Hello, hope this is the right place to put this.
I'm inheriting ~$30,000 from my grandfather who sadly passed away this year.
I have never had anything like this happen to me before so I'm not quite sure what to do.
I'm thinking of investing it but I'm not sure what I should put it into - housing, interest, stockmarket etc.
I'm not interested in anything risky such as cryptocurrencies.
Any advice?
Thanks.
Should I be deleting this?
If your username can be traced back to you, yeah. Also I'd take out any specific details, or 'salt' the post. So e.g. if you're actually inheriting $50,000, put $35,000 in the post. That kind of thing.
I should be good then, thanks.
@jez24: Haha all good. Actual advice wise, if you don't have much experience investing, and if you're like me and don't want too much trouble, look into ETFs. Or otherwise just walk into your local bank branch and ask to talk to someone - they'll be happy to have the opportunity to get your business. Just be ware of fees and commissions that they charge.
With the Royal Commission underway though, there's probably no better time to actually get good advice from the banks.
With the Royal Commission underway though, there's probably no better time to actually get good advice from the banks.
Interesting. I thought otherwise.
@jez24: I have friends working in basically all the big banks - everyone is absolutely paranoid and on tiptoes to not garner any extra attention from the Commission.
+1 on the ETFs.
That's a nice little amount, but not large enough that you'll need to get too fancy to invest.
There are some great, established ETFs that you can spread your investment across. It'll be a good, relatively low risk experience too if you haven't done the stockmarket thing before.
Check out CanStar for a bit more background on ETFs and ratings for each.
Start with barefoot investors book as this will give you a good plan going forward.
term deposit
Its too much to worry about, I will take care of it for you and spend it wisely ;)
Stick it in a term deposit or high interest saver until you have a definite idea of what to do with it.
$30k won't go far in Sydney or Melbourne, but there are plenty of places in Australia where that would be a good start on a deposit for a house.
$30k?
Offset your mortgage.
No mortgage? Use it as downpayment.
Already have a house and no mortgage, put kids through school and provide activities and trqvel to eye opening places.
Fully paid house and no kids? Hookers.
and travel to eye opening places.
this..
might not seem like the wisest investment, but I bet you'll remember your grandfather and the gift he left you way more when you're older when you think of the places it allowed you to see, rather than an ETF balance ;)
You need a better idea what you want out of it. Ie whether you want a long term investment, or a short term while you save some more for a house deposit. What is your risk appetite? Obviously not crypto’s, but shares are more risky than property.
Would your grandfather want you to use it for luxuries (holiday/car) or think you were foolish to not invest it and make it grow.
As mskeggs says, term deposit until you work out what you want in the long term.
yeah…depends on your life situation and your age…
start with a RAM online saver account that gets 3% and then look at your options.
Either a managed share fund or something.
Sorry to hear about your grandfathers passing.
First you need to consider the relationship between risk and return. Greater the risk means the more likely you will lose money in X years over a 20 year period. Higher the return means the more money you earn.
There's several options you can look into:
Investment accounts - cash management funds (savings account) and term deposits which are low risk and relatively low return. e.g 0.5% p.a to 2.5% p.a
Superannuation - depends on your super fund and investment strategy, the core strategies are usually medium-high risk but yield medium-high returns. Usually around 6-9% p.a. However, the money will be locked out until you retire or look into buying a first house.
Debentures/unsecured notes - where you lend the government or a company X amount of dollars and they will pay you back with X% amount of interest p.a. The risk depends on the likelihood of the company going into liquidation. If the company liquidates, debtors will normally repay individuals with debentures first and unsecured notes last. This means unsecured notes are higher risk and higher return compared to debentures. Debentures/unsecured notes usually pay interest every quarterly and have a loan period meaning that you won't be able to withdraw money for X amount of years (like a term deposit). For a well known company, the risk is usually low. e.g Westpac debentures yield a return of approximately 3% p.a. Less well known companies could yield a higher return of 5% but there's a higher risk of liquidation.
Property - $30,000 won't be enough to put into property.
Managed funds - A bit of every type of investment. You can opt in for an actively managed fund where you give you money to a fund manager and they will use your money to buy a bit of everything e.g stocks, property, shares etc. Usually the return is higher as the fund manager is trying to beat inflation but also runs a higher risk as you're trusting the fund manager not to go into the negatives. Then there's passively managed funds e.g ETFs where a company will buy shares proportional to their market share in a particular exchange. If the stock exchange rises, then your investment will rise. Passively managed funds don't yield as high returns as actively managed funds but the rationale is that most of the time you will gain some sort of return as the Australian share market is always growing (unless Australia goes into recession or depression).
Shares - Buy shares from a company on an Australian or foreign stock exchange. Shares are unpredictable so they are high risk and high return. Blue chip shares are the safest i.e Large companies that will always grow in value like Qantas or a bank. Buy low and sell high. Reading the news is a good way to predict which shares will go up or down.
I recommend using the moneysmart website to have a look at your options.
What you choose to invest in will depend on the risk you're willing to take and the returns you want. It's all proportional to some extent.
Some concrete advice. Citibank is offering 3.98% per annum interest for 6 months. Do that while you consider what you wanna do.
On a 6 month term deposit, when you invest $250,000 or more with half your funds in eligible investment products.
Is this the one you're talking about?
hmm I was walking past Citibank and I saw the sandwich board. It didn't say $250000. In my state anyway.
If $900 extra a year is useful. Rams is a safe bet until you decide.
Personally I'd invest in top bluechips with high dividend, aiming average of 7 or 8% p/a incl. franking.
Term deposit with various expiry dates. And live off it a bit at a time whilst you salary sacrifice the max. into Super.
If you have a girlfriend or non married partner, i wouldn't be telling her
FIRST OF ALL - DON'T TELL ANYONE WHO DOESN'T ALREADY KNOW!