Investing advice for a pre-university student
Hello,
I have £20k in savings from working the past year. I am about to go to university. I asked my dad for financial advice, and he told me to throw it all in crypto. No chance I'm doing that haha, so here I am consulting strangers on the internet.
I feel like it is certainly wise keeping some liquid for uni expenses / investment opportunities (e.g. a business) - lets say £10k. I will be working during my studies, allowing me to accrue some more capital. My fees will total £50,000 worst case scenario once I have finished.
I am based in the UK.
I suppose I have 3 options:
1) Invest in an ETF of some kind (no idea if it's a good time?) and withdraw in 3 years with hopefully an increased sum, helping me pay off my loans. This could backfire however, leaving me in worse stead. Pay as much of loans as possible.
2) Keep it cash, but risk free, but do not get any potential gains. Pay as much of loans as possible.
3) Forget the loans even exist. Use my money to 'develop' myself or just have fun, or just invest it in an ETF longer term. I'm not really materialistic (I've been saving this entire year anyways), so would most likely throw it in a longer term ETF anyways.
Which option would you recommend? If you are recommending I invest in an ETF, what risk tolerance do you think would be wise? I have been looking at some of the Vanguard funds, and they recommended a 20% equity 80% bonds for a 3 year horizon, but there was a 10% dip last year, and the thought of losing £1000 next year potentially (if things don't improve) across a 3 year time horizon seems to make the investment much more risky. I mean, I would have to get a 5% return over the next two years to recoup my loss, which seems to be the average return for this type of investment anyways in which case...what is the point?
I know very little about the current market, so apologies if any of this is obvious/silly to you guys.
Thanks a bunch :)
bump
Open a Barclays bank account and open a "plan and invest" or whatever account and just have those people manage your money for you.
^ HSBC has one of these too.
Firstly good for you for trying to think about this for yourself.
Would take the 20k and stick it in an ISA for tax reasons.
You want 10k liquid so put this in cash with interest if you can. Don't put it in a bonds fund given that can devalue with changes in rates. So make sure no risk of permanent capital loss in this bucket.
Take the other 10k and stick it in s&p 500, msci world or similar tracker and let it compound. Incrementally add to this risk bucket as you earn during uni.
Good luck
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