Hey All,
I've got about $300k sitting in a 'high' interest savings account (measly 5%) which I think could be made better use of.
The interest is a pittance and I think it can be used for potentially better returns elsewhere.
A bit of background about myself. Mid 30s with house paid off in Sydney. Living abroad in SEA. Would like to discover different flows of income.
Please help me out with any ideas. Cheers
Just remember that property is not necessarily safe - given how the housing crisis is going, things may change in various ways that could cause property prices to stagnate or go backwards. It's the sort of weird thing where people just assume property is safe and will increase forever but there's no such thing as a free lunch….
Calling bonds as riskier than property makes no sense as bonds are guaranteed returns whereas property is not (e.g., see: https://moneysmart.gov.au/investments-paying-interest/bonds) - "Bonds can provide a stable source of income and can protect the money you invest. They are considered less risky than growth assets like shares and property, and can help to diversify your investment portfolio."
it is safe if you buy freehold
Unless numerous things happen which devalue it immensely (flooding, gov housing policy changes Etc.).
Again, this idea that houses just go up because ???? is a bit too basic. It's how you can lose money by not understanding risk. Look at Japan where house prices go down over time and note that many people suggest that Japan is how most countries will end up eventually.
@DingoBilly: nah man don't compare to Japan or South East Asia. Japan most people don't live in houses anyway unless rural.
Australia if it is one of the capital cities ALWAYS go up for freehold there no chance of it going down in the long run and never has. Even if it was flooded the land price still stays strong over time…
What's your experience with houses? Do you have one?
@DingoBilly: I don't think you should underestimate the stupidity and selfishness of Australian politicians. Most of them own investment properties so they implement whatever policies they can to pump prices. These politicians all entered the workforce in the 90s when times were good, which made them soft and weak, which is why times are getting harder now for everyone. Our last chance of correcting the market was in 2016 or 2019 when Labor wanted to change the negative gearing laws.
I would not be surprised if there was a massive market downturn and the government introduced some scheme like MortgageKeeper where taxpayer dollars are given to mortgagors so they can pay the banks and stay afloat.
Immigration is at insane levels, 2000 to 3000 people per day are arriving in Australia because we've supposedly had a perpetual "skills shortage" for decades. That's all bs, the more people we import the more doctors, nurses, civil engineers, baristas, dentists, artists etc. we need to support the growing population. The reason we import so many people is to keep wages low and to boost demand for housing, thereby boosting rents and house prices.
No expectations no disappointments really.
@Ghost47: Spot on. Massive immigration is the past didn't prevent skill shortages from developing; why will it be any different this time around? A skilled worker bring in a spouse, children, siblings along with their spouses and children, and sometimes even parents. In exchange for 1 "lifter" you get a lot of people of dubious quality who may turn out to be lifter or may turn out to be leaners (the latter is actually more likely according to statistics).
The only immigrants I know we definitely need right now are GPs (free free to add any other professions we genuinely have a genuine paucity of). Give them permanent citizenship. Treat all other immigrants like they do in the Gulf States. They can stay here as long as they work. They get no welfare freebies. They can never become citizens. Use immigration for our national benefit, rather than as a welfare program for people from poor countries. Malaysia, Japan, Saudi Arabia, China and many more grant permanent citizenship to very few outsides; if it is okay for them to do it, it is okay for Australia as well.
@Ghost47: 2016 or 2019 when Labor wanted to change the negative gearing laws
This would have fixed so many issues we have today and the SAD thing is they didnt get rid of NG they just changed it to one property and grandfathered the existing NG properties.
@vid_ghost: You honestly think that if they had removed negative gearing in 2019 that there would not be a housing and rental shortage now? There are approx 160K houses built per years and the removal of negative gearing would have resulted in the extra 200K+ houses required to house all the new arrivals?
@tomfool: I do not understand why people think the removal of negative gearing will result in those renting to suddenly buy their own house. It will though result in a lot of rental properties being removed. And will big business also lose the ability to negative gear, if not than it's just transferring more wealth to the wealthy.
@tonka: Math…
If people aren't incentivised to invest in property with negative gearing, they're able to borrow less and earn less, pushing them to seek investments elsewhere. Removing investors from the market generally put constraint on sales and the hope is stock catches up and and prices stabilise.
@SydneySchnorrer: And will your math make all the generationally unemployed, the lifelong disability pensioners and chronic commitment avoiders, international students etc also sign up for a mortgage? I know many people that quite simply want to rent. What they all gonna do when property investors just shift to shares where negative gearing is quite acceptable.
@tonka: SydneySchnorrer: Can you also explain how removing investors will allow stock to 'catch up'. I would expect some existing owners to simply leave a property vacant as tenant is a requirement to negative gear and no tenant reduces bills, risk and frees the property for personal use. Owners currently living with family etc could also choose to move in. And of course the many investors that generate new builds for the depreciate will cease.
@SydneySchnorrer: Negative gearing is allowed on any investment, so by you thinking investing in shares would also not be as attractive, therefore levelling the investment playing field and pushing investors to the perceived safety of property. Property is seen by many as a safe place it has for centuries. Property keeps increasing in value due to the increase in demand cause by the increase in population. The only way it is going down is if there is a sudden loss of population.
The thing with removing negative gearing is it just pushes that loss to when the asset then makes a profit or is sold, so either the loss is carried forward until the property becomes positivly geared and then the owner pay no tax on that income or reduces the capital gain when it is sold, therefore less tax.
@DingoBilly: Japan is a completely different demographic .. Their population peaked in the late 80s and since then people who can have been leaving Japan in droves .. There are more adults wearing diapers in Japan than babies. Look at their aging population and heavy decrease in population.
Australia is completely different .. we still have alot of people that want to migrate here which will keep our population increasing for atleast the next 30 years (and possibly beyond). We don't have enough houses, aren't building enough (look at all of the building industry collapses going on) and have a net increase migration strategy of 500,000 people per year for at least the next 5 years if Labor is still in power.
given how the housing crisis is going, things may change in various ways that could cause property prices to stagnate
The property 'crisis' is being caused by massive supply issues. Economics 101, low supply and high demand causes prices to rise. And this is not changing anytime soon. It will take years to build the millions of new homes needed to satisfy the current demand, let alone the artificially created demand from our awesome immigration policies (700k people last year alone!)
It's the sort of weird thing where people just assume property is safe
Once you grasp the supply and demand figures then it makes a lot more sense.
This is a very basic year 10 economics understanding yes. But it doesn't change the point that property is not the safest place to park your money, that makes no sense.
The government could announce changes tomorrow that they're scrapping negative gearing and doing other changes which would change the value of them. Climate change can make a property worthless due to being in a flood zone now, immigration caps can be lowered etc Etc.
Vs. Just 5% return guaranteed no risk in a bank.
It's not really up for debate, it's just basic financial logic on risk VS return and property is not the safest or even that safe on that list.
This is a very basic year 10 economics understanding yes
Yet here you are, failing to grasp even the basics…
But it doesn't change the point that property is not the safest place to park your money, that makes no sense.
No-one said 'safest place to park your money', you said, and I quote "property is not necessarily safe"…
Your straw man won't work here…
@DingoBilly: to be pedantic they'd have to split the 300k over 2 banks for it to be guaranteed safe - IIRC the govt secured limit is 250k
property could fail, sure… but so could banks (up to a point)
they're both unlikely to fail though IMO
@quick-dry: Can also argue that massive inflation can make it unsafe. If comparable investments ie property and shares double while you hold a cash value, there's a good argument your cash value investment has failed.
@DingoBilly: Nobody said property is the safest place to park your money. It is however, relatively safe. OP mentioned it among other options of Shares and Gambling.
Housing is incredible safe. It's what all politician's invest in. If you want to be rich, emulate politicians.
All political parties is Australia support massive immigration intakes. They need to constantly and endlessly recruit more suckers from the third world into their Ponzi scheme. Even with 0 net immigration, Australia's population would be gradually but slowly increasing (there are still more births than death). There is no demographic death spiral yet despite ridiculous claims that Australia needs massive immigration to stave off population collapse (and what's wrong with population collapse anyway; there are far too many people in the world to provide them all with an American lifestyle for the next one thousand years).
Even with 0 net immigration, Australia's population would be gradually but slowly increasing (there are still more births than death)
birth rate is still below replacement.
Have you not seen big short, people defaulted on bonds. AAA credit rating bonds
Depends on your appetite for risk. Anywhere from property (safe) to bonds (relatively safe) to stocks (volatile) to crypto (unsafe) to gambling (stupid).
did you just state housing is less 'risky' then bonds?
WOW - this is why you dont take financial advice from randoms in the internet
im not saying property isnt a solid investment but it is modestly risky - you also take a huge hit in taxes ie stamp duty, land tax etc if you end up a landlord you got risks from troublesome tennats in which the law is almost always against you and then changes in legislation ie greens calling for rent freezes.
Property is probably more risky then ETFs long term but it is just easier to get finance from a bank for
Are you seriously recommending "share in a cafe" over stocks?
What about a cheesecake shop franchise or jims mowers while we're on stupid ideas for investments.
Rookie numbers
Convert into a HYIV and park in a garage 🤔
Buy a bottle cap factory. Start amassing bottle caps.
I still saving up all the ring pulls from my aluminium cans so I can donate them to the kid that has to collect his weight in ring pulls so Coca Cola will buy him a wheelchair…
+1 for the Fallout reference. Hope that was the intention!
I'm a safe player, so I would split the 300k into two banks to yeild interest.
Most banks do max 250k, do you have the 300k in one bank?
Other safe option is to deposit some into your super and reduce your taxable income.
Buy a local pizza place and get free pizza for the rest of your life. Be hands off and split the profits with an experienced pizza manager you employ, the place will run itself. People will always eat pizza. And they are pretty cheap and easy to make in volume.
invest your savings in running a restaurant, it's easy profits
For karma's sake, I wish to God you would start following your own advice
Borrow money from your friends and family, convince your partner to put their cash in, and actually do this
Please
Running a restaurant/pizza place is difficult—lots of hard work. You hardly have time for family!
I mean, yeah, even ignoring the fact restaurants are a lot of work and have tiny margins and fail often (three things that should basically disqualify them as an idea for a passive investment), the advice is especially shitty because
free pizza for the rest of your life
is something a (profanity) five year old would add to the top of their want list (while we're at it, maybe they should invest in an amusement park so they can "go on rides and cut to the front of the line whenever they want")
If you're an adult running your life to the extent you have a lazy $300k sitting in a bank account, you probably are already in a position to be able to eat pizza whenever you want, it shouldn't be a factor in structuring your investments, right?
@Crow K: Free pizza tastes 10x better. Plus all your orders get made correct and first. And the excitement of the owner coming.
pizza where you buy the ingredients, pay the staff to make it, pay for the space it's made but then it gets handed to you because you don't need to put cash into the register is "free pizza" and it tastes ten times better
Like I said before, a five year old's understanding of how things work
one of those people who uses "write-off" in a sentence without understanding what it means
At this stage I'm not convinced you've developed object permanence, much less an understanding how business/tax works
@AustriaBargain: I mean, yeah. You know how we laughed at Kramer when he said that, because Kramer doesn't know how it all works? This is that.
@Crow K: Well then OP can just write off their free pizzas. It's a write off, won't cost him anything but a fistful of tax deductible flour, cheese, and like 60 seconds of minimum wage time.
@AustriaBargain: (putting the aside the ATO has a listing of businesses that use their own goods and the deemed value of them as tax adjustments)
I mean, the flour and "60 seconds minimum wage time" (sure, let's go with that as being the only other costs behind pizza ingredients) are already an expense of the business, though?
Where does this "write off" step come in? They push a button in the manager's office labelled "write-off"?
In what sense are you using "and then they write it off"?
@Crow K: Just don't enter it into the system. If you order three free pizzas a week the manager will quickly figure out how much cheese and flour to buy, it won't be like "there's a shortfall of six cinder blocks sir, there will be no children's hospital".
@AustriaBargain: So, this is how it works in the real world (simplified)
April 1: Buy $30 of pizza ingredients, which is enough to make 5 pizzas (there is now a $30 expense in the Profit and Loss)
April 2: Make 5 pizzas. Sell four of them for $20 each, manager eats the fifth one. (There is now $80 income in the Profit and Loss, net profit is $50).
Note how the manager doesn't need to "figure out" how much cheese to buy or "go and do a write off"?
@Crow K: And pay tax on your own free pizza? Or have the free pizza appear as a sale in your spreadsheets? Nah best to keep it casual, under the table, on the dl.
@AustriaBargain: Basically you do one of two things when you're caught saying something dumb
there's something wrong with knowing what you're talking about
Thanks for the AustriaBargain tier contribution, as always
@Crow K: I'm just glad to know I have fans who recognise my name. Gonna print this page out and stick it on the fridge.
@AustriaBargain: "See kids, it's not just a word for me, write-offs are a business concept too.
Have a read and see if you can explain it to me later"
See kids, it's not just a word for me, write-offs are a business concept too
However 'joke' doesnt appear to be a word for you at all
@dtc: What is this, tag team battle with the League of Shitty Takes
(looks for CowFrogHorse standing by the ringside with a folding chair)
@Crow K: This is the second back and forth I've seen between you - I'm not sure why you bother with this guy. As far as I can tell most of what they have to say is bad takes/bad humour/bad trolling/actual ignorance and they don't seem to care which.
is something a (profanity) five year old would add to the top of their want list
Yeah! Exactly!
It is third on my list. Right behind buying a toy store for free toys, and a McDonalds for free burgers.
A family member does own an indie pizza place. The money is good, but he kinda lives in fear a Dominos will set up across the street.
Great way to lose money. Especially if you have no industry experience.
Dominos must be close to bankruptcy.
Hillarious that you think the biggest pizza chain in the world didn't come without a lot of luck.
@dongltron: Yes it was very lucky that they were able to identify the existence of a market with low standards.
Invest some stocks
Which ones? I am only interested in the ones that go up.
FANG, NDQ, IVV
dogecoin, to the moon
Shib? Doge is so Elon Musk.
Nail salon. I could go to the dingiest shopping centre and there will always be customers in the nail salons
Nice troll. The bit about being a sex pest in SEA is great.
It does look troll-y, member since a week ago.
I don't think he's trolling, he knows what he's doing.
Probably could diversify and put half into a dividend ETF or similar.
Which ETF would you recommend and how much divident are they paying if you have them?
Another trolling, flexing post about "how rich I am"
He saved money by eating dogs?
User name checks out.
Actually no, but if life is getting hard for you in Sydney you always have an out :)
Another tall poppy syndrome post
in a 'high' interest savings account (measly 5%)
5% is good…. You would have been crying during covid when HIR had been all sub 1%
Park it my garage and the forget about it.
Bitcoin. You'll have $310k. No wait, $280k. Hmm, $250k. Nope, $290k.
Then you have, $500k, $600k, $300k, $1 mil, $1.2 mil, $2 mil.
Do you know much about Bitcoin? I love the roller coaster of Bitcoin, best investment in the last 10 years, just facts.
Do you know much about Bitcoin?
Yes, do you?
best investment in the last 10 years, just facts.
Every Ponzi scheme has the good times. The problem is knowing when to get out before the whole house of cards falls over.
people have been saying this for 15 years now lol
Even if you claim it to be a Ponzi, why wouldn't you maintain 1% exposure rebalancing every year.
Then when the "house of cards falls over" the max you lose at any time is 1% of your portfolio (at rebalancing time).
Over the last ten years, 1% BTC, 99% SP500, rebalancing every year 14.31% CAGR.
Whereas 100% SP500 was 12.77% CAGR
Max drawdowns are the same, worst years at the same, best year is slightly better and you get a higher Sharpe ratio.
You'd be ignorant to write it off. You're juicing your returns and improving the Sharpe ratio.
10% BTC as above is 25% pa.
why wouldn't you maintain 1% exposure
Same reason I don't maintain 1% exposure on horse racing or poker machines…
Over the last ten years,
Past performance is no indication of future performance…
You'd be ignorant to write it off
Ignorance would to be expect future performance to match historical performance. But you are free to gamble your own money how you see fit.
@1st-Amendment: I see you're not receptive to new ideas or are aware of position sizing, risk analysis, risk adjusted expected returns, etc. That's OK, index investing was a new idea about 40 years ago as well. A lot of people are salty they missed the gains, but it's not too late. Take a look at it objectively, without any preconceived notions.
We can come back in 10 years and see how it's going. Maybe you're right, but risking 1% annually to juice the returns over 2% pa is a no brainer. It goes to 0 now, however unlikely, you lose 1% of the portfolio but enjoyed 10 years of compounding at 14.31 instead of 12.77. Total return of 292% vs 242%. A portfolio of starting balance $10k is worth $39,378, or $34,280 without the BTC allocation. This year to date, a portfolio simulation shows the BTC allocation has grown to 2%, it goes to 0, you're still ahead.
The old past performance line that people use to sound sophisticated, yeah, same can be said about stocks, real estate, gold, what's your point? We don't know, but we look at it and try to quantify it - drawdowns the same, highs the same, but the Sharpe ratio has increased. It's a better portfolio than 100% SP500. I'm just putting it out there.
I see you're not receptive to new ideas
High risk investing nothing new. The fact that you think this tells me a lot about you though. The crypto bro personality type is well understood.
Take a look at it objectively,
Can you do the same thing? If so tell me objectively what is the value proposition of crypto? It is does nothing, produces nothing, is useful for nothing, the value is entirely built on speculation of more suckers buying into it to grow ie the very definition of a Ponzi scheme.
But I'm open to hear an objective case for it. Feel free to give me something more than 'it went up before, so it'll go up again', because that is not objective at all.
The old past performance line that people use to sound sophisticated
It's not sophisticated at all, it's a pretty basic rule of any investing. But I'm sure crypto bros know better…
what's your point?
Crypto is by definition a Ponzi scheme. I thought that was clear.
@1st-Amendment: I never mentioned crypto, just Bitcoin. I would absolutely agree with your points against crypto. If you take the time to research BTC, you will find it is different and you will find the answers to all your rebuttals. I would recommend starting with Broken Money by Lyn Alden, or at the very least start with one of her shorter articles to address your Ponzi scheme concerns: https://www.lynalden.com/bitcoin-ponzi-scheme/
All the best and good luck! For me, BTC absolutely has a place in the portfolio.
Depends on your appetite for risk. Anywhere from property (safe) to bonds (relatively safe) to stocks (volatile) to crypto (unsafe) to gambling (stupid).
$300k isn't large enough to do much with for large autonomous returns. I suppose you could dump it into superannuation for slightly higher than 5% returns but doesn't seem worthwhile. Maybe buy a share in a farm or retail business/cafe etc.