Details
Age- 22
Gross Salary- £19600 approx (self-employed)
Tax @20%- £3920
Net salary- £15680
Total expenses- £10,247.88
What's left- £5,432.12
Assets- £800 in bank and £360 in an investment portfolio
After finding this excellent blog 3 months ago, I've paid off £500 of credit card debt (now debt free) and have stopped living pay check to pay check.
I am currently living with my dad and paying £200 per month for rent and bills with the intention to save to buy my first home. Not knowing how strict my dad is with the time frame but, he has given me 2 years before I have to spread my wings and leave.
I have been researching about the eighth wonder of the world... COMPOUNDING INTEREST. Also, with all these videos with RENT vs BUY, I wanted a mustachians opinion on what's best for me and my quest for financial independence.
My question: do I save intensively to buy my first home or consider the prospect of renting and focus on building my portfolio (with the power of youth and compound interest on my side)?
BUYING- the best help yo buy ISA offers 2.27%AER and 25% bonus when it comes to buying. Your first months max deposit is £1200 then a max payments of £200 each month. Finally being capped of at £12,000 max in the pot.
PORTFOLIO- with no lump sum or in fact any real money to start investing into my "freedom fund" I download an app called "Moneybox". Long story short I automatically invest 20% of my income (£80) every week with my asset allocation 15% cash fund, 15% property shares fund, 70% Global Shares fund with my intentions being over the long term I'm ready to take the blows that come when following volatile markets.
What would you do if you were in my current situation? Any advice would be greatly appreciated! Many thanks
Ryan