not worry about investments or planning.
    Spend time experiencing as many different things as possible.
    Travel.

    The best investment is your own home (but if you're happy living with your parents, it has less value).
    But there's no point being self-sufficient or even rich in your middle age and then deciding you want a life.

    The chances of life working out as you plan or expect is, in my experience, zero.
    When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
    Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

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      #3
      Originally posted by jpkeates View Post
      My advice to any 20 year old would be to have as good a time as possible and not worry about investments or planning.
      Spend time experiencing as many different things as possible.
      Travel.

      The best investment is your own home (but if you're happy living with your parents, it has less value).
      But there's no point being self-sufficient or even rich in your middle age and then deciding you want a life.

      The chances of life working out as you plan or expect is, in my experience, zero.
      Amazing advice.

      You're a kid (although you won't think you are).... enjoy your life! I didn't buy my first property until I was in my 30's.
      Be responsible with your money of course, but go and enjoy yourself as life goes very fast.

      The best times of my life were between 24 and 30. I'm glad I didn't have any adult responsibilities.

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        #4
        Living at home with no financial responsibilities gives you the most disposable income you are ever likely to have! Enjoy themselves certainly, but start saving for the future too. If their employer offers a pension scheme - which it should do - join it. Tax breaks & employers contribution makes this a no-brainer and the sooner you start the longer for the money to grow. Then save a little every month, preferably in a stock market investment in an ISA so that when you want to buy a car / buy a house / get married / travel around the world you have a little nest egg already. Its amazing how quickly you can build up a deposit if you are living at home, so use this time to get ahead of yourself so when the time comes you have more options. Money doesn't buy you happiness - it buys you choices!

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          #5
          I'd say half and half - save up some money for a deposit and make the most of not having to pay the majority of a wage into rent/bills/tax etc, but at the same time spend some time and money enjoying life before moving out and having those "adult" commitments. I'm only 28 now, but I don't think I properly appreciated the years of free rent, free food and not having to worry about bills and things. Plus trying to save for a deposit whilst renting isn't ideal

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            #6
            A lot of talk of enjoying yourself, I am sure you all had a really good time and then had to work until 65.....not my idea of a good time. Be fanatical about saving, make yourself financially independent as quickly as you can, he could easily do this by 30 years old (As I did). Then you have the next 50 years to have a good time and REALLY enjoy life. I am not saying do not have friends or good times, of course you should do that but always do it with an eye on the money and your ultimate goal which is to have enough money to not work if you do not have to, that is my idea of fun.

            Regards investments - Peer to peer sites, saving accounts, very small bit in BTC whilst you save for investment property number 1. I am yet to meet a single person who is a self made rich man who has told me "I wish I did not make all of this money and just went out and had fun". They no once you have made it the fun never stops

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              #7
              I became financially independent of my parents at 18 and saved hard to put deposit on first house at age 23 - a repo with no central heating or double glazing. I continued saving hard throughout my 20s and 30s. Budgeting and living within that budget is a lost art form which needs to be rediscovered. 6 years after graduating from uni, I also put myself through a distance MA which gave me access to higher paid jobs. Haven't been in debt (including mortgages) since I was 35.

              My one luxury throughout this time was travel. However, I not only travelled on a shoestring but lived and worked in a number of countries too. Living overseas is a complete eye-opener. You'll never see your own country in the same light again. I have loved every minute of the travel my savings afforded me.

              By far the best decision I ever made financially was not to have kids. We're more than happy with the 12 nephews/nieces we've got. We'll be taking early retirement later this year and that simply wouldn't be possible with kids at all. Neither of us is 50 yet but we planned towards early retirement proactively because there is so much more we want to do than sit in offices.

              In terms of general life advice: travel as widely as possible, read as widely as possible and become proficient in a foreign language and a musical instrument.

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                #8
                Property does not always go up.

                If I were starting now I'd probably avoid BTL.

                Good luck anyway.
                I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

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                  #9
                  When I started I was going to work on a scooter and spending most of what I earned. But as my salary went up I started saving for a car, then a pension, then a deposit for a house.
                  I bought my first flat for £65k in 1989 and lost £25k on it which put me off investing in property for a long time. Only after I lost my job in 2013 with no real prospect of getting anything comparable did I go into BTL.

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                    #10
                    Originally posted by theartfullodger View Post
                    Property does not always go up.

                    If I were starting now I'd probably avoid BTL.

                    Good luck anyway.
                    I am not sure about this one. For the last 400 years property has always went up. There have been ups and downs but there has never been a consistent fall in property for a sustained period of time

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