Just wondering where to invest $400,000.00 for a 12 month term maybe longer for the highest interest? I would appreciate any information as I have no idea and banks seem to have very low rates, thanks in advance.
Where to invest $400,000?
kim65 on 09/07/2015 - 16:33
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in the bank.
Yes. In my bank, specifically.
Hello there Ughhh pug.
Herro what.
Invest in Pug bank!
put it on red.
I subscribe to the Wesley Snipes school of investing: "Always bet on black"
@Scrooge McDuck: Not that I'm aware of. 0 (or 00 in the US), is where the house gets its edge. AFAIK, 0 is neither odd nor even, neither red nor black.
Then negative 0 must be odd.
No.
- An even number multiplied by -1 is even.
- An odd number multiplied by -1 is odd.
If you play roulette (a silly thing to do expecting to win, but anyway) and you place a bet on 'even' and the ball lands on 0 or 00, you lose. As far as a roulette wheel is concerned 0 is not an even number. You can argue with the croupier, but if you kick up too much of a fuss you'll be asked to leave by security.
You're right that zero is an even number, but the casino won't care. Anyone with a passing knowledge of mathematics wouldn't step into a casino anyway.
A rational mathematically literate person would "step into a casino" if they seek risk, count blackjack cards, skilfully throw craps dice, are competitive at poker, or are bonus hunting.
@Scrooge McDuck: A rational mathematically literate person would know that the term to describe mathematical literacy, is to be numerate!
A literate person would know that the term to describe mathematical literacy, is numeracy!
Fixed for you.
@Scrooge McDuck: Oh my, still wrong, since knowing the term is a matter of vocabulary, rather than literacy.
No no! Black!
I hear the Shanghai stock market is a great place :D
In reality, a high interest saver account like ING or Ubank is relatively low risk and are still returning over 4%. edit: "if it were me," I would split it into two accounts to ensure you stay under the government guarantee threshold though.
In reality, a high interest saver account like ING or Ubank is relatively low risk and are still returning over 4%.
You haven't checked that for a while, have you?
Damn, that happened quickly. I thought I had moved to ING at still over 4%, apparently it was 3.75% now down to 3.5%
Stupid RBA.
The RBA is not stupid. They make informed decisions in the best interests of the national economy.
@brownhux:
Must be struggling with a mega-mortgage or missed the /sarcasm.ZIRP has failed everywhere in the world, but I guess Australia is different and doing the same will work for us… because like Kangaroos
@CheapandUsed:
Couldn't disagree more about the success of ZIRP globally. Has kept the wolf from the door in US, and now Europe is turning around too.Its only recently that 'economists' (and I use that word loosely) are starting to realise that low rates have helped big business and the 1%, but screwed everyone else.
http://www.abc.net.au/news/2015-03-11/jericho-the-interest-r…
http://www.washingtontimes.com/news/2015/apr/20/richard-rahn…
This one seems to have the better summary;
"First, the primary effect of low interest rates on wealth is exactly nothing. For every borrower who pays $1 less in interest, there is a saver who receives $1 less in interest income. Any economic growth is second-order; lower rates transfer wealth from savers to borrowers."http://www.pbs.org/newshour/making-sense/real-financial-mons…
@CheapandUsed:
And that is just the point. Savings don't stimulate economies, borrowing does. It allows small business to take out loans they otherwise couldn't have afforded and grow their business, and then employ more people. These newly employed people are then able to borrow because of their new job, and borrow more because of the low interest rate. They borrow to build a house which then sends the money to the tradies, who use it to employ more people and so on and so on.Borrowed money flows through the economy, savings do not. This is one of the most basic economic principles.
@Notalotofmoney: Unfortunately that's not how the banking system works. You need to read about Fractional Reserve Banking and watch Money As Debt
@ScroogeMcChicken: The most important aspect that's often overlooked (and was mentioned in the Money as Debt video) is sustainability. As humans (and Australians in particular) we've had an extremely fortunate run in recent decades but we can't pretend the "Australian dream" will be sustainable when the earth's population swells to 11 billion people and beyond.
Well.. it is rallying back for the second day. :)
RAMS 3.6%, ING 3.5%
they have limits ..
RAMS has a $250k limit and ING $100k.
That's $350k with some of the highest savings rates, tons higher than Westpac term deposit rates.
Damn, Wish i had this problem.
Invest in me!
If you're thinking about high interest saving accounts, be aware that there's usually an up-to limit, to which the high interest will be applied, any amount higher than that limit will be on the bank's normal saving interest rate.
yes, often around 100k or 200k.
My offset account ;)
That perse is not a bad idea for the OP if you have friends whom you trust and they have mortgages,
Instead of Putting the money in a no interest account, you can keep them in your friends offset account and he pays you 0.5 less than what the bank would have charged him.Ofcourse important to have the trust in the first place.
Tax Man ain't gonna like that!
Thankfully nobody can be trusted these days.Why? It's perfectly legit to lend money to friends as long as you declare the interest as income. Having said that one would be crazy to do that regardless of how trustworthy their friends or family.
People have killed/disowned family for much less. The love of money is the root of all evil. Rather not put people in that situation..
The love of money is the root of
allmany kinds of evil.People have killed/disowned family for much less. The love of money is the root of all evil. Rather not put people in that situation..
Well I guess you know your people the best, there is a risk with everything.. but you know how much your people are good for.
You can say the same thing for lack of money. "The lack of money is the root of many kinds of evil."
Ofcourse important to have the trust in the first place.
The reason why you get a bit more money from this is the increased risk - your mate is much more likely to default on you than a major bank.
Invest in Eneloops. It's an OzBargainer's choice of currency!
Man.. Thats enough eneloops to light up OP's suburb
Personally I'd buy a BMW M3 and put the rest in whatever deposit gives the highest interest.
You and me both.
"Here in my garage, just bought this new BMW M3 here.."
ill take you on in my Mercedes-AMG GT
I'd take a Tesla Model S P85D
0-100kmph in 3.2 seconds and not a drop of petrol used
Have you heard about great investment opportunities in Nigeria? Your $400k in an escrow account will give you access to over $30 million. I can put you in touch with my local broker/prince and get the ball rolling.
All jokes aside, you should consider doing more than just "throwing it in a bank" - the highest % interest you'll get is 3.6% (with probably a 250k cap) and 3.5%. You can EASILY get well over 5% by investing differently, stocks are good, some stocks give more in dividends than 3.5, let alone value increases. E.g. Commonwealth bank has a dividend yield of 4.86% recently. That's far better than 3.5% when talking such big money, and it's also gone up over 5% in value (peaked at over 10% increase) in the past 12 months.
8 or 9% is not out of the question if you invest wisely in a good range of things. Of course, put some of it safely in a high interest savings account (perhaps 100-200k), but you shouldn't put it all there.
3.5% will only yield you $14k in the year, but if you get a reasonable 7% that's already double what you'd have otherwise gained. Free $14k for very little effort.
Stocks crash, really quickly too, just ask me how I turned a loose $26k into a $15k debt in Dec 2008.
If the OP is investing for just 12 months and needs to still have $400K at the end of 12 months then they should stick with a bank.
If the OP is actually able to invest for several years then they should consider shares.
You're doing something severely wrong if your shares turn into a debt.
you heard of a margin loan?
@Davo93:
Ha, you have obviously heard of a margin loan but don't understand how they work.The bank would force you to sell your shares well before you lose all your capital let alone get into negatives. He must have been drawing from his home loan to invest in regular shares or buying/selling CFDs
@Devils Advocate: Obviously you don't understand margin loans. The bank forces you to meet margin calls which means coming up with more money to buy more shares or pay down some of the loan. At the end of the day the bank doesn't give a feck what happens to your capital, they are only interested in the loan that they gave you.
In my case, after 7 margin calls I was cash broke. I had to sell off the stocks and settle the margin loan by taking out an unsecured loan for $15k.@RustyStainless:
Did you read my comment? Where I said the bank forces you to sell the shares (to meet the margin call). There is no provider of margin loans in Australia that lets LVRs go above 80%. Therefore, it is impossible to go from having $26k to having -$15k with (only) a margin loan (you still own 20% yourself at an LVR of 80% which is the margin call).Sounds like you got in too deep. You shouldn't have had a margin loan if you didn't have the capacity to meet potential margin calls. Also, how did you lose 100% of your capital (if your second loan was only 15k, you must have lost it all)? Sounds impossible / a lie.
@Devils Advocate: I did read your post and I don't really think you understand the realities of a margin loan, and YOU didn't read my post properly. The bank DOES NOT force you to sell shares, otherwise you would be lowering the value of the share holding in comparison to the loan amount. You have to BUY more shares or find extra funds to pay down the loan. The theory is that if the market is falling you will be buying shares at a lower price, and if you can ride it out you will be rewarded with good leverage.
Looking at the 80/20 lvr that you mentioned, say you start with $20k, if the value of your stocks drop and you have to add $35k worth of shares to maintain the original $100k (80/20) then when you sell at $100K, $80K goes to the bank and your remaining $20K goes against paying back the $35K additional that you had to get from somewhere. That still leaves a debt of $15K.
As I mentioned, through 7 margin calls I kept topping up the the shares. What this means is that those extra shares that I bought along the way were also losing value. That's the problem with margin loans - they can amplify your gains in good times, but they can amplify your losses in a crashing market.
And that was all in the space of 8 months for me.
lose*
This is absurd advice for a 12 month investment window.
if buying short and have the ability to foresee the market then it is good. I have bought Blackmore and Bellamy and Medi bank private.
I can't help but say, well done! Take your results and exit the market and spend time learning about investing.
If you genuinely have the power to foresee, tell nobody, but private message me and we will have riches.@mskeggs: Forgive my mistake, what I mean foresee is that you analysis and make a choice out of the most possible uptrending stock, the reason why I bought Blackmore and Bellamy share is simple, President Xi came to BNE and sign lots of deals, Chinese loves Aussie chemist especially Blackmore, they also love baby milk powder especially bellamy. Done. It seems so stupid analysis but that makes me some money(i actually did some of data analysis though, but i guess i am not confident enough to rely on data analysis only). But I agree with some of comments here that 12months is short for investment in stock market and it really depends on how much risk the investor is willing to take, and 400K is clearly too much to have fun in stock market for most of people.
@JackyQ:
I understand your point, that you made investments based on the individual business circumstances that resulted in a profit. That is how most investors choose investments. But if you had made similar decisions on October 16th 1987 you would have lost 1/5 of your investment the next week, even if your strategy was perfectly correct.
The reason a 12 month investment window is problematic for stocks is if you happened to be so unlucky, you might be forced to sell your position before the share price recovered.
If you invest with say, 5 or 10 years of an investment horizon, you can recover from most short term set backs.
For the record, I think the share market is very risky this year, and the chances of a substantial fall are significant. And I think this risk will remain as long as distorting zero interest rates remain.
You will need to work out whether the possibility of missing out on returns from the market in the short term is worse than the possibility of losing a chunk of your capital in a crash.
Nobody knows for sure. With hindsight we should have all bought investment properties in Sydney!My take away is that even at pitiful low rates I have about half my retirement funds in cash.
bail out greece
I think he'll actually want his money back, though.
How old are you if you don't mine me asking.
Bitcoins
What are you doing here?
I had the same issue, October last year. (First world problems…)
I made two ing high interest online saver accounts and put in 150G in each to earn interest. The remaining 100G i put in shares. CBA, BHP, (which gave a bloody great freebie with a south 32 demerger ($1680 free overnight in S32 stock)
Anyway i could go on with other companies but the trick is to find the ones that pay the highest dividends and hold on to them as long as you can (years) you get paid free money for just part shareholding in their company!
Buy the way, each time you buy or sell stock you are charged a brokerage fee. I use ANZ etrade and costs me $19.95 each buy or sell.But definitely keep most in holding in a high interest acccount, the rest invest in shares! I watched my grandmars from the day she bought hers (paperwork of the anount she invested and when with CBA) and today and the gets 65G a year in dividends alone, forgetting her shares have more than multiplied, they mutated!
You gotta know when to hold'em, know when to fold'em, know when to not sell, and never run.
Good luck.
Ps just recently I took 90G out of my ING and purchased land, from a deceased estate, and sold it 4 weeks on for 120G (back in ING)
CTG is gonna be the death of me but its all from 400G I never had so I can't cry over milk I didn't buy then spillBHP, (which gave a bloody great freebie with a south 32 demerger ($1680 free overnight in S32 stock)
This isn't exactly true. The value of BHP stock fell by approximately the amount that was demerged at the time of the split.
True but have you seen the new sites BHP have sourced for extraction. 1-2 years we'll back up!
My eyes hurt.
Talk to your financial planner, not sure advice from strangers on the internet is wise for this sort of thing…
not sure if i agree on that…
I know this Nigerian prince who need some money to get his millions out! He sounded like a really nice guy, hell I will even split the differences with you.
Or Eneloops, lots and lots of Eneloops. They are like bitcoin from OZbargain.
Joke has already been made, above
I would suggest you see a private wealth consultant. They will be able to assist.
This is also absurd advice for a 12 month investment window.
Invest in OzBargain :)
If only they listed on the ASX i would
Cmon scotty!
rams is good
or bankwest qff card, gets u 144 points per 100 per year = 576000 qff points = 4 business class RTW tickets i beleiveI wonder whether guys suggesting to go to a financial planners go to them themselves.
I have been there and for one year they tell to put money in a term deposit, and it makes sense. Anything else in such short term is higher risk unless you are smarter than guys working for banks full day but then why would you ask the question here?:))
This is good advice ;-)
yes except the term deposits are less interest, better do a savings account at the moment.
How much are you paying/week in rent at the moment?
With 12 months you should aim to get your money back as your first priority.
That means term deposits, high yield savers. Shares have a significant risk of loss, as does real estate or other investments over this time frame.
If you do go with a bank, use two unrelated banks with half in each (you will probably have to do this anyway and the headline rates are often only for balances up to $100k or $200k). The AU gov will protect up to $250k in Australian authorised deposit taking institutions if there was a Greece style disaster here.Bank is very safe but you won't make that much money over time (due to inflation of 3.5% cancelling out interest of 4%).
I would drop a deposit on 2-4 houses and rent them out. You would be set for life.But considering its a HUGE sum of money you really should consider a financial planner.
Could you explain how you would be set for life with a $400K investment on 2 - 4 properties? You would be hard pressed to rent them out with enough income to cover the mortgage, let alone rates, repairs, insurance, strata. Property prices are booming now however it is always cyclical and I doubt they will continue to rise as they have in the last 12-24 months.
Besides the OP needs the capital back in 12 months. If you can make $400K profit in 12 months on up to 4 houses borrowing from the banks (assuming they would lend you the money to start with) then you will be the new OzBargain guru and we will genuflect in your presence.
I think the suggestion of a financial planner for a 12 months investment is myopic.
DealzEddy123 on 09/07/2015 - 16:42 Comment score below threshold.
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