I earn $55,000 a year have $200,000 cash from an investment.
How do i build wealth? i am 39 y/o.
SHould i buy a property and fulfil the Australian dream ?
I Have $200,000 Cash - Should I Buy a Property?
Sam Sharik on 04/12/2019 - 16:47
Comments
Look at what's happening to Deutsche bank shares.
Banks can't make good profits in low interest rates
Invest in Lego. It's more lucrative than the housing market
You sureš???
Look into it
Dont invest in property. Buy a car and do Uber and put all the money into Telstra shares and earn dividend.
Please educate yourself and ask professional adviser for investment. Everybody have different risk appetizer and P/L expectation.
A good deal for me might be toxic to you. Asking strangers online for investment advice is one of the receipt to hell, in most of cases.
Do you really trust financial advisers after hearing all these horrible stories from the Royal Commission ? I'd rather do my own research ! If they have so much so called good advice, they are all billionaires and no need to work. These so called financial advisers are simply car sales people.
Agree Queen Muffin !!
Have you actually talk to more than three advisors or just reading some news?
I don't like Trump at all, but fake news is real if you are not carefully chose your source of information.
Yes, I been to a few financial advisers at the banks. All trying to convince me to buy their bank products. Lucky I didn't listen to them or else I would have ended up like one of the victims in the Royal Commission.
@Queen Muffin: Come on, Miss Muffin, at the banks?
I would not call them advisers, they are sell reps.
Housing = long term investment. Location, location, location!
30 minutes commute to a CBD
5 minutes from schools
Close to schools, hospital and Uni
Close to road and rail
Away from high flood/fire riskThen you'll have somewhere you can rent out relatively easy.
Look for a place with dual occupancy potential of a granny flat for better yields.
location is the key - i agree
Vanguard ETFs.
was looking at this unsure , looks good on paper but conflicting stories
What are these conflicting stories?
That's quite an achievement. I personally would buy a house. You seem to have other shares and a business, what else would you do with the money? Tijuana tour?
thanks.
This thread is going to go down in ozbargain folklore. Along with the Mercedes guy
Red/black
No one has mentioned buying and selling foreign currency as an investment yet. I think buying pink diamonds or any type of precious stones are also good investment but I'm yet to find out how.
More information on your person situation required.
Single/ Married?
Living arrangements?
Goals?Single
Renting
Retire asap
Retire asap
If you want to retire early, a FIRE (Financially Independent Retire Early) sub is probably a better place to get info than a consumer spending site's forums.
https://www.reddit.com/r/fiaustralia/
https://www.reddit.com/r/financialindependence/
https://www.reddit.com/r/Fire/Id learn about Index Funds if I were you.
I read some of the comments here and would have to say:
- Do NOT put a lot of money in crypto currencies
- Do not try to time the market
- Do not buy individual stocks.Read this book to know more about index funds:
https://www.amazon.com.au/Little-Book-Common-Sense-Investingā¦You've managed to save up 200k on 55k/year so you probably don't need these but could be worth a read anyway:
https://www.amazon.com/Millionaire-Next-Door-Surprising-Amerā¦
https://www.goodreads.com/book/show/1052.The_Richest_Man_in_ā¦ (This is a very entertaining book imo)good advice. much appreciated
Why do you want to retire asap?
Life has too be more than slaving oneself to pay bills and then die.
You might be my doppelganger judging by your goals
if you want to make money buying a property is dead money if you are scared of life ubank saver/property is the way for you
Are you offsetting against mortgage? Another long term investment is putting more money in super
How did you inherit the 200k?
Not inherited. Profit from an investment
Make another investment
have you accounted for tax on that investment
of course
At 55k/yr, how is Op going to service the loan?
200k in the bank is great but is any of that from genuine savings given that you rent.
Are you single or with family/dependants?
Where/ what are you looking to buy?
Single - maybe buy a 2-3 bedroom house
Uber: What is an hour of your time worth? if you are employable, then rather than part time at $x per hour plus uber at a lot less, simply work a few extra hours retaining free time at your higher rate.
Don't give away your life for less than it's worth, every hour of your life you sell to your employer is non recoverable, make sure the remuneration for it allows you to spend the remaining time as you would like.
Good luck whatever you do, work out what kind of risks you want to take (age/family is a factory here, I'm pretty risk averse regarding my families future, I'm sure I could have made more $ but at the cost of more risk than I was comfortable with). Get educated financially so you don't get taken for a ride by someone who is.
Sensible words. Thanks
First mistake is to ask us.
Why not speak to a "financial advisor"?
Talk to your bank manager.
Place as much as possible back into Super.You sound gullible in electing to seek advice from this site.
Do not place your money in any "hair-brain" schemes.A fool and his money is quickly parted!
I would disagree - I think I have gained some useful advice with this post.
Barefoot investor says houses aren't a great investment these days, and I would tend to agree.
Investing in the top AU stocks in a aggressive portfolio seems to yield higher and more reliable results.
Buy yourself a home. Itās a tossup whether property is a good investment or not, but a home gives you security from eviction, a firm base to grow from, the comfort of ownership (renovate, decorate, etc), mortgage repayment replaces rent, etc. Itās a sensible optio ( assuming you intend to live/work in similar area).
Thanks
You have already amassed 200k from an investment, why not continue with that one?
i have investments.
Would you care to share what kind of investments you have?
Buy an old house.
Buy Ozito Power-X tools from OZB when on special.
Fix old house with said tools (And youtube / google search).
You really don't need to spend much $$ on tradies or materials, its mostly labour.You come out the other side with:
- A house the way YOU want it.
- The knowledge of how to do everything you have done.
- Getting out of the rent trap, and crappy landlards (Typo for lards but it seems better).
- Freedom! you can do what you want when you want!
- A house that is worth significantly more than you paid.
thats an option
Really depends if you have the aptitude to renovate, some people just cant use a screw driver.
I basically did this 3 years ago, nearly finished my renos. One of the next jobs I am going to do is turn it from a 3 bedroom into a 4.
I'm doing it right now whilst working a lot more than OP. He should have plenty of time being a part timer.
Its great learning as you go, no time constraints.
lol ozito ftw… not good advice for a newbie. I kind of had this idea before we renovated a 70's home. We found so many random stuff and hidden costs. If you break the structure you then need permits, unless you are cool with removing your reno when you sell. You can do minor stuff if you want, but then again it takes practice to get things to not look dodgy.
I think that's an option for some people but not for most people who doesn't have the skills, time, or patience to get into something so uncertain. One thing is to build a table DIY, but a house is a bit more complicated.
Take your time and learn.
Removing a wall… NOT DIY.
Refreshing cladding on interior wall & painting, DIY it.
Flooring, painting are time consuming and can DIY but can change a houses price pretty dramatically.
Check out this subreddit: https://www.reddit.com/r/fiaustralia/
Lots of similar questions get asked all the time
you make 50k and have 200k from your investment, how about investing the shit out that investment?
yes thats one option
mind I asking what kind of investment you have there? partnership, stock, cryptocurrency or higher yield bmw?
If you are sick of renting, then buy a house. If you saved that much on $55K then you will be able to smash a mortgage in 10 years. I think the reward of owning your own place, where you can live and do what you want to it outweighs "long term investments" for wealth.
true ! thanks
Always consider the option of rentvesting, then live in a sharehouse elsewhere or live with your parents to keep living expenses down.
Look after yourself and just focus on owning something outright by the time you hit 50-55.
Women 18 years of age will let you do very fun activities with them, you only have to take a bus ride in the sky for a few hours. It's also the fountain of youth.
lol fun activities !!
Bus ride in the sky?
Don't buy property just for living in. This is how people get into debt so easily. Only do it for investment and only if you have lots of money backing you up. Mortgage literally translates to death agreement! Rather use that money to enjoy life and not give it all to the banks.
Agree. Same is the case with credit card debt.
You could probably buy a dirt cheap property just outside of the Brisbane LGA (Ipswich, Moreton Bay, Logan) and still have some left over. May have to pay LMI though.
dirt cheap property… for $200,000?
Well relative to most suburbs in the Brisbane LGA. I'm talking like $350k property, you could put down a 70k deposit to avoid LMI and mortgage the rest.
Definitely on Russell island!
Russell island is a joke. Go spend some time looking around there.
@Oofy Doofy: Never said it was good! never actually been there. You been there much in recent times?
@tryagain: Yes.
Unless you like paying 6 bux each way on the ferry, and work in Redland bay area, don't bother.
Walk around, mix with the locals. Get a feel for the place.
@Oofy Doofy: I'm on the GC and staying put, but cheap real estate always interests the ozbargainer in me. From what I have read, there used to be quite a bit of drug problem a few years back, but that has been cleaned up now.
Would be ideal if you liked the quiet life and mostly worked from home but needed to go into the office once or twice a week. But if you had to commute into Brisbane every day it would get very tedious very quickly I would think.
The idea of a glamping set up on a cheap isolated block as a weekender does have some appeal, but the Mozzie population from what I have heard is pretty bad.
You need to upskill/increase your income.
Don't think you have a sufficient deposit or income for Sydney. Could look for property elsewhere
i am in QLD.
Wait for these things to happens ( does not need to be in this order )
- Negative interest.
- Cash ban law, we will know it is a YAY or NAY in Feb.
- If 2. happens wait for one or more banks to 'restructure or refinance' themselves, basically another 2013 Greece debacle.
- Stock market crashes or corrects.
If all of the above happens you may just buy some cheap AAA stock, it will generate far more income than … get into a 500k debt.
Last but not least, buy some cheap Bitcoin. Then sell it in 6 months time.*None of these are finance advice, I bears no liability.
What is AAA stock?
AAA or bluechip. Whichever will crash to their lowest possible price?
Unfortunately it's not that easy, no one knows when things are at their lowest price.
None of your advice makes sense.
You're basically telling people to invest in a sinking ship.
*None of these are finance advice, I bears no liability.
There is a saying "dont catch the falling knife". If people learn to read chart, technical and fundamental analysis, ect … They may come out better off ( financially ) than just watch the dumb box that entertain mindless minds.
Again recession is a VERY GOOD time to make a fortune. One man lost is another man gain. That just how it works.
So you dont like these ideas, what is yours ??
I am in a similar situation and I am not buying a property because:
1) I was conditioned to "buy low, sell high", and it does not feel smart to buy in this market
2) It will be a massive stress for me to commit to mortgage payments, keeping my job will become a matter of survival, loss of financial freedom will be overwhelming
3) I am quite content with the rate of return the managed funds are giving.
4) I am not Australian enough to subscribe to the mantra1) I was conditioned to "buy low, sell high", and it does not feel smart to buy in this market
Worst reason ever.
Land and property value in this overcrowded world will not decrease bar some unforeseen catastrophe (or foreseen aka climate change).
I say world and not Australia, because with such a large population overseas wanting to move to Australia its more of an influence over property prices than most others.
How about foreseenable events such as negative interest rate, 10k-cash ban, bail-in law to protects banks, GFC 2.0, quantitative easing, stock market crash ?
negative interest rate - https://www.livemint.com/industry/banking/why-are-interest-rā¦
10k-cash ban - only affects illegal activities, who don't care and will trade in cash anyway.
bail-in law - TBH, I don't know enough about this.
GFC 2.0, quantitative easing, stock market crash ? - All speculation not foreseeable. (if you can foresee this you can easily become super duper rich.)
bail-in law
https://www.ainsliebullion.com.au/gold-silver-bullion-news/sā¦. It is just a 'flood gate' once it opened, it could leads to 2k cash ban !
quantitative easing
Martin North covers it many time, here one of it https://www.youtube.com/watch?v=_Iub2aUeYsA&t=239s
Here is another angle to looks at it, 10k cash ban and bail in law are to protect the banks. How ? One cant do business without using the bank ( 10k cash ban )> so $$$ must stay in the banks > once enough people default on their mortgage the bank goes under > they use the bail in law to 'restructure' > which in turn take people deposit legally.
*None of these are finance advice, I bears no liability.
Consider putting some of it into your super. Super contributions (to a limit) are taxed at 15%, whereas your income is taxed at ~30%, so you're saving 15% straight up - as long as you are happy to lock it away for another 16-26 years.
This is a bad advise tax wise.
OP's effective tax rate is 19.13% whereas, super is taxed 15%. The difference is about 4%. Not worth locking up your money until retirement age. It is a different story if OP really want to increase his super.The deduction is off your marginal rate, which is 33% for 55k.
With super you are paying effective rate, not marginal. So you need to convert your marginal rate into effective rate. I don't think you know how the tax rate works.
$10,525 is the maximum tax you would be paying for $55k salary. So effectively you are paying 10,525/55,000 = 19.14% tax.
If op has more deductions to claim, he could be worse off. Money could best invested elsewhere rather than locking into your super.
@No ONE: I don't think you understand how tax brackets work. Probably best you don't give people financial advice.
You pay 32.5c for each $1 over $37,000. If your income is over $37k then every dollar over $37k you earn is taxed at 32.5%. If you put that dollar into super instead then it's taxed at 15%.
@macrocephalic: You are actually naive and I don't think you understand what effective tax rate is. You want to advise people on tax, you have to give the the end results.
You are ignoring the first $18,200. Just because it is tax free does not mean you have to ignore it.
Someone on $30,000 annual salary would be paying $2,792 (with marginal tax rate 19%). But in reality you are only paying 9.3% tax on the whole $30,000.
If you were to put it in super (say $30k), you would be foolishly be paying $4,500 in tax in your super account. Now this is your TAX ADVISE!
You have to compare like for like rate, not compare Apple vs oranges.
@No ONE: You're confusing things far too much by trying to factor effective total tax rates in rather than simply looking at the bracket rate.
If he's earning $55k then he's his top amounts are in the 37-90k bracket. That means he's paying $3,572 on the first $37k, plus 32.5% on everything over $37k. So he's paying ((55000-37000)*0.325)+3572 = $9422 in tax.
If he put $18000 into his super then it would reduce his taxable income from $55k down to $37k (+18000 super co contribution). This means he'd pay the normal rate on the first $37k, but only the super co-contribution rate on the remaining $18k. (18000*0.15) 2700+3572 = $6272
TLDR: If he put $18k into super each year (with current rates and incentives) then he'll save $3150 in tax.
It's that simple.
Excellent advice. The OP is looking for an investment.
Those who think for the long term do very well.
Most people can't manage it and always end up as the coulda shoulda people.
@Sam Sharik: Not sure what this article has to do with their share price. Plenty of companies spend millions on adsense. What stock would you recommend that's safer/ better value? I'm in a similar position as you and am looking to do something with 400k. I'm definitely leaning towards stocks at this stage.