Coming into Money Soon but Big Dilemma

cillianbc on 05/03/2018 - 08:48
Last edited 05/03/2018 - 11:32 by 1 other user

To set the scene. My family consists of me my wife and a 7 month old.

We currently live and work on the northern beaches in Sydney, my wife is currently on mat leave from NSW health ( great job & perks).

We currently live in a 2 bed "house" and have cheap rent due to a friend owning and helping out.

Here is the dilemma.. In the next 2 years combined with our savings and inheritance we will have close to 800k.

We would ideally like to get ourselves a 4 bed house somewhere but even with that cash and a mortgage we would still struggle on the northern beaches.
(Out west central coast etc not an option due to work locations)

The main option is to move somewhere like Perth and buy a house outright and live mortgage free.

The other option is to try turn the that 800k into 1.6.

My questions is 2 fold

any advice?
best way to turn 800k into more in the next 2-3 years?

Financial Investment Moving

Comments

  • John Kimble on 05/03/2018 - 08:56
    +1

    …

    John Kimble on 05/03/2018 - 08:56 (Collapsed - Offtopic. Show)
  • 87percent on 05/03/2018 - 09:01
    +3

    step 1 - get PROPER financial advice
    step 2 - profit?

    • John Kimble on 05/03/2018 - 09:13
      +6

      OZB forums IS proper advice

  • sss333 on 05/03/2018 - 09:03
    +7

    Sorry for your loss

    • John Kimble on 05/03/2018 - 09:09
      +14

      Sorry in advance for your loss it seems

  • singlemalt72 on 05/03/2018 - 09:13
    +6

    In b4 Crypto, Bikies and 80K car……

    • John Kimble on 05/03/2018 - 09:13
      +8

      Left out 800k on black

      • Steptoe on 05/03/2018 - 17:39

        …or Red.

        One of us will be correct.

        • John Kimble on 05/03/2018 - 17:41
          +3

          Unless it's green.

  • theHMASfriendship on 05/03/2018 - 09:15
    +10

    The other option is to try turn the that 800k into 1.6.

    Perhaps you can develop a gambling or drug addiction which should help you achieve your goal of burning through 798.4k.

  • cillianbc on 05/03/2018 - 09:16
    +6

    I think the main lesson learned is don't ask on Ozbargain

    • sph on 05/03/2018 - 09:20
      +5

      Who would have thought there is no easy solution to double your money. Perhaps ask whirlpool?

      • cillianbc on 05/03/2018 - 09:25
        +4

        I don't expect anyone to be able to provide that, but I also didn't expect people to spend more time picking out the holes in my question rather than actually trying to help.

        To naive I guess

        • Peter Enis on 05/03/2018 - 09:52
          +35

          *Too

        • MrBear on 06/03/2018 - 08:09
          +3

          *naïve

  • Quantumcat on 05/03/2018 - 10:18
    +14

    If you can't commute from central coast or out west, how are you going to commute from Perth?

    • dcep on 05/03/2018 - 11:12

      800k in Perth

      you can pick anywhere you want

      • jackspratt on 06/03/2018 - 12:50

        you can pick anywhere you want

        Yep - suggest looking in Peppy Grove/Mosman (Saunders St)/Dalkeith/Cottesloe/Nedlands/Applecross (Melville Beach Rd) /Attadale (Burke Drive).

  • PissLUR on 05/03/2018 - 10:36
    +3

    Just keep paying rent at your friend's house. Don't you worry about that.

  • altomic on 05/03/2018 - 11:43

    buy 2 appartments and rent them out.
    value increases in 2-3 years and you borrow off them to buy your house

    • dcep on 05/03/2018 - 11:54
      +6

      "apartments … value increases in 2-3 years"

      you sure ?

  • [Deactivated] on 05/03/2018 - 12:13
    +1

    Bitcoin

  • Youfah Mizzum on 05/03/2018 - 12:46

    Here's a serious answer - refreshing!

    I'd invest in managed funds. They should be earning around 7 to 20% these days. I don't keep up to date so I may be way off, but I usually just double or triple the current mortgage rate and usually can find funds with earnings at around that % rate.

    If you're coming into around $800k, seek professional advice. Unfortunately most FA get kickbacks from fund managers so they often just recommend managed funds where they'll get a decent commission so if it's possible see if you can find a genuinely independent advisor. I can't help you filter through the various advisors. They'll also earn a trainling commission.

    Second piece of advice - without a financial advisor I'd be looking at wrap accounts. Do some googling to see what they are - in summary they are a way to invest in several managed funds by just investing once in wrap account. The account allows you to research a selection of maybe 50 funds and split your funds across any of those funds. You can also do free swaps within the wrap account so if, in 6 months time you log onto your account and see a better performing fund(s), you can just swap your money around.
    Let's say you earn 8% in 1 year. That original $800k will suddenly be $864,000.

    • Cheap Steve on 07/03/2018 - 22:57

      A few points:

      Your 7 to 20% is not guaranteed. It could easily be -20% over the next 12 months.

      FA's will not be getting any trailing commissions, was outlawed a long time ago.

      When you "swap" between managed funds in your wrap account within 6 months then any capital gains will be fully taxable. If you wait 12 months then get a 50% discount.

  • Oz8argain on 05/03/2018 - 12:47

    The worse thing you could do is lose that money.
    The most risk averse thing you should do (besides leaving it in a bank account) is to purchase a property ~700,000 with spare cash or buy ~1m above and put all in offset account then you have small repayment, larger house, better suburbs for your children. or get 1 to live in and the other to rent and wait for growth.

    you'll have your house + your assets will grow in to 1.6m like you wanted many years down the track. Finally, ask your financial adviser

  • bobbified on 05/03/2018 - 13:15
    +2

    turn the that 800k into 1.6

    Red or black?

    • yippy on 05/03/2018 - 13:43
      +2

      Always bet on black!!! Passenger 57.

  • Islund on 05/03/2018 - 13:19

    give me the 800k, I will pay off my mortgage and sell the house for 1.6mio. and we can split the difference. Is that a good idea or what?

  • one man clan on 05/03/2018 - 13:34
    +2

    800k sounds like plenty of money to put towards a house with a modest mortgage. Why do you need 4 bedrooms NOW when there's only 3 of you. Get a 3br place and upgrade later.

    • Geoff-bargain on 06/03/2018 - 12:24

      On the Northern beaches you would be looking at stamp duty of $60,000+ on the purchase. Better to get the house you want more if you can manage it. Or something you can renovate or knock down when time comes.

  • Oofy Doofy on 05/03/2018 - 13:57

    Vanguard diversified ETF. Pick the ETF that fits your risk profile (if you're young, I'd stay fairly aggressive though). Use the dividend and interest income to pay rent or to cover a mortgage on a place in a cheaper part of the country.

    I would just keep it like that indefinitely. DRP maybe, and sell off a wad on a good year.

    Tbh the biggest concern here is who actually inherited this money? You or your wife? I'd be seeing a lawyer about this specifically.

  • Toph Beifong on 05/03/2018 - 17:05

    How about putting a little bit of that 800k into proper financial advice and make more money out of it?

  • The tiger on 06/03/2018 - 09:54

    Hi, Cillance, I am serious trying to be helpful seeing your wish to own your own house.I am an old male( a former public accountant) with a lot of experience in vesting in share equity. I have been helping myself and giving sound advice to my adult kids in this aspect.I strongly suggest you use your saving into a share poloi consisting of some 12 different types of shares. Since your target is to accumulate enough fund for owing your family house I suggest the investments should be on those reliable good dividend yield low risk companies. Here I suggest go to Bunnings and Woolworth property trust units and others. The two I mention would yield you some 7%a.n.return. The chance of the collapse of these two companies in my view is 0 as everyone will have to eat and they are super super stores with deep rooted business foundations. You can ask your accountants or real friends for others.Good luck.

    • MrBear on 06/03/2018 - 20:57
      +1

      Bunnings and Woolworth
      The chance of the collapse of these two companies in my view is 0 as everyone will have to eat and they are super super stores with deep rooted business foundations.

      Unlike Masters, who, ironically, was owned by Woolworths and was a super super hardware store..

  • parisienne on 06/03/2018 - 10:24
    +2

    I only have one question….what job does your wife have in NSW Health that she gets any form of "perks" (the "great job" bit….i don't even know where to start with that statement). Considering that myself and many of my family members have a pretty close insight into this department (over 6 major hospitals),i can safely say that a free uniform and access to toilet paper aren't perks.

    • dammit on 06/03/2018 - 11:16
      +1

      Probably maternity leave ?

    • cillianbc on 07/03/2018 - 08:54

      Maternity leave, choice to work full time or part time after returning from Mat leave, salary packaging, ADO's. There is prob more

  • The tiger on 07/03/2018 - 08:56

    Hi, Mr. Bear, to make a comparison of Masters with Bunnings Store is something out of way. Experience wise , Masters or Woolworth on hardware business got only shallow or zero foundation.By the way at the end of the day, Masters failed her mission through a successful sale by Woolworth.The property trust I mentioned is that all Woolworth’’s stores were sold by them to a listed property trust, and in return they rent them all for running their business.That property trust does nothing except collecting rentals from Woolworth .

  • cillianbc on 07/03/2018 - 09:00

    Thank you for all the helpful answers. We will be getting professional advice but like one poster mentioned they all get kick backs from funds so it can be hard to find someone to trust.

    I know this is a massive case of "first world problems" but it doesn't mean we don;t worry about making the right decision for our future and our kid(s).

    • Cheap Steve on 07/03/2018 - 22:48
      +1

      Commissions on managed funds were outlawed a decade ago.

  • Strahany on 07/03/2018 - 22:02
    +1

    Ethereum.

  • echelon6 on 07/03/2018 - 22:40

    800k isnt even a thing anymore in Sydney. If your NW is 800k you belong in the Hills district. Also, inheritance pfft.

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