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  • Profile photo of HansHans
    Participant
    @htjp1984
    Join Date: 2017
    Post Count: 2

    Hi everyone,

    I am new to this property website after reading the book and I am investigating on how to set things up for my first property purchase.
    At the moment I am saving for a down payment and it is just sitting there in a savings account (with virtually 0% interest). So, I was wondering, what kind of methods are you using to save the money for the down payment? Do you use bonds or maybe commodities? I think stocks are too risky for the short term, but bonds might be a safer option, but I am not entirely sure how they work? Can you lose money on bonds as well?

    Let me know your thoughts,

    Regards,

    Hans

    Profile photo of JaxonJaxon
    Participant
    @jaxona
    Join Date: 2014
    Post Count: 282

    You can loose money on anything under the right circumstance, even banks e.g if the banks didnt get a bailout in 08

    there are pros and cons to each avenue, pick what you understand and more importantly, under the risks.

    personally, bank acc is good till you build equity to move beyond that.

    Profile photo of Colin RiceColin Rice
    Participant
    @fms
    Join Date: 2011
    Post Count: 338

    I think a TD is the safest bet.

    Citibank are paying 3% atm.

    Here is a list of the top offerings – https://mozo.com.au/term-deposits

    Colin Rice | CDR Finance
    http://cdrfinance.com.au/
    Email Me | Phone Me

    Perth Based Mortgage Broker - Investment Property Finance Specialist | E: [email protected]

    Profile photo of HansHans
    Participant
    @htjp1984
    Join Date: 2017
    Post Count: 2

    Yeah, it is true that with any option you can lose money, even keeping the money in a sock under your pillow (if you consider inflation) makes you lose money, it all comes down to the amount of risk involved in each option and how much risk you want to take.

    Term Deposits might be a good option when we know we would buy a property and do not have all the funds available. The problem is that you can only access it after the term is finished. If we need to act quickly, we cannot access the funds without paying a penalty.

    Profile photo of Anthony ZanattaAnthony Zanatta
    Participant
    @azanatta91
    Join Date: 2016
    Post Count: 25

    Hi Hans, I’m in the same boat at the moment and I’ve thrown most of my savings into an ING Savings Maximiser. It’s 2.8% return without needing to lock your money into a term deposit for a similar rate of return :)

    Profile photo of Corey BattCorey Batt
    Participant
    @cjaysa
    Join Date: 2012
    Post Count: 1,010

    Hi Hans, I’m in the same boat at the moment and I’ve thrown most of my savings into an ING Savings Maximiser. It’s 2.8% return without needing to lock your money into a term deposit for a similar rate of return :)

    I do see this as a common strategy – high interest saver gives you an OK return whilst not putting it at risk which makes it a no brainer in terms of putting funds away until being used for a purchase deposit.

    There’s no point going crazy chasing returns on your deposit when in reality it won’t make a material difference considering the small amount of funds and shortish investment horizon until you would use the funds. On the other hand, should you mistime/misread what you’re investing in, you could set yourself backwards with your funds available.

    Corey Batt | Precision Funding
    http://www.precisionfunding.com.au
    Email Me | Phone Me

    Investment Focused Finance Strategist - servicing Australia-wide

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