How to kick-start a nest egg with previous garments

Cash earned from selling old clothes could help young people get started with investing, according to Lloyds Bank. 

Research by the bank suggests that its customers aged between 18 and 25 who used Vinted make approximately £25 per month from selling on the platform. 

However, they also spend £45 on average – as it is tempting to reinvest money made into purchases on the site. 

Lloyds has run the numbers on how much young people could make if they took some of their Vinted profits and invested them month by month. 

A popular way to invest is to put in a regular amount every month, and hopefully watch the pot grow over time.  

Manuel Pardavila-Gonzalez, investments managing director at Lloyds Bank, said: ‘Being able to put aside an affordable amount like £20 a month will help kick-start an important part of investing – building the habit.

‘We can see from the increase in 18-25-year-olds opening share dealing accounts with us in the past year that there’s an appetite to get a head start on their financial life goals like owning a home or seeking to grow their savings.’

‘I’d consider investing my Vinted cash’

This is certainly the case for one Vinted user, 23-year-old Jay McCondichie from Glasgow. 

Much of the money she makes from selling is used for purchases on Vinted.

She said: ‘I would probably buy more things on Vinted with the balance that I would make from the clothes, or I would transfer it over to my bank account, and probably buy something new with it.’

However, she is now looking to the future, and how investing some money could support her goals. 

Having launched her own personalised gifts business, Mint Bleu Designs, in 2021, Jay said much of her money went towards startup costs which prevented her from investing.

With the business now self-sufficient, Jay wants to begin investing for the future and says the money she makes from Vinted could be a good place to start.

‘These days it’s so easy to make some extra cash on Vinted from things you don’t use,’ Jay said.

‘With the money I make from Vinted, I really should be putting it aside. The extra money definitely adds up and could go towards something big like a new car, house deposit, to do some travelling or even to start up another business in the future. It really does sound like a no-brainer.

‘I do have a bit of a shopping habit. I buy a lot of clothes. With all the clothes that I have and don’t wear, selling them on Vinted would make me quite a bit of money.’

A common problem is that man younger people don’t know where to start with investing, or think it comes with heavy costs. 

Two thirds of those under 25 believe the costs of investing make it expensive, Lloyds’ data shows, while 34 per cent said they don’t know enough to get started.

Those interested in investing with an online account can read This is Money’s guide to the best DIY investing platforms. 

Lloyds offers an ‘Invest Wise’ account, which offers fee-free regular investing to those aged under 26. 

‘It’s just never something that crossed my mind at the time,’ Jay said. ‘But now, looking back, I wish I had done it a lot sooner. When I was younger, I was not thinking about anything like that, I would just spend my money.

‘It’s just not knowing what sort of account to open or not knowing what saving accounts are out there to do it properly.’

Like so many, she puts money away in a savings ‘folder’ in her banking app, but is concerned that she isn’t getting the benefits she could elsewhere.

How much could Vinted profits make you?

Based on historical economic data, Lloyds said someone beginning to invest £20 per month at age 18 could see themselves with £3,460 by the time they reach 28. 

That represents a profit of more than £1,000 on their total stake of £2,400.

Increase this to £50 per month, or £100 per month, the investments could grow to £8,651 and £17,302 respectively over the 10-year period.

It’s recommended that investors leave their investments alone for at least five years, to ride out any market ups and downs – and this could be easier to do for those who start early in life. 

Pardavila-Gonzalez said: ‘It’s sensible to think about leaving the cash that you invest for at least five to 10 years, so getting started earlier gives people more time to make their money work harder, while building confidence and learning more about investing if they want to make more decisions for themselves.

‘Seeing how a small amount can look by the time they reach the back end of their twenties could make their goals much more achievable, but remembering it’s a long-term way of saving is important no matter when you start.’

Investing for a 22-year period, until the age of 40 for current 18-year-olds, Lloyds said young people could make £61,892 by investing £100 per month, pulling in almost £14,000 more than their initial investment.

Those investing £50 per month could make £30,946, while those putting away £20 each month would see their investments sit at £12,378.