Many thanks for reading, This forum has been of immense help already.
I am about to turn 25, and am secondary school teacher living in London looking for advice on how to invest, budget, save.
Earnings -£1800 pm - after tax, student loan deduction(this works like a tax in UK) and Defined benefit pension.
Outgoings (I live with gf, so we split everything and the costs below are solely mine )
- Rent - 650 pm
- food -150pm
-electric,gas,water - 25pm
-council tax - 50pm
-motorbike,petrol, insurance - 30pm (for weekends,shopping once or twice a week, its very old 1995 CB500)
-internet - £25pm (I pay for my dad's also)
-phone - 31pm (contract ends in September, will move to £10)
- fun,going out,clothes - £130 pm
£700 left over for savings each month.
Savings
£15,000 - Tax free high interest savings account earning 4.10% (fixed until May2014, product no longer available)
£5,600 - tax free interest savings account earning 2%
£3,700 - normal savings account - 0.1 % interest (figuring out what to do with this)
Cash for day to day - in current account £1200
This is all really to save for a deposit on a house. London prices are high. Hoping to raise £25k each with gf to buy next year when the fixed interest ends.
Investments
£1100 - In stocks and shares tax free accounts (low cost trackers 0.37% TER UK INDEX and PACIFIC INDEX excl japan)
100oz of silver, 1/2 ounce of gold (physical). (Spot value £2000 - down on when I bought it in August 2012)
One thing I have gathered is I am an awful investor. I bought into the whole end of the dollar scenario and am just thankful I did not do anything silly like 100% silver and gold. I also sold my S&P tracker in November last year, I did'nt loose money but missed out on the massive gains. (Luckily I kept open the UK and pacific tracker and they have done well)
I think what I need to do is pick a vanguard Lifestrategy account in a tax free shelter and just set up a direct debit and forget about it, even re balancing I feel will lead me astray. However I am not sure what bond allocation to go for at my age, or what percentage of my £700 income I should put into it.
Should I sell the current stocks I have and start again with the vanguard fund?
Seeing as I have the pension, this works as career average salary 1/60 accrual rate. So work 30 years and retire on half your average salary for the rest of you life. (pension is to be taken at 65, can be 55 but will be reduced). Does this count as an allocation to bonds?
As you can see I am in a bit of a financial mess and missing a clear direction. I am able to save, I cycle to work and spend very little. My aim is to retire early and be FI.
If you have read this far, thank you very much and any advice you could give would be very welcome.