40k and no job

mozil

Hi there just a few questions not sure if im breaking any rules with this type of post feel free to remove it.
Basically im 23 and out of work,
I do have about €40k in saving and a €9k loan which I am still able to service at the moment with my unemployment benefit.

I do have the strong possibility of a job now thank god with a salary of about 32K.

Basically Im wondering what to do with my 40K. I dont really have much need for it right now. Ive had it in a 6month fixed term saving acc a few times.
Long term Im hoping to buy a house So ideally I would like to have access to the money if over say the next 3 years the right house came available. Or should I go and clear the 9K and have no loans on my plate?

I suppose im asking two questions really the other being if say the money was tied up for say 5 years in a state or other relatively safe fund,would a bank give me a 100% mortgage on condition that once the fund matured I paid off what would have originally been the price of the deposit. I know now reading that a 100% mortgage sounds crazy but thats what I'm here for just a little bit of advice

ht9zni1gs28crp

Go travel and see the world while you are young!

Plenty of time when older to watch bank accounts and interest rates.

gordongekko

the rate you get on deposit is probably less than what your paying on the loan. Probably better to pay off the loan.

CD8ED

As far as I know savings over 20k or 25k (can't remember which) means you do not qualify for unemployment benefits so saying you have 40k in savings (good job on saving btw!) prob isn't the best idea!

But if I had that kinda cash I'd be on the first plane outta here!

gordongekko

CD8ED wrote: »

As far as I know savings over 20k or 25k (can't remember which) means you do not qualify for unemployment benefits so saying you have 40k in savings (good job on saving btw!) prob isn't the best idea!

But if I had that kinda cash I'd be on the first plane outta here!

unemployment benefit is not means tested. Job seekers allowance is means tested

Ash.J.Williams

travel

CD8ED

gordongekko wrote: »

unemployment benefit is not means tested. Job seekers allowance is means tested

Ah, thanks for straightening that out!

homer911

Probably not what you want to hear, but you could consider putting it into a pension (or rather, once in employment, put some of your salary into a pension and spend the equivalent savings). Putting money into a pension at your age will generate huge benefits in later life, and if you dont know what else to do with the money..

mozil

Yes have considered travelling but the gf still has a year and a half of college left so would be a tough enough to "pull the pin" there as they say..

I suppose pension could be an option with the likes of canada life zurich mayb? Throw 20K into it and still be in a pretty good position

roro2

To answer one part of your question - no, a bank will not give you a 100% mortgage regardless of cash on deposit.

Mezcita

Pay off the loan.

gordongekko

mozil wrote: »

Yes have considered travelling but the gf still has a year and a half of college left so would be a tough enough to "pull the pin" there as they say..

I suppose pension could be an option with the likes of canada life zurich mayb? Throw 20K into it and still be in a pretty good position

there are tax reliefs available for investing in pensions however as your not currently working you may not be able to avail of these tax breaks.

Value Hunter

Pay off the loan first and foremost, crazy to be paying the interest rate when you can clear it risk free (as opposed to investing in something to achieve the same rate)

As for the other 30k odd, well it depends as you need it for a mortgage deposit in the future I would suggest a extremely safe course of action. Either simple deposit accounts over numerous different banks, or if your willing for a bit more risk, investment in blue chip high dividend yield stocks (assuming you can capably research said stocks)

If your going the stock route I would thread carefully at the minute, either waiting 6 months - 12 months for a certainty in the american economy vs stock market, and would also hold a small percentage of the investment in hedges if an investment in stocks is your choice. Difficult times for stock investment at the minute as we're at a crossroads economically, especially vs the stock market.

gordongekko

Value Hunter wrote: »

If your going the stock route I would thread carefully at the minute, either waiting 6 months - 12 months for a certainty in the american economy vs stock market, and would also hold a small percentage of the investment in hedges if an investment in stocks is your choice. Difficult times for stock investment at the minute as we're at a crossroads economically, especially vs the stock market.

hopefully the fed meeting next week will clear up matters but there are still some positive signals out there. Samsung for instance just reported record profits however visibility into the future is not that clear at the moment

worded

Uk prize bonds. Your funds are in sterling and you could win a few £

Clear the loan, put 20k somewhere and goto Asia or South America for however long before the new job starts. You'd only need a couple of thousand to go and it would make the decision of what to do when the gf finishes a bit easier.

You're in an incredible position with 20k more (net) than I had when I was 22 with no job.. I used to think career and future but so happy that I've ended up in Asia for the last three years. I can save more money out here than back home anyway so it's a win-win.

Good luck with it. You're in the top .00000000001% for your age financially speaking so take advantage of it.

Value Hunter

gordongekko wrote: »

hopefully the fed meeting next week will clear up matters but there are still some positive signals out there. Samsung for instance just reported record profits however visibility into the future is not that clear at the moment

Couldn't agree more, individual companies have been reporting great earnings and look quite fairly valued even with the large run up in share prices.

That said though the market throws a tantrum at nearly every fed meeting (only to recover in a day or two)

Really difficult to see the next year ahead, the US economy is almost getting to the self improving phase but tapering is coming in, going to be a very fine line for the fed to draw. Personally, i'd take significant economic growth over any government actions

gordongekko

Value Hunter wrote: »

Couldn't agree more, individual companies have been reporting great earnings and look quite fairly valued even with the large run up in share prices.

That said though the market throws a tantrum at nearly every fed meeting (only to recover in a day or two)

Really difficult to see the next year ahead, the US economy is almost getting to the self improving phase but tapering is coming in, going to be a very fine line for the fed to draw. Personally, i'd take significant economic growth over any government actions

ya its a difficult line alright. The fed continues to print money that needs to find a home somewhere. That's boosting share prices. The fed won't stop printing money until there is decent economic growth but if it stops printing money then the bull run may end. Its quiet difficult for a "value hunter" to find the value right now.

650Ginge

homer911 wrote: »

Probably not what you want to hear, but you could consider putting it into a pension (or rather, once in employment, put some of your salary into a pension and spend the equivalent savings). Putting money into a pension at your age will generate huge benefits in later life, and if you dont know what else to do with the money..

Pensions have little if any benefit to someone not working as there is no tax to offset.

That amount in one go would be over must people's tax allowance anyway so you would be tying it up for 40 plus years at the end of which it would be taxed as income more than likely for no benefit.

Also charges on pensions are usually higher than other products. Not to mention 0.6% government levy.

Sonnenblumen

If I were in your shoes, I'd deal with the bigger picture and to avoid distraction make a few simple financial arrangements. For starters, I'd make my own pension arrangements, ie by putting 30-50% of the cash into buying blue chip global stocks, nothing whacky, stable growth Plcs and steady divi paying shares.

The writing is on the wall for traditional pensions, poor growth at best and more and more feeding at the trough with charges, admin, tax etc etc.

Cut out all the middlemen, and don't be fooled by tax breaks which don't even apply in your case.

Put a bit into National Bonds , secure and average but guaranteed returns.