Thats what I'm waiting for now as well, I'm going to be 22 and live in west london, which is so expensive for car insurance, some insurance companies are actually refusing to insure in some areas unless you have loyalty with the company for more than 10 years.
Once Im 22 the cars going to be sorned, collect parts and upgrade the 316i to an M50B25.
If you have money to spend, especially for trying to make more power, your better off taking care of the M40 4 pot and making sure your shell is good to start with, rust search + repair. Repaint a few things, what ever you think needs doing.
As for power, use 5w40 fully synthetic, Good plugs (im using bosch super 4) and a K&N panel filter which has made a difference to be honest.
Also might want to check your Dizzy cap and Rotor arm, makes a big difference and maybe your HT leads. If all these are good the next best thing is have your injectors cleaned out and search for vacuum leaks if you suspect any, this should restore some lost power and make it feel better to drive. From this Major and Minor service it will be good enough to drive for a good 5 years obviously with yearly services and what not. Timing belt too if it needs doing.
Plus you gain knowledge as well which is useful, I was in your position a Year ago wanting to chuck in a M50 or M20, but its wiser to wait. Plus bigger engine or more power is more maintenance as well...
Good luck and keep us posted
