Increasing my savings/wealth as an 18 year old.
Hi guys, i'm not a common poster on WSO but have always found it really helpful! Anyway - I am currently 18 (almost 19) and have about GBP13,000 saved. I am in uni but luckily I have received a scholarship where all costs (Books, tuition and living costs) have been paid for the company I work for (Big 4) during my holidays where I make about GBP22,000 a year before tax (not pro-rata). How can I increase my wealth further? I know I should invest and all but where would be best to invest? And in what ratio? i.e. BONDS:STOCKS:CASH (3:2:1)?? Any help is appreciated - thanks!!
Well Leisl, at your age just don't go into debt. You don't know enough about anything to really invest intelligently at your age. But if you are stick with a broad index like SPDR and go for growth companies. Put in as much as you can when you can afford it. Just don't go into debt, which can be difficult for kids at your age(not patronizing I'm significantly older than you).
Haha no need to explain yourself - I know that I am rather dumb in terms of having financial knowledge compared to most others on this forum. I currently have money in Fundsmith LLP Fund Equity Class 1 which has seemed to done fairly well and have given me about 9% return since investing.
Honestly, just "set it, and forget it". Don't worry about short term returns just work on putting away as much as you can the returns will take care of themselves.
I would hold off on investing until you know what you are doing. If you want to prepare you can open a paper trading account and mock invest for a few years before investing real money.
At your age I would put 4k in a help to buy ISA. That way you get 1k from government and can withdraw the money when you by your first property.
I would also put 2.5k in a nationwide fledirect account. That pays 5% in the first year. You will need to "pay in 1k" a month into the account to get the interest. This can easily be done by transferring money from another one of your accounts and then back out again. You can do it manually via online banking or set up standing orders.
Then also open a couple of Bank of Scotland Vantage accounts these pay 3% on up 5k so 10k in total. You will need to do the trick I mentioned about to deposit 1k a month. Also need 2 direct debits to get the interest so if you don't already have enough (e.g from mobile phone or gym memberships) you can set up GBP1 direct debits to the charity of your choice.
This method will get you a return of £1,425 on£16.5k in the first year. That's a return of 8.6% risk free.
If you have even more savings then I would open another Bank of scotland vantage account (you can have 3 max). Then a Club Lloyds account (2% on 5k plus 6 free cinema tickets a year). Similar monthly payment and direct debit criteria apply.
Can also open a 5% nationwide regular saver (deposit up to GBP500 a month for year to get GBP162 interest).
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