Hay this is my first post. Im 20 years old (soon 21) and on my final year/semister of uni. I have done a Diploma in International Business and doing a Double Degree in Management/Marketing at the moment. I have just landed a job in my final semister at General Electric in GE Money thanks to my mentor who had contacts there.
I was wondering at my age why would you guys recommend I invest my money in. Im lucky iv done a degree but now im wondering how I should invest. Iv been reading up on shares and joined the asx share game to learn shares but I want to know what should I do in property?
I was thinking when I start work I should try investing my money into a bank account with 5% interest. Im trying to read up on as much info as I can until iv saved up enough money.
I was thinking to save my money (about 30k) then purchase a house and rent it though I know its probably not going to be as simple as that.
Iv read a few investment books and was planning to read rich dad poor dad as I never finished it the first time. What else can you guys recommened that I do to make the most of my money?
It is very difficult for anyone to provide you with financial advice without knowing a lot more about you. It could cost you a lot of money.
TMA
http://www.email4money.info
Investor Links
First Home Buyer Websiteits sounds like you should have words with your mentor pronto! he may have the answer youre looking for…….
Blinkau,
whilst no-one on this site can give you advice, I think you may be looking for opinions. ie. what we would do if we were in your shoes right now.So for what it is worth, this is what I would do if I was you right now.
I would firstly save to buy a home to live in that is really affordable and has three or more bedrooms.
If it is really affordable you can still ‘have a life’ and be able to make other choices later if need be – or invest further. And whilst it has at least three bedrooms you can rent out the other bedrooms for extra income if you want later.
If homes are too dear around you go out a suburb or two.
There may be better opportunities in the stock market or elsewhere, but unless you are really driven to extract every dollar out of any investment venture you take on, buying a house now, taking adantage of the First Hoe Buyers grant and ensuring you have ‘forced savings’ in your home is a really good start and I think better than doing nothing for a couple of years whilst you decide what to do.
Just negotiate really hard and buy something.
That’s what I would suggest. Think about it together with other suggestions.
Thanks Endless Summer. That sounds like the right sort of thing to do but I was thinking while saving for my house investing the money I save into shares until I need it. I really need to understand the sharemarket better first.
I like the first home buyers grant but I don’t want to move out of home (too easy to save at home). Maybe I could list myself as living at the address (but not live there) and rent the house out at the same time… not sure if thats a good idea though [blink]
Where would you recommend I go to read about the ups and downs of the property market? I know I don’t want to buy in the up time thats for sure.
I also talk to my mentor often but the more views I get on what to do the better.
That’s a really good question about where to save for your deposit. My suggestion would be that you need to decide whether you want the safe option or the risky option.
For your first home, my suggestion would be to go with the safe option. Just open a high interest savings account at a bank and just save hard. Whatever extra you might squeeze out of higher yielding investments you can save each week by sacrificing that extra pasta meal and couple of drinks out with friends. Yes there are some great shares being traded (oil, other resources – you can look into those if you like and go for them if you are prepared to take the time to read up on them you can make a ‘killing’ as they say).
So just listen to your gut feeling. If you think that you the focus on higher yielding investments will work for you then go for them – just find out all you can before you start – and remember that most are long term investments.
Or alternatively if your gut feeling tells you that higher yields sound great but are more of a dream than a reality for you then just go with the easy savings in the bank. I know factory workers in their early thirties who are wealthy now just because they started saving early and bought property early paid it off and just bought the next one – no rocket science behind it.
That’s the problem with degrees sometimes (I have one too) sometimes we can just overanalyse. Time is your greatest asset. Think about using that even more wisely than your money and I believe you will be better off for it.
As for the FHOG – I say this, buy the house, get the grant, move in and get some mates you trust to share on a low rental with you. Not quite right – but either way just save – negotiate really hard in this market and buy the house.
Once you have the house sorted, then look at other investment opportunities. Keep reading etc.
I think the trick right now is just to negotiate really hard when you buy the house – make lots of offers, look at lots of houses, get the building inspection before you buy the house etc.
That’s my opinion. Get lots of opinions, then follow your gut feeling.
Great to see young folks wanting to learn how to get ahead financially.
My advice is:
Now that u have a full time job, save save save. U should be used to this having been a student for a few years.
Deposit your savings into a high yielding account.
Work out how long it will take to save the deposit required (possibly $20K _$30K for a entry level house.
Learn as much as possible about property investing.
Finish reading Rich Dad poor Dad, and read property investing books, or anything to increase your investing knowledge.
Buy a property using the FHOG.
hrm
Sounds like you’re interested in the stockmarket. There’s no quicker way to learn than by buying some shares. If I were in your situation, I would bank all my cash in a high yeilding account immediately and when I had say $4000 or so, invest it in a very low risk blue chip stock (like a bank for example). I’d then repeat that exercise maybe once more with a different stock. Continue putting the rest of your earnings in the high interest account and now you’d have both low risk exposure to the stockmarket and also very safe, no risk savings.
Thanks for all the really great replies guys it has given me plenty to think about.
I seen a friend recently turn a profit in the share market (5k to 20k) and was thinking thats an excellent way to make up some money for desposit. Though he also mentioned he has lost alot as well in bad investments. So it is risky but bluechip sounds like a good way to play it safe until I have enough disposable income that I can go risky.
Im really interested in saving and becomming rich [biggrin] It just seems if you don’t save it the money slips through your hands soo quickly. All my mates have taken jobs and only ended up in debt due to cars and so on.
I think im going to put my attack plan down to;
1. Work and buy a few nice things iv missed (nothing much).
2. Save into suncorp (5.25% interest)
3. Switch money into the share market into bluechip
4. Purchase a house!Id still prefer not to move into my first house as I know it will kill savings on bills. I think id prefer to use the first home buyers grant in the future when I plan to move out for good.
I really want to get as many assets as possible with minimal borrowing from the bank. Id hate to get to 30 and relised I own nothing.
I want to avoid the traps like credit cards and car payments as from what iv seen with friends this is where 90% of their money is lost.
Thanks for all your advice guys ill keep reading and keep at it they say the first 20 million is always the hardest [grad]
I’ve been meaning to add something to this for a few days now, but been too lazy [blush2].
My recommendation: buy exchange traded index funds
STW which tracks S&P 200
SLF which tracks S&P 200 Listed Property
for info http://www.streettracks.com.au/The basic premise is that you’re not likely to beat the market, so why risk being flogged by it? Settle for average. STW includes the largest 200 Australian shares and SLF is the same for Property trusts. Simplest starter portfolio is to maintain a 50:50 ratio and rebalance through contributions (never sell). You are significantly reducing the chance that your first foray results in disaster, even if by poor luck rather than lack of skill.
A good read is the PDF available on http://www.indexfunds.com. This is American info, but applies similarly. Don’t take the Farma and French conclusions as gospel and keep an agnostic mind to trading if you like.
Another site more specific to Austrlia is
http://www.travismorien.com/FAQ/main.htm who uses index funds for his personal portfolio
and another favourite article
http://moneycentral.msn.com/content/Investing/Simplestrategies/P38651.aspDown the track I also recommend international exposure again at a fixed % of portfolio, but there are no ET index funds, so you would have to use mutual funds, not so bad. This will be your safety net if Au turns sour. And a bet against the dollar which is a far way above its long term average.
Finally if you want to beat the market, as many funds claim to, you have the option of margin. Why take the unquantifiable risk of trusting a fund manager with you money in the hope of out performance when you can index and gear. You increase your risk, but also you prospective gains and most importantly you are in control.
My conviction to these incredibly simple strategies is that I have been implementing them for 3 years to amazing success (not through market timing or brilliance, just stubborn adherance). I have only 5 years on you so have been happy to gear (between 50% and 60%), but I suggest you do not take this step for at least a few months until you get used to the idea of your net worth vacillating daily.
I actually spent months researching and writing software to evaluate optimal gearing strategies, but can sum up the most important conclusion in one sentence: Don’t push it.
The gearing that is, remain well under the max. If you’d implemented the above 50:50 portfolio since 81 (i think when my Au data dated back to although I ran this from the 20’s on Dow), then at 60% you would not have had a single margin call. Although you would have been screwed at 20% interest rates [biggrin], so would just about every other strategy mentioned on this forum and given the conservative gearing (compared in absolute terms to most property investments) a case could be made that this is a relatively safe approach. If instead you’d been at 65% gearing you would in fact have LESS equity at the end of this term (i.e. to present) and have had more volatility. I will be more interested in property when I again live in Au and prices are more conducive to investing; every dog has its day.So, STW and SLF, no brainer, gear once you’re comfy. Worked for me. Sure in a bull market, but what the hell would you say of property last 5 years? [biggrin]
blah blah i have no quals, follow at your own peril, if you lose everything, bug**ger that means I lost it all too
You must be logged in to reply to this topic. If you don't have an account, you can register here.
