Advice on What a Young Person Should Do with Their Savings?

Lbargainboy17 on 21/05/2016 - 22:47
Last edited 21/05/2016 - 22:48

Hi Everyone

I am looking for some financial guidance on what is best to do with my savings.

I am 20 yo uni student who has a 'decent' amount of savings (by uni student standards).
I have recently landed a entry level job before I have finished my degree that pays a tad under 70k per year pro rata and I also continue doing a shift a week at a retailer for extra cash on the weekends.

In addition, I have paid off all my HECS fees to date and looking at ways to maximise my savings.

Could any one provide any advice on what the best thing I could do is?
I feel that my money is just sitting idle and could be used for things like investments. The issue is I barely know anything about investing and I am not a strong risk taker!

Any advice would be appreciated :)

Financial

Comments

  • barginhunter11 on 21/05/2016 - 23:05

    Buy a house

  • Cheeper on 21/05/2016 - 23:23
    +3

    Property is a reliable investment but it can be involved and you must buy the right property. Also you will have tenants involved so there lies another possible pitfall. There is a lot of outgoings but it is a long term investment so expect 10 or more years to see those profits roll in.
    Regular term investments are almost worthless there days as you would know and the next best bet there is the stock market. To ensure some reasonable return there some research is essential and it does involve some risk.
    Managed funds can be worthwhile but check around for a good co to deal with as some are all show and net returns are not so good.
    You don't mention your living situation so I am assuming you are living at home? If so then make the most of it for now but when the time comes purchasing your own accommodation is beneficial. Even if you may be paying off a loan it is much better than paying dead rent money.
    Being an old codger and looking back the biggest regret I had was not having enough money to indulge in my desires in the younger years… don't forget to invest in yourself, have fun, reward yourself. Don't sacrifice too much and do the things that interest you, especially travel.

  • mrtin on 21/05/2016 - 23:55
    +2

    Nice position to be in.
    Depending on your goals and surplus funds you (after seeking professional financial advice) could start building up your diversified investment portfolio to set you up for life.
    As an adviser, one of the biggest issues i see is people waiting until much later in life to start investing. Your big advantage is you have time on your side (i.e. the compounding effect of interest (or whatever returns you are getting).
    Good luck. Take action.

  • GameChanger on 22/05/2016 - 00:22

    What entry level job you have landed?

    $70k is fairly high for entry level.

    • [Deactivated] on 22/05/2016 - 19:09

      My guess - a bank. Credit analysis.

      • GameChanger on 22/05/2016 - 19:26

        Yeah seems like that or could be a Govt job as surprisingly they start high.

  • tomleonhart on 22/05/2016 - 00:39

    on red !

    • xoom on 22/05/2016 - 04:17
      +4

      Lies. Bet it all on black. Can't go wrong. Just ask wesley snipes.

      Yes agreed. Look into property. But take your time looking. Sus out your budget for it.

      • loulou1 on 22/05/2016 - 11:25
        +1

        I disagree, put it all on green. Yes it is much riskier, but the return is far greater.

  • Elnato on 22/05/2016 - 09:16
    +1

    I always hear entrepreneurs say the best investment is in yourself, any further training you can do will benefit the rest of your career so focus on that first of all, then you can:

    Pay down any debt you may have
    Buy an investment property or be an owner occupier (depends on your current living situation)
    Diversify with a few share options
    Put a larger portion of your wage into super.

  • EightImmortals on 22/05/2016 - 09:32
    +1

    Sounds like you're doing OK as is. I'd hold off on the buying a house (unless you can pay cash for one, or pay it off quickly)as going into debt for a house right now 'might' be a mistake(IMO). I'm still predicting a house price collapse or retreat in the next year or two and have sold our investment properties accordingly. Of course the interest rates are so low right now as well so things like term deposits, while safe are not producing much of a return. We have put some of our cash into a couple of LIC's (listed investment companies) run by Geoff Wilson (WAM, WAX and now WLE on the ASX). They are an ethical crowd with plenty of experience and hold plenty of cash. They pay a decent dividend twice a year and seem as safe as anything can be these days. Other than holding their stock I have no connection them. Or google 'Wilson asset management'. There are other LIC's listed on the ASX as well. You could trade directly yourself but I found it to be a major chore and wasn't too good at it, I feel much better letting the experts do it for me.

    There's always the forex market if you have the time to learn how to trade it, you can get demo accounts for free while you learn. Don't put real money on the line until you have things sorted out (srsly). Find a mentor or trustworthy training mob.

    Avoid superannuation as the money goes out of your control and governments simply change the rules to suit themselves. Many an old timer lamented to me at being mugs for investing in super their whole lives only to have a lot of it pinched by politicians. Yes, it will give you some tax deductions but you'll find that most company dividends are fully franked as well so your tax liability is minimised there and, as I said you keep control of your own money.

    So there's plenty of ways you can go but what I've learned (usually the hard way) is to always keep control of your money, never hand it over to ANYONE you do not trust 100% and have a long relationship with (or a referral from someone you do know and trust personally). Also, there's usually no rush, so take your time and do heaps of research, never put all your eggs in one basket and watch out for get-rich-quick schemes, they never seem to work. Never invest what you can't afford to lose.

    All of the above is simply my opinion it is not meant to be taken as financial advice, I am not a financial adviser and have no financial qualifications other than what I've picked up from the school of life. Feel free to ask if you want to know anything else or PM me if you prefer.

    • bargainboy17 on 22/05/2016 - 12:47

      Thank you for the tips! This was the sort of advice I was after!

      I am considering some sort of property investment at some point in the next couple of years but it does feel awfully risky at the moment plus I don't have a strong income stream given I undertake full-time uni.

      will look into the LIC's that you have suggested as well which sounds like a good place to possibly start given my situation. I feel like getting started is probably the hardest thing at the moment as it sounds like I will need a lot of time to educate myself on how to invest as I will need to start from square one.

      From your experiences, do you know what the best place/resource is for someone who wants to get started in investment and has little understanding of how to begin?

      • EightImmortals on 22/05/2016 - 13:53

        Investment property's are a good idea you just have to time it right. All markets move in cycles in their own timings. You can start by opening an account with a stockbroker, Etrade, Commsec, nabtrade etc.

        For forex a great resource is http://www.babypips.com/school

        For regualr stock market discussion/education you could try Hotcopper or Topstocks, hotcopper is a very active site but beware of rampers/derampers and a lot on nonsense to wade through. As I said before I prefer to leave that stuff up to the pros which is why I got into LIC's.

        Again, getting started is the hardest part but approach it like another uni subject, in that your results will show up 3-4 years down the track, but without the student debt and the uncertainty of the job market.

        • JepunK on 06/02/2017 - 10:39

          hahaha TS…I'm on there…

      • Slippery Fish on 22/05/2016 - 15:44
        +2

        The advice I was given, take your time, choose wisely. A 2% return is better than an imaginary 6% that turns out to be -20%.

        • EightImmortals on 22/05/2016 - 16:21
          +1

          Absolutely, don't let greed force your hand before you are ready.

  • Smulder on 22/05/2016 - 10:07
    +2

    Travel! Experience the world while you are young. There will be plenty of time to save and invest when you are older.

  • kaz09 on 22/05/2016 - 13:54

    wow how do u manage full time job&uni + another casual job???!?!?!
    Your time management skills must be insane
    Does your social life get affected?

    • bargainboy17 on 22/05/2016 - 15:00

      Well my 'full time job' that you referred to is actually a part-time position (21 hours a week) plus my casual job is 5 - 8 hours depending on shift length so it equates to under 30 hours a week.
      My time management skills are far from insane haha, my grades are taking a bit of a dive but im still passing well enough I guess.
      But it definitely takes some toll on my social life but i do manage to play social sports once a week to keep fit and remain 'social'. Remaining motivated is probably the toughest bit atm.

      I definitely wouldn't work full-time and do full-time uni that would truly be insane!

      • [Deactivated] on 22/05/2016 - 19:13

        i knew a girl who worked full time and overloaded University subjects to SIX/ Semester. It took her 6 years to graduate from a 3 year degree because she kept failing. Her original degree was a double degree and was supposed to be 5 years at 4 subjects/semester (but she kept failing the other part of her double degree).

      • kaz09 on 22/05/2016 - 19:30

        oh sorry i had assumed with that 70kpa it would be a full time job!
        We're at the same age but so you're already so far ahead in life than me lol T_T

  • [Deactivated] on 22/05/2016 - 19:43
    -1

    Blackjack and hookers

  • [Deactivated] on 23/05/2016 - 12:48

    buy drugs in bulk, you can make a good return breaking it down to smaller sizes and selling.

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