Hi all,
I have 10k saved, what should I do with it? Currently it is in a saving account but its not a good rate. I was looking at the 3.5% interest rates, but thats not very much return.
So what would someone do with 10k?
Now I do have a mortgage but I do not want to put it towards that, I want this money to grow….
or should I just take it to the casino and put it all on black?
3.5% isnt too bad for risk free about the same rate as A200 ETFs their payout usually between 3-7% depending when you bought the shares and how the market is doing but average around 3-4% a year but you face market volatility
to make better than what you get in the banks, you got to take risk and with risk come the risk of losing money as well as capital gain
so, it come down to what you are comfortable with and how much risk you willing to take.
you are the only person who can answer this sort of question, everyone else input are just their opinion
$10k multi on the 160 mil thursday evening.
or keep it until you have 20, 30, 50, 100k
What multi
buy gold etf
what does it take for gold to go up ?
inflation , money printing , war , btc crash
Nope. Gold still down.
10k saved
Assume this is 10kWh?
Buy a Tesla battery (or equivalent make) to make huge savings on your rising energy bills
Salary sacrifice 10k into superannuation. Its only taxed at 15%, compared to your current tax bracket. Assuming you are on 32.5% tax bracket, that is risk free 17.5% return.
risk free? you are locking away this money for like eternity (retirement). I wouldn't recommend unless you are wealthy.
Its all relative, no investment is risk free. If you have the money its a smart tax move and is relativley risk free - you can move your super around between levels of risk and its an investment people should review regularly just like any other. Plus we all want to retire at some point and if I don't make it something for the kids to have.
It is risk free, as it is instant gain, with no investment risk, from less tax paid vs nominal tax rate.
Once the funds are inside superannuation, you can choose your risk profile to suit your requirements.
I don't trust that my super will be there waiting for me when I retire. It's a nice to have if it still exists and I make it to that age, but i'd like to actually make my own wealth independently on my own terms.
where would it (the super, not you) go?
i agree, where possible one shouldn't rely on super; but if i have been giving 10% of my pay for 50 years, im gonna wanna see it "at the end"…
The higher the pool of money gets, the more politicians will be circling around it like vultures figuring out how to spend it while making it look like they had to do it for whatever crisis is happening at the time.
@ProlapsedHeinous: I disagree. Self funded retirees reduce the amount the government has to pay in pensions. Retirees who can afford private health insurance and private health care reduce the costs on the public health system. This is well understood by governments and there has been bipartisan support for the superannuation system for the last 30 years. There may be small changes, but I don't expect and significant changes that do not have grandfathering provisions for funds already paid in.
Any attempt to raid superannuation would be political suicide and politicians know this. It's not just retirees, but most people who 10-15 years away from retirement is also going to be fairly strongly focused on their future when it comes to voting.
they already saved it so there is no 15% on non concessional super contributions
unless you mean put $10k after-tax in super and then submit notice of intent to claim personal super contribution
FYI OP is invested in cash only plan for super lololol
unless you mean put $10k after-tax in super and then submit notice of intent to claim personal super contribution
Of course you do this for any extra super contributions…
actually not all the time
e.g.
if you are already below tax free threshold
if you are getting certain Centrelink benefits which the deduction will deem it assessable for calculations
anyway hothed wrote salary sacrifice the $10k and that's not possible as it is already taxed
they already saved it so there is no 15% on non concessional super contributions
This statement is almost certainly wrong for OP though. He can put it into his super and get a tax rebate for the difference he paid above 15%.
In current market I'd invest it in solar if you can get it and don't already have it.
Why solari
Power bills only go up - cost of panels/batteries also going up with inflation.
My thought is that you wont get much return in traditional investment/savings products over the next period (compared to inflation) and with inflation being as high as it is buying products that will save money long term is a low risk investment if you're in a good position with the mortgage.
Had my solar installed about 1 year ago.
The rate of return I am getting is about 15% per year at a minimum. It is hard to beat that.
Great recommendation actually. $10,000 is more than enough for a decent sized system. Electricity prices are going nowhere but up.
Offset man. Best return you can get and as a few others have said, no tax to pay on it. May seem boring but makes a diff over live of loan.
Lowest risk, best return for risk taken.
Given how interest rates are going up so much, it makes more and more sense the higher they go…
Plus one for Offset or redraw facility. Check it is 100% deducted from the amount you pay interest on. Once you have significantly reduced your mortgage you may want to buy an investment property and could get a higher loan by getting a second mortgage on your home. The higher % loan you can get on an investment property the more losses you incur for negative gearing.
The higher % loan you can get on an investment property the more losses you incur for negative gearing.
Is it just me, but I always think making a profit rather than a loss to be the better outcome?
You make the profit when you sell the property and pay only 50% tax on the capital gain after 12 months
Negatively gearing a property and making a capital gain are two separate considerations (linked but separate) so I stand by my statement.
You can make a capital gain without throwing money away by making a loss with negative gearing.
Can you explain how making a loss somehow maximises your profit?
sell the property and pay only 50% tax on the capital gain after 12 months
By the way, that's not how CGT works - you do not pay 50% tax on your profit.
There is a 50% discount applied to your gain prior to calculating the tax applied.
It may be worth doing a little more reading on the subjects as you may not have as full an understanding as you believe.
Buy Tesla stock and dont look at it for a few years.
why the negs?
This is ozbargain mate.
Duh
or look at it everyday for the next 5 years and cry
Surely has room to run, maybe to 2-3x every other car company combined
Blockearner can give you 7%, but it's more risky than a bank.
Bikies
I mean, spend it on coke and hookers
Look for product under $3 on Alibaba.com, make sure it's in demand! Buy 20 ~ 50 pcs and sell them online. Don't buy big quantity as you need to test the market first, there are heaps of overpriced products on the market and believe it or not prices didn't go up in China as they keep telling us. My family members import from China all time and one thing went up was the sea shipping but it went down again. Good luck
Sell locally where? Which websites?
make sure it's in demand!
Yeah that's really the trick isn't it…
If youre looking for low risk and high return, putting it into your mortgage is by far the best solution.
Instead of earning money on it, youre saving money on it, which is tax free. It will also have a compound/growing effect of savings.
Keep saving. $10k isn’t much in 2022.
Until someone asks to borrow 10K from you…
I lent someone $100k so they could transfer it to give them the edge on buying a house being able to say they’d transfer it upfront. $10k would be fine, my friends and family are good people. I’ve got pretty high expectations of people I surround myself with.
? can you now do in English
If it's in an offset account it's already paying off to some degree by decreasing the interest paid on your mortgage.
If you're looking for something a bit better you could go mutual funds (eg. Vangard), but note that you'll need to keep the cash there for a number of years (10?) to guarantee a decent return overall (some years go up, some down).
Women and drink, waste the rest.
$10,000 is not much these days. Do what you did to save $10K.
Expect wait till it’s $50K or $100 K and drop the $50’K on deposit for house or unit.
The best thing to do with this amount of cash is to offset it from your mortgage somehow.
If you don't have an offset account, maybe you can still have redraw which is the next best thing.
Next time you refinance consider splitting your mortgage into two parts. One for the bulk of it on the better interest rate, and one with a smaller amount (that you could reasonably expect to save up before the next refinance) with an offset facility. Something like 50k might be good for you.
Mortgage offset is best bet for the next year or 2 if you are on a variable rate. Knock it off your balance while interest rates peak.
Backpack in developing countries for 2 months.
Dude. Recession is here. Keep it unless you are sure on the future and so get some girls and enjoy
I know this is out of left field, but if you can get hold of any rolex watches, specifically a submariner at rrp then do it. You can nearly double your money.
I’m soooo disappointed with ozb community 😔😔
So much shite coming back at a very honest request for simple help… everything is turning into fkd up sarcastic marasmatic exchange of who’s better at it😔😔.. shame really..
OP has the opportunity to go to a financial advisor.
If you choose to post to the Ozbargain forum you prepare yourself for anything
This is actually one of the most helpful threads I've seen on Ozbargain
Any old school or/founders/moderators could put an end to it?? Honestly getting into an ukraine kinda mess..😔😔
Great idea, invest in Ukraine!
Cheap fertile land
Once you've been de-mined ,
And you can sell scrap metal on the side
Brain and savings used to be the purpose of this .com… certainly not anymore 😔😔
As far as 10K op question at hand, I’d suggest finding and consulting a good financial advisor. At least for starters will teach some good investment strategies. Not all of them are hawks and most are governed by very strict legislation. Start small and legal. Get your head around it. Learn about investing. Use your initial capital as an education tool if anything but! U will get a small return at first. But then again, u won’t loose all of your first, probably hard earned 10К
spend $300 on a financial advisor for $10k investment. Instant -3% loss.
that is bad investment
REITS are pretty cheap (~30% discount on NTA/share) at the moment and get about 6-7% return; however, they are interest rate sensitive, so there’s the potential to make a capital loss. On the upside handsome capital gain if things play out differently. What’s your time horizon and risk tolerance?
Came to see the answers; wasn't disappointed.
Donate it to charity, be a good person .
Savings account or offset
Would have been a nice house deposit 15 years ago to get you into your first house.
Today you need 10 times that for a starter home.
Save it until you have what you need.
By then you'll probably need another 10x more tho
All the best
OP already has his first house that is why most people are recommending he put the money into his offset account.
Make a stake account to trade US stocks, all in on Alibaba shares. Currently its below its IPO price. Wait 1 year, it'll double in value.
Remind me 1 year!
Put money in mortgage offset and take a separate loan to buy shares and the interest on that is tax deductible
ever heard of debt recycling?
that's what I've said so most likely
Honestly, as I'm sure others have echoed, I'd be keeping it on the mortgage to keep for emergencies.
If you can invest it elsewhere and withdraw quickly without paying capital gains, maybe consider that.
I've got cash on the mortgage offset and some set aside for investment into an ETF, Vanguard High Growth, and some other shares. That $10k will work better for you now with your interest rate at 4.44 or whatever it is.
Then set aside cash from your income to invest.
If you can invest it elsewhere and withdraw quickly without paying capital gains, maybe consider that.
Can't think of any option where you won't pay tax on the gain (short term or long term) made via investment. Can you give some examples?
I can't. I don't think it exists, to be frank.
I would say your money will work more for you sitting on your mortgage.
Especially as the interest rate appears to be increasing again.
You could potentially earn 3.5-4% in a term deposit OR save more on the interest charged, leaving that amount in your offset- if that makes sense?
My point is that Mortgage offset strikes the right balance between accessibility and avoiding capital gains, etc. If $10k is all of your savings, I wouldn't tie it up in investments. Keep it for the rainy day and not have to worry about the markets.
Buy 2-3 vanguard ETF's. ASX, World, Emerging Markets.
House.
Also one other thing to note…
If this is the only $10k you have in savings (which it sounds like it is) then this is also your rainy-day / emergency fund.
So you want to keep where you are able to easily access it at any time. This is more important really that the amount of return you are getting on it.
What probability of growth above the risk free rate will you accept?
Is 50% chance of growth (50% chance of loss) acceptable?
What timeframe is your investment horizon?
You haven't provided enough information to receive a sensible answer.
From what he has said it sounds like this is his only saving, and I would agree with trapper he should keep this money readily available in case of emergency as he has a mortgage and other bills to pay. An offset account is ideal.
Buy 4 4090 Nvidia gtx and start a business
you know the OP did ask
So what would someone do with 10k? (NOT would SHOULD OP do with 10K)
so how can their be "wrong" answers…
however I have retracted my above comment at a serious attempt at helping OP… I may know a thing or two about what I am talking about however I am wasting my time here I think which is a shame
buy a champagne camry with a corner dent
Will struggle to get one for 10k these days 😅
There's no better GUARNTEED RETURN than paying down your debt.
Or buy things that will save you money or time. e.g. Look at everything you eat, use, wear, buy… and think: "Can I buy something that will make this cheaper/faster by making it myself." One example is a bread machine. I buy the cheapest plain flour, yeast, bread improver, and already have the other ingredients anyway. I also buy powdered milk. Not only do I get great bread but I'm not driving to Colesworths every 3 days for fresh bread/milk which multiplies the saving by using less fuel.
Another is buying things you KNOW you'll always use, in bulk, when on sale. Make a guess how much you use a week, buy 3 months worth, and it will probably come on sale again before you run out. Then top up the quantity again. (Meaning you're always paying the discounted price and so saving even more money than before.)
Good idea. I do that often. Yesterday I bought 30 bodywash bottles 40-50% off. Just need to sort out space issues. Lol
Matched betting is the fastest and most reliable way to make that 10k grow.
Haha yes, this!
Did quite well with Matched Betting over a year or so ended up +7-8k until I got promo banned from almost all the bookies :(
Definately takes a lot of time and patience though!
Not crypto
But $ASTS spacemobile shares, and sell when Australia has 5G service across the whole continent.
Wasn't there a graph showing over last 30 years a balanced portfolio showed 10k-400-500k? AVG 8.8%?
Just put it there and leave it for 30 years.
Go invest it in an index fund ETF on the ASX e.g. Vanguard MSCI Index International Shares ETF (VGS). You can easily do this via an share trading app.
Keep it in your offset account, lower your repayments - keep it aside for emergency
If you want extremely low risk return that isnt taxed stick it in the mortgage as you can redraw it later and it will offset 4% interest cost (soon to be 5% interest cost). This is better than a 4%*(1+32.5%)return before tax.
Solar is also another excellent tax free return if you are planning on staying where you are, extra benefit if you work from home or have power costs that can be transferred to midday (dishwasher timer, pool timer, A/C, etc).
Unless you have a fixed mortgage, it will be difficult to find any low risk short-term investment that will offer higher returns than your current mortgage interest rate. If there was, we would all be borrowing against our mortgage, investing in that option and making free money.
As others have said, putting in into the offset would likely be the best option for the current time period and would allow you immediate access if you required it.
What's you're current interest rate on your mortgage?