Brother just sold business and has $250K (but no job). What should he do?

[Deactivated] on 23/08/2017 - 20:43
Last edited 23/08/2017 - 20:44

Hey fellow Ozbargainers…
My little bro is 29 years old, healthy and fit.
He just sold a franchise food business and has $250k cash in the bank after everything's said and done.
He rents and doesn't have a house yet and he's married and has a 2 year old. His wife makes about 75k a year and they live in Adelaide where houses are still very attainable for someone with $250K in the bank at his age.

He's decided he wants to be either a baggage handler because of the 'active' role of moving around a lot at work, the staff travel also appeals. He's smart/disciplined/socially aware enough that he'd be able to apply for management positions in whatever field he works so income would hopefully peak at something like at least $70k ( Just as an idea). The other option would be to become a mental health counsellor. Both jobs wouldn't be super high paying but I think he'd end up with about $60K a year as a baggage handler or 70k as a manager etc after overtime/weekend rates and $60-70K as a counsellor. The counsellor job would't require weekend work though which is a big bonus perk.

What would you do in his situation with this money and are there any career options where the training would be 1 to 2 years which would pay more than these? Pretty smart kid and has worked in corporate sales before (with me) and done well, but doesn't want to work corporate now so I can't really help him get a job, so options seem limited to get anywhere near $100k income which I think he should aim for for healthy retirement purposes- hopefully he and the wife could get to a combined 200K income by the time they're 40 etc.. if that makes sense.

They agree they should buy a house with the $250k once he gets a job and the bank approves a loan.
Should he dump the full 250k into a house and get his mortgage as low as possible or should he diversify in more than just a single house? eg $125K into 2 houses and hope for capital growth while renting one out? Shares or bitcoin etc?
One idea I gave him was they could buy a block and build a duplex on it for their first home, sell half and live in the other half for a few years, then do the same thing and keep trying to make a 'side' income- but we don't have experience doing this.

Any help would be much appreciated and openly considered.

Thanks fam.

Financial

Comments

  • fossilfuel on 23/08/2017 - 20:59
    +5

    He's smart/disciplined/socially aware

    Can he handle the emotionality counselling brings? I just started placement and had to sit in a counselling session with a kid who was very traumatised and has sustained multiple bruises as a result of abuse. Very easy to get a diploma but you need to be sure he's up for the job. There's no point going into it and then leaving halfway as a result of emotional stress.

    Does he have tertiary qualifications? Perhaps he can do an MBA given he has experience working in a "managerial" role.

    Has he considered a trade? Electricians, Plumbers etc all move around quite a bit and earn a killing. You also get the benefit of running your own company and setting your own hours.

    • [Deactivated] on 23/08/2017 - 21:09

      yeah he's got some basic uni arts degree in media studies/politics (double degree I think).
      He had considered doing psychology at uni but never followed up and started working.
      To answer your question, yes, he'd be fine with the emotional high's and lows of being a therapist/counsellor.

      I think an MBA is out of the question because he wouldn't want to go back to corporate. Certainly an option. Thanks for your input!

      • fossilfuel on 23/08/2017 - 21:22
        +2

        He had considered doing psychology at uni but never followed up and started working.

        If he has a degree, look into a postgrad diploma in psychology. If he completes it, he'll be eligible for provisional registration with the Australian Psychological Society and work his way towards full registration. Or he can pursue further education if he wishes to specialise e.g Clinical, Forensic, Organisational, Educational, Sport etc. once he completes a postgrad dip.

        Unfortunately I think all are full fee paying and it'll set him back ~$27-28k.

        • [Deactivated] on 23/08/2017 - 21:35

          Yeah I think the counselling would be a trial for this eventual move to psych.
          Any idea what a qualified psych makes these days? Just working as a consultant from office to office?
          Thanks for the suggestion.

        • fossilfuel on 23/08/2017 - 21:44

          @murphy84:

          Really depends what field you get into. If he's going to work for NSW Health, then starts at 64k. But note that these are registered psychologists and they've already completed their 2 year internship.

          Most Clin psychs go into private practice. Psych is really broad so there's really no definite figure of how much everyone makes. A clin psych might do a cognitive assessment which lasts 2 hours and charges $300. They might then see clients for the next 3 hours, charging about $50 per 15 minute consult. An organisational psychologist might spend a 3 days designing a workshop on improving team leadership then delivering that workshop over the course of 2 days (Might end up charging $2000-$2500 for example).

          Highly variable, depends on what field you want to go into.

        • Scrooge McDuck on 23/08/2017 - 22:23

          @murphy84:

          What appeals to him about psychology?

          What are his passions, interests and hobbies?

        • [Deactivated] on 23/08/2017 - 22:31

          @Scrooge McDuck:

          wanted to study it in uni, but got tired of school and wanted to make some money so started working.
          One of those people who's great at analysing, listening and sizing people up with logic etc..
          He's a very, very good poker player too, if that helps ? hehe.

        • Scrooge McDuck on 23/08/2017 - 22:45

          @murphy84:

          He's a very, very good poker player too, if that helps ? hehe.

          Live or online?

        • [Deactivated] on 23/08/2017 - 23:47

          @Scrooge McDuck:
          both
          (cash games)

        • original15 on 24/08/2017 - 17:24
          +1

          @murphy84:
          If he got tired of studying I'm not sure if a career in psychology is for him given the need for a few more years of formal education, but if he is up for it, commit and go for it!!
          Also, while it's an interest what makes him employable as a mental health counsellor?

          As a side, the two job options he has come up with are almost polar opposites, so I'd be trying to uncover what it is about these two jobs that would really motivate him, not focusing on any perks like staff travel etc

        • ozbjunkie on 24/08/2017 - 18:35
          +1

          @murphy84:

          Don't forget that undergrad psych is 4 years, with possibility that grads skip the first year.

          Might not want to do that though, as going into second year writing reports without first year knowledge can bring down marks, and honours entry is very competitive, d average at least.

          Then if going by 2 years supervision to registration you pay your supervisor, and cannot charge money to your clients (usually). Otherwise, masters is another 2 years.

          Then there's one more year of supervision and an easy ethics exam.

          5-6 years of study until earning entry level salary.

          Or try to immediately start your own practice if you are buddies with enough GPs (not likely).

    • rompastompa on 23/08/2017 - 22:07
      +1

      He's smart/disciplined/socially aware

      And capable of making his own decisions?

      • [Deactivated] on 23/08/2017 - 22:30
        +3

        haha yes, pretty successful for his age actually.
        Just a brother trying to look out for him :)

  • AlienC on 23/08/2017 - 21:23
    +1

    Honestly. 230k on ethereum or bitcoin. You decide. Heck even on ripple he will make a return above 10% this year.

    • [Deactivated] on 23/08/2017 - 21:32
      +1

      we discussed this actually. I told him it's a pretty serious opportunity and he could triple his money in 5 years.

      Sounds weird saying 250K will get you 40 bit coins lol.

      Are there taxes on bitcoin when cashing out?

      • AlienC on 23/08/2017 - 21:45

        No idea as I myself am just newly diving into this idea. But I would assume that since it is very closely related and acts like stocks and stock markets that it might or would contain require some taxing.

        I would a definitely allow for it just in case.

      • Scrooge McDuck on 23/08/2017 - 22:19
        +6

        Are there taxes on bitcoin when cashing out?

        AFAIK, capital gains tax applies to it like any other appreciating asset.

      • cpho on 23/08/2017 - 22:30
        +2

        Refer to the ATO page

        If you have acquired bitcoin as an investment, but are not carrying on a business of bitcoin investment, you will not be assessed on any profits resulting from the sale or be allowed any deductions for any losses made (however, capital gains tax could apply)

        Where you use bitcoin to purchase goods or services for personal use or consumption, any capital gain or loss from disposal of the bitcoin will be disregarded (as a personal use asset) provided the cost of the bitcoin is $10,000 or less.

        So, if you seriously put all that money into Crypto, you'll very likely be subject to taxation when cashing out.

        Also, for that sum of money, you're probably better consulting a financial specialist or accountant in crypto for more specific information instead of OzB.

      • CactusReloaded on 24/08/2017 - 17:06
        -1

        Dude, trust me, you'll triple your money in a lot less than 5 years!

        • Slippery Fish on 25/08/2017 - 22:04

          If that was so true you would be putting every spare cent into it, it's a gamble in which his brother could lose everything.

          I just wanna punch everyone I see saying put it in crypto.

        • AlienC on 26/08/2017 - 16:41

          @Slippery Fish: all investments are a gamble but the most promising ones and well known ones atm with actual good solid proof and backing are some certain cryptocurrencies.

          You can get much steadier and still solid returns with like Facebook or nvidia stock but nothing crazy like bitcoin ethereum or ripple right now. Bcash also looks promising but because it is so new I am not sure about it.

          Just look at the charts and take a gamble (if your sixth sense is very well up to scratch).

          Some people have it some people don't.

        • CactusReloaded on 26/08/2017 - 20:34

          I did put every spare cent into it. Working out pretty good so far, hence my comment.

        • Slippery Fish on 27/08/2017 - 09:10

          @CactusReloaded: ok then :)

      • Slippery Fish on 25/08/2017 - 22:02

        Never give family financial advice… You can only lose.

    • JIMB0 on 23/08/2017 - 21:59
      +21

      Tulips are better.

    • poboy on 24/08/2017 - 00:05
      +8

      When everybody starts talking about how an investment is a sure thing… That's when you lose your shirt.

      • AlienC on 24/08/2017 - 05:31

        And what if you already have no shirt, your pants?

      • JIMB0 on 24/08/2017 - 05:59
        +2

        The shoe shine boy told me that it was a sure fire way to double your money and the guy sweeping the floors told me that a house worth $400k-$500k today will soon fetch $1million.

        • mrtin on 27/08/2017 - 22:44
          +1

          I thought it was the taxi driver who knows these things.

      • outlander on 24/08/2017 - 12:15

        True, but remember this is the internet! There's a wholllle nother world out there, filled with cashed up people who don't know how low they are on the information chain

      • Slippery Fish on 25/08/2017 - 22:01

        Lucky number sleven.

    • echelon6 on 25/08/2017 - 21:48

      A fool and his money…

  • sien on 23/08/2017 - 21:25

    What does he think about teaching?

    With a kid and perhaps another the holidays and hours are a huge bonus.

    If he likes moving around perhaps he could try to get PE teaching job.

    1-2 years of training and then you go out and get a job. There is a big turnover rate initially though.

    • [Deactivated] on 23/08/2017 - 21:33

      yeah excellent idea actually. The lifestyle aspect would be great. I wonder what a PE teacher makes after 5 years?

      • fossilfuel on 23/08/2017 - 21:48
        +2

        PDHPE is very hard to staff at the moment. If he decides to do a Masters in Teaching, a provisional teacher starts off at 68k a year. A proficient teacher will earn about $79k a year (not sure how long until you become proficient). These are older figures but they have newer figures lying around.

        The teachers job isn't all that cushy. You think you get school holidays and then realise how much assignments you have to mark :P

        • CheapSticks on 23/08/2017 - 22:41

          Bit of a side question, what are the prospects of someone doing post grad degree n teaching science in school? Is it easy enough to find casual work and get a permanent job?

        • fossilfuel on 23/08/2017 - 22:54
          +1

          @CheapSticks: Really depends what science area you want to teach in.

          I'm working off what the scholarships tell me. Science (with physics) is in demand. If you're willing to take that scholarship, teach.NSW will set you up with a permanent job so long as you agree to work in a high demand location.

          Casual work is really hit or miss. Permanent job is more probable if you decide to take a rural position.

        • CheapSticks on 23/08/2017 - 23:58

          @fossilfuel:

          ok thanks. Was trying to find info for someone as I saw this thread. cheers !

        • Aussie Smurfette on 24/08/2017 - 08:42
          +1

          @CheapSticks:
          And if you go to the right uni you can teach at private schools which are higher paid

        • biozet on 25/08/2017 - 15:27

          in queensland while private admin get more than their state counterparts, actual class teachers in public schools are generally on a higher rate than private school teachers. I thought the same (as aussie smurfette) until a friend pointed this out. Mind you some principals at exclusive private schools get more than the prime minister.

  • rambutann on 23/08/2017 - 21:37
    +2

    I have worked for Qantas before in a fairly operational role (not as hands on as baggage handler but very close).

    The hours were horrible, working a rotating roster (it was 24/7 for me) was horrible, the chopping and changing was the bad part. If you aren't working for Qantas then you will be paid next to nothing (from my experience..).

    In addition to this, you are literally just a number. Redundancy is a common threat that looms over the entire workforce. People will often stay at lower ranks to reduce their chances of being made redundant.

    In saying this, yes it is great working an airport. Has he considered trying to get a job at the port of Adelaide?

    Either way, these jobs are in very high demand and I believe that people that land a job at an airline/port are extremely lucky.

  • JIMB0 on 23/08/2017 - 22:00
    -1

    With only $250k you can still partly get the dole ~$400k is where it is reduced to nothing.

  • spackbace on 23/08/2017 - 23:08
    +23

    Surprised no one has said the obvious answer…

    3x $80,000 cars! Best investment he could get :)

    • [Deactivated] on 24/08/2017 - 00:00

      they have to be a bmw

    • theHMASfriendship on 24/08/2017 - 08:52
      +5

      Imagine the yield with three of them.

    • flickr on 24/08/2017 - 11:24
      -1

      I am getting confused..

  • ziaxk87 on 23/08/2017 - 23:42
    -1

    for real don't put everything into house. interest rates are at all time low.. put what is required to get out of MI.
    buying second house is also an good option, wouldn't suggest duplex as he has a family 2yr old.
    best thing would be to open an other business rather than doing a job.

    • Aussie Smurfette on 24/08/2017 - 08:36
      +1

      interest on a house at an all time low is still better than any other investment you can put it in.

  • ThomasBD on 24/08/2017 - 02:09
    +1

    If I had 250K I'd pay off my house and that would free up a lot of income, which could free up a bit of time. He could spend more time with his kids and wife and enjoy time. money is time!

    He has that much money spare at 29 maybe he should work for himself doing whatever he enjoys that has money in it. selling fast food business and making that much profit after selling he must be good with business and understanding how to make money and business valuable.

  • AlienC on 24/08/2017 - 05:38
    +2

    Random idea: if he has that much money to throw around and is looking for a new career why not become one of those wacky YouTubers or start a channel on what he really likes. Heck if he wanted he could just eat in front of a camera and still maybe earn some money.

    Personally I would invest in a quality 4k drone and do drone videos from around the world finding the most picturesque places.

    4k content is still somewhat new and there is going to be continual demand for it.

    If you start filming right now time lapses, area panning, scenic filming, artsy top down bokeh captures or whatever I am sure you will easily get hundreds of thousands of subscribers easily. High quality content art film style YouTube videos are going to be the new mlg blaze it vids I tell ya. Well tbh it has already started.

    Plus he gets to let his child travel the world and record it if his channel does successfully.

    • abb on 25/08/2017 - 12:07
      +1

      You have to be good though.

      Maybe he should buy a paintbrush and become the next Picasso… ?

      No doubt travel photog would be an excellent job if you have the skills.

  • Aussie Smurfette on 24/08/2017 - 08:34
    +2

    Basic financial idea is to pay as much as possible on your own dwelling. If you want an investment property from there you borrow for it, it works out the best tax wise.
    As for what should he do job wise, whatever he feels like.

    • smpantsonfire on 25/08/2017 - 17:48

      In an offset account though

  • Dazza610 on 24/08/2017 - 08:34
    +2

    Take your time…

    Don't rush into anything.
    Kick back for awhile and think.

    BUT… don't fall into the trap of doing NOTHING for too long.

    Set yourself a time period, (say 2 weeks or a month)
    You would be surprised what ideas you can come up with, when you have NO pressure .

  • Geoff-bargain on 24/08/2017 - 08:45
    +1

    If he can finance it buy the 2 places

    Yes you will eventually pay cap gains but you can neg gear it before then and it will go up in price faster than paying down your mortgage.

    It might be worth him spending a bit on some proper financial advice but make sure you go with someone independent who isnt making money by selling you something.

  • [Deactivated] on 24/08/2017 - 08:53

    Chucker , whatever falls out is yours

  • [Deactivated] on 24/08/2017 - 08:59
    -1

    If he needs his brother to do the research for him he's already on a loser.

  • WT on 24/08/2017 - 10:35

    My aunt was a psychologist, a little different from being a counsellor but along the same lines. People dont realize how mentally taxing it can be and how it can affect you personally.

    while your brother wont be dealing with the criminally insane, drug/psychosis type patients he may be dealing with a fair bit of abuse which can be hard to cope with.

    Pays good though, she retired at 40 and basically switch to real estate investing

    • Some Guy on 25/08/2017 - 00:09
      +1

      Your aunt must have sold a very lucrative practice. I know three psychologists with 15+ yrs and none touch $100k pa (pro rata). A lot of part-timers and return-to-workers in that profession.

  • HeWhoKnows on 24/08/2017 - 13:05

    Tell him to get a job or roll the cash over into another business

  • npat on 25/08/2017 - 11:36

    buy a house or two

  • realpotatoguy on 25/08/2017 - 11:40
    -3

    He's young and has money in the bank. Do medicine in Uni, it will really pay off.

    • mr fox on 25/08/2017 - 13:57
      +1

      From baggage handler to surgeon, interesting contrast.

      • Save Medicare on 25/08/2017 - 16:31

        Ortho is pretty much a contact sport

  • lysp on 25/08/2017 - 14:18

    Interest only loan (if it's still possible for PR).

    Put all the money into an offset against that loan.

    The interest payments will be minimal/zero.

    If he needs some of that money it's available (just means he'll start paying a small amount of interest on the house).

    If they want to get an investment property, can use some of that for a deposit. Although want to keep interest payments against the main house as low as possible (as they arent tax deductible where the investment property is).

  • ihbh on 25/08/2017 - 14:48

    What was his investment in the franchise - initial and over time (e.g. what income did he draw from it)? How long did he have it for? It gives me an idea of how profitable it was.

  • MelCheapo on 25/08/2017 - 20:03
    +2

    Baggage handler: it will destroy his social life, most likely destroy his family, probably destroy his sense of self worth and almost definitely destroy his back.

    Disabuse your brother of this idea.

    • [Deactivated] on 27/08/2017 - 01:06

      speaking from experience or what makes you think this?

      His reasoning is that he is friends with multiple baggage handlers and they are, for the most part, very happy guys who enjoy their job and the ones his age have families and love it.
      Low stress overall. He's extremely fit and strong so back and physical issues won't be an issue. Worked in demolitions for years when he was younger so no problems with lifting etc…

      Free travel perks for whole family after 6 months working for someone like Qantas or Virgin.

      Thanks for your input.

      • [Deactivated] on 27/08/2017 - 20:01

        It's a job not a career

        Big difference

  • JIMB0 on 27/08/2017 - 11:58
    +2

    Buy this flux-capacitor from Jaycar for $200k and find a small nuclear reactor for $45k, leaving $5k working capital. Then travel back and forth in time making a killing on the stock market / betting.

    https://www.jaycar.com.au/flux-capacitor/p/OUTATIME

Login or Join to leave a comment
Login Join