Where Do You Keep Your Savings?

witsa on 05/12/2020 - 13:36

Everyone on ozbargain is rich right? Assuming you have savings, or are able to save, where are you keeping your money?

I just ask because I was surprised with this thread (https://www.ozbargain.com.au/node/588041) how many people actually keep their savings at the bank.

Long term this sounds like the worst strategy to grow your wealth.
- you don't get a great interest rate (especially right now)
- what they give you, you get taxed as if it was income
- the amount you get back is barely enough to keep up with inflation.

Basically, the Australian government really doesn't want people saving money and it shows in their taxation treatment.

Unless we're talking a grand or two for a rainy day fund or for something I'll need very soon, I can't really see any reason where I'd put the money in a savings account. There's lots of other options out there although there's obviously upsides and downsides to them.

So for you rich people with savings, where do you keep them?

Poll Options

  • 203
    Savings account
  • 429
    Mortgage offset
  • 92
    ETFs
  • 41
    Shares (for those who like to gamble)
  • 7
    Investment property
  • 30
    Cryptocurrency
  • 32
    High yield investment automobile
  • 14
    Something else
  • 38
    I have no savings
Financial

Comments

    • Shwayne on 07/12/2020 - 17:20

      From what I've seen that normally means "oh I can afford 4 more investment properties now".

  • Hunter14 on 07/12/2020 - 17:31
    +2

    'Shares (for those who like to gamble)'

    Can't take this discussion after adding that disclaimer. It is arguably the best choice overall.

  • TheRealCher on 07/12/2020 - 17:44
    +1

    My headphones…

  • qwijibo on 07/12/2020 - 18:23
    +3

    I go to the casino once a month and put it all on black. Because Wesley once gave me advice to "always bet on black".

    Edit: And results are better than putting it all on random shitcoins.

  • The Wololo Wombat on 07/12/2020 - 19:36

    A friend recently started his own trading company.

    He's been getting 0.5% per week return consistently for about a year and guarantees the principal. So, yea. I jumped in. The man's a genius.

    • macrocephalic on 08/12/2020 - 14:51
      +1

      Is his name Bernie?

    • BigBirdy on 09/12/2020 - 08:26
      +2

      guarantees the principal

      So you’re holding the title to his home?

  • Munki on 07/12/2020 - 20:57
    -3

    My savings is what's keeping the economy afloat. #ballerAF

  • hoey888 on 07/12/2020 - 21:22
    +1

    I currently hold investment properties, shares, ETFs and managed funds. Currently very structured very conservative as we are looking to upgrade PPR.

    Would I buy buy/upgrade PPR? Yes as we need a larger house/yard to start a family. Prices and returns irreverent as wife is buying based on emotion. We currently live in small apartment close to work.

    Would I buy another/more investment property? Probably not at the current prices and yields. The prices are just stupid for the return and risk. If the property was had solid fundamentals and was well priced I would consider. Very hard to find these as prefer property I can touch and see in Melbourne area. You may get higher yields interstate, but not worth the hassle and headache.

    Lets say you get an "average/median" investment property in Melbourne at $700,000 returning $500/week. That's roughly 3.7% gross yield on investment. Not much incentive to invest on such low numbers. If you are unfortunate enough to have bad tenants or covid rent relief that brings the yield even lower.

    Would I purchase more shares/ETF/managed funds
    It would most likely return more than investment property example above. Usually fully franked dividend shares are 4%+

    Would I park my money in an offset?
    Hell yea, considering my investment loans are anywhere between 2-4%. Parking money there is like guaranteed return, unlike other investments which could move either way.

  • DASHCAM NOW DUDE on 07/12/2020 - 22:46

    In Australia's most trusted mattress, Sealy.

  • Jimothy Wongingtons on 07/12/2020 - 22:52
    +1

    spaceship…my savings are not great ;c

  • BeoWulf on 07/12/2020 - 23:39

    Obviously all of it with Blackrock.

  • AustriaBargain on 08/12/2020 - 00:01
    +2

    Where does the Queen keep her armies?

  • IM-Cheap on 08/12/2020 - 00:44
    +1

    Shares. I dumped a bunch of money in as people sold at 50% loss during covid - easy money, was even prepared to hold them for 2yrs without dividend & wait for the pricing to recover.

    Did not have enough nerves to gamble on afterpay though - I just don't understand how that's not a dumpster fire waiting to happen.

    • DemocracyManifest on 08/12/2020 - 15:17

      The chances of afterpay making money I reckon are pretty high in the coming months, will be interesting to see how they fare

      • macrocephalic on 08/12/2020 - 16:29
        +1

        In the shares trading platform I use they keep flagging Zip (Z1P) as one of the most viewed stocks each day, and it has had some pretty good days, but it's also had some pretty bad days. Overall it's at roughly the same value now as it was in June - whereas the rest of the market is up a lot.

        • DemocracyManifest on 08/12/2020 - 16:54

          I guess zip is more of a conventional product, as much as they say it isn’t, it’s practically the same as latitude as a non bank lender with interest rates to match

  • pogichinoy on 08/12/2020 - 05:31
    +1

    Hello mr taxman. Nice try but fancy seeing you again.

    Merry Christmas.

  • blorx on 08/12/2020 - 10:02

    3 or more of those options.

  • zawarudo22 on 08/12/2020 - 11:46
    -1

    Put mine on Cryptocurrency - but more like Stablecoins (I chose USDC particularly).

    Nexo, Celsius or BlockFi easily provide 10%+ compound daily/weekly/monthly interest.

    Significantly less risk than actual crypto coins (BTC, ETH). The only risk is if these company go down under, which I personally think its highly unlikely in the next few years. The main catch is to be smart in converting your AUD to these stablecoins, you'd want to minimise the converting fees from merchants.

    • dddddog on 08/12/2020 - 12:00

      nice. what percentage do you use for each one? ie. nexo, etc etc

      i have about 12k aud in Nexo and half of that is DAI

      but I'm considering putting more in Celcius now with USDC as well.

      also, where do you convert the to stablecoins? cheers

      • zawarudo22 on 08/12/2020 - 12:10
        +1

        Wow that is great! must be enjoying the daily compound interest of 12k worth.

        I personally put my actual Crypto in Nexo (about AU$1100) worth.
        Moved all to stablecoins from Nexo to Celsius when they announce that their stablecoins rate at 11.51% (though now it is at 10.51%), but no biggie. About AU$7k worth.

        I only have US$250 in BlockFi to qualify for that free US$25 worth of BTC. Personally not too impressed with their rate.

        Edit: I initially used CoinJar since it provides AUD to USDC conversion. Though I really think it's not a really good idea as they eat a significant % in conversion and buying/selling. In the future I am thinking about doing AUD > XRP > USDC. Though I'll have to do more research on where I should be doing this.

        • dddddog on 08/12/2020 - 14:10

          awesome! well done.

          yeah, thinking to put AU$20k into Celcius and collect those CELs. Looks like a very good return potential
          https://digitalcoinprice.com/forecast/celsius#tab_view

          heck, they've already gone like 40x in the last few months.

          regarding conversion, I see that Independent Reserve does USDC and has a lower fee than CJ.

  • macrocephalic on 08/12/2020 - 14:15

    Well the ASX overall is up about 9% in the last 5 weeks. The long term average is about 7%pa. If you don't need to access your savings in the next few years then an index ETF is not much of a gamble - and even then you'd have to be pretty unlucky to lose more than 30% if you bought at the peak and sold at the very bottom ofa multiyear cycle.

  • AngusD on 08/12/2020 - 14:57

    The bulk of our savings are in shares, followed by mortgage, then savings account.

    Probably got more in the savings account right now than we would have, historically, wanted to keep in cash due to the returns being so poor. But we've been reluctant to put any more into the share market this year, both due to the volatility in the market itself as well as the potential for unemployment meaning we wanted to have extra cash there in the bank just in case.

  • Brooklyn on 08/12/2020 - 19:06

    If you know your collectible market as I do with cameras.
    I buy and resell Vintage film cameras… My profit margins are around 25% or more, some I keep for later some I sell right away. The marketplace for film cameras especially Leica and other rangefinders has gone mad over the last year. M6 cameras I purchased for $1000-1500 I am now selling for $4000. I put all of the money back into more stock… plus it's fun.

  • lookingforTV on 08/12/2020 - 19:56

    A genuine question, for those of you that answered "Savings account", is that because you currently don't have a mortgage account with offset or don't have a mortgage? I'd be interested in hearing why people save into a 'Savings account' if offset/redraw was available on their mortgage.
    '

    • whooah1979 on 08/12/2020 - 20:07

      I'm surprised that 34% of voters don't care about their savings while only 0.01% own investment properties.

      • Hangryuman on 09/12/2020 - 11:33

        the question was where do you put 'savings'

        I answered elsewhere that I invest in property

        and consider 'savings' to be small amounts of cash not yet invested elsewhere

    • Colin2905 on 09/12/2020 - 02:05

      Mortgage paid off ten years ago.

  • Dreamcast on 08/12/2020 - 21:28

    Inside all the door stops.

  • avoidfullprice on 08/12/2020 - 22:44

    I see savings and investment as two different things.

    Savings are money I don't need to spend right now, put in a place I can spend/withdraw later. Say three months of expenses. When I have a mortgage I put most of my savings as offset/redraw. Some as gift card, some as physical cash.

    Spare cash not kept as savings are invested away, or gambled away in your speak. These longer term investment I put in shares.

    But I'm frugal not rich, so my response doesn't count towards your question hehe

  • echelon6 on 09/12/2020 - 09:58
    +2

    OP labelled shares as 'for those who like to gamble' but didn't do so for crypto

    lol

  • Hangryuman on 09/12/2020 - 11:21
    +1

    as a retired guy with enough, I have investments in real estate, shares, managed funds and super.

    so when you say savings I tend to imagine you mean a limited amount of spare cash - but not yet invested in growth assets.

    reminds me of one of my first jobs - just paying the rent, food and travelling I couldn't save anything

    until I got a promotion, and suddenly I had spare cash I could save - and later invest.

    yesterday I spoke to a rich guy who asked me about the derisory interest rates from banks - like 0.1% - I said they were offensive and insulting.

    his son was just opening a store selling high-end luxury watches - between $10K and $140K - each.

    we discussed his business approach - buy cheap, sell dear - which you can apply to any enterprise.

    he then said in these times where the old normal has disappeared, and what was booming last year has now disappeared - who knows what the future holds ?

    study, read and research widely and carefully, find people with integrity, invest early, work hard, grow over time, keep learning every day, and always take responsibility for your own decisions

    don't be the ones on TV Current Affairs bleating 'I trusted that nice man in a suit - how come he took all my money ?'

  • Scythic on 09/12/2020 - 18:21

    Every time I checked my superannuation report, it stated that I have lost money from investment.

    What to do?

    • BigBirdy on 10/12/2020 - 07:33

      How often are you checking it? Since the GFC 10 years ago, my super has been growing strongly and consistently. It took a dip earlier this year of about 10% due to Covid, but it’s now recovered. I’m very happy with it.

      • whooah1979 on 10/12/2020 - 08:13

        It's wise to check investment portfolios at least half a yearly, every quarter or even weekly and daily for high-risk investments.

        Don't make the mistake thinking that people will look after your investment just because they get paid.

  • LakeVostok on 09/12/2020 - 23:00
    +1

    In a hole in my backyard :)

  • Frozensage on 20/12/2020 - 16:40

    Should have day trading, which is gamble. And shares which is a calculated risk, just like anything outside of term deposit. There is no such thing as free lunch. You get better odds with shares than lottery yet more ppl are happy buying powerball every week which is nothing short of a miracle if u get top prize

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