How to Start Investing $50k?

Ldxlx on 20/09/2018 - 11:58

I’m in my early 20s and am currently studying with 2 years to go. I also work as a casual in retail, so my income is still very low.
I’ve started thinking about purchasing property in the next few years (after uni), so I started looking into different savings accounts and have recently moved from CBA to UBank.

Recently, I have inherited $25k (which doubles my savings) and have no idea where to start with investing this. Initially, I was going to put it in my savings and let it sit there until I’m ready for it but after speaking to my parents, they have offered to assist me in purchasing my first property.

I’ve also considered investing in the stock market but have no idea where to start and don’t feel confident in my very limited knowledge.

What is the best way for me to invest this money?

Financial Investment

Comments

  • [Deactivated] on 20/09/2018 - 11:59
    +2

    AMG

    • ElWircho on 20/09/2018 - 13:13

      AaaawMyGod ?

  • Quantumcat on 20/09/2018 - 11:59

    Give it to me

    • SlickMick on 21/09/2018 - 12:56

      or me. I'll give you 4%.

      Seriously, returns are really crap atm, and you presumably don't want to be risking your savings.

      I've helped out family members with loans and charge them 5% to cover the interest I'm paying.
      If I find people who want to earn interest same way I might make a little business out of it :)

  • dane45 on 20/09/2018 - 12:15
    -3

    While I can't comment on the "best way" to invest, from my personal experience as a novice investor I would recommend P2P lending because it's easy to understand.

    I currently have money in RateSetter, and even just investing in short-term 1 month loans the rate of return has always been higher than what's offered by UBank. Might be a good place to put your money at least while you decide what your next steps should be.

    • Cheap Steve on 20/09/2018 - 12:29
      +4

      Also consider diversifying into crypto, cdo's, stamps, lego millenium falcons and ostrich eggs.

      • HighAndDry on 20/09/2018 - 12:44
        +1

        Hahahah yeah, that really shouldn't need, but probably should have, a bold "/S" tag.

    • dxlx on 20/09/2018 - 12:29
      +3

      I’ll definitely check it out, thanks!

      • Cheap Steve on 20/09/2018 - 12:33
        +4

        Sorry OP. I was being a smart-arse so please ignore my advice above. I was trying to highlight that P2P lending is very high risk and in no way comparable to cash in a bank.

      • HighAndDry on 20/09/2018 - 12:44
        +2

        No. No P2P lending!

      • dane45 on 20/09/2018 - 12:59
        +1

        The guys here have made a valid point in that it's certainly not zero-risk and so you should 100% do your due diligence like you would with any investment, but based on my own positive experiences I still think it's an option that's worth checking out even if you decide that it's not right for you.

    • HighAndDry on 20/09/2018 - 12:43

      I would recommend P2P lending

      No. Just…. no. Not when OP will need the money at a specified time in the near future.

      • Mentallysick on 26/09/2018 - 10:09

        what is P2P lending?

        • HighAndDry on 26/09/2018 - 10:10

          I remember your other posts and comments. No. Stop trying to find get-rich-quick schemes. You'll just lose all your money because if they worked, people far smarter than you would already all be doing it.

    • jellykingdom on 20/09/2018 - 13:17
      +3

      Hell, I'M going to check it out. I'd actually never even heard of this. Could be a good way to diversify a little from just the shares and investment property

      • Cheap Steve on 20/09/2018 - 15:45
        +2

        Are you doing this just to upset me and High & Dry? If yes, then congratulations it's worked…now just STOP!

  • Maglia Nera on 20/09/2018 - 12:18
    +1

    BMW

    • Oz8argain on 20/09/2018 - 13:41

      not the Aztek?

  • abb on 20/09/2018 - 12:19
    +7

    I would wait until you have a proper post-uni job to buy a house to live in. If it's solely for investment, and you can make the repayments, then you could do that now.

    If you're going to buy a house to live in ~2 years, then you probably shouldn't put too much in the share market (usually recommended to invest there for 5-7+ years timelines).

    Have a look at "VDHG" on the share market - it's a very well diversified ETF you can buy. In your shoes, I would stick 10-25k in there and keep the rest in cash for the house deposit.

    This is not financial advice. Don't do what I say. Do your own research.

    • dxlx on 20/09/2018 - 12:29

      I was thinking the same, just waiting until I have a stable job before I buy. I guess I’m just trying to find out what else I could consider in the meantime. Thanks for your help :)

    • jellykingdom on 20/09/2018 - 13:14

      I agree with this. Don't go and invest the whole lot if you're expecting to want to spend it shortly, or you might find it difficult to get it out again. I made that mistake with buying shares and then had to sell a bunch at a loss when i decided to buy my first house. Gotta keep a decent amount of it liquid

      Re housing, i would be careful at the moment. You're young so presumably want an apartment (also they're cheaper), but they're the riskier option right now.

  • AdamFury on 20/09/2018 - 12:21
    +10

    Check out Vanguard ETFs.

  • dasher86 on 20/09/2018 - 12:31

    black

  • HighAndDry on 20/09/2018 - 12:33

    Guys, can we have a quota of like, max 1 joke top-level comment per thread? Because if people reply to those, we end up with a lot of dead space before OP actually gets an answer and (despite the entertainment value) I think OP would like substative answers than laughs most of the time. /forum-policing…

    Recently, I have inherited $25k (which doubles my savings) and have no idea where to start with investing this. Initially, I was going to put it in my savings and let it sit there until I’m ready for it but after speaking to my parents, they have offered to assist me in purchasing my first property.

    Sounds good, but I'd still wait until after Uni (and once you have a full-time job) before buying a property because:

    1. Your borrowing power will be much higher unless your parents are going to fund the entire balance of the purchase price;

    2. Buying now is a terrible idea given the state of the market; and

    3. Give yourself an opportunity to develop and practice saving habits with a full-time income (the temptation to spend once you have serious money coming in can affect people differently, and you really get one chance to develop good spending habits).

    For a horizon of 2-4 years, you really don't want to put any serious amount of money that you'll need in the stock-market. One bad decision (or another military flare up in the Middle East etc) could wipe out a chunk of your savings when you need to use it, and then you'll be stuck between cashing out and realising those losses, or leaving the money there until the markets recover and potentially delay your property purchase timeframe.

    Honestly? Term deposit. I know I'm probably being over-conservative by some people's standards, and it is a very conservative route, but the aim is really not to make money, but to safeguard the money and just not lose money to inflation in these few years until you'll be using it.

    I'll leave it to others more qualified to suggest specific banks and term deposits though.

    • dasher86 on 20/09/2018 - 12:41
      +8

      Guys, can we have a quota of like, max 1 joke top-level comment per thread?

      No.

      It teaches a valuable lesson that financial advice on the internet can be helpful and also unhelpful.
      OP needs to pick and choose…

    • Ryanek on 20/09/2018 - 12:42
      +1

      Guys, can we have a quota of like, max 1 joke top-level comment per thread?

      Good luck with that one.

      • HighAndDry on 20/09/2018 - 12:42
        +1

        My life involves a lot of aspirational goals….

    • dxlx on 20/09/2018 - 13:09

      Will definitely look into term deposits!

      I was also thinking the same in regard to purchasing property so was definitely wanted other opinions as well.

  • Maglia Nera on 20/09/2018 - 12:38

    Black 22

  • CyberMurning on 20/09/2018 - 12:47
    +4

    by not checking ozb, you will have more saving in the bank.

    • hawkeye on 20/09/2018 - 13:39
      +1

      Double edged sword

  • wei13 on 20/09/2018 - 13:25
    +2

    Maybe consider First home super saver scheme. My super is currently returning at about 7-8% per annum.

    • SlickMick on 21/09/2018 - 13:06

      is it just me, or is that FHSSS next to useless? Max $30K!!?? I'm sure it might help some get across the line, but why wouldn't you let them save as much as they want for as long as they want, until they have enough for the house that they want!!??

  • afah0447 on 21/09/2018 - 09:43
    +1

    1) The best investment in the long-rum would be to place it into Superannuation especially given your age…but that is not very sexy.
    2) Invest in a low cost listed ETF (exchange traded fund) on the ASX. My preference is VGS with an automated dividend reinvestment plan.
    3) Take $5k and backpack around SE Asia for three months. This will truly be an investment in your life and well worth the cost.

  • fishka2 on 21/09/2018 - 13:27

    I’m no FA but will put my 2c worth as I have been in the same situation just a year ago. In My view 50G was a small amount to loose and a big one to invest, contrary to a general belief. As far as I saw it, 50G could be recovered within a year on a smart budget so I chose an aggressive (but smart) tactic playing the market. Long story short, with AU economy doing fairly well, and having chosen a reliable broker, I doubled the money within a year without much involvement and just bought a property which pays for itself. Two buts but. 1) MUST do a thorough research as per which broker to go with. There’s plenty of material/reviews available online, try to fetch one who is liable to a degree for investment strategy and action. And 2) Spend time finding RE gems; in my case it was a shithole loft in Bondi for which i can now charge 700pw and pack to the rafters (6 people) without caring if they do any damage, cuz the place costed me 350K and is a real dump. Surround yourself with good research and advice; you have time because with all Trump-China thing going on and market waiting how to react. Just don’t rush. Find shithole gems in both shares and property. Find responsible managers in both too. Good luck

    • usernameinvalid on 22/09/2018 - 22:31

      How'd you find 6 people to rent a 'sh*thole'? Please forgive the silly question, I'm new to real estate.

    • Drpepper666 on 03/10/2018 - 16:43
      +1

      Investment advice: make risky trades to double your money then buy some real estate in Sydney

      U wot m8?

  • fishka2 on 24/09/2018 - 23:53

    Backpackers mostly. Kinda mix of medium term stay and rotating airbnb

    • usernameinvalid on 26/09/2018 - 19:19

      Thanks mate.

      OP If you can't afford to loose it, don't put it in the stock market. Like the others have said - two years just isn't long enough

  • HadleyMetz on 05/10/2018 - 06:04

    Congrats on wanting to get started investing so early! This head start, if done well, could prove to be a great blessing later in life. You should consider investing in real estate! A lot of people shy away from real estate investing, but this is actually one of the best and safest ways to invest your money.

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