What Would Be a Good First Investment for a 19 Yr Old?

L[Deactivated] on 07/11/2019 - 12:04

Hi all,

I've been saving for the last few years, and haven't invested any of it but now I want to look into some investments.
What would be a good start?

$60,000 in savings as of now.

I'm after something more liquid, I've been thinking about an investment property (an affordable 1-2 bedroom apartment) but it might not be a good idea as there's a chance I'll start studying in the next coming years, which could halve my income, and if the property goes vacant, I could struggle to make repayments.

Any advice is appreciated.
Thank you all.

Financial Investment

Comments

  • bossmode on 07/11/2019 - 12:08
    +9

    Life experience is intangible and invaluable as you enter the workforce. Consider putting aside 10% of your 60,000 towards a holiday or something that will broaden your perspective and view of the world.

    • Kangal on 07/11/2019 - 13:34
      -3

      Yeah, we don't have enough information to make a proper judgement/advice.

      What is their career and job plans?
      Their living arrangements?
      Support from family or friends?
      Other tangibles?

      I would most likely keep $20k out of it to spend on things I might need to, and stick that $40k into a slow/long-term stock options.
      Most millionaires are old people, made from their house prices increasing, and the power of compound interest. Does OP want to have good retirement options or be a millionaire?

      Here's how compounding interest (10% pa) can accumulate until retirement of 65yo:
      From 1yo, paying $1 a day ($30 month) = Total Savings $20,000 = Total Investment Accruement $1.1 Million
      If starting at 10 years old, $50 per month = Total Saved $33,000 = Total Accrued $1.1 Million
      If starting at 20 years old, $100 per month = Total Saved $54,000 = Total Accrued $1.1 Million
      If starting at 30 years old, $250 per month = Total Saved $105,000 = Total Accrued $1.1 Million
      If starting at 40 years old, $800 per month = Total Saved $240,000 = Total Accrued $1.1 Million
      If starting at 50 years old, $2,500 per month = Total Saved $450,000 = Total Accrued $1.1 Million

      So if you left $40,000 sum, at the age of 20, to compound interest at an average of 10%, for long-term (45 years) investment.
      Your final accruement will be roughly $2.95 Million Dollars. If it was upto me, that's what I would do, and sleep well at night knowing my future/retirement is secure. You still have your 20's to save up another $50,000 to start a business, buy a house, make investments for spending purposes, etc etc.

      So OP you're well ahead of the curve, I only wished someone gave me this really useful/important advice (failure of family and the public education I guess) when I was younger :'(

      • chobani4lyf on 07/11/2019 - 13:49
        +7

        Not sure where you are getting average 10% return but please let me know.

        • Kangal on 07/11/2019 - 16:14
          -3

          Over a long-term, that's what it equals to.
          Some years it will be slow such as 5% other years there will be lots of prosperity like 15%. The 10% figure is something that's agreed upon for passive long-term (20 years) by the industry. If you are an active investor, you will see much higher and faster returns.

          Regardless, of the actual rate (11% or 13% or 9%), the gist of the point seems kind of obvious to show how compounding effect works.

  • navyskies on 07/11/2019 - 12:08
    +8

    $60k in savings at 19 is fking amazing. I think I had……3-4k at that point?

    What's your secret?

    • [Deactivated] on 07/11/2019 - 12:13
      +4

      no secret, I've been working full time for a year and 9 months as an Inventory person in a fulfillment center. Pay is good, I work a lot of hours and my expenses are low, but this is not a career for me so I will be looking into something else in the coming years. Lots of uncertainty.

  • [Deactivated] on 07/11/2019 - 12:17
    +3

    You have the equity but you lack the stability and the knowledge.

    Just because you have one resource doesn't put you in a position to invest. You need all three of the above.

    Consider differing you investment until you know what you're going to do. There's no point committing yourself to a lucrative investment and condemning your career.

    • [Deactivated] on 07/11/2019 - 12:20

      makes sense,
      thanks for your response.

    • pencilman on 07/11/2019 - 12:37
      +1

      Agree. Invest in yourself and develop a 5 year plan. You've already shown that you have the capacity to save.
      But put what you can into growth investments.
      Personally I like something like the Vanguard Australian share fund or ETF.
      But in the current environment, not cash.

  • mrkorrupt on 07/11/2019 - 12:25
    -4

    bitcoin

  • dcep on 07/11/2019 - 12:26

    use that as your tuition fee

    unless your family already have that covered for you

  • djkelly69 on 07/11/2019 - 12:31

    Definitely not direct property.

    I would do some research into shares, EFTs, managed funds, etc.

  • idonotknowwhy on 07/11/2019 - 12:33
    +5

    $30,000 in here. Keep this in case the markets tank while you're studying (you don't want to sell your investments for a loss).

    $30,000 in here Hold onto this for as long as you can, and contribute to it each time you have another $2,000 to invest. Buy it via this

    Also read these books

  • Seraphin7 on 07/11/2019 - 12:37

    Some form of equities (covering local and international equities) index fund(s), whether via ETF or platform.

  • Riczter on 07/11/2019 - 12:57
    +1

    I would keep 20k liquid, 20k in vanguard/index funds and 20k in RateSetter. If you use a referral link for ratesetter you also get a free $50. This link should pick a random ozbargainer's referral code if you are interested in signing up: https://www.ozbargain.com.au/api/referral/393

    • virhlpool on 09/11/2019 - 15:47

      What's the risk with Ratesetter investment for say 1-yr duration?

      • Riczter on 10/11/2019 - 00:45

        Im no expert so do your own research, but I believe it to be a pretty safe investment. No one has ever lost a cent of their money on ratesetter in Australia, thanks to their provision fund which covers any bad debt and people not paying up when its due. The main concern and i guess the main risk of ratesetter is that the provision fund would likely not cover everyones bad debt if the economy crashed and australia went into a serious depression. Then it is likely bad debt would skyrocket, the provision fund would be used up and investors would lose some or all of their money. However the likelihood of this seems relatively low, and if it does happen it would probably have a massive negative impact on whatever investment vehicle you choose anyway. So for me, with the ease of use and relatively low risk its a good investment for me. Simply chuck some money on, set it to reinvest at the end of the term, and leave it alone, and you get no stress, easy, high interest :)

        • virhlpool on 10/11/2019 - 08:26

          Thanks. Ratesetter investment makes sense only if you invest for 3 or 5 years. For month over month, the interest rate is very low and they don’t have 1 or 2 yr options.

  • Typical16-bitEnjoyer on 07/11/2019 - 13:02
    +1

    You're 19 and considering study. Whack 50k in term deposit/interest accruing account for 12 months. Your situation may change and jumping into a property with your situation doesn't seem wise.

    Spend the remaining 10k and travel for 3-6 months. Go backpacking through Europe. Visit South America. Get some life experience and enjoy yourself before hunkering down for study.

  • kahn on 07/11/2019 - 13:07
    -4

    You're 19 and you want to invest? Y'know, a 19 year-old with $60,000 is like a mule with a spinning wheel. No one knows how he got it and danged if he knows how to use it.

    • idonotknowwhy on 07/11/2019 - 13:25
      +1

      That's why they're here, asking for advice.

      When 'dumb' money acknowledges its limitations, it ceases to be dumb.

  • JTTheMan on 07/11/2019 - 13:46
    +1

    Well done is all I can say!

    I wish I had $60000 saved at 19, that was 26 years ago and by now I would have been very rich if I knew how to invest even small amounts.

    It can be dangerous listening to external advice as no one can really predict the future and everyone acts like they know the one answer.

    I think you should just use a common sense approach and you'll do well. But one guarantee is with inflation so slow it's best to get it out of the bank and into something that looks healthy. Property is always guaranteed to grow in future, regardless of how bad it looks in the short term.

    It's very hard for a 19 year old to think about 10 years down the road and I definitely couldn't do it when I was 19.

    • [Deactivated] on 07/11/2019 - 18:12
      +1

      Yep I really can't think 10 years down the line but I'm just trying to make some decisions now that the 29 year old me could benefit from.
      Thanks for your response!

  • RM on 07/11/2019 - 15:01

    Well done mate. Well begun is half done, you are certainly on the right path.

    All I can recommend is live it + save it. Don't be heavy on either side - so save some and spend some.

    Reg investing this - how about talking to someone senior in the family, someone who has proven record of creating/multiplying wealth? Parents/elder siblings/cousins?Doesn't matter how small it is - someone who has done it for themselves are more likely to suggest you (correctly).

  • cashless on 07/11/2019 - 15:04
    +2

    ETF's. Start here

    • idonotknowwhy on 07/11/2019 - 16:29

      For sure, but with at least a few months of living expenses in cash, to avoid selling at a loss when out of work (which is likely to coincide with a market downturn).

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