So I am a 20 year old uni student and I have been able to save around $50,000. Now I have been lucky enough to still be living at home which has greatly aided my saving efforts, saving me money on bills etc. Ive currently got all the money in a savings account earning about 4%.
I was just wondering if anyone had some advice on ways to better diversify my savings in other investments, like shares, mutual funds, bonds etc. Any help is appreciated.
Thanks, yeah been studying full time and working part time. I just try to save as much as i can and its starting to pay off.
What is your job if you don't mind me asking?
gigolo :P
Check out his username… He runs a carwash?
Haha.. Bravo!!!
Haha yes a carwash. And thats all.
Consider a market index fund or ETF.
These buy some of all the shares in the ASX200 or All Ordinaries index, so buying the index fund gives you exposure to all those top tier companies with one transaction.
They don't charge high fees for the service.
In the past, this type of investing has produced the greatest return of the options available to ordinary investors (that is, excluding options where you have to do considerable work yourself, like starting a business or being an angel investor/venture capitalist).
Since at any moment the market might be historically high or low (at the moment I think it is a tad high) it is a good idea to stagger your investment into a series of purchases over a period, say 12 months. This way, you avoid the risk of a market crash the day after you invested $50,000. This is called dollar cost averaging, but it means you automagically buy more shares when the market is low and less when it is high.
To invest in an index fund, you fill out a form and send some money (Vanguard are a good one). To buy and ETF you open a stock broker account and buy the ETF share code just like any other share. The fees for Vanguards ETF are lower than their managed fund, so I would take that path, but bear in mind you will need to pay brokerage costs to buy or sell the ETF (still a better deal, in my opinion).
And lastly, some bigger picture stuff. If you read someone like Nassim Taleb, he suggests you must always hold a hedge of emergency wealth. His personal example was having some money in gold which allowed his family to flee civil war Lebanon, but I'm sure Jews in Europe last century or Kurds in Iraq today would give the same advice. So keep a small portion of your wealth accessible as your ultimate insurance policy against catastrophe. This protects you financially too. If there ever is another 1929 style crash, when shares lost 90% of their value, you will have some wealth on hand to purchase those distressed assets.
Good luck and well done so far.
Thanks for the advice. Ill definitely check that out.
in lieu of investments, funds etc.
Invest in some life experience - travelling =)
No better time to do it!
Yeah got a overseas trip planned for next year, cant put it all in the bank!
$50,000 savings and you are 20 and studying full time, you are either drug trafficking or prostituting yourself.
OP mentioned he lives at parents.
So OP gets free food, free accommodation, free internet. so he can save $1000 a month easily (he is working part time so he earns some money).
if this $1000 put into a savings account over 4 years you'll end up with 48,000 in bank account even without interest. when we take the interest also into account then it exceeds 50K.
to OP;
Don't jump into Share market without closely monitoring the market trends.
If you buy shares at right time and sell at right time you are on path to be a millionaire soon.
but if you buy at the peak of market and sell in a down market then you can loose all your hard earned savings soon.
Lol, no.
It all comes down to how much risk you are willing to take.
You have to understand the products that you are investing in.
e.g. No point investing in Woolworths if you believe the big foreign chains are going to come and take over.
Firstly. Buy yourself a life. At 20, living at home and, i assume, ferreting away your casual wage, i would stop and take advantage of your age because at 4% per annum, your youth will be a blip
put it towards a home loan
20 with 50k savings?
may I ask you what you do? as you have asked us all for suggestions?
all this time you still haven;t said what it is exactly you do,,,, just want help from us lol
Depends on what you plan to do with the money, and when you will need the money e.g. If you plan to use the money as a deposit for a house in 3 years then I would probably avoid high risk investments like shares, and leave the funds where they are.
Also depends on how much risk you are willing to take with they money. Invested in shares your $50k could easily become $45k or lower, in a very short period of time. If this doesn't bother you then perhaps consider shares or EFTs with some of your funds.
sport and racing arbritage and doing it carefully and wisely
buy a unit
As a 19 year old…
Umm..Yeah
Full time study with 50k o.0
know dat feel brah :'(
Parents probably throwing pocket money at him.
before investing in anything other than in the bank, you need to seriously ask yourself about 'time-frame'. If you can't be certain that you can leave it in for at least 8 years, then you should stay away from shares etc. They can drop at some point and you do need to have the time to leave the money in for the eventual recovery.
It's not that unbelievable. I'm 20 and have saved $30,000 (some of which I spent on a car) while studying full-time and working 10 hours a week (in retail) for four years. I do live at home but buy my own food, pay for my own petrol/registration and insurance.
There are very legitimate ways of saving money as a young person. It just involves not spending lots of money on alcohol.
Good job OP :).
BRK/B enough said….you can PM me and for $50 I can walk you through setting it up….oh yeah I did meet the great man earlier this year at the AGM….
As world renowned economist and tax expert Wesley Snipes once said.
"Always bet on black"
I'd be hitting Crown Casino. What could possibly go wrong?
he prolly has a scholarship, good work
Any possibility of opening a business in a related field to what you are studying, or buying over an established one when you have more?
If you are still looking … I'm trying to get back into credit notes (I think it's called).
Basically, using notes set up on the share market, you would be loaning your money to a company (I'd stick to companies that seem safe, but that's me) which saves them borrowing from a bank. They then pay you a bit more than you would get from a savings account, but you have to know how to sell the notes if you want to get out before the notes expire. (Usually at expiration you are handed shares worth about 100-107% of what you invested … getting out earlier lets you avoid having to sell the shares as such)
The thing is, finding out what is being issued, when, and deciding if you'd feel safe lending to that company or not.
That's really impressive! Out of curiosity, were you studying full-time too?