UPDATED: $75,000 of savings - How would you invest it?

LTed Mosby on 27/05/2014 - 23:45
Last edited 02/06/2014 - 19:12

Update: 2/06/2014

  1. As suggested by paulsterio and others, today I have purchased $15,000 in an ETF that tracks the ASX200 (ASX:STW). So I have $60,000 in saving left.
  2. Subscribed to money magazine for some light reading (currently $3/3 issues, then $13.50/3 issues there after)

Next steps:
Looking for a 300-350k investment property around Melbourne to lease out.
Looking to invest in shares more geared towards dividend payouts.
As always, suggestions/opinions welcome.

Original Post: 28/05/2014

I have been putting money away for the last 2 years and now have $75,000 in a savings account (CBA Goal Saver) that I would like to invest.

I am 24 years old, still living at home. My outgoings basically consist of myki(public transport), phone, foxtel, gym, petrol, girlfriend. I am able to save an average of >$650/week (slightly more than half of my net pay).

I am going to be seeking professional advice from a financial advisor in the next couple of weeks. (pm me if anyone can recommend someone in the Melbourne CBD).

So my question is: How would you invest $75,000, and what what type of realistic return would you expect from your suggestion?
Would love to hear the opinions of the OzB Community.

Cheers
Ted Mosby

Financial

Comments

      • Ted Mosby on 28/05/2014 - 23:32
        +3

        Hi Zan123, interesting comment. Can you please elaborate on how investing into shares and property does not "turn the gears of economy"

      • chukkii on 30/05/2014 - 11:39
        +2

        the OP should contribute more to the community

        And i suppose the taxes OP's paid mean nothing to the community?

      • nadan on 30/05/2014 - 11:45
        -2

        Because of this a lot of crap happens in the world "assumptions", you just assume that he hasn't helped his parents and finalized your impression of him. Very poor form, given that you have zero knowledge of his background.

      • ChatCPT on 01/06/2014 - 00:36
        +1

        Sandsay & zan123 are obviously trolling. If not theyre just jealous losers. Please ignore them and get back on topic. Im enjoying this educational discussion.

      • Cluster on 01/06/2014 - 12:41
        +1

        In regards to the comments that 'saving money' is the reason why the economy goes into recession because they save and don't spend, nothing could be further from the truth.

        While some spending is great, too much (in the form of spending everything you have and borrowing even more to spend) is what causes recessions. Money is misspent and badly invested which causes asset bubbles and the inevitable hangover (recession).

        The savings the OP is stashing away are the basis on which loans are made to you and me. Without a solid savings base Australia is reliant on overseas money markets. These can turn against us on a whim and demand far more interest than we're paying now. Savers are saving us from economic depression.

    • mskeggs on 28/05/2014 - 20:11
      +12

      Strange comment for this site. No indication that the op parents are unhappy for him to be living at home. Sounds like they raised him to be conscious of saving.
      Not sure how you got so much tuition debt? In oz we are lucky that there is a pretty high income limit before that has to be repaid at all.
      I didn't know Ted was white. And I guess he might have left off his charitable giving, but maybe he isn't a big giver yet? I wasn't at his age.
      Pretty revealing though that you don't earn an income, have mounting debts, and are repeating advice not to save.
      Will you be relying on the gov or charity if you outlive you savings?

    • nomoneynoproblems on 28/05/2014 - 20:20
      +7

      Lol butthurt and mad at the same time. Jelly gonna Jelly.

    • Ted Mosby on 28/05/2014 - 20:50

      Sandsay - try this out. It might help you
      http://shop.coles.com.au/online/mobile/national/durex-lubric…

      • sandsay on 29/05/2014 - 01:38
        -2

        I don't at all mind flavoured lube. Seriously though, I just spoke my mind. I know quite a number of people who think the same. Generally those conscientious people who also care about others besides their sexual partner, and basic family.

        • johnno07 on 29/05/2014 - 15:09
          +3

          So borrowing $300,000 from the government for you to spend on your own personal education is you way of being a "conscientious" person and show how you "care about others"? Get a grip.

    • johnno07 on 29/05/2014 - 00:37
      +4

      $300K in tuition debt? Either you're a professional student, or, judging by the strange grammar/sentence structure and vague racism towards white people in your comment, you're on a visa, paying double tuition and doing/have done something expensive (medicine?).

      You won't live beyond what maybe 70 and your body would have deteriorated from 50.

      Not only is the life expectance more like 82 in Australia (which will no doubt increase significantly in the next 60 years before the OP hits that mark), how far is $75,000 really going to get you if you just spend it all as your genius friend recommends? Not really very far - maybe a deposit on a house and a mid-range newish, second-hand car. What a capitalist pig!

      • sandsay on 29/05/2014 - 01:41
        -1

        Following your train of thought, I'm an ageist, and racist as well.

        • sparkles on 29/05/2014 - 09:27

          Can you explain what you are studying to have got excess of $300k in fees? Dayum. My total HECS debt for a 3 year degree was $12k, even that was a bitch to pay off.

        • johnno07 on 29/05/2014 - 15:06

          Your words, not mine, buddy.

  • mlburnian on 28/05/2014 - 18:41
    +2

    hop over to hotcopper and invest all your money in speculative stocks. you will either become a millionaire or lose all of it - no biggie, as you are only 24.

    disclaimer: this is not financial advise. DYOR

  • Munificent on 28/05/2014 - 18:53

    In the medium to long term, if it were my money I would look at allocating $50k to shares, leave the 25k in the on-call online savings.

    Out of the 50k, invest across 10 blue chip stocks across the various sectors and industries, with half growth shares (shares that pay little dividend but you rely on capital gains - think mining stocks), and half with high yielding dividend paying stocks (minimal growth plans but pay most of their profits out as dividends - think Telstra, Big 4 Banks). $5k per share is a decent amount, not too little for the brokerage to be a huge cost, but not so big that you can't diversify

    Once your shares bring you enough money - follow the steps from this guy
    https://www.ozbargain.com.au/node/145993#comment-2013887

    • herzy on 01/06/2014 - 13:28

      Please pretend you've never heard the term 'blue chip', and focus instead on simply looking for good companies that you think will be bigger and better than they are now, available for a cheap price.

  • spoonmugen on 28/05/2014 - 18:59
    +9

    buy a merc

    • ozb-442 on 28/05/2014 - 19:20
      +1

      Actually found that fairly humorous, +1

    • johnno07 on 29/05/2014 - 00:38
      +2

      buy a merc

      …and send him on high risk/reward criminal errands.

    • CI on 28/05/2014 - 21:03
      +2

      Why

      • Charity on 28/05/2014 - 22:57

        I guess if it just about money, you have a good point. If he never moves out, he will no doubt save more money. Heck, his children could also be raised in his parents house to further boost economies of scale.

        • mskeggs on 29/05/2014 - 07:07
          +3

          In plenty of cultures around the world three generations under one roof is the norm.
          It would certainly help me if I took in a parent to keep an eye on my kids while I am at work.

    • ChatCPT on 01/06/2014 - 00:42

      Son of a zombie wouldnt understand what its like to have good parents

  • [Deactivated] on 28/05/2014 - 21:33
    +1

    If I was you, I would buy a unit close to the CBD. How about Brunswick? Its only 4 km from the CBD, easy access to public transport, vibrant, multi-cultural hub, close to universities.Something like this maybe :
    Linky, this or even better a 3 bedroom one like this one

    • Ted Mosby on 28/05/2014 - 23:35

      I was looking into buying a property (some in Brunswick) before the xmas break but didn't take the plunge. Thanks for the suggestions - ill check it out.

      • Dr Techno on 30/05/2014 - 10:39
        +1

        First house you always a bit hesitant. After you have been through the whole process, buying 2nd house is a no brainer. :)

        I was in your position once, young living at home for a long time with good savings.. If I was you I would buy a house as early as possible.. Stay with parents and rent out your property so other ppl help pay it off for you. Then when you are ready to move out umm delayed early 30s then house might be paid off or close to it, or you might be onto your 2nd property by that time.

        Would be good to do the above while you still have a good safety net (staying with parents).

  • illumination on 28/05/2014 - 22:59
    +5

    Ted, don't have any solid advice for you (I am reading this because I am trying to pick up ideas) but I'd like to ask you a few things just to find out how you got to where you are now. Based on the numbers you've shared, it seems you've got a salary around the $80k mark. My questions:
    - How long have you been working, and how long did it take for you to start saving well? I can see you've said you've been saving for 2 years but have you been working for longer than that?
    - Ever since you've started saving, have you only relied on your job to increase your savings amount or have you done a little bit of investing elsewhere?
    - Do you have any insurances in place? (Private Health, Income, Trauma) - if you do see a financial planner, he will probably start talking to you about this stuff
    - Have you had to make significant alterations/sacrifices to your lifestyle to be able to save well?

    • Ted Mosby on 28/05/2014 - 23:46
      • Working for about 2 and a half years now. Splurged for the first 6 months, saved after that
      • No other forms of income. Tried to "learn" how to trade shares during uni but the GFC hit during that time and that was the end of that.
      • Private Health Only
      • I still live pretty well, (and yes - this is due to that fact i'm still living at home)
      • p1 ama on 29/05/2014 - 00:20
        +1

        You really should have invested during the depths of the GFC, even investing in a market index you would have made nice capital gains.

      • hahaboy on 29/05/2014 - 18:45
        +4

        Which industry are you working in?

  • [Deactivated] on 28/05/2014 - 23:30
    -7

    donate it to me?

  • xuqi on 29/05/2014 - 00:36
    -3

    Buy property.

  • garetz on 29/05/2014 - 03:20

    The no1 investment you can make is in yourself, either in education or starting up a business.
    The next best investment is property, they dont say safe as houses for no reason.

    Then comes shares, just so you know shares are a racket, most of the sharemarket is controlled by banks. These days with information so prevalent its very hard to make short term gains, only medium to long term. At the moment the market is at its height, so you could potentially lose everything when the inevitable downturn happens.

    I was in your position at around age 28, i had about 110k, i bought a unit, then a 2nd unit, then a 3rd unit, all within 3-5 years. All using capital gain from the previous investment as part of the 20% deposit. This was just after the gfc, all 3 properties are positively geared and over 50% paid off now.

    Not only does property give you capital gain but passive income, as long as you grow at a steady pace, by the time you retire you will have 10-20 properties. That will be your nest egg.

    Superannuation is on the road to ruin, dont depend on something you have absolutely no control over, i guarantee you within the next 50 years the government is going to rob all our super/us blind.

    • Devils Advocate on 31/05/2014 - 15:47
      +5

      I'm not sure where to start on this comment… Here I go:

      The no1 investment you can make is in yourself, either in education or starting up a business.

      Correct, however OP seems to already have a university degree and a healthy income so he has already done this and is reaping the benefits. As for starting a business, that's far easier said than done..

      Then comes shares, just so you know shares are a racket, most of the sharemarket is controlled by banks. These days with information so prevalent its very hard to make short term gains, only medium to long term. At the moment the market is at its height, so you could potentially lose everything when the inevitable downturn happens.

      The amount of misinformation here scares me that there are people out there as uneducated as you.
      1. The share market is not controlled by banks, take your tin foil hat off.
      2. It's very hard to make short term gains on anything, but that's not the aim of investing in shares (unless actively trading). Shares are a long-term investment. Find me a 10 year time frame where the ASX200 has had a return of less than 5% per annum. There isn't any. Even the last 10 years (taking into account the GFC) the ASX 200 has returned 57.12% (https://au.finance.yahoo.com/echarts?s=%5EAXJO#symbol=%5EAXJ…).
      3. How do you know that the market is at it's height right now when the best financial analysts in the world don't know? Maybe you are a genius (s). In all seriousness, there is always people who say that the market is at it's height after a good year. Then it goes and returns 15% again next year and the cycle continues. Put simply, any time is a good time to get in the market (if investing for long term).

      I was in your position at around age 28, i had about 110k, i bought a unit, then a 2nd unit, then a 3rd unit, all within 3-5 years. All using capital gain from the previous investment as part of the 20% deposit. This was just after the gfc, all 3 properties are positively geared and over 50% paid off now.

      Sorry buddy, I've got some bad news for you… If you had have used your $75,000 and (assumed) unit borrowing of $250,000 "just after the gfc" (assumed 01/01/2009) and invested in even an ASX index fund the investment value would now be $484,777. Plus dividends of say 3%pa and you would have earnt passive income of $57,750 (plus franking credits) and you would now be getting an income from them of $14,500pa.
      Just to make you feel worse, if you had have put the $325,000 in CBA shares (for example) your $325,000 would be worth $913,227 (https://au.finance.yahoo.com/echarts?s=CBA.AX#symbol=CBA.AX;…), you would have been paid ~$160k in dividends (https://www.commbank.com.au/about-us/shareholders/shareholde…) and you now be receiving $43,400pa in dividends (real passive income, rent is not passive as you need to maintain the property)

      Not only does property give you capital gain but passive income, as long as you grow at a steady pace, by the time you retire you will have 10-20 properties. That will be your nest egg.

      As I said above, rent is not real passive income, but dividends are.

      Superannuation is on the road to ruin, dont depend on something you have absolutely no control over, i guarantee you within the next 50 years the government is going to rob all our super/us blind.

      Put you tin foil hat back on X2

    • OldBugger on 31/05/2014 - 19:07
      +3

      by the time you retire you will have 10-20 properties. That will be your nest egg.

      Sorry, but I cringe at this type of outlook on life. You spend the whole of your younger years buying and paying off mortgages in this mindset to make as much money as possible which will finally be available to you … when you retire.

      I know it's an Australian tradition now that starts from the moment we hit 18, but it we weren't always so money hungry.

      To the OP, I say invest a little here and there (education, your own business, some in a high interest savings and a house that you will live in are some ideas) but ensure you spend some of your earnings on things you love and enjoy in life today too.

      More than Money - https://www.youtube.com/watch?v=k7JlI959slY

  • DEvok on 29/05/2014 - 03:43

    I still believe that if you have the right amount of money start of your own business, it must be something that does not compromise your assets, it is substantially important as it regards to the amount of profiit you gain. continue to expand therefore you have a steady income for the rest of your life, think of James packer.

    Having all of your earning in the bank for interest is a waste of time as there are so much opportunity on the long run. Long term rates are only great if you have a certain amount which as I'm referring to millions" having $1000, per week you would not need to work, or you could.
    What I am saying is deposits will be alot more difficult than having a business if you want as a long term investment.

  • baker bob on 29/05/2014 - 05:54
    +3

    Cash on deposit for a 24 year old is the 2nd dumbest idea after putting the money under the mattress. Factor in inflation and taxation and cash on deposit is a horrible investment for a 24 year old who has a life of investing ahead of him. Its great for retirees who want to preserve their retirement funds.

    Careful with professional advice OP, financial planners will often push you towards whatever product they are making commission on and with the amount of money you have to invest they will no doubt stick you with some kid fresh out of uni simply regurgitating PDS'. I personally do not trust any professional because every single one that I know personally is rich from the commissions they make, not the investments they make.

    I would say ignore the money for now and spend the next 6 months educating yourself. There are many specialist investment forums that have a wealth of knowledge. Read them and then you can make your own decisions based on what your goals are and what your risk appetite is. Subscribe to magazines etc. I'm a property person myself so I will start you off with Somersoft forums. There are many others.

    As for starting your own business. No one can say that's the best decision for you. It might be the best decision for some professions but certainly not all.

  • Gomo on 29/05/2014 - 07:31

    maybe get a commbank share pack, you can start off with I think $4,500 and see how that mini investment goes for you?

  • ExtraSalt on 29/05/2014 - 09:15
    +3

    can i just say, 24yo bloke, with a gf, 730 days and $75k savings…..how do you do it? lol well done for even getting that much. I'm 25, been saving for just over a year….maybe 16 months? and I'm only on $30k

    • tomleonhart on 29/05/2014 - 11:54
      +1

      I think Living at home is his answer.

      But discipline is important, strip out anything that you don't need or want. Shitty phone, shitty car, bring lunch, drink coffee at home, cook your own dinner, don't change phone every 6 months, don't go on an expensive phone plan etc…

      I'm 27 and I'm on a $258k saving/investments and I have been renting since I was 18.

      • ExtraSalt on 29/05/2014 - 11:57

        damn. well played man. I think its a great thing you can fall into, but its the transition that would be hard for myself and many others. But with our lives getting more expensive by the day, your returns show that its well-worth the sacrifice

    • ronnknee on 29/05/2014 - 13:55

      It'd be easier with a higher income but obviously finding a job with a much higher income is difficult.

  • coolhead on 29/05/2014 - 11:25

    With this much money, young age, being Single, no major liabilities & hopefully no major expense in near future..this is what I would do.. Invest a % of it in high returns/high risks options like Shares of well known companies & some small ones as sell, some in mututal funds which invest in property, foreign shares etc..

    buy an investment property around 300k with about 5% or max 10% deposit (weribee, hoppers, tarneit, truganina…look for something near amenities specially train station).. i know LMI comes into picture but then you dont have to pull out hugh deposit.. starting early is always better…

    after these 2 things will set you willk be left withh about 15-20k in hand… go on a holiday mate maybe you deserve it.. enjoy till u r a bachlor..
    Keep the spare funds in an offset account & in hand in case you need in an emergency…

    P.S: I am no financial advisor so dont quote me on anything… cheers

  • johndowy on 29/05/2014 - 13:39

    No idea, since I have never seen that much money but, damn your rich and young. Is your girlfriend also that rich? If she is, then maybe combine your money for a bigger investment of some sort?

  • michshanlee on 29/05/2014 - 14:04
    +1

    Ted, fyi when I was considering moving my funds out of Goal Saver, Commbank matched the interest rate I was going to get from a competitor so it may pay for you to talk to them prior to moving the funds. Cheers Michelle

    • Ted Mosby on 29/05/2014 - 21:02

      Very interesting - i'm gonna give them a call.

    • grovesy15 on 30/05/2014 - 09:23

      Just inquired about this myself…seems to be only for fixed term deposits, and not for the everyday NetSaver or GoalSaver accounts.

      The agent was actually quite rude about the whole thing, so I'm more than happy to move to MEBank and then UBank now. Cheers!

  • R3XNebular on 29/05/2014 - 14:20

    Hey mate I am in the same situation however ended up purchasing a 400k house and splitting the loan in half fixed and variable. Now have the house for rent and the rent is returning 450 a week which is basically the repayments I need to make for both loans. Plan to purchase another house when I've knocked over 100k in repayments. Basically the house is slowly paying for it self.

    • tomleonhart on 29/05/2014 - 15:18
      +2

      Are you managing the property by yourself ?

  • gk0r on 29/05/2014 - 14:32
    +2

    Whatever you do, do not invest in property. Not in Australia, not any time soon. The 14 year property run is over. The days of 30% annual property growth are over, and they are not coming back. Also, keep in mind all property costs, these are seldom tracked by property spruikers for obvious reason. If you run your numbers carefully, in many cases even if you "make" $100,000 in property 'sticker price' in 5 years you're actually behind in the real total costs by the time you factor our property taxes, insurance, strata fees (if any), stamp duty, real estate agent fees, legals fees, etc.

    For most cases the property investment looks quite dire after you breakdown all costs (including cost of finance, etc).

    Run from people who say 'buy into property, double your money in 10 years and benefit from negative gearing in the meantime'. These folks thing that losing money is good. That's what negative gearing is. Losing money. Your money. I'd rather invest into something that will make money, not lose it.

    • siraitken on 29/05/2014 - 14:39

      So… gKor

      How would you invest it?

      • StewBalls on 29/05/2014 - 20:05

        I'd wager gkor reckons bitcoins is where the smart money is at! ;)

        • gk0r on 31/05/2014 - 02:53
          +1

          It's already covered by @paulsterio earlier in this thread, and therefore I did not feel the need to go over it again - but I am happy enough to go over the basics again. The most sensible thing to do in the current market conditions is investment in the ETF. That's where most money is going to be made in the medium to long term for most people.

          Given the average level of financial education and daily commitment required to process and analyse financial news and their implications - it would be silly to do anything else. Take the last GFC for example - we all watched it tank. How many of us actually bought quality shares at a discount price?

          If your day to day business is not investment then you have no place 'picking stocks' or 'timing markets'. Most people, even those who devote their lives to it, cannot do it in the long term. So look for global trends instead and global market turns. Invest in the market and you'll do better than 'pickers' and 'timers'.

          It will not transform you into an overnight millionaire, but with steady commitment the fortunes are on your side. Australian share market is heavily propped up by our superannuation funds. The generous employer contributions of 9.25% ~ 15% keep a steady river of 'free' and 'mandatory' capital injections with more than half of that capital ending up in Australian Share Market.

        • StewBalls on 02/06/2014 - 12:24

          Nice answer, and nice try at misdirecting on the coattails of someone with at least some professional financial experience…but your original comment was just misinformation about losing money from buying property & clueless speculation about mythical bubbles bursting. This myth has been busted many, many times.

          That's just the same typical Gen Y nonsense spouted on OzB all of the time by people who are afraid to take the plunge. Yeah, they keep telling you how much their funds make in theory, but at the end of the day in the real world they always end up behind those whose property investments just keep inexorably creeping forward…just look at property prices over the last 20-30 years! FFS, next it will the baby-boomers stole my future!!!

          As noted by someone else, remember the old adage safe as houses…that's no myth!

        • Pacify on 02/06/2014 - 23:46

          Oh you are quite, quite wrong.

          Housing bubbles are very easy burst, and Australia is in the midst of one that has grown to spectacular proportions.

          Our house prices no longer reflect wage levels, and only being held up by negative gearing and high rent prices.

          This bubble will burst, just like it has in many other parts of the world. Its just a matter of time, the current house price trends are just not sustainable.

          The safe as houses line is one long antiquated.

        • gk0r on 04/06/2014 - 15:36
          +1

          You are entitled to your own opinion, I am not trying to change your mind or even educate you. If you think property is the best answer for everyone then by all means, go ahead.

          Here are just some of the facts:in 2011 FY there were 1,811,174 property investors in Australia. Two out of three recorded a loss, the average loss was $10,947 per annum. Total value of losses added up to $13.2 BN. A couple more facts: 72% of all property investors in Australia only have one investment property. Further 18% only have two. The question is - why? Because 90% of all property investors CANNOT AFFORD more than two properties because it's COSTING THEM MONEY

          Now, try this exercise. Go to a bookstore and look at "Investment" book case. You'll find that 80% of the books there will be on the subject of property investment. You will find books like "0 to 100 properties in two years" and "0 to 330 properties in 5 years" and other BS along these lines. If that stuff really worked, these figures would be drastically different.

          Now, if you want to talk about Myths try these: "You can never lose money in housing" and even the one you mentioned - " Safe as a house". My favourite: "You will always sell your house for more than what you paid for it"

          Nothing mythical about these myths…

    • 8200 on 31/05/2014 - 18:47

      If the rich Chinese and others keep coming and developers keep releasing the new estates slowly, premium property, ie good suburbs, will continue to rise forever.

      The only downward would be outer overpriced new suburbs and overpriced well spruked nonsense like the Docklands

      I agree though, insane priced here in Australia

    • tohara on 01/06/2014 - 22:06
      +1

      you clearly haven't factored in the favourable tax implications of investment properties

      • StewBalls on 02/06/2014 - 12:31

        They never do…nor do they ever think about properties other than bog stock residential as investments.

  • ethereal88 on 29/05/2014 - 15:30

    Invest it in a high interest savings account. If you have 500K+ in a bank you can live off the interest if you don't splurge too much, maybe add in a part time job around 20hrs a week. By the time you pay off any property you could likely have that cash in a bank earning interest at call ready to go with basically no effort.

    • p1 ama on 29/05/2014 - 17:00

      Maybe during better financial times, yes, but definitely not now. Interest rates are around 4% for most savings accounts at the moment. If you have 500K invested, that is only 500,000*0.04 = $20,000. You can't live off $20,000.

    • redslert on 30/05/2014 - 12:40
      -1

      Pretty much the only good advice I have read so far.
      It is perfectly fine to have cash sitting idle in a high interest account.

      Nothing more silly than thinking idle cash needs to be spent.

      • herzy on 01/06/2014 - 13:36

        Opportunity cost…

  • Lucky13 on 29/05/2014 - 16:01

    Spend it on me! I like flowers, long walks on the beach… etc etc

    • Malarkey on 29/05/2014 - 16:26
      +2

      How YOU doing?
      ( ••)
      ( •      •)>⌐□-□
      (⌐□_□)

    • tomleonhart on 29/05/2014 - 16:34
      +5

      What is the return % do you yield?

      • hahaboy on 29/05/2014 - 18:46
        -1

        It's in the form of sexual favours.

  • augv on 29/05/2014 - 19:13

    Moving out to rent before I started full time work after uni has crippled my ability to save. Now that it's been about 12 months, I will be coming back to this thread once the savings pile up. Seems to be lots of good advice.

  • RubenM on 29/05/2014 - 19:28

    Go to somersoft.com and start reading to see whether real estate would suit you. I think it's the easiest way to get rich (not quickly though). If you leverage your money a little and buy two $250k houses with the money, you'll make $10k in equity with if the market goes up a modest 2% in a year.
    You have to be in it for the medium to long term though as initially you'll be down a little bit of money. So if you think that you can do without the money for at least five years, then definitely worth considering.

  • mr_asstight on 29/05/2014 - 20:36
    +1

    I want to congratulate OP for his discipline. The money will continue to grow if he remains that way

  • altomic on 29/05/2014 - 21:47
    +9

    Race 5 at Randwick. Everything on a trifecta for 2,5 & 9.

  • johnathonjohnson on 29/05/2014 - 22:04
    +2

    Well…

    “I’d be glad to buy a house, but that’s like a carpenter selling his toolkit.”

    I shouldn't have to mention who may or may not have said that.

    As for advice, I'm not sure what field your in, but you should consider studying in finance.

    I'm 25 and currently finishing off a Bcom (Finance) with savings of < 0.

    We would refer to this as 'sunk' costs. I am not worried what has passed, I have had at least 8 years and 250K of great experiences. If you asked me how 'wealthy' I was, that would be how I would derive value and come up with this figure. I am now focusing on the future, or my 'projected' or forecasted earnings. But 75K will sure give you a very, very, very good head start to snowball that figure.

  • ge on 29/05/2014 - 22:16
    +1

    Don't pay a salesman for advice. They are FAR from experts. Ever knew a Rich financial planner? You better pay for financial education.
    My recommendation in a laziness scale:
    1) Most lazy: buy index funds (not mutual funds) in industries you think have a bright future, and forget about them.
    2) Mid lazy: find someone Rich who isn't interested in making money from you and follow their path.
    3) Not lazy: Get educated about wealth building and make your own decisions. A good start is reading Kiyosaki, then you can move onto reading about Value Investing, Real Estate investing, etc. Remember to focus in investing, not trading, not speculating. The more you know, the lesser the risk in your investments and the more you realise how financial planners are only pay cheque to pay cheque salespeople selling bad products for the lazy.
    Good luck.

  • vanslilamhed on 29/05/2014 - 23:20

    As someone in a similar position to OP (albeit not quite as much savings) - what are some basic readings you guys would recommend to get my head around the whole wealth building thing? Gestaba mentioned Kiyosaki… anyone have any other suggestions?
    Looking for something really aimed at a novice, preferably relevant to Australian context.

    Thanks in advance!

    • Cheap Steve on 30/05/2014 - 05:53
      -1

      Richest man in Babylon, millionaire next door, motivated money, any warren Buffett book.

      Kiyosaki gives great educational advice but it when it comes to investments he tells you to borrow heavily to gear multiple properties or invest in speculative shares. This is a recipe for disaster IMO.

  • AG_ACT on 30/05/2014 - 02:50
    +5

    Hi Ted.

    I had the same question as you in 2010 to invest approx 100k- I have a smaller income than you (much smaller when I started) so my situation was slightly different, but it might help you learn from my mistakes.

    I invested 60 percent of my savings in shares and 40 percent in property(deposit on a block to settle in 1 year so I had more time to save). I can easily say that percentage wise, my shares have definitely performed a LOT better than my property. To be honest though, I prefer the investment in property.

    Shares are more volatile, and if you are anything like me, you will spend a lot of time looking at the markets. It becomes very tempting to sell when you think you have made a decent amount, and sometimes it can be hard to make the decision to sell when you need to. As things are under your control, it's much more involved.

    With property, it's a smaller return, but it's set and forget. You hate the bills when they come in, but they are unavoidable. Plus it gives the added advantage of you having somewhere to move into when you decide to move out. Personally, I bought land and had a house built that I like, but this is definitely not something I'd recommend. Contrary to popular belief, you spend more than an existing house, and it's near impossible to find tenants because of the location of new blocks.

    If you do end up going for a property my advice would be to get something without strata, and something as close to ammenities as possible.

    Best of luck with whatever you end up doing.

    • AG_ACT on 30/05/2014 - 03:00

      Oh one more thing, it's great to plan, and deliberate in the best approach, there is definitely some great advice here, but I'd suggest doing something to start…

      a bank account with a mediocre return that you pay 15 percent or more interest on is probably not the best….

    • Cheap Steve on 30/05/2014 - 06:07

      You should read the short article Mr Market by Benjamin Graham. Google it. This might stop you worrying and checking on your share portfolio all the time. I found it very interesting that you prefer an investment strategy which gives you less income, less capital growth, more ongoing expenses and more time involvement.

  • drexxx on 30/05/2014 - 03:40
    +2

    Hey mate. What's your goal? Retire by thirty? Be a millionaire by 35? Or work until you're 65 and retire (like most of the nation?)

    I don't know nor care, let's just set one :-)

    That will dictate what strategy you need to implement!

    • nsm on 30/05/2014 - 23:34

      Millionaire by 35

  • pitiek on 30/05/2014 - 07:58
    +1

    Just invest it all on this..

    http://goo.gl/ZakjE8

  • nadan on 30/05/2014 - 11:35

    Great topic, I have been procrastinating on this for a long time, and it's finally time to open a commsec account when they have the special on again.

  • jezza8888 on 30/05/2014 - 15:06

    mate go get that app that allows you to follow warren buffet's shares.

    then copy them

    • Baysew on 30/05/2014 - 17:20

      You don't need an app or to copy them.
      Just buy Berkshire Hathaway Shares.
      (Mind you they are $US 192,300)

      • herzy on 01/06/2014 - 13:45

        Get the other class… no real difference

  • sintro on 30/05/2014 - 16:35
    -1

    Hi Ted, Don’t waste your time with shares, managed funds or any other forms of financial investment products. Just keep it safe in a high interest online savings account like Ubank as others suggested.

    In all seriousness (and I am dead serious) the REAL money (MON eye = one eye) is knowledge.
    You need to learn and understand Natural Law and apply it in your life, it will explain to you how money is just another form of control system.

    Watch the video here:
    Mark Passio – Natural Law Seminar
    https://www.youtube.com/watch?v=ASUHN3gNxWo

    Everyone needs to watch this, it is truely empowering knowledge.
    I started late, you're only 24. A great time to start.

    • p1 ama on 30/05/2014 - 16:51
      +3

      You need to learn and understand Natural Law and apply it in your life, it will explain to you how money is just another form of control system.

      What?

      • sintro on 30/05/2014 - 16:58

        It is all fully explained in the video, in a logical order and concise manner.
        Check it out.

        The information is free, all you need is to pay with time and attention.

  • apprentice01 on 31/05/2014 - 17:51

    take a punt and invest half in bitcoins buy low sell high with in a week you may be able to make a little fortune

    • herzy on 01/06/2014 - 13:46

      or you'll buy high without realising, and sell low in a panic and lose your little fortune. don't gamble.

  • 8200 on 31/05/2014 - 18:42
    -1

    Firstly, well done Ted in saving that sort of coin at your age

    Forget banks, around 4% interest is nowhere, wont even out-run inflation

    If you can get another $25k, ie $100k [min. chips], you could consider to invest with these guys, they are doing 30% P/A:

    http://microequities.com.au/our-funds/deep-value-microcap-fu…

    Its in the share market which is the easiest way to make money, and to stay liquid if you need your funds ASAP.

    Be VERY careful who you seek advice from, they will steer you towards what they get the biggest commission from not what is best for you

    Good luck

    • dannyhc on 31/05/2014 - 19:39
      +3

      How long before Micro Equities gets exposed as the next Ponzie Scheme? Place your bets!

      • 8200 on 02/06/2014 - 09:40
        -1

        They have been active for over 5+ years, no fly-by-night here, also the prices HAVE gone down too [so no Madoff scam] but overall its just keeps rising most of the year

        Of course you can lose your capital, with big gains comes risk

        Its just another option for the OP, might be too risky for him

        Cheers

        • sprucemoose on 02/06/2014 - 16:14
          +1

          Madoffs scam was around for 10+ years! Just because something has been around for a certain amount of time doesn't make it legit.

  • bargin424 on 01/06/2014 - 22:11

    Interesting topic

  • brilliantthings on 02/06/2014 - 08:47
    +1

    If you do the Natural Law thing, make sure you buy a $500,000 apartment in the inner city.

    Dumping money in a high interest bank account requires you to pay tax on the interest. This makes a 4.5% return more like 3% for most people. Dumping the money in a home loan offset account, offsets the home loan interest rate (maybe 5%) without incurring any tax on the interest saved. A 5% gain.

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