Paying off credit card at the moment which is roughly -$2500 but I do have a full time job as a security guard. I want to explore the options out there where I can at least make some extra cash and reinvest it. I am willing risk lose up to $3000.
With Limited Available Cash ($3000) What Are My Investment Options?
[Deactivated] on 30/04/2020 - 13:46
Comments
There's a lot if you're looking at 3-7 year options.
Would you like to share some?
Qan
Unpopular opinion but you're not going to get enough return on $3,000 to warrant any potential risk. Save it for a rainy day.
Ask your bank to open a savings account with no card or access beyond online banking and transfer it there for a measly 0.02% interest.
If you'd invested 3k in BTC a month ago you'd have $4200 today.
And if you invested two months ago you'd roughly have the same amount today. Impressive rally over the last couple of days though.
+18% in 24hr. Perfect short term gain.
You mean gambled 3k in BTC.
Speculating on BTC is no different from the equity, derivatives, property market, etc.
Pay off the credit card and invest the $500.
The interest you'll accrue on the $2500 may easily outweigh any return on investment if you invest the full $3000?
Listen to this OP, this is too true. During the 2020 Berkshire Hathaway meeting, Warren was recalling a story where a lady was incessantly bugging him to tell her some great stock tips for a sizable sum but it was revealed she also had an equivalent sizable credit card debt - Warren told her the greatest and safest guaranteed(!) return is to pay off that credit card debt; it's the same as earning a 20%+ return (sans tax). There is NO risk involved in this. However this lady got defensive and couldn't understand why he wasn't answering her question. It shows the financial education amongst some people.
Another way to sort of look at these things is to always keep your bad debts as low as possible. Reducing your spending by $100/m is a saving of $1200p.a. = that's the same as if I just give you $12k for free and you earn 10% on it (not even considering taxes on those earnings!). Which do you think is the easier one? Scouring the forums and endless opinion articles, going through individual company balance sheets and AGMs, looking at geopolitical factors, watching Youtube gurus and asking strangers on the internet vs. cutting $3.33/day from your daily spend? Once you've got your expenses optimized, by all means your cash pile becomes the excess and you can go invest with it
Too many people easily get attracted to the shiny and bombastic stories of people making quick bucks and get FOMO but forget about the debts that strangle them. Paying off your debt isn't as sexy or motivating as looking to double or triple your money in stocks but that's because we're drawn to the hope. No one likes the boring way; get your finances in order first and build wealth slowly. Definitely give you props for being willing to lose it all - it's the bare minimum required to try investing but don't be brazen about it as the goal is not to lose money!
If you haven't invested in your health and fitness yet, I'd do that. Neglecting those things can cost you the most money down the track. I know not the sort of answer you're looking for but i think it's often neglected part of our lives.
What's the actionable item here?
- Gyms are closed …
- personal trainer? 3k probably wont go very far
- home gym equipment? 3k seems like overkill if you have enough motivation
You don't need weights it a personal trainer to get fit.
How do you invest financially in your health? Only way to keep healthy is to live and eat right. That can be expensive but I wouldn't call it an investment.
Health insurance seems like a waste of money since you still end up paying a lot either way, and our public health system is pretty damn good.
I agree but I am just lazy these days. cancelled my ongoing gym membership because of not being used for months.
You can't even put it all on black at the moment!
I lol’d
I'd start growing an emergency fund or even a save for something you really want in the future.
Pay off the credit card, unless you have a specific skill, you aren't going to make more than the 20 odd % interest you are paying on the card.
This. With $3000, there's a risk that you'll make or lose money on the stock market. With a credit card, you WILL lose money in the form of interest.
Pay off the credit card first before investing because your credit card interest will become much bigger than your investment returns in the long term.
If you want to make extra cash, ask for more shifts or find a second job.
Very much this. Credit cards average around 19% interest rate. In a year, this is roughly $475 if you weren't gradually paying it off. You will not find any low-to-mid risk investment to be remotely worth this. You just need to be smart with your money and remember that growing wealth is often not as effective as owing less.
Sometimes debts like that can work in your favour however. I just did the math on paying off my solar, and decided to get a loan for it instead of pay it outright. The outright funds would have come from my offset account, and the increased interest from not having those funds in there would have been more expensive than the interest accrued on a new loan specifically for the solar.
use the $3,000 as collateral to take out the biggest loan you can, then invest that loan in bitcoin
The ramp up has already started, better be quick.
BTC is +18% in 24hr. OP could FOMO now.
Yea, Bitcoin if you understand it. Bitcoin will be worth $100k USD at least in the next 2-3 years.
If not, pay off your credit card.
Too bad OP doesn’t have 85k. That way he can buy an investment vehicle
LG C965
Pay off the credit card.
Consider either
- a high interest savings account for the rest, use it as an emergency fund to avoid future credit card debt.
https://www.ozbargain.com.au/node/532074If you must invest, despite having no emergency fund at a time of incredible global instability, consider
Spaceship until you hit 5k (no fees under 5k)
free $5 via a link from https://www.ozbargain.com.au/node/493339Or put $600 (minimum parcel) in an ETF via Selfwealth,
using a referral link from here to get a free trade https://www.ozbargain.com.au/deals/selfwealth.com.au
Raiz or Spaceship sound like the best way for him to dip his toes in. He doesn't really need to be afraid of 'losing it' all ("I am willing risk lose up to $3000"), as long as he's aware it may move up or down in line with the portfolio. If he takes the Index Portfolio option in Spaceship — if that goes to $0, he'll have bigger issues than losing his $3000.
Sign up to Selfwealth and invest in ETF
This is what I would do as well but bearing in mind that most ETFs seem to have a floor of $500 the first time you are purchasing it (i.e first purchase needs to be a minimum of $500). Add the $9.5 brokerage on top of it, so ensure you have a couple of hundred dollars more if taking this route.
While I generally agree, self wealth offer free trades upon signup negating the brokerage. It isn't a terrible idea if you've got small funds to put them in and forget about them.
I'm actually doing a few Small trades(around 1k) for my mum this month after setting her account up. Poor woman is financially illiterate and overwhelmed since her divorce.That is really some great work you are doing for her. I am signing up today with Self wealth but is there a way I can learn about trading (Australian Specific Content)>
I am really thinking about getting in to this but have no experience. Is there a way I can learn about trading quick?
I'd really recommend the barefoot investor. It gives you a good easy to read grasp of everything financial in Australia. The self wealth site has some tutorials. When I was younger the actual asx website had tutorials too but they weren't very easy to use without some remedial knowledge from something like the barefoot investor.
If you shoot me your email address or another way to upload it to you I can send you a PDF copy of the book for free :)I have that book but haven't started reading it due to a newborn and other things in the head.
Pay the CC and invest the rest at Dan Murphys
It'll have to be incremental investing - current limit is two investments each
Someone touched on signing up to self wealth for ETFS. This is what I am doing for my mother who has a little more than you currently. Self wealth offer a month of free trades upon signup. This negates the need to factor in the brokerage when buying. I'm buying her a few different vanguard ETFS at around 1k each and expect her to leave them alone for at least a decade. I suggest if you've got no other idea, you do this too. It's relatively safe and easy.
My mother's completely financially illiterate having had her ignorant ex husband control everything. I just finished explaining her super is actually made of shares. She had no idea and was under the impression the super company had taken her money and wouldn't return it. Of course my ignorant father didn't correct this. To be honest I wonder if he even knew, he makes terrible financial choices that seem to come from random non sensically ideas.
Anyway. Back on topic. Of you're not confident with money matters I suggest doing what I am for her and also reading the barefoot investor for a basic grasp of money matters.
Good luck.I thought self wealth is expensive because you need to pay for the intelligence service if you want to trade.
No you don't? That's a cool free feature?
Mine doesn't make me pay for it after the trial? It's just a flat 9 odd?
Maybe give them a call if your account is doing that. If you're just asking me then…no it doesn't cost that premium fee for intelligence services.
Hey thank you very much for the information. Yeah its maybe because it was a classic previous generation thingy where hubby will know it all and wife will take care the children and house. My father also never taught us a single lesson about finance. Anyway, I just signup with SelfWealth. I will read the book hope everything works out fine.
Everyone has missed the point in responding to your question. Rather than figuring out HOW to invest, think about WHY you want to invest.
- Are you trying to save for retirement? Speak to your super fund or financial planner, and look at increasing how much you put in super.
- Are you trying to pay down debt? Pay off non-productive debt first (car loans, credit cards etc), then think about your options.
- Are you saving for a deposit on a house? Look at cash and the various government incentives?
- Are you trying to increase your income? Consider investing in yourself - training and education can pay more than a lot of investments.Once you know why you’re investing, how long do you have to achieve your goal? And then figure out how much you’re willing to risk to achieve it. Being willing to risk $3000 when you’re trying to save to buy a house worth $500K may not cut it.
Once you’ve figured that out, write down your goals….what do you want to achieve now, in a month, in six months etc and stick to it. FInd someone to keep you accountable to sticking to those goals.
Check out www.moneysmart.gov.au for heaps of good and independent info on how to go about investing.
If you’re looking to just get rich quick, go to the local casino and put $3000 on black. Far less painful than watching the gyrations of the stock market.
Bon fortuna!
Nope, you missed the point. He is $2500 in credit card debt, he should be paying that off ASAP and leaving the remaining $500 in the bank.
Yes, I want to save for house deposit and make some passive income.
Invest in CommSec Pocket. They a 7 ETF funds to choose from. Only $2 brokerage fees per transaction.
If the last few months have shown us anything, it is that getting rid of debt and having cash reserves reduces all sorts of risk and gives different opportunities. Pay off the card, if you owed $2500, I would make that my savings goal ASAP. Once you have that, maybe look at investments with better yield. Just make sure you save and invest. The other obvious option once you have paid your card off is (depending on income) chuck it in super and get the co- contribution, easy money.
Halarious question
$3,000 is considered EXPENDITURE
Yea, its nothing to most of us, but everyone need to start somewhere.
Yes they need to start by paying off CC debt and saving, not by investing.
Yea, the CC debt needs to be paid off, unless there is an investment which returns more than 20% or whatever the interest rate of the CC is.
@techlead: Would need to be significantly more than 20% because they'd pay tax on that. There's no investment that pays that well.
If you have any high interest debts pay those off first…gets you a guaranteed high return straight up.
Options with any leftover I would suggest to either invest into yourself in the form of education or otherwise try to start up your own small business.
I started with $500 6 months ago, and am now generating $10k a month in sales, and approx $2.5 to $3k profit a month, so it is possible.I am losing towards my CC. I was considering eBay to sell accessories for phones. would you mind sharing what do you sell? (inbox if you like)
Ebay is how I started my small business. In terms of categories you need to have a look to see what is in demand, and then what you can buy for, and then build in costs like ebay fees, paypal costs, postage etc and still come out making a profit. Start with Phone Accessories like you have mentioned however do your research first to determine if it is worthwhile. Whilst there is heaps of demand in that category there is likewise heaps of competition too so margins are slim. All i can say is do your research first as it takes hours to work out. Worthwhile if you are will to put in the time.
I am totally on to it. Just doing my research at the moment. Really need that source of passive income. Would you be able to assist with a few quires down the line? Nothing financial or about what you sell etc
There are currently no good investment options.