# Spare Cash



## Widget (May 7, 2002)

If you had Â£30K burning a hole in your pocket which of the following three options would you choose:

1. New Car
2. Pay off part of mortgage
3. Sell house and buy a Â£30K more expensive one

:


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## David_A (May 7, 2002)

Depends if you own a TT or not . . .

Dave


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## Widget (May 7, 2002)

I do, but the guy with the warming trousers doesn't.


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## head_ed (Dec 10, 2002)

Sorry but it has to be 2 or 3, either way your Â£30k will increase in value that way not decrease! :-/


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## mike_bailey (May 7, 2002)

If this is a survey then I would go for the mortgage option (nowadays, even though I have a TT I would still go for the mortgage).

I used to be fairly open to risk particularly with PEPs, ISAs, pension but after seeing them converted to dust and government stealth taxes my risk profile has been somewhat reduced as I can see more trouble ahead (like many others I think!?).

But that's just me....


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## Widget (May 7, 2002)

The problem is, he, as do all of us, wants the best of both worlds.

If he does the sensible thing he will regret not taking the more reckless option and vice versa.

#3 offers both personal and financial enhancement and would be my choice. I think :

But then I bought a Â£30K car ;D


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## R6B TT (Feb 25, 2003)

2 or 3 depending on what your house is worth at the moment - and if you like it as it is.
Where I live it wouldn't be worth spending 30K more as the Stamp Duty, Legal Fees and moving costs would be 20K - and 30K on a 450K house doesn't buy you much!

So I had an extension built 

Or, swap to an offset mortgage with a savings and mortgage pot. That way you can still get at your 30K if you need it but in the meantime your mortgage payments are reduced. Very tax efficient too.


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## David_A (May 7, 2002)

The sensible financial options is usually to pay off your debts before saving, because debts usually cost more than the savings.

However when your debt is against a house it gets complicated - don't think the Â£500 pm that my mortgage cost me could have got me the Â£90K increase in house value over the past 3 years any other way.

Basically what I'm saying is get yer mate to buy a TT, though if he doesn't like hot trousers don't switch the seats on!

Dave


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## chip (Dec 24, 2002)

Based on the limited info. (what about age, dependents, future earning potentials, other debts etc.. ) you provided about your friend;

With the sensible hat on, I would opt for 2

Without the sensible hat on, I would opt for 1

Before he does anything with the cash, I suggest he tuck away 3 months net salary in a high interest a/c ( cash ISA limit 3k per annum). If they are not bothered with the interest, buy premium bonds, who knows, they may get the top prize! This sum will come useful in unexpected rainy days (especially in this present employment climate).

In reality, what options he takes will be wholly dependent on his personal circumstances.


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## ag (Sep 12, 2002)

Nobody has mentioned the obvious. A Â£30k motorhome! Now that really is the best of both worlds.


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## 55JWB (May 7, 2002)

Premium Bonds..... You might win an Million  ;D


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## vlastan (May 6, 2002)

I did number 1!

And I think all of us here that have mortgage have done the same!!

After all we want to enjoy life today and have a nice car now in our twenties and thirties.

I know people that have paid their mortgage when they reached 38 years old...but they have always bought second hand rubbish cars all their lives!

Not me, thank you.

With my current predictions my mortgages will be paid within 11 years when I am 44, which is not so bad!


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## scoTTy (May 6, 2002)

Get hime to immediately transfer his mortgage and savings to a flexible mortgage.

He will then be paying interest on Â£30k less of capital and can then have the freedom to decide if he wants to spend Â£10k, Â£20k, Â£30k or more on a car when ever he feels the time is right.

Best of both worlds.

P.S. Point him to the mortgage thread for more details!!  ;D


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## garyc (May 7, 2002)

> If you had Â£30K burning a hole in your pocket which of the following three options would you choose:
> 
> 1. New Car
> 2. Pay off part of mortgage
> ...


1. AND 3. This is your life.


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## jam (May 8, 2002)

sell TTR, add Â£30k to value of TTR and get fully loaded M3 cab SMG


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## IanWest (May 7, 2002)

Or use it as a deposit on a buy to let flat, watch that go up in value as well as his house, that then creates another chunk of equity to purchase another house or pay for the car...or in my case, pay off the car loan!


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## garvin (May 7, 2002)

> I know people that have paid their mortgage when they reached 38 years old...but they have always bought second hand rubbish cars all their lives!


Yes, I know a couple who spent most of their adult lives to date (now in their early 40's) striving to achieve the house they wanted and completely paying off the mortgage. They were very successful at it and have achieved their aim .............. except they spent so much effort dedicated to this aim that they have now forgotten 'how to live' and must qualify as the most boring couple of people on the face of the planet!

Back to the main question ............. hhhmmmmm

New Car - well I've had a fair few new cars in my time and I still replace both cars with new ones every 2 to 3 years. Better car ..... well the TT suits me down to the ground and anything Â£30k's worth more exotic would firmly enter the realms of diminishing returns. Might consider a completely over-powered Caterham though as a third car - just for the hell of it.

Pay off part of the mortgage / buy bigger house - well I've always geared my mortgage to be paid off when I retire and have kept the repayments such that when I retire my disposable income remains steady - so I might put the extra Â£30k into a bigger house or extension.

In reality I would spend it on something really enjoyable - good holiday or, as I'm doing now, a wicked Home Cinema/Entertainment system


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## PaulS (Jun 15, 2002)

> Or use it as a deposit on a buy to let flat, watch that go up in value as well as his house, that then creates another chunk of equity to purchase another house or pay for the car...or in my case, pay off the car loan!


 [smiley=thumbsup.gif] very similar to my plan


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## bash-the-monkey (Jun 5, 2002)

30 grand = beer and hookers for all ;D

Bash
www.bashthemonkey.com


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## chip (Dec 24, 2002)

> 30 grand = beer and hookers for all Â ;D


but that wasn't in his list of options??!!! Anyhow, I second your motion.... ;D


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