22 y.o, have a graduate job and saved up $10K. What should I be doing with my money?

LMelbBargainHunter on 12/06/2017 - 00:30

I've been lurking these forums for quite a bit and I've seen some pretty solid advice, so I thought I'd make a post too!

So here's a little info about me:
* 22 years old
* Have been working at an accounting firm as a graduate for a few months
* Currently living with parents (not many expenses besides the basics - phone bill, car insurance/rego, food, etc.). My car is already paid off and I don't plan on buying another one in the near future
* Saved up $10K
What should I do with my money now and going into the future?

Here is what my plan was:
1. Put the $10K aside into another high interest rate bank account and leave it there as an emergency fund
2. I currently have just over $30K in HECS-HELP debt. Once I save up another $10K, I want to put it towards this debt. I know that HECS is "interest-free", but to be honest, I would rather pay this off quickly (within the next 3-4 years) and have one less debt to worry about when I move out of my parent's house in the future
3. Start investing in shares (probably once I save up another $10K or so)
4. Do a bit of travelling whenever I get the chance

What are your thoughts? I know there may be a few others who may be in my position, so hopefully this thread can help out others too!
Thanks! :)

P.S. A high yielding investment such a $80,000 car is not an option ;)

Financial

Comments

        • Pizdets on 12/06/2017 - 15:26

          Thanks for clarifying I didn't know the government was doing that.

        • based on 13/06/2017 - 19:51

          @doweyy: Did that make it through the senate?

        • Hamlet on 13/06/2017 - 20:32

          @doweyy: Is this only first homes?

        • doweyy on 13/06/2017 - 20:39
          +1

          @based:

          Yes, posted in the 17-18 budget papers here. Official legislation is still under construction, however it will still be activated come 1 July.

        • doweyy on 13/06/2017 - 20:41

          @Hamlet:

          Yes it is

      • 811b11e8 on 14/06/2017 - 08:43
        +1

        I'm pretty sure the barefoot recommends to stay away from salary sacrificing super for a future home loan. His advice in general is really good.

        If you do sacrifice and your life circumstances change you can't withdrawal that money until you 65 if you chose to not buy a house.

        My advice is save everything you an while at home, make a separate account for holiday and blow money and put in a fixed amount in it every month.

        Once you have say 50k start looking up if you want to buy a house if not get a high growth vanguard managed fund or look at buying there Etfs via the asx.

        Work on keeping your expenses low, it's very easy for spending to blow out when your this young and have a fat pay check. I spent thousands of dollars a year on coffee and beer for a year for example when I was 24.

        Also forget about your Hecs debt, it's like tax would you pay more tax now so you don't have to pay it next year?

        When your getting established really just keep an eye on you cash flow.

        Save for the unexpected, like getting made when I was made redundant, 2012 about a 1/3 of my colleagues at a bank were made redundant and we're all applying for same jobs. So build a good safety net. Or knocking up some bird.

        Over the next few years you could possibly Re locate for work if you get a good offer. So if you do go the house path make sure it's in an area your could rent easily to quality tennants.

        Stay away from Super speculative things like CFDs, bit coins, or gambling. If you do go this route take the money out of your blow money only.

        You could ask this post on barefoot website might be a better place for it.

        • redraoh on 15/06/2017 - 09:55

          I'm pretty sure the barefoot recommends to stay away from salary sacrificing super for a future home loan. His advice in general is really good.

          He does recommend it, see here. Although he has some conditions, e.g. if you're planning to buy within five years.

          If you do sacrifice and your life circumstances change you can't withdrawal that money until you 65 if you chose to not buy a house.

          Yeah, you would want to be sure you are going to buy a home. Don't do it otherwise. I think you can withdraw your contributions (up to $30k) for a deposit any time until retirement, so it wouldn't all be lost if you don't buy straight away.

  • Piranha2004 on 12/06/2017 - 12:46

    Sink it into Ethereum blockchain technology :)

  • zealmax on 12/06/2017 - 13:57
    -4

    22 and have 10K savings? What is wrong with you? You are only young once, live your life.

  • Hirolol on 12/06/2017 - 14:23
    +1

    Not sure if anyone said this but you can always buy a bit coin or some ethereum.
    Its only going to go up as more people invest in the technology.
    To get started you can head to btcmarkets.net
    That's where I started and it's a great way to get to know the basics of it.

  • fenric on 12/06/2017 - 14:33

    Another vote for travel here. Do it now, because before you know it you will be economically tied down with a house/partner/kids and the opportunity will be gone.
    You will never meet a person who says "I wish I travelled LESS when I was young". Plenty of the other kind though :)

    • whooah1979 on 12/06/2017 - 15:22
      -3

      You will never meet a person who says "I wish I travelled LESS when I was young". Plenty of the other kind though :)

      there are plenty of gen y/z whinging about rent and property prices going through the roof while sipping cappuccinos, lattes and taking selfies on their latest iphone that they purchased on a plan.

      op is doing the right thing by being financially responsible.

      • fenric on 12/06/2017 - 16:06
        +2

        They are not mutually exclusive. The most financially responsible route would be to never drink, go out, travel or do anything fun or interesting (that costs money). Just stay at home and do nothing…
        But that is not exactly living is it?
        I'm not saying spend every cent that you earn and never save. Just to make the most of the freedom he has, while he has it.

  • AMLagonda on 12/06/2017 - 15:57

    Keep saving….

  • The Wololo Wombat on 12/06/2017 - 16:37
    +1

    Save another $4k and buy an 'investment property'. Find unit/townhouse in a positively geared area for <$250k.

    I bought my first one at 21 with $14k, though I did get an additional $7k grant to help (I think it still would've been possible without it, the FHOG has now changed in QLD to new properties). Now I have a >$1,000,000 portfolio at 26.

    Had to pay LMI, but if you are secure in your job, you do have a chance at getting a loan IF (and only IF) you are willing to 'move into it' for at least 6 months.

    Now what the Government considers as 'moving in' is up for you to investigate and get professional advice about. It doesn't always mean living there 100% though.

    Good luck. Check out free podcasts to educate yourself more.

    • whooah1979 on 12/06/2017 - 16:40

      did you travel between 21 and 26?

      • The Wololo Wombat on 12/06/2017 - 16:48
        +2

        Yes. I've been to 40 countries now and lived/worked in the UK.

        I'm a school teacher (science), I'm not loaded. My parents have not financially assisted anything (except charging me minimal board as I've lived at home, which has been a HUGE help but not make/break). That's the beauty of positively geared property, they actually MAKE you money. I wouldn't be able to do some much travel without it.

        • [Deactivated] on 08/09/2017 - 15:40

          Have you imagined the impact when property market will crash? I personally think govt should limit the number of property in one's portfolio. I am sick and tired of paying ever increasing rents because of some people's greed.

        • The Wololo Wombat on 09/09/2017 - 10:24

          @twoperspectives: Look into the Australian property market over time, then even overseas markets… they rarely 'crash' they do have periodic short term drops, so you have to have enough LVR to weather that. Sure I am taking a risk, but I've done over 100 hrs of reserach into markets etc, before I bought - while it looks risky, with education, I've made very low risk decisions.

          You are also assuming rent is getting higher due to investors. It's not, I can explain to you why if you like… but in terms of limiting investing - You can't limit stuff like that - otherwise you'd have a communist government which stifles innovation. Anyway… people would buy in trusts or other creative ways even if they did pass those laws…. it's the way the world works….

          I mean this in the nicest way possible (to help you, not belittle you) - I think you need to change your defeatist mindset. Complaining won't get you anywhere in life, you've got the be the one to innovate, the one to invest. Find your niche, take a risk.

          You can always find 102 reason why investing is a bad idea, or why starting a business is a bad idea… sometimes that's right - but you have to educate yourself, put in the hard yards and take a risk. I know that sounds arrogant, but honestly I mean it to help you. If you change the way you think, then you will change the way you act.

    • canyoudoitcheaper on 12/06/2017 - 16:42
      +1

      $250k these days wouldn't get you within 100km of any mainland capital city.

      You would have to buy out in the 'sticks and stones', and put up with the low rental yield/ occupancy rates.

      • The Wololo Wombat on 12/06/2017 - 16:50
        +3

        This is not true.

        I bought in this complex last year (2bdrm townhouse) for $155k, rents out for $270pw

        http://www.realestate.com.au/property-townhouse-qld-redbank-…

        It's just over 20km from Brisbane. Walk to the train-line too.

        I hear negative/pessimistic stuff like this ALL the time. People justifying why property is bad/impossible. It's not.

        • spat220 on 12/06/2017 - 23:08

          Far from impossible, but I find investing in equities such as stock markets these days a much more appropriate investment. Simply because property contains high amounts of debt and I've never been a believer in using debt to make you money. I understand the concept in regards to positive gearing property but I believe there are smarter ways to make money. Throughout history the returns are very similar between markets and property, however markets don't need to involve debt like property, nor do they require large amounts of start up capital. Once you factor in the interest etc on loans, share markets have proved a more profitable place to invest your money.
          Well done to you though, you sound like you set yourself up quite well

        • Fogofterror on 14/06/2017 - 14:20

          @spat220: I take your point, but you fail to factor in the magnitude of returns for property vs shares. You can:

          1. Save $100,000 to purchase shares @ at 9% return (conservative historical average)

          OR

          1. Put down a $100,000 deposit for a $500,000 property for a similar rate of return.

          Without taking into consideration costs or tax implications for both and assuming some factors, the 1st option returns $9,000 however the 2nd option will net you $45,000. The ability to use debt to leverage greater returns in terms of magnitude is a strong consideration.

          Not all debt is bad, particularly if it is used in generating returns.

        • The Wololo Wombat on 14/06/2017 - 22:50

          @Fogofterror:

          The tax implications are huge. I put 14k of my own money on my first property. It's now turned into over $100k equity in five years. Nothing additional has come from my pocket. Try to do that with shares consistently!

    • Black Brown Blue on 14/06/2017 - 21:26

      Hi Wololo Wombat,

      Now you can only get FHOG on new properties and depending on the state it is between 10 and 20k. Without the FHOG you have to save the addition 10-20k. Positive gearing can work well if you make a wise investment. I am considering a positively geared property for investment, I am just 23 and have just started a proper job. I am currently living out of home on rent which is 10k a year which may as well be contributed towards a property. Then again the real benefit will be seen when you start renting it out.

      How much loan repayment were you paying weekly on your first house and how many years loan did you take?
      You can take loan from 5 years to 30 years and my understanding is that the longer the time the higher interest you will be paying.

      • The Wololo Wombat on 14/06/2017 - 23:01
        +2

        Hmm… weekly, let me remember… it was about $350pw (P&I loan)? But you've got to learn about the tax benefits of having an investment property also, they subsidise the cost significantly! You've also got to factor things like repairs, vacancy, insurance, water and rates, body corporate, and property management.

        Always go 30 years for the loan (or longer, if it becomes possible one day). You can always choose to put more money into the loan if you want to pay it off faster and ultimately pay less interest (or just have cash sitting in an offset account). Don't worry about interest, your tenants effectively pay that, instead worry about YIELD, worry about GEARING, worry about CAPTIAL GROWTH.

        I know the FHOG laws have changed :) The fact they were changing in QLD in 2012 made me get started!

        My advice is:
        1: Go talk to a few different mortgage brokers and a few different banks to determine your borrowing capacity. I've been rejected by some for fiance and told 'it's impossible' then had others actually make the 'impossible' happen! You might be able to borrow now.
        2: Learn as much as you can :) Education turns risk into opportunity
        3: Don't listen to others telling you how risky it is, or volatile the market it is. These are just the reasons they tell themselves they shouldn't do it. There is ALWAYS money to be made in property, you have to be determined enough to make it work! Listen instead to those who ARE making it work.
        4: That said, don't be stupid, you can get burned, so again, educate yourself. But don't let fear paralyse you from taking action.

        • Black Brown Blue on 15/06/2017 - 12:18
          +1

          Thanks for the tips. You are right, there are pros and cons. Learning and educating yourself is the best way to be safe and make good decisions.

  • singlemalt72 on 12/06/2017 - 16:56

    Never heard a person at the end of their life say "I wish I'd travelled less"!

    Use some to travel, even budget travel. Get out, see things, make memories.

    • trongy on 12/06/2017 - 22:18
      +5

      Never heard a person at the end of their life say "I wish I'd travelled less"!

      What they normally say is - "I which I could afford X", where X is something they could have afforded if they had travelled less and saved more.

      I'm not saying don't travel, just bear in mind that money spent on travel can't be spent on other life goals.

      • Randxyz123 on 12/06/2017 - 22:52
        -1

        What they normally say is - "I which I could afford X", where X is something they could have afforded if they had travelled less and saved more.

        Never ever heard anyone say that….

        I'm not saying don't travel, just bear in mind that money spent on travel can't be spent on other life goals.

        And you can't get time in your 20s that you spend working to buy a house or investments and not travelling back.

        You don't need to spend all of it. You could spend… $5-6K on a decent Europe trip /tour though.

        • trongy on 13/06/2017 - 15:50
          +2

          You don't need to spend all of it. You could spend… $5-6K on a decent Europe trip /tour though.

          That was my point. I'm glad you got it.

          In my opinion, those who do professional work in UK or Europe for a few years get the benefits of travel while still earning money and advancing their careers. I'm told it's practical to take many short trips a year and explore Europe while based on London for example.

          And you can't get time in your 20s that you spend working to buy a house or investments and not travelling back.

          No-one ever gets any time back. It's equally true to say you can't get the time you spent travelling in your 20's back and spend it developing a lucrative career. That's why each individual needs to evaluate their decisions based on their personal values and not some-one else's values.

  • WillKillfor5Cents on 12/06/2017 - 17:36
    +1

    just don't buy smashed avo on sourdough bread with fetta cheese. Enjoy life, travel, travel and travel!

    Live. Laugh. Love.

    • banzini on 13/06/2017 - 12:12

      and bonk

  • guystingy on 12/06/2017 - 17:45
    +1

    Invest in eneloops

  • zerokas on 12/06/2017 - 18:49
    +3

    I wish I had found Mr Money Mustache at that age…would be financially independent by now…

    Check it out…
    http://www.mrmoneymustache.com

    He invests in Vanguard funds www.vanguard.com.au

    PS. The worst thing you could do is buy a car. Also, if the student loan is without a %. then pay it up in rates and use the money to make more money.

  • Infinite Monkee on 12/06/2017 - 19:08
    +1

    Buy ETH with it

  • bryans on 12/06/2017 - 20:07

    New iPhone 8 on sale in October
    Xbox One X release date in November.
    Christmas December.

    You're all set bro!

  • ego22 on 12/06/2017 - 20:12
    +1

    Do what i did… Or didnt do… Never leave home. And keep putting it off. And before you know it. You to will be rich as hell. But travel all you want. I dont travel because travelling pisses me off. another good excuse to save, develop a hatred for traveling.

  • Randxyz123 on 12/06/2017 - 20:30

    Have you ever traveled ? If not, book in some leave next year and travel for a month.

  • Shwayne on 12/06/2017 - 22:02
    -1

    HECS is not strictly "interest free", it's adjusted for inflation.

    Paying off HECS debt and getting the 5% rebate can typically be better than sitting on the cash.

    • Drifta on 12/06/2017 - 23:18
      +2

      5% no longer offered - withdrawn by gov

      • lostn on 12/06/2017 - 23:58
        +4

        Ah. In my day you got a discount of 20% I think. Now there's less incentive to pay it back early.

  • gimli on 12/06/2017 - 22:42
    +1

    If you enjoy travelling and have the time then do it. I think you will find in the future time and not money is what prevents you from travelling. It does need to take up all 10,000 anyways.

    I would also think about how you would want to invest your money when you have say 50,000 or 100,000. Are you interested in property, shares or something else etc? What ever you choose start reading into it as though you are going to invest tomorrow? The problem you will find is that buy the time you have $100,000 for a deposit or to put in shares you don't have the time to learn.

    Anyways on a more practical note. Say you put your money in high interst savings you get 3% which is about $300 an year. Even if you were to make 10% an year in stocks (very unlikely in short term but possible in longer term) you are set to possibly gain $700 extra. So TBH you are not missing much by just keeping your $10,000 safe this year. I think investing in shares is a great idea but the point i'm trying to make is that your 22 you have lots of time so take your time!

  • [Deactivated] on 12/06/2017 - 23:19

    mama put a little money in the mattress taught me how to make a silver spoon outta plastic…

  • lostn on 12/06/2017 - 23:56

    Buy eneloops with your 10k?

    1. I currently have just over $30K in HECS-HELP debt. Once I save up another $10K, I want to put it towards this debt. I know that HECS is "interest-free", but to be honest, I would rather pay this off quickly (within the next 3-4 years) and have one less debt to worry about when I move out of my parent's house in the future

    It's interest free, but not really. The debt is indexed every year by CPI, which is around 3.3% or so. A bank loan which charges interest does not get indexed. This is effectively an interest rate. The greater the debt, the faster it will grow by.

    If you intend to pay it off eventually, you will save money doing it sooner. I believe you get a discount if you make voluntary payments of something like 20% to 25%. At least that's how it used to be.

    This is a big saving btw.

    1. Put the $10K aside into another high interest rate bank account and leave it there as an emergency fund

    This is the safest option if you don't know how to invest. You will make piss all interest, but it comes without risk. Anything that generates real interest is going to carry a lot of risk, which you may not be comfortable with.

    • lostn on 13/06/2017 - 11:42

      Seems the voluntary payment discount was foolishly abolished by the commonwealth government. I would not recommend paying it back now, as long as the money you would pay it back with can earn a higher return than the CPI it is being indexed at. I haven't looked at current interest rates, but the last time I checked a few months ago they were pretty low, and I'm not even sure if it covers CPI.

      The truth is, with investing it's no pain no gain. You either have to take more risks if you want potential to make a bigger return, or you're going to have to be patient with your money and wait longer to get results. It's going to make you uncomfortable no matter what. If it were easy to make free money, everyone would do it. Bank interest is safe but crap. Term deposit pays a little bit better, but you lose access to your money until it matures. Real estate is where money can be made, but you have to have some knowledge and be patient. And barrier of entry can be high. The affordable areas are further from the city, and they won't go up in price as quickly as areas closer.

  • TurkishDelight on 13/06/2017 - 01:45

    Learn some trading? You are already good at numbers.

  • Easy game on 13/06/2017 - 03:03
    +7

    Long time lurker, just joined. First post. I'm posting here because you're​ in a similar position to me. New grad job, money coming in, savings adding up. What to do?

    (I don't know your circumstances and I'm not giving you financial advice nor anyone else financial advice here - I am not qualified to and do not profess to give such advice.)

    What you decide to do with your money is going to depend greatly on three things: your risk tolerance; your future earning capacity; your current and expected future savings rate.

    Saving $10k is great - well done.

    Firstly, never, ever, ever pay off HECS early. Ever. Just don't do it. (Save for the the final year as mentioned above). It used to be cost effective when you got a considerable discount and an income tax shield - but no more. Consider HECS the cheapest loan you'll ever get. If you can't take that money and gain a return above CPI with low risk then you're an idiot. You're better off doing that and keeping the profit on your HECS loan. Repaying a HECS loan is almost the lowest yield thing you could do - not all debt is bad. If you can take that debt and get a good risk adjusted return at higher than borrowing costs (easy in the case of HECS) then that's good debt (that's even ignoring the special favour it gets when you die by being wiped). You're better off investing that HECS money because the opportunity cost of paying it back is so high - you forgo the opportunity to earn returns above the rate of CPI on that money.

    Because you're young, you have presumably a longer investment horizon than most. Putting myself in your shoes I would be willing to allocate my funds to risker assets (higher expected return as compensation). A loss doesn't hurt a 22 year old as much as one nearing retirement who looks more for stabity and certainty (at the cost of foregoing upside risk of higher returns), assuming this money is specifically for investing and you have your daily expenses covered quite apart from this saved cash. But getting higher expected returns over a long investment horizon can make a huge difference.

    I would keep some (I'd say $5k or so) in cash and cash equivalents with low yeilds but with high liquidity in case you ever need it in emergency (maybe more depending on circumstances, risk tolerance and availability to access cash from other sources if needed). But that'd be my only defensive position with such a long investment horizon. Obviously if your income is decent and you have a high saving rate you should be even less concerned with this (say you're saving $2k per month, then you will be able to add quickly to your portfolio to spread risk).

    But at a young age, I'm looking to maximize my (very) long term risk adjusted returns, with a preference for higher yeilding and riskier assets (Aus shares, international shares, diversified and well managed property investment trusts). This will involve a lot of volatility with such a small sum as $10k (as it is less feasible to spread/diversify as transaction costs are proportionately large) but if you inted to continue saving at a high rate, that $10k will quickly become a small part of your portfolio as you add to it over time.

    Shares are typically high yielding over a long investment horizon. I wouldn't recommend just picking a stock to get started - you'll be over exposed. I would make my first investment in an actively managed listed investment company with a good track record of beating the relevant benchmark over a decent timeline (YES, they do exist) but do your research (tax outcomes and your preference for capital gains or franked dividends or other distributions, track record, management team, etc). That or an exchange traded fund - start out quite diversified with only one trade (but be wary of ASX index funds which are overweight in banks, BHP, Telstra, Wesfarmers just due to sheer size). I'd check out some of the A-REITs which are out there ATM - some have loooooong weighted average lease expiries with good tenants and attractive yields.

    But my preference would definitely be for an aggressive portfolio given your​ age (without knowing full your goals) and steady income (grad job and low expenses) to supplement your investments regularly. Don't trade often and dwindle returns on fees. Don't think you can pick individual stocks better than the market - but if you do think a company that is relatively cheap - don't be afraid to buy looking for a long term strategic hold. Wherever possible hold for 1year+ for the CGT discount and take a long-term view to increasing your wealth. And don't ever be sucked into monitoring performance too regularly because all you're seeing in price movements on the daily is usually random noise. And remember, the more frequently you buy/sell, the more fees you pay and therefore the lower your returns (esp with small sums where fees make a higher proportion of the investment (ie $20 brokerage is only 0.1% on a $20k trade but a whole 1% on a $2k trade).

    I certainly wouldn't be locking my money into a low yielding term deposit or bank account just gaining at or slightly above inflation simply because it's easy.

    FYI this is just how I would be thinking about things in the position described - I am by no means saying this is a suitable strategy for OP or anyone else reading and I've made a lot of assumptions here (which may or may not be correct).

    • Hamlet on 13/06/2017 - 20:41

      Same situation here (young, grad job, savings coming in) and really appreciative of your reply! Good luck with the trading! I shall look into it…

    • Tidy on 14/06/2017 - 02:30

      Soon to be grad here, this post was very motivating.

      Where did you begin to read/learn about all of this Easy game?
      I didn't even know what a franked dividend was until I googled it after reading your post.

  • OzzyOzbourne on 13/06/2017 - 08:00
    -1

    Buy property, the government has set up a great ponzie scheme

  • Shame on 13/06/2017 - 11:11

    Pick a small cap stock you really believe in and put 100% of your money into it, then wait until Mr Market smacks you in the face for being greedy. It will hurt like hell but it's a lesson that you will remember for the rest of your life. Better to lose $5k now than to make the same mistake in 20 years time and lose $200k.

    Losing money due to my own stupidity was the best lesson I have ever learnt.

    • lostn on 13/06/2017 - 11:47

      Heh. Lesson taken. I'd rather learn from someone else's lesson than learn it first hand.

  • majuks on 13/06/2017 - 12:04
    +1

    vanguard high growth management fund.

    I had better luck there getting ~7-11% return despite the 0.9% management fee, than my share portfolio ( that one is a complete disaster).

  • acersaurus on 13/06/2017 - 12:31

    Well done on being in the position you are in.

    I'd recommend doing some travelling around South East Asia. It's cheap and great, otherwise I'd put it in the bank and start saving for a home loan deposit..

  • Jabberwocky on 13/06/2017 - 13:39
    +3

    Make priceless memories for just $10k….go out on holiday do something adventurous, something you enjoy…I am 33 making $250k / yr. All I did was take right decisions, invest etc etc…

    Now all I think about is how I could have made my life more enjoyable 10yrs back, accumulating priceless memories for the rest of my life..

    Enjoy your saving. You have the all of your life to do the rest. But you won't be 22 forever and do what you can do today

  • nietzsche bargain on 13/06/2017 - 14:45

    If you are open to it (and I suggest you should given your interest in investments), focus 100% of your energy on moving to a more lucrative career path - finance (e.g. get transferred to transaction services rather than audit to set yourself up for a jump to IB).

    In the context of a 3-5 year horizon, even if you strike it lucky with a 25% p.a. return, your extra $10K profit is almost irrelevant compared to the $50-150K p.a. (insto banking/IB) boost in income and exit opps.

    Don't bother putting it into any sort of managed product, as I said before, the few extra % won't get you far. Instead, open up a trading account and have a go at investing (set your expectations low) but the value in doing so is greater than the actual few thousand you may gain or lose.

  • [Deactivated] on 13/06/2017 - 14:55

    There's no real reason to pay off HECS early is there? Unless you're considering a home-loan or something (as it stops the % cut from your take-home pay, meaning your income is effectively higher)? Even then, cash for the deposit would be better than slightly higher take-home pay wouldn't it?

    Edit: Oh, it's apparently indexed debt… So there's basically an interest on it anyway. The ~2% CPI is barely different to ~3% high interest saving accounts. The interest is basically negated, but it still has the advantage of cash-on-hand.

  • Dr Prepper on 13/06/2017 - 15:08

    I agree that you should invest in an ETF like Vanguard etc.

  • bulletNOVA on 13/06/2017 - 15:13

    Business?

  • Slothme on 13/06/2017 - 15:59

    Buy a land that is going to get settled/titled in a year or 2 worth the 5%deposit = your 10k (if you have a constant income). 10 years down the line when you are 32,probably married and moving away from your current place. You feel so comfortable not only interms of price.. but distance from cbd. If you got a place 20km from cbd 10 years from now probably you have to find place 30-40km away .

    Just a thought . You completely ignore 😊

  • idonotknowwhy on 13/06/2017 - 17:09

    15% in BTC
    15% in ETH
    10% in ZEC
    60% in travel. I recommend Japan.
    While you're there, you can use an Android/iOS app to obsessively check the prices of your 3 investments ;-)

  • Oz80085 on 13/06/2017 - 17:23

    I would start with buying shares in a listed investment company like Australian Foundation Investment Company (AFIC). Then you could dabble in some riskier shares if you feel the need. Also, marketplace lending could be worth considering (ratesetter). Seems to be good return and fairly low risk. Main draw back of marketplace lending is that your money is not liquid. If you need your cash back, it could take 5 years…

  • sillyguy on 13/06/2017 - 18:12

    Buy $5000 worth of XRP at .36 AUD now, enjoy ur graduate life, work hard, spend $5000 on ur hobbies over the next 2 years :)

  • atris17 on 13/06/2017 - 18:22

    Invest in MONEY MAGAZINE, u learn a lot of about finacial planning

  • Cleremy on 13/06/2017 - 18:30
    -1

    "What should I be doing with my money?"

    Using it to brag online about the circumstances you came by the 10K is a start…

  • T1OOO on 13/06/2017 - 18:58

    Imo. You need to move out and mature, then you can answer your own questions. Imo, it's a necessary step to becoming an adult.

  • SoBargainVerySave on 13/06/2017 - 18:59

    Should be investing in ethereum and other cryptocoin/ICOs. I've made 4x my investment in a month lel

  • Wallyt99 on 13/06/2017 - 19:35
    +1

    You should put some money in my PayPal account. I broke my TV.

  • 4foxache on 13/06/2017 - 19:45
    +1
    1. I'd pay off your HECS debt asap. I personally did that as soon as I could because I wanted that 'monkey' off my back. I understand the do your calculation bit and see what works best but to be honest starting on a debt free slate is worth the piece of mind for me.
    2. Property is a pretty good start and that served me well as a first investment. I saved up about $40k and bought a 3 bedroom house in Cranbourne North for $289k in 2009 and haven't looked back. I'd suggest something similar in another good up and coming area… Frankston area has potential but has already moved upwards a lot recently.
    3. Diversification start investing early in your super and re-invest any shares your company gives you. It really snowballs over time
    4. Invest in yourself increased earning power = increase options.

    Good Luck!

  • syousef on 13/06/2017 - 20:13
    +1

    Find someone who does well for themselves that you respect and ask their opinion. Better yet ask several people who have done well for themselves that you respect. Asking random strangers on web forums is utterly misguided. This is a bargain shopping site. Here you should ask how to get lower prices on lower priced items.

  • kylarstern on 13/06/2017 - 20:42
    +3

    To your points:
    1). WORK AND SAVE for a HOUSE: $10K isn't actually that much. You'll need way more than that. Save so you can buy a house. The housing market is only going to get less affordable. I bought my first home at 23 years old (I am 26 now) by working my ass off since graduating university. I was offered a full-time job upon graduating but I started working an extra day weekly to save up faster (i.e. I've been working 6 days/weeks since graduating). Yes its mortgaged but my house value has already skyrocketed since I bought it (close to school, shopping centre, bus-stops) and its a lot better than being a renter.
    2). FORGET HECS for now: You'll have the time to pay it off later. Its always there in the background yes but is it impacting on your life? No. I know plenty of people who paid off their HECs later in life i.e. in their 40's. Its not going anywhere. Save your money.
    3). DO NOT INVEST IN SHARES UNLESS YOU HAVE THE KNOW-HOW: If you're an expert go right ahead but I would not recommend it. I know plenty of people who have been successful but a lot more people who are less successful with share investment. A good way of making money but also a good way to losing a lot more money.
    4). Please dont be like all the jobless millennials throwing away your money travelling to exotic places all the time. Sure you can travel but you need to hold down a job that can give you the money to do so.

    Basically just work your ass off, save and make good life choices. Good luck.

  • FatBlanket on 13/06/2017 - 20:51
    -2

    Shove it up your you know what

  • Mysterious Laptop on 13/06/2017 - 21:33

    whats a ballpark figure that you earn? that would give a clearer indication of how much you should be saving, HECS etc etc.

  • astroe on 13/06/2017 - 21:42

    Put it all in BrickX!

  • rob3 on 13/06/2017 - 22:02

    Maybe adelaide is a lot easier to save, but at 21 I finished my uni degree and had 40-45k in savings from washing cars…. Parents did pay for food and I didn't have to pay rent.
    I still had a great time at uni too and went on holidays. Is sydney that much harder? living in rural nsw since graduating.

  • machej on 13/06/2017 - 22:41
    +1

    I seriously think you should rethink about paying HECs off early. It's the cheapest loan you'll ever get. A balanced fund will outpace it long term even with a recession.

  • [Deactivated] on 13/06/2017 - 22:48

    stick it all on number 10 in the last race at Melbourne

  • ASTROBOY18 on 13/06/2017 - 23:22

    You should travel as far and for as long as 10k will last you. You will look back on these days as the best days of your life. You will learn and grow beyond your years. Once you're back you'll work hard in order to do it all again.

  • vicsta on 13/06/2017 - 23:31
    +1

    Whatever you do, don't spend it on option 2 (paying off HECS) - HECS is the best loan you'll ever get for the rest of your life.
    The answer would depend on what's your passion. If you've got a passion for shares/finance, then try investing, but you won't really get that far with 10K, it's more for experience rather than making much money. If it's me I'd vote option 4, but depends..

  • sunnyc on 13/06/2017 - 23:50
    +1

    Learn to play craps. Best advice I can give.

  • ldq on 14/06/2017 - 09:52

    Look into managed funds instead of "high interest rate" bank accounts.

  • magikz on 14/06/2017 - 09:59

    Here's an alternative route that I found works for me:

    Flip goods. Back in uni I started with textbooks imported from overseas. Managed to make about $200 profit each semester. One of my earliest hustles was a surplus stock for voice recorders. Bought about $500 worth of stock, and managed to double the money in 3-6 months with eBay and Gumtree.

    Same concept can be applied to literally anything if you can do adequate pricing and things are not too difficult to pick up/resell. Obviously this creates more work for you, but the % returns are much higher.

  • Piranha2004 on 14/06/2017 - 10:12
    +1

    Serious question: Why are people recommending not paying off HECS? Sure its almost an interest free loan but the yearly (half-yearly?) indexation continues to make your debt decline at a slower rate than if you paid it off upfront. When I was paying off my HECS (mid 2000s) I found that every year the indexation would mean that the loan wasnt reducing by as much as I had hoped. I ended up paying the remainder (about $20k) upfront and also received a nice 10% off the total (so actual payment was around $18k). In total, I think I ended up paying about $5-10k above my original debt purely because of indexation. Had I not paid upfront, this figure could have been around $15k - $17k over time). I read above that the govt doesnt provide any incentives to paying off the debt early (for some strange reason) which is probably good enough reason to not pay it off. Not trying to troll but trying to understand the logic behind this.

    • Fogofterror on 14/06/2017 - 14:29

      The indexation is supposed to be consummate with a rise in your salary/wages due to inflation. So even though the amount might rise, your income should (in theory) be rising proportionately. The extra money paid towards the loan should instead be put towards something generating a higher return than the indexation rate i.e greater than 1.5%.

      Every financial planner will tell you to leave your HECS alone.

      • Piranha2004 on 14/06/2017 - 15:37

        Yeah I didnt realise the indexation was only 1.5% these days. Mine was more like 4.5-5% and I definitely wasnt getting pay increases at that rate!

  • SupeNintendoChalmers on 14/06/2017 - 12:50
    +1

    Take a good holiday- at 22 you are in your salad days. Don't get stuck in a Big 4 accounting firm working ungodly hours for the crumbs the Partners throw at you. Enjoy your life.

    Follow the captains life

    https://www.youtube.com/watch?v=mGvUDvZ7KyU

  • OG Puppy Banana on 14/06/2017 - 14:02
    +1

    I'll go against the grain and say to spend it responsibly on your youth.

    Assuming you're in a grad job, that means you have prospect. With prospect, your salary will quickly balloon as will the savings.

    When your salary starts going up, the 10K you have now will look trivial, but the time lost i nthe best years of your life isn't!

    Travel! Go out!

  • PleasureMe on 14/06/2017 - 15:35
    +1

    Blow it all on hookers and coke

    • PJC on 14/06/2017 - 17:13
      +2

      Save money. Hookers and Pepsi.

      • bumheadboi on 15/06/2017 - 10:29
        +1

        LA ICE… is that still a thing?

    • devilbabies on 15/06/2017 - 02:10

      go to pattaya and hire 250 ladyboys to run a train through you. toot toot.

  • neonlight on 14/06/2017 - 20:02

    Two options. Use that money for travels or further education, and enjoy it when you are young.

    Path your way to know what you want in life

  • bumheadboi on 15/06/2017 - 10:28

    10k would last you a few years traveling S.E. Asia. do that.

    • devilbabies on 15/06/2017 - 15:59

      10k would last a year of fun frugal traveling. you'd have to live like a hermit ozbargain monk for it to last for a "few" years.

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