I have $60k to invest, for about 5-7 years.
I'm 45 years old, own my own house, have an investment property and no debt, apart from the mortgage on the investment property.
Am leaning toward ETFs, though open to suggestions.
$60k to Invest for Approx 5 Years
Actionman77 on 07/10/2018 - 00:06
Last edited 07/10/2018 - 13:35 by 1 other user
Last edited 07/10/2018 - 13:35 by 1 other user
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Thanks Mr Bottom, if I have any left over, a new pair of specs.
Too risky, IMO……think that ship has sailed as well.
Up over 200% since that comment, so probably not too badly
600% gain in 1.5 year.
Few of them last long because very few can make money
I remember thinking about 10 years ago that there was a huge oversupply of cafes in my area, wondered how they survived…….there's probably twice as many now!
Invest in me. Pay off my student loans.
Not a bad idea at all if: there is some sort of royalty on all your future earnings for the next 20 years (as return on investment), and you have a good propsect of earning 100k+ a year…
If you know you wont need to touch it for 5 years, then ratesetter should be a perfect option for a decent chunk of it.
@riczter Have you used this? How safe is it? How often do they pay interest. As with all these investment things if it sounds to good to be true it probably not good. Assume if the loaner doesnt pay you lose.
I've used it with small amounts. They pay interest monthly (at least for the shorter term loans that I did). They have a thing call the provision fund which is basically self-funded insurance that if someone defaults, they cover it out of that. The thing is though, if loads of people on RS defaulted at the same time, the provision fund might not cover it all, and that's why they say you may not get your money back.
Yes I have been using it for the past couple years. Has been 100% reliable. If the loaner doesnt pay, the provisional fund covers it. No invester has ever lost his money on the ratesetter platform in australia. It would take a significant economic downturn for you to lose your money, which is definitely possible, but the overall risk seems low.
Thanks guys, this looks like an interesting way to diversify……thinking maybe $10k lent over 5 years…..according to their website they are paying 9.2% (after fees).
@Actionman77:
Don't forget to use ozbargains random referral link (my link above) this will give you and a random ozbargainer the referral bonus, if there is one at the moment.Scrap that, doesnt look like there is a referral bonus at the moment. The $75 one ended last month.
@Riczter: I've tipped 10k into this……just a question, how do you have reinvestment's set up? I was thinking of putting the money back into the 5 year market, though to my mind, if I keep doing that, my access to the principal will always be 5 years off?
@Actionman77: I set mine to return me the interest and capital payments each month, because I wanted a little bit more liquidity. However in order to get the best interest benefit you should reinvest it back into the 5 year market. If you know you may need it after 5 years though, you could set it to reinvest into the 3 year platform for the first 2 years, and then into the 1 year platform for the remainder. That way you are maximising your interest, but still assured to have your money available at the 5 year mark. Just have to play around with it to suit your needs. Obviously any money not being reinvested is not earning interest.
@Riczter: Great info, thanks……one other question if I may? Am I best splitting up my 10k into smaller parcels for lending?
@Actionman77: Shouldn't really matter. Ratesetter will split it into smaller parcels behind the scenes in order to match up with borrowers, and then every time you reinvest you will be splitting it into smaller and smaller parcels, but ratesetter manages all that behind the scenes.
@Actionman77: Keep an eye on the Cryptocurrency market.
Everyone missed out in the 2013 boom, and I stubbornly missed out on the 2017 boom.Many "shills" said it was going to recover in mid-2018 and boom AGAIN in Dec-2018… I called bs.
However, I do think its quite cyclical. There's a strong chance for a boom in 2019, and even higher in 2020. We're talking about turning $10k into $100k.And with the weakened Aussie economy, unsettling mortgage market, and a looming financial crisis in 2019/2020…it might be a case of three storms colliding perfectly: crypto boom + weak AUD + global recession = Major whales looking to safe-harbour their savings. And if/when this happens, it will cause a second/third tidal boom of the crypto market as people try to move away from the dollar into Stores of Value.
Basically, I think it will cause a big boom. Bitcoin hit USD $19,000 from $4,000 (x5-fold) during the last boom.
I think its going to stabilise around the $9,000-mark before the next boom, so traditionally we could expect it to hit around the $40,000-mark. Though due to the looming recession I think its going to hyperinflate the value to around the USD $100,000-mark (or probably more)….in a perfect storm scenario. A lot of it rides on Trump, and the decisions he will be making (will they bail out the large companies/banks again?).So yeah, look into it.
I wouldn't gamble the whole $60k, but since its money you can afford to burn… you're probably best suited to throw $10k of it at crypto to boost your earnings and I estimate that amount will probably bring more back ($30k?) than the other $50k invested in stocks (6% annual? $9k max return?).@Kangal: Kangal, very interesting reading……I'm very reluctant to go down the bitcoin path, for two reasons I guess, I don't know how to get into the 'market' and there's so much conflicting advice regarding this instrument…..but damn, it's SO tempting!
@Actionman77: Take the scientific approach, and be objective and honest on the matter.
I don't see Bitcoin replacing Visa, let alone gold, or even further fiat currency… so my rationale is that it is doomed to fail its objective. Yet, I see potential in using it like a stock; buy cheap and sell expensive, as do many others.
You can see patterns about which cryptocurrency offers the best technology, most talk, most penetration, and most funding… its isn't a "blind" market, its just that there's so much data out there that makes it hard to analyse.I'm reluctant too, but I sat and watched the previous trends and booms happen, and it didn't sink BitCoin.
I will do my best to get prepared for the next one. I will have a secure/private wallet and buy both bitcoin and some altcoins when the time is right. My current plan is to not enter the $6k market now, but enter it at $8k (higher cost but lower risk) in Early April 2019 and then probably sell off in Early Dec 2019, hopefully for $14k if it doesn't boom, then rebuy 6 months later at around $11k and sell during the mega-boom. If we get a regular boom in 2019/no super-boom in 2020, then I won't rebuy 6 months later, but I would've made a much higher profit.Just remember to adjust for your risk. If I were in your situation, I would only gamble $10k of that $60k savings. Potentially you could make more with that $10k in crypto than you would with $50k in other savings. You should do your homework now, get well prepared ahead of the coming months: Amat victoria curam.
@Actionman77: I'll answer for him if he doesn't mind! The easiest on-ramp for beginners would be Coinbase (downloadable app), however I believe your purchasing limits start off small and fees are higher than other options.
I'd recommend BTC Markets as an Australian site. It's a bit less user friendly, but has lower fees and higher spend limits. If you're familiar with stocks and charts then it'll be easier for you.
Also HIGHLY recommend moving any that you buy into your own personal wallet. I myself have a Ledger Nano S which is like a USB stick that holds your funds, but there are cheaper options. You can even keep your wallet pass phrase on a piece of paper and store it somewhere safe.
I say go on a holiday and enjoy life. You've done great, spoil yourself.
Thanks GangGang……sorely tempted!
You only live once and last time I checked, you can't take cash with you when you're dead.
Take $5k, and get on Skyscanner and find some cheap flights somewhere random. SE Asia is amazingly cheap.
Don't forget cash rewards.
Also depends on your situation. If you're married with kids, you may have to discuss it. If not, go for it.
Married with kids would just underscore my decision ;)
For sure, you own your own home and you have some passive income! What are you waiting for! Perfect age to go around the world
Lol. Closed mindedness is overatted.
What's EFTs? BtW
Exchange traded funds, basically investing in shares.
ETFs don't have to be shares. There are Exchange Traded Funds for Metals, Real Estate, Cash, Bonds, even Cryptocurrencies.
Err what? Would you like to clarify?
Borrow another 20k and get a car.
Mustang?
$80k AMG Investment
wow thats high yield! Now ya talking!
i thought this is getting old but no, it still makes me chuckle
@h4zey: Legendary posts never get old. Those who were there at the time remember it like an Ozbargain badge of honour. ;).
Wow +34
This is a very high yield comment!
Get a wife and some kids and that $60k will be well taken care of over the next 5-7 years.
Did at a while back…..through much scrimping and saving have still managed to build a little nest egg!
You'll be 50 in 5 years! No mortgage on your PPOR, and hopefully the investment property is self sustaining?
Why invest? Retire! That's what I intend to do (I'm turning 40 this year - I want to retire at around 50 or at least work part time or something cruisy). Or if you do want to invest, perhaps something passive so you can then focus on enjoying life? You never know what the future holds or how long you'll be around to enjoy it :)
Yeah IP is self sustaining, not sure 60k is en to retire on though!
There was a forum post few weeks back of a guy living off <16k a year, including rent, so minus rent, maybe ~6k a year. So living on 6k a year means you could retired happily for a good so 10 years.
6k a year, I'm impressed!
@Actionman77: I didn't read the post in question but don't be. Inflation will devour him over the years.
Rule of thumb is you earn 7% off interest. 3% must be reinvested to keep inflation at bay, 4% to live off.
So you need 1mil if you want to live off 40k (at today's spending power) forever.
I think you're on the right track already. No need for ozbargain advice. ETF should diversify you from property, and don't give up day job.
Either that or wait for my share tips when it comes up…no guarantee I will ever post another tip again though ;)
Thanks cloudy, reassurance is always heartening……I'll keep an eye out for a hot tip, maybe……..you've previously given some good info?
agree that etf or shares are better options to diversify your investment portfolio.
stockmarket usually goes down in oct and stockmarkets were down on Friday so might be a good time to tiptoe in. I wouldn't invest the full 60k straightaway but probably $5-10k whenever the stockmarket is down. similar to a dollar cost averaging strategy
Well, I dropped 9k on VDGR……I'm out $190 in about 5 hours! I know, it's the long game I'm interested in……but damn, feels like I've just been kicked in the arse at the casino!
The floggings will continue until morale improves!
Only $190?
I lost $10K today!!! Feeling so sad right now :(
@Homr: Well if nothing else, you've made me feel a lot better Homr!
You're 10k loss was not completely in vain!
Onwards and upwards!@Actionman77: When will it go up? I actually felt panic today but kept my cool and held and didnt panic sell. Any tips how to deal with today's bloodbath is much appreciated.
I thought today was actually a good day to buy as you are getting a 3% discount effectively. I am down about $500 today as well but transferred some funds to buy more tomorrow and will continue to buy each month for next yew years hopefully
Feeling a little better today? The stockmarket goes up and down and it's very hard to time it correctly, even if you are a professional trader.
$190 on 9k is only 2.1% or 0.32% of your $60k portfolio. Might also include buy/sell spread or brokerage? Don't lose sleep over it! If you are then it's not the right investment for you.
As Warren Buffet says - be fearful when others are greedy and to be greedy only when others are fearful.
Ask the Barefoot Investor. Wrong forum.
At least half in super, your getting old.
Maybe consider Stockspot.
It looks like a pretty good option for what you are after.
I would think ETFs or any shares are a long game 10, or better 20year, plan. There will be crashes and they could come at the 5-7year mark you're planning to cash out.
Half in super. 45
It all depends on the level of risk you want to take. My Wife and I retired at age 51 and 53 and set the bar low where we can live comfortably with just a 3% return on investments which is pretty much bank interest. We do have around 15% invested in equities however which is just a possible future bonus but if GFC 2 comes along it will not send us broke.
Super
God, retire before 60. STuff working. Your grandkids (fingers crossed) will appreciate you more.
Invest in a 4x4 and camping gear and go bush for a year.
I'd love to, wife, not so much.
Put 40k in asx:VDGR
20k in a Ubank Saver.
Stay away from shitcoins.caravan and travel the country if you havent already that is
Pending other circumstances, including your income, existing approach to superannuation and current/target wealth situation, putting the money into superannuation may be a very good option.
Obviously the question remains on what to invest in once in super, but you can contribute up to $25k a year under concessional rates (which includes any employer contributions already being made) and may be able to get a hefty tax refund. Have a word with your accountant.
ETF, the popular ones, either VAS or VGS, park it for 5 years
I second this with 1 change. Go for A200 instead of VAS as it got lower MER
A200 crashed today, same with VGS :(
Another thought I've had……my daughter and her husband are saving for a deposit on a home……just wondering if there would be any advantage in me lending them the 60k for 5 years @ whatever the standard variable rate is (4.5%?)?
Yeah, it's commonly done… but just as long as you can trust them and it won't create family issues.
It's better than long term interest in the bank, but in terms of risk you will need to make your own judgement…
Thanks kickling, do you know what the tax implications are, ie is the interest he pays me 'declarable'?
Don't quote me, but technically yes and realistically no.
Gift rule - max of $10k per year up to $30k over span of 5 years … if you were to call this a "gift". So $60K exceeds this and will be called an Asset transfer.
Generating income - you are generating income from an asset/investment, therefore declarable.
Realistically - 4% on $60K isn't big fish to fry, and if you are making this an informal "dad special" deal and make some smart arrangements, then I'd say unlikely you will need to worry.
Note : Moving around $60K may attract some interest from Banks (topic related to money laundering) and that may lead to declaring the reason why you are doing so.
@kickling: I think that rule only effects Pension!? If person A gives person B $100K, it wouldn't be taxed or anything right?
@od810: Sorry, that appears to be correct.
In Australia, a true gift is not taxable, regardless of size.
However, it can affect calculations for pension (as the giver) and also Centrelink asset calculations (as the receiver).
If it is going to generate a return, it is no longer a gift, and will be an asset.
I don’t want to give tax evasion advice. But practically, if she bought a gift card here, a nice dinner there for you instead of interest there’s no way the ATO could pin that consideration down to the lump sum you lent.
The only issue with large sums of money lent is always, will it cause relationship issues, no pay back, you suddenly want the cash and she can’t give it, etc.
But if it’s all good in the hood go for it, better that than middlemen banks or financial institutions getting a cut.
@cloudy: Again, very helpful, thank you cloudy…….now to work out if I'll be in front @ 4.5% with ahem, tax minimising, or potentially 9% from an ETF, with the full whack of tax.
@Actionman77: I'd suggest that you think of lending at a 'high interest saver' rate rather than the variable loan rate. Also, write down the loan amount and P+I repayments. This clarifies that it is a loan and not a gift.
If you go ETF, I'd consider IOZ (Australia), IVV (US) or IVE (elsewhere). There are ETFs on the ASX for overseas markets so you can easily diversify beyond our shores.
my 2c
@Actionman77: My folks helped me out in this way when I was buying a house 16yrs ago. It really helped to smash the bank-owed principle down.
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I suggest a decent bottle of bourbon and drink approx 200ml per annum. Enjoy :)