Hi guys, I currently have 92 grand in savings but it's in a NAB account and only around the 1% interest mark. I'm thinking I should withdraw it and open some kind of separate savings account, like maybe a savings maximizer account with ING or something? Has anyone else here done the same? Im already an ING customer with a orange everyday account but I'm pretty clueless about this. Cheers.
Need advice on what I should do with my savings
jiminycrickets9000 on 02/02/2018 - 13:20
Comments
Hi - I'm going to assume you are an adult with a full-time job, under the age of 40 (Although it can apply to anyone).
Get an Emergency Account of $20,000 in a bank account that you can easily access (The interest rate doesn't matter). This money is reserved in case you loose your job/crash your car etc.
Take $10,000 and open a CommSec account. Use this 10K to buy Vanguard ETF's. Buy 30% VAS (Australian Market Index) and 70% VGS (World Market Index). Alternatively, you could put it into a Vanguard Managed fund.
Take $10,000 and buy CryptoCurrencies. Buy 33% Bitcoin, 33% Ethereum and 33% Litecoin. Don't worry about the price or other shitcoins and don't try to daytrade. Just buy them, put them in a secure wallet and hold onto them for a few years. Some people will hang shit on me for suggesting to invest in Crypto's, but at the end of the day, it's only 10% of your networth and you are young, so you can easily accommodate the risk.
With the remainder of your funds (~$60,000), put it into either a RAMS or ING HISA Account (The rates have recently been reduced to ~2.7% Interest, so you will need to find which one gives you the best rate), but it's better than no interest. This gives you flexibility until you decide if you want to buy a house or invest in shares with the remainder of your money.
That should cover your current savings.
Going forward, each pay (Assuming fortnightly), do the following:
- $200 into crypto's (Buy weekly, Following the same split as above)
- $200 into CommSec Shares account (But only buy once a quarter).
- $400 into HISA (Or w/e the minimum is to get the bonus interest rate)Another good source of information is www.reddit.com/r/ausfinance
Hope this helps.
As always, do your own research. My ideas are only suggestions. If you don't understand the terminologies/acronyms I have used, you best research them further.
^^^ this!
Can I ask why do you recommend the 30/70 Aus/World split?
Australia only accounts for a small % of the total (world) market. Some people go 50% Aus and 50% World, but in my opinion, this leaves you over-exposed to the Australian market.
Thanks.
Is the commsec method the best for Vanguard Index funds?
Recently been reading about it, and looking at the best way to buy in.
Also, what fees, etc are due, and what's the process control me tax time?
You can buy Vanguard "Shares" (VGS/VAS) etc on CommSec a few times a year. You'll pay commission everytime you buy/sell ($20) and you'll need to take care of re-balancing yourself. This method is fine if you are doing large sums and have the time to watch over everything.
The alternative is to contact Vanguard directly and put your money into one of their managed funds. This allows you to put as little as $100 and you can BPAY directly into it, with no fees. Vanguard will take care of the re-balancing for you, however, you pay a slight premium for them doing all the work. If you are lazy, then this is the way to go.
Tax is basically the same for both. They send you a nice piece of paper and you enter it into MyTax without any issues.
Thanks for the explanation Coota! Can you confirm if my understanding of the below is correct?
There are Vanguard 'shares' which can be bought from a broker like Commsec (which are ETFs/index funds with a once off brokerage fee but minimal ongoing fees) and no minimum investment.
Vanguard also offers managed funds (which are actively managed with a higher ongoing fee) which can be bought directly, but has a minimum investment of $5k.
Can you also explain what you mean by rebalancing?
Many thanks!
Yep - You have the basic understand of the two. If you need more in-depth comparisons, there are plenty of good posts if you search on reddit.com/r/ausfinance
Re-balancing is basically adding more/less to your funds (each time you buy) so they match the ratio you first set. i.e If you originally said you were going invest 30% in Aussie markets (VAS) and 70% in World Markets (VGS)……
After a year, your Aussie stocks might be doing great, but your World stocks might be a little bit behind, so when you next buy, you buy slightly more VGS (Because it's cheap) to bring your ratio back to what you originally set.
sorry, this is a super-bad explanation, but I hope you get the drift.
Thanks.
How about tax time. Say I go Vanguard directly.
Do you pay capital gains / deduct losses each year, or only once they are sold?Any sign up bonuses for new customers to brokerage?
LOL $20k in an emergency fund is a waste of money. Use a credit card instead.
Earn interest on the $20k by investing it.
If you're not getting 2% you're losing money in real terms. Unless it's offsetting interest on an appreciating asset, that's way too much to leave in a bank account. If you need to keep in in savings, don't go for anything below around 3% IMHO.
There are a lot of missing variables here. You should be more specific on your age bracket, financial situation, income, risk averse, etc. You can dump everything into saving or everything in shares, etf. It is very hard to say. It is like your super fund, early age you should be aggressive with your investment but when you are older you should be safe to preserve the capital.
Might be: 70% for share purchase plus bank margin loans to purchase extra shares, to maximise Tax benifits, then 10% as everyday saving account, then, remaining 20% high interest term deposits Account.
Give it to me.
Too subtle. You might not want to beat around the bush and tell the op what you want them to do the money.
What sort of investment you looking for and what return ?
EFTs EFT EFT EFT EFT EFT EFT EFT EFT!
Open up a SelfWealth fund for $9.5 ASX trades, then split your money up buying this.
25% VAS - AUD, 23k
60% VGS - WORLD + US, 55k
10% VGE - EMERGEING MARKETS, $9.5k
5% - Cash in an interest bearing account - 5k.Don't overexpose yourself to just AUD Market. Setup what is called DRP and let it sit there and continue to grow (Dividends paid to you will automatically be used to buy more shares).
You think diversification is overrated?
Pretty sure this is terrible advice - 95% in equities at historical highs. HmmEverything is at historical high because of low interest.
Use the Buffett Valuation Indicator
It's not as bad as you think, compare GDP of a country to its market cap… whatever the market cap is above GDP, is how much the market is overvalued in %. This puts Australia into the slightly overpriced territory, which is the same as the USA.
Jump into the Australian medical marijuana industry while it's still in its infancy. Dump it all into AC8. See you on the other side :)
Is there any point to stay with a bank for "loyalty". Eg. Stay with a bank like CBA in hopes that one day, bank loyalty gives you reduced interest rate on home loan or something as opposed to just jumping on to the highest interest rate bank for maximum savings ?
In my experience, no.
Been with CBA for too long, enquired about them just matching a rate, they weren't interested.
Just find a good broker, and get them to do the hard work giving you suitable options, for you to make a decision.
Then a year or two later, consider reviewing the loan, with the possibility of refinancing.
You're from QLD which means property price is somewhat reasonable compared to Sydney or Melbourne. With banks making it a lot more difficult giving investment loans for IP's, that's most probably out of the equation now but you're not far from it. For the time being, I'd recommend diversifying your investments to maximise your overall return:
1. Shares and dividends (as Doggie explained clearly) - $10k here
2. Put your money in a higher savings account (see other comments - I've had mortgages for over 4 years now and no longer use savings accounts as I just put it in my offset). But I remember I used to use Ubank Saver + USaver Ultra which had a limit of 5k that gave me the best interest at the time
3. Are you a student? (I'm guessing not since you've managed to save up that much) but Government gives rebates for Super and FHS accounts. Match $1 for $1 up to $1k.
4. My opinion - put $5k in crytpo but make sure you do your research on which coins to purchase. Don't go ahead and purchase $5k worth of bitcoin as there are plenty of coins which can give greater return (and loss).
5. Keep your eye on Petrie (and Brisbane) property market. I have a feeling Petrie station will become a major centre or hub in the near future with a new university opening up hence increase in demand for student accommodation.
6. Buy Gold for long term investment (say $5k).
7. Stay organised and be prepared during tax return to claim as much as you can.
8. Keep Ozbargaining.I'm sure I can think of more but that's all I can think of now.
I'd diversify a little.
50k in an ING Direct savings account (low risk, low reward, very liquid if you need the money)
2K in another account to swap in and out of ING every month to qualify for bonus interest
8k in Bitcoin (it's cheap now)
2k in ZenCash (or another small cap crypto. These have the potential to go up 10x or more, and 2k is a small amount for you to risk. I personally like the look of what Zen are doing)
10k in some local, stable aussie shares which pays dividends like Telstra or an aussie bank
10k in some US shares (do some research).I'd spend the rest on some shit you want for yourself. Not too much on material goods though, those just get boring really quickly. If you haven't been to Japan yet, make that a priority! Buy a Hilton Gold membership of ebay for $70, book the cheapest rooms, get free upgrades, drinks, ego stroking every time you interact with staff, etc. I recommend Hilton Osaka, the service was excellent!
Things like that ^ are best enjoyed while you're younger, before life comes and (profanity) you in the ass.Edit: Buying US shares can be a bit annoying though, and takes a good week to set up. I went through CBA and their US broker partner.
The US Shares and Crypto Currencies are important though, as they offset against our country going down the shitter:
https://medium.com/@matt_11659/matt-barrie-australias-econom…"ego stroking every time you interact with staff" - stroke it to the east and stroke it to the west too?
Exactly what I have done minus bitcoin and zencash.
Yeah, I probably got neg'd for mentioning the crypto lol
Research and at the very least keep the money in a high interest saver.
I would consider investing a portion of it in stocks.
If you are really eager to take the advice of a stranger from the internet, put 5-10k in ASX:AC8 (medical marijuana stocks) Price is currently dropping, so i recommend buying in at 80-90 cents per share if they drop that low.
+1 AC8 WILL BE BIG….SET A REMINDER WITHIN 2 YEARS COME BACK AND PROVE ME WRONG PEOPLE (at least 3 to 5 times its current price)
What are you smokin’ 💨 ? 🤡
Don't waste money on smoking, Maybe when it's legal I'll give it a good go? Lol
just enjoy helping people invest wisely
I won't tell you what you should do. I will tell you what you have done.
- Advertise the details of how much money you own on a public Internet forum.
- Ask random strangers on the Internet for financial advice.
- Consider betting your life savings that these strangers know what they're talkinga bout.
And as usual Ozbargain mentality strikes. Nothing I've said above is false. I haven't abused the guy. In fact I've stated the bleeding obvious. 3 downvotes.
Get married
If you've seriously got $92k in a 1% return account, you're not trying very hard.
Do you have any ideas that would create value? Invest the money in yourself/your ideas to do something you really want to do. Just an option to consider rather than by proxy (bank) investing in other peoples businesses.
Not cryptocurrency
Just a comment to say top effort for saving the 92k.
Give yourself a small reward then keep going!
Seek a financial adviser pronto. Will help prioritise your goals and objectives and determine if they're realistic.
Bitcoin and ethereum are on sale..
You could have 10 storey building from Asian country then have it rented through Airbnb
which countries?
Philippines or good old Thailand?
Both are a terrible idea. Those places take care of their own first and foremost (all else being equal), just like it should be IMO.
Do you realize your rental income will be in those countries currency, not in aussie dollars. So what's the point?
@baldur: I converted the AUD92K and its about PHP3.6M Phils peso. Enough to bu 2 condo units which you can use for Airbnb, booking.com etc.
These units will earn Php40K a month or 8 years and you get back your investment plus 2 units.
Once the market starts to recover, chuck it in stocks my friend. Do a few blue chips, a few mid risk and a few high risk.
Am preparing to buy big shortly
TLDR 80k sports car.
Similar position: Thoughts on putting it on AFIC? Would HostPlus ChoicePlus (as suggested by barefoot investor) be a suitable way?
Australia only, but there is the value of majority franking credits. Completely up to you though.
give it to me
I've been working on a new method of penis enlargement that uses harmless gamma rays. I've tested the device extensively on myself, but require funding to carry out proper clinical trials. Contact me
Nationalised (non-private) Banks in fast growing countries like India offer deposit interest rates around 7% per annum. State Bank of India (SBI) is their biggest & safest national bank. Check their website on eligibility aspects for non-citizens. If SBI fails would mean Indian government going bankrupt which isn't going to happen with their 300 billion USD plus reserves. Something to consider & do more research about.
So they've only got enough for $226 per person??
Invalid correlation mate.
Exposing yourself to foreign exchange risk is not smart specially when AUD is appreciating against other currencies.
Very valid point. Aussie $ gaining when the money is to be brought back would hurt the interest earned. Calculations need to factor an average amount.
Valid correlation mate.
Walk into your bank and ask for a higher interest rate. It works for St G, so why not NAB.
Noticed ing requires you to make 5 purchases a month on their card?
Bitcoin buy the dip
Look into La Trobe Financial. http://www.latrobefinancial.com.au/Investors had 100k in for the 12 month term. 5.2% return, also have 48 hour accounts.
Open up a Nabtrade account. 2.15% and you can still have access to it (not locked away like a term deposit).
I had the same problem with NAB (apt acronym). I was getting 0.1% interest with NAB on my cheque account. I always thought it was an insult. I would have rather they gave me nothing.
Anyway I solved it by transferring it all over into a Ubank Usaver account with an attached Ulta "feeder' account. It pays 2.87% and I can do all my online bill paying. Ubank is part of NAB and at the moment I'm getting $165 per month on my money. Thank you very much Ubank.The Ultra "feeder" comes with a visa debit card.
You'd be crazy not to put 5-10% of it into cryptocurrencies at the moment, especially with a US Senator speculating the market "could hit 20tn in value" in a Senate Committee meeting yesterday.
If you didn't put half of it into crypto yesterday, you're doing it wrong. Wait for the next big dip.
Could have made $1000 per btc if you bought yesterday. Now 7k USD
Fixed Income Interest fund. Should return approx 10%p.a. paid monthly. DM me, i can help with details of one we use.
only around the 1% interest mark.
Move it to a higher interest account, ING/Ubank/RAMS all have better interest rates
As per many wise guys who have already commented here, it all depends on where you are at life and how much risk you wish to take. I am 35 and have similar amount and looking to use it as a deposit for a house or investment property. Ironically in my area around Liverpool in NSW it's bit expenses (over priced), whilst the right house is found I have placed all the money in RAMS. The interest isn't great but atleast there is some interest.
I did look at investment in many areas, like Term Deposit (compared to savings accounts not much of difference), and with bonds/shares the risk goes up.
If you are willing to take little bit of rise, look into Van Guard investments or Wilson Asset Management. The growth is around 10% for Van Guard and depending on which WAM fund you choose it could go upto 20%.
Give it to me mate. I'll bless you forever :D
Cryto currency investments :) Risky, but high returns
I invested in Cryo, but the funds were immediately frozen.
I have also invested in cryto, 50%+ gain in the last 3 days.
Go see a financial planner, most do free first consult.
Surprised no one had mentioned ratesetter.com.au
Do ozbargainers not trust it? Gives on average 9% on the five year term deposit. Seems to have a very good risk to reward ratio. Less mucking around, just set and forget. I’ve been happy with it since I joined last time it was on ozbargain with the referral codes, having the option for it to reinvest or return the interest plus capital to your bank account each month is nice. Surprised it is not suggested more often in these posts, is there something I’m missing?
Agree - you can spread across different time periods depending on when you might need the cash back. Current percentages being paid:
1 month - 2.9%
1 year - 3.7%
3 year - 7.8%
5 year - 9.0%
More risky than a bank but far less risky and more predictable than shares/gold/currencies. I wouldn't put it all in Ratesetter though - may be 50% of your total. Don't both with property - it's glory days are over for years to come - shares are going to be a stock pickers market so choose a funds manager carefully (WAM for starters). Crypto is mental for anything but entertainment - avoid. Essentially the easy money has been made (often accidentally) - the next 5 years are going to be hard slogging.I'm also very interested in Ratesetter but 9% sounds too good to be true, surely. The provision fund offers some reassurance but 5 years is a long time.
Yeah that’s what has me puzzled as to why it isn’t more popular than it is, coz 9% is really good in today’s market. But I’ve been earning about 9% for two years so far without a problem. I reckon if Australia’s economy went sideways the provisional fund would get eaten up pretty quickly, but so would most other investments so it seems like a pretty good spot to park your cash. Just keen to hear if there are reasons people are not comfortable with the platform that I’m not aware of.
If we saw another crisis like what happened in 2009, the provision fund would be destroyed.. thats what I'm quite hesitant. It's all fine right now but if a crisis hits its going to be destructive.
May I ask what you're doing to get 9% atm?
@Mysterious: Yeah that's what I expect as well, but I would expect to lose my money just as quickly if it was on the sharemarket tbh, this is just a lot easier and simpler to manage.
I just put a couple grand on the 5 year option to get the 9%.
@lainey13: you get the interest monthly, just like a savings account, with the option to reinvest it, or return it to your bank account
It started in 2012 in Aus, and in 2009 in UK.
People just don't research, as we have seen from the OP. I'm not too familiar with all of these long term investment options either so I just leave my money in a savings account.
Adding to this,
I just found out about this, http://www.australiansecurecapital.com.au/index.html
Seems quite reasonable to me, but i don't know how reliable they're in general.
Can anyone please shed some light?cheers
Incredibly risky, be very careful and be prepared to lose your money. VERY different from putting your money in an online savings account in the bank. Westpoint, Fincorp, ACR, City Pacific, LM First Mortgage Fund, etc etc —- Please be careful.
My vote goes to ING Savings Maximiser account, your already with ING so that should be easy. You 2.8 percent a pretty good rate.
I faced a similar conundrum a few years back (2014). I had some savings, but was thinking of also gearing and investing in some US stocks I expected to really take off, combined with a predicted falling Aussie dollar. The stocks I had chosen were ones which I was extremely familiar with (being in the industry).
https://forums.whirlpool.net.au/archive/2227301
The first I chose, was Amazon, which was trading at $358 USD at the time, with the Aussie exchange rate 1 AUD = 0.9366 USD
I also had selected Workday (trading at $98 USD), and Salesforce (trading at $63 USD).Today, approximately 4 years later, Amazon was was trading at $1393 USD, workday at $115, and Salesforce at $109 USD.
The exchange rate, 1 AUD = 0.79 USD.
So… Amazon is up nearly 290%, Salesforce 73%, and Workday 17%.
Aussie dollar has dropped 15%.
If I had had the guts to invest some $$, I would have made a huge return with all share prices increasing significantly combined with the drop in aussie dollar.
Instead, I got myself a huge home loan, a house price that will be flat for years, and lots of regret.
If I had the cash available and was thinking of investing locally, I'd be looking in to aged care, and also primary food areas targeting large international markets like China and India where tariffs/trade barriers are either minimal or potentially likely to be removed. If you had invested in chickpea / lentil recently, you'd be regretting your decision: https://www.graincentral.com/cropping/pulses/blow-for-trade-…
It is also important to moderate your regret. Can you be positive that you would still be holding Amazon now - perhaps you may well have sold after making 50% or 100% - it would have been very tempting.
buy bitcoins
All these responses and different advice is pretty confusing. Answering where I'm at in life I'm 28 and work as a casual in retail, I have previous work experience but have been shit kicking basically my entire life. I've been told I'm going part time soon for months but it hasn't happened yet, my hours worked a week change all the time. I'm living with family atm and paying cheap rent so I sometimes am able to deposit money into my savings, it's now at 94k, still in the nab account just earning $50/month interest. I know next to nothing about anything relating to investing it in whatever, haven't got a clue about crypto other than knowing the name of it.
Assuming you do not have an existing home loan (if so I would say stick it in the hopefully 100% off-set account).
This other option is a bit out there but one interesting alternative can be loaning it to a family member for just a bit less than their current interest rate but above the going cash rate so that you are both 'winning'. Make sure that you have strong ties with that family member etc though and of course trust them.
EG. Current Mortgage rate for Cousin is 4.50%
Current cash rate you can get is 3.50%
You charge 4.00%Even better if they have a CC debt (18%+) but I would not want to lend to a person who cannot pay off their CC cards. :-)
I'm going to be considering this interesting scenario as I'll be paying off my home loan by June this year and so excess cash will need to be re-deployed somehow. I have a cousin who might (rumours from my mum) be in some financial strife with CC debt from many years back and so I might lend a helping hand and be his low interest re-financer for a year or so until he gets it under control.
Investment property or buy land?