Dad Panicked and Withdrew All Super When Covid Hit, Now What?

Jase83 on 17/12/2020 - 09:19
Last edited 17/12/2020 - 13:12

So my Dad (age 65) panicked after seeing his super drop about 20% in March when the first Covid crash happened. Without telling anyone he withdrew it all (~100k) and put it in a term deposit earning basically nothing. Only told me a few months later.

Not looking for specific financial advice, but in general what are his options for a very safe place to park the money and start to withdraw some over the coming years. Can he put it back into super now? The best savings rate I've seen is UBank just over 1%, barely seems worth it.

It's kind of a touchy subject, I don't want to come across as lecturing or judging, just try and help steer him in the right direction.

Edit: Couple of other bits that may be relevant

  • Owns a basic house (400k) with partner (think they still have a small mortgage) + maybe 75k in total assets, I doubt any cash savings other than this ex Super money.
  • Not working anymore (partner works part time), has some health issues. Was getting jobseeker during Covid but looks like that might run out as they push him to apply for and be prepared to work in jobs which are completely unrealistic.
  • Will be eligible for age pension at 66 as DOB is between (1 January 1954 to 30 June 1955) https://www.servicesaustralia.gov.au/individuals/services/ce…
  • It was just a regular super fund, maybe Australian Super. No defined benefits, etc.
  • Term deposit is about to finish so he is free to move it

Thanks!

Financial Superannuation

Comments

      • seraphim2017 on 17/12/2020 - 13:14

        got to admit, I'd never trust the powers that be not to move the goalposts so would never want to bank on a stet anything in retirement! (obvious, trust issues ha ha!). Well, hopefully I'll be able to retire with some semblance of life quality but I'm definitely not going to have a million in super!

        • mskeggs on 17/12/2020 - 16:07
          +2

          $640k is the super target for a 'comfortable' retirement (that includes top private health insurance, regular international travel, new cars and frequent restaurant dining).
          Note that this level of 'comfort' exceeds the median income, so for most Australians they are suggesting you skip these things now to possibly have them in retirement.

          I disagree, and think people should balance their savings and consumption over their life. If you drive secondhand cars now, keep doing so in retirement.
          The AFR (and the Liberals!) agree:
          https://www.afr.com/opinion/comfortable-superannuation-targe…

          Which makes me hesitate, but I still think it is correct.
          https://www.canstar.com.au/superannuation/how-much-super-for…

          There is pretty good research that shows people are considerably more frugal in retirement (time to shop around, cook instead of takeaway, already own stuff so no need for latest fashions etc) so this seems OK to me.

  • Love a bargain on 17/12/2020 - 13:17
    +2

    How much do they owe on the mortgage and is there an offset account? If so, sticking the money in the offset account would be better than in a term deposit/ bank account.

    • pebee47 on 18/12/2020 - 13:39

      My understanding for the amount of pension calculation is that money put into a home loan offset account won’t lower the asset test amount whereas an amount in a redraw account does.

      • Love a bargain on 21/12/2020 - 12:52

        My response didn't look at pension qualification (as OP mentioned elsewhere that he doesn't think it'll push their dad over the threshold) but merely states that it has to be better than sticking the same amount of money in a team deposit as their dad is currently doing.

  • screensaver on 17/12/2020 - 13:22

    I am in the same situation so I put mine in a managed fund that owns their own buildings and pays out a share of the rents, a bit shocked to discover they took out fees upfront, but intend to give them a go, my second choice would be La trobe 12 months term paying 4.35 % payable monthly plus some FF points.

    • Mad Max on 17/12/2020 - 14:09
      +3

      This La Trobe 12 months term sounds great at 4.35%. I had a look, but it is not a term deposit. Just a managed fund. And La Trobe is not a bank so not covereby the $250K Government guarantee (for what it is worth, as I am not sure that it would be honoured in full anyway).
      So this is not a low risk term deposit equivalent.

      • screensaver on 17/12/2020 - 14:43

        I think it is low risk, they have never had a problem and have always paid/ If you want the guarantee you have to settle for low interest.

        • mskeggs on 17/12/2020 - 16:08
          +9

          They have only existed while the property market is going up. I rate LaTrobe as quite risky.

          • netjock on 18/12/2020 - 22:46

            @mskeggs: Correct.

            Problem is when all th investors want to get out and they can't sell properties fast enough.

            Happened in the UK after Brexit vote and investors wanted to all get out of property funds at home. 6 month freeze on redemptions.

        • Mad Max on 17/12/2020 - 18:18

          Unfortunately if you want very low or no risk (and you trust the government $250K guarantee) you have to settle for the about 1.1% on offer these days from some 2nd or 3rd tier banks.
          That is if your savings are less than $250k.
          If they are more than that you can spread them in $250K lots in a number of banks.
          Anything more than that return, you need to take some degree of risk.
          Nobody knows what is going to happen next. Exactly as nobody expected the pandemic market meltdown. Yes it did recover…for now.
          4.35% these days is very good, but probably not as safe as you think.
          It is certainly not a good time for self funded retirees. At that stage of your life and with no more salary/wage coming in, you would probably need to be conservative with your savings.
          The only way $640k could give a 'comfortable' retirement is by progressively eating into your capital and eventually ending up with $0 at some stage.
          With the current interest rates and preserving the principal, a very safe investment approach would require at least $2M.
          Don't forget that in the end most people will require a nursing home and the RAD for a comfortable choice is often over $500K.

          • whooah1979 on 17/12/2020 - 20:03

            @Mad Max:

            (and you trust the government $250K guarantee)

            Australia has never been a position to test if the FCS works. The FCS may be enough for a tiny bank, but is it good enough for a crash where all the 4 goes down.

            • mskeggs on 18/12/2020 - 07:26
              +1

              @whooah1979: it will absolutely be suitable, money printer go brrr.

              Which loaf you buy with your wheelbarrow full of savings will be up to you.

              Your larger point stands, and is called TINA (there is no alternative). Even for super risk averse investors, the wider economy has become way over leveraged and asset prices well over valued.
              So the bank guarantee removes risk for individual banks, but in a system wide problem, cash itself can be a problem - then it will be the gold bugs, and god help me, bitcoin bros saying I told you so!

              I don't know how to navigate this market at all for a risk averse investor, except to have no debt, some cash and carefully chosen investments.

            • netjock on 18/12/2020 - 22:50
              +2

              @whooah1979: Big 4 won't go down. The government will throw tax payers under the bus before that happens.

              2008/9 government guaranteed the debts of big 4.

              2020 government allowed banks to pay repayments but still charge interest. While landlords who had to give rent cuts got a small cut in land tax only.

              In other countries governments are even amending accounting rules so paused mortgages (and loans) don't have to be provisioned for losses.

        • jv on 22/12/2020 - 00:14

          I think it is low risk

          That reassuring… 😕

          • screensaver on 22/12/2020 - 02:47

            @jv: I didnt say no risk, I said low risk. They have a won an award for 12 years running, so I would personally risk it

      • Donaldhump on 21/12/2020 - 10:35

        for the record the government guarantee is bull sh*t anyway… a bail in wont trigger this, banks are fair game now

  • Donaldhump on 17/12/2020 - 13:46
    +4

    split over a combo of these.

    asx:pl8
    asx:vdhg
    asx:vdgr
    asx:mve
    asx:mvw

    and use dividends only for life expenses

    bank interest rates suck ass, and u have to do handstand and cartwheels do get the bonus these days

  • screensaver on 17/12/2020 - 16:15

    La Trobe s a pooled mortgage fund so the risk is spread over all the loans, not just one. They fund developer projects using the mortgage as security

    • netjock on 18/12/2020 - 22:51
      +1

      Developers are like high interest second or third mortgages. When things go wrong you get nothing.

      • screensaver on 20/12/2020 - 16:56

        no these are first mortgages, and they are pooled with all the others, They have over 7000 loans and 6 billion under managemnt in this fund. 3% of loans are 90 days in arrears but they have their mortgages as security. The only reason I didnt choose this one is I found another fund which says it has capital growth as well as a good return and they own their properties so I went with them

        • netjock on 20/12/2020 - 18:17

          7000 loans and 6 billion under managemnt

          If that is the case then $857k per loan on average. Can tell you for a fact that if you're borrowing $857k then you're probably top 10% of wage earners in this country. Bit sus.

          • screensaver on 20/12/2020 - 20:23

            @netjock: its for major building projects

            • netjock on 20/12/2020 - 23:15

              @screensaver: You know the risk associated with having an empty piece of land and funding it until it is fully completed.

              If buyers back out, economy tanks or the builders go out of business then you have a piece of land with fraction of the value of the development value.

              Example.

              $600k for a block
              $1.2m to build 3 units
              $700k sale price for each ($2.1m gross)

              If you loan 80% of the final $2.1m value first mortgage. The risk between $600k piece of land to $1.8m full complete is one big risk.

              It is first mortgage by name but not risk profile. Consider carefully. Been burnt before therefore flagging the marketing is not as it seems.

              • screensaver on 20/12/2020 - 23:59

                @netjock: I was very wary but no longer am. However, I found another fund that is said to give capital growth as well so I took the plunge. They say to diversify too but I am just trusting the one fund.

  • brad1-8tsi on 17/12/2020 - 16:37
    +2

    Is the super account totally closed? If not, have a word to their financial planners about re-investment options and capital preservation.

    If he has health issues he should be working through the process of getting a disability pension.

    He should then aim to get the aged pension at 66.

    He really needs to set out a plan for the next 10-20 years rather than reacting every time the financial markets stumble.

    I would also impress on him that he shouldn't make financial decisions of more than $10k without having a discussion with you or somebody that has a clue.

  • reactor-au on 18/12/2020 - 07:42
    +2

    This kind of thing makes me very sad and very anxious. My mother did the same but lives in another country. Parents very seldom listen to their kids, always seem very stubborn to me.

    • BigBirdy on 18/12/2020 - 08:44
      +3

      Kids very seldom listen to their parents, always seem very stubborn to me. (fixed it)

  • Stoozer on 18/12/2020 - 08:39

    Has your dad ever lived and worked overseas?

  • BigBirdy on 18/12/2020 - 08:55
    +4

    If you do a little bit of research, I think you’ll find at his age (under 67) he can make a non-concessional contribution to super of up to $100,000 without having to meet an employment test. On this basis, he contributes his $100,000 into an accumulation account, then requests his super fund start a retirement pension with it
    This may help guide you

  • spurf on 18/12/2020 - 09:00

    My parents have a similar level of savings and live a comfortable life on the age pension so definitely not the end of the world. Personally I would advise they pay off the mortgage if they can and budget to live on the pension and leave the remaining savings for a rainy day in a savings account.

  • ndea on 18/12/2020 - 09:09

    Your dad's decision may have worked out in the past.

    He did not reckon on the new economic doctrine of infinite stimulus.

    It may hurt, but I would be tempted to re-enter the market.

    The only certainty is that your dad's fiat will be debased. Asset number will almost certainty go up, whether that be stonks, negative geared investment properties, cryptocurrency, or sacks of potatoes.

    • netjock on 21/12/2020 - 00:57
      • property he lives in
  • OzHunterNSW on 18/12/2020 - 09:48
    +2

    I did the opposite.
    I placed everything in High Growth sectors…. shares have NEVER performed so good in their entire existence.
    As is, I now have thousands more than I had back B4 the crash.

    There were many many warnings NOT to over react. Your father should have been old enough and wise enough to know.

    Your father has locked himself in on a LOSS.

    The only thing now is to try and get the money back into a Super Fund. It's a bit late now…. he has lost essentially 20k.

    Speak to a financial consultant - DO NOT invest in some "friend of the family"…. do you understand?

    Alternatives are, back in Super, buy gold, buy Bit Coin.

    Pay off the mortgage and consider the home as an asset… and you will be saving by not paying monthly repayments.

    • [Deactivated] on 20/12/2020 - 10:05

      he has lost essentially 20k.

      More like 50k+ if it was in March.

    • MontyMacaw on 20/12/2020 - 13:48
      +1

      Only a fool tries to make money back they have lost. It’s gone. Protect what is left.

  • DarkOz on 18/12/2020 - 11:13

    Now what? Now you help him spend it! 🥳

  • Wilson Wallace on 18/12/2020 - 11:29

    My experience, I did the following

    1. Didn't touch it, lost 20%
    2. Waited for market to stabilize and changed it to high growth.

    I would look at getting your dad to talk to a financial advisor, reinvest the cash into stocks that are still recovering, reinvest into bluechip stocks. I would stay away from Gold stocks for now, when recoveries generally happen gold stocks don't usually go anywhere. World in shits = gold UP, check the graphs, charts etc.

    Considering your dad is 65, bluechip stocks is all he should be thinking about.

  • trapper on 18/12/2020 - 12:01

    Only 100k in super at 65? wow, wtf happened there, or does he have more super that he didn't withdraw?

    He still has a mortgage so obviously offset the entire balance if possible, or otherwise just pay it off.

  • mrvaluepack on 18/12/2020 - 12:05
    +2

    Just tell him not to worry and enjoy his cash that he withdrew. $100k isn't a lot of money at age 65.

    Australia has one of the best pension and social welfare system in the world, courtesy of me and many other tax payers.

    He'll be fine living off Age Pension as long as he doesn't have an expensive lifestyle to maintain.

  • MontyMacaw on 18/12/2020 - 12:16

    Hey at his age and level of security it was perfectly understandable. I would give him some credit for getting out of risk. The market rebound is based on absolutely crazy valuations and quantitative easing (printing money) and nothing to do with fundamentals so could happen again at any time. Reinforce his run for safety was not stupid for the time. Going forward he needs some good advice and sticking it in a Neo bank is not that. Xinja just folded and there have been problems with people getting their money out. I would suggest splitting it up with some good advice and reasonable expectations. Anybody that is close to or is retired should be spreading their risk for safety because shares etc are a 7 year spread if you want the optimum security. Also looking at the markets every day worrying about your savings is stressful. Maybe talk to a lawyer who may be able to invest it in chunks for a better return. Beware of commission financial advisors as they often work for the best commission not the client’s best interests.

  • Duckie2hh on 18/12/2020 - 12:24
    +1

    I hope your prepared to support him for the rest of his life

    • Oofy Doofy on 18/12/2020 - 12:57
      +1

      He will be fine.

      What I'd be worried about is a silver divorce/separation. That would throw a real monkey wrench into things

  • peterw1 on 18/12/2020 - 12:28

    is it worth your father ringing the previous super fund and asking for advice - they may do it for free. Alternatively ask fathers partner to ring their super fund and get suggestions. I assume the law recognises them as a couple. Another option is to put the whole lot into partners super and make sure they write a binding nomination so that if they die prematurely the funds go to your dad. Even if after getting the money they split, I think he has rights to 50% of assets so I don't think depositing the funds incentivizes a split, but a combined balance will improve their retirement, less fees etc. I'm no financial advisor so get some advice.

  • sauce2k on 18/12/2020 - 13:32
    +1

    I sometimes find it shocking people seek for financial advice on ozbargain. We have a great community here but go see a professional.

    • dust on 18/12/2020 - 14:13
      +5

      Financial advisors aren't free. If you only have $100k to play with it might not be worth it. (If OP inherited $1.6m and wanted to secure their family's financial future that's a different question!)

      • sauce2k on 18/12/2020 - 14:29

        Wait so $100k isn’t worth seeking professional advice nowadays? Crazy man

        • Hunter14 on 18/12/2020 - 18:59
          +2

          I think they have the right to ask as majority of people on this site are presumably financially literate.

          They could get a few ideas before going down the professional route.

          And yes 100K these days is not very much especially for someone who is 65 years old. I mean, what is a professional going to tell them? Put it in an ETF for the next 30 years?

        • zwolf on 21/12/2020 - 05:59

          In the age of internet, I can't think of anything I would pay for advice on.
          I can get a college education for free if so inclined.

        • macrocephalic on 21/12/2020 - 11:29

          Spend 2%+ of your life savings to be given some generic advice which others will give away for free (if you can sort the good from the bad). With 100k there's not a lot that a good advisor can do other than tell you the available incentives and to put it back into a safe but medium growth investment vehicle (super, ETFs, etc). If you had millions then I'm sure there are a lot of sneaky little tricks to keep grow it and pay less tax, but for 100k there's not a lot.

  • darkchoc on 18/12/2020 - 14:26
    +2

    Hi @Jase83

    Firstly, make sure you filter through the noise in this thread. Online forums are a great way to get some ideas on how to deal with challenges - but as long as you take everything as suggestions for you to consider and follow up.

    Secondly, you Dad is not alone in moving money to cash during a downturn. Behavioral science shows us that humans are risk averse and furthermore, close to retirement, people stay looking at their retirement balances far too often. The noise in the media and a general lack of knowledge of long term investing with super means many people switch to cash in market downturns. Unfortunately, the system that gives people choice gives people to take action that in the short term feels better but gives a long term adverse outcome.

    Here are a few ideas that I suggest you explore with your dad:

    1. use savings (from term deposit) to pay off mortgage, credit card debts and any loans that he may have.
    2. Here's an excellent resource for your to help your dad with: https://retirementessentials.com.au/

    For a fee of $400, this company helps to complete age pension application. Furthermore, your dad might be eligible for a pensioner concession card. The pension concession card can really help with reducing expenses. The Age pension can provide a steady income for life.

    These two steps could really help your father.

    With $100,000 lifetime savings at retirement, paying $3k (or 3% of savings) to a financial advisor does not make financial sense. Therefore low cost suitable advice is much more appropriate. I hope the resource like retirementessentials.com.au is helpful.

    Good luck

  • Ace26 on 18/12/2020 - 15:05

    Some very interesting comments here, working with an established financial planner (CFP) your dad might still get benefit if he is planning on working part-time or contracting when market improves.

    He could make a non concessional contribution into super again and consider a balance fund which offers a decent 4-5%pa return.

    He might still meet both asset and income test and will qualify for full age pension. This however depends on how much his partner is earning through the part time work you mentioned.

    Unless your dad has ability and capacity to work and earn for a bit longer, his options look limited.

  • sfk10 on 18/12/2020 - 16:23

    Reinvest it in blue chip stocks or dividend etfs.

  • The-Kremlin on 18/12/2020 - 16:33
    +1

    Gonna be quite a tough retirement for him…that is not much to live off and his house isn't worth much either.

    He needs a change in mindset, yes he's older but that doesn't mean people can't change…he really needs to take control of his finances and learn the basics. Maybe enrol in a finance literacy course, never too late to learn. It's upto him though.

    • dtc on 18/12/2020 - 17:53
      -2

      most people of that age retire will that much. Dont believe the 'all boomers are all rich' memes. Most people at 65 will be retiring with a modest house and the old age pension.

      $100k super will top up the pension by around $5k per year. Not an insignificant amount but its not going to change his life with any amount of financial literacy, unless he invests and gets lucky.

      • The-Kremlin on 18/12/2020 - 20:08

        I don't think that's the case. Most would retire with much more, $100k in super when retiring is very little and a house worth $400k that's not yet paid off is definitely less than average.

        https://qsuper.qld.gov.au/news-hub/articles/2019/08/07/06/10…

        https://www.abc.net.au/news/2020-02-10/older-australians-who…

        • SeVeN11 on 21/12/2020 - 03:06

          Age pension for a couple is like 35-40k almost tax free…

          I think people are under estimating the age pension…

          It's equivalent to having $1m earning 3-4% interest.

          • The-Kremlin on 21/12/2020 - 03:33

            @SeVeN11: That's for a couple…to be reliant on a pension in retirement is hopefully not the plan for most. It's very little, can't really have a decent lifestyle in your final years being reliant on that.

            • SeVeN11 on 21/12/2020 - 04:42
              +3

              @The-Kremlin: Maybe I'm just the odd one out. 35-40k (almost tax free) for a couple with no rent, no dependents, most big ticket items already purchased i.e. car, furniture etc. seems like quite a bit of pocket money…

              Maybe I just spend a lot less than most people.

              • The-Kremlin on 21/12/2020 - 10:46

                @SeVeN11: I'm thinking in retirement you'd want to enjoy life more and not live frugally…relying on government handouts doesn't give you many options.

                • SeVeN11 on 22/12/2020 - 00:10

                  @The-Kremlin: 35-40k of living expenses for a couple is not really a frugal life, but that's obviously very subjective.

                  I know some retirees decide to move to a south east asian country and retire there like royalties.

          • Mad Max on 21/12/2020 - 18:15
            +2

            @SeVeN11: Couple age pension $37,014/year.
            As you say you need $1M to get that sort of return out of a conserative investment.
            So if you have saved most of your life and end up with $1M you get nothing from the goverment because your assets are over the threshold.
            On the other hand if you spent it all and lived it up you get a nice $37,014 to live a modest but nice life.
            Lesson to be learnt…?

            • SeVeN11 on 22/12/2020 - 00:04

              @Mad Max: That's exactly what I am saying… if you don't think you can accumulate more than a few of million for a couple in by the time you're 65, there's no point trying… There is a huge dis-incentive to get ahead in this country.

              The safety net is so big and future tax payers i.e. our kids, grand kids pay for it etc.

              It's a bit sad, that is why 16% of tax collected goes to age pension… In addition, 20% of tax collected is for health and I'm guessing a large portion of that is used exclusively for pensioners. I suspect ~25% of all tax collected is for exclusive use by people over 65 years old (16% of Australia's population)

              Note: I'm not saying this is bad or good. I'm just stating facts so people are know what is going on.

              Personally I think it's a bit too generous, but I can't complain because it's really forcing me to pay taxes to support my parent's retirement and medical expenses so they don't have to directly depend on me. i.e. allows them to be independent.

              I just think they need to make sure medicare is not abused by the medical profession… The cost of medical procedures in asian countries is a fraction of ours which means there is a big margin that goes into the pockets of medical professions.

              e.g. $200 for a scale and clean or $200 for a 5-10min steroid injection.

      • netjock on 18/12/2020 - 22:55

        Most of the people retiring now got hit bad in the 1990s recession.

        Then missed the tech boom.

        They probably missed out on 2008/9.

        Assuming OP dad lives in 400k house they probably not in inner Melb or Sydney where retirees are living on a gold mine.

  • raiseyoursteaks on 18/12/2020 - 17:48
    -1

    Putting it in Bitcoin in March, he would have been 400% up by now

    • whooah1979 on 18/12/2020 - 18:16
      +1

      How many boomers do you know would risk their nest egg in something most people don't understand? Trying to explain what a blockchain is would 💥 their mind.

      • netjock on 18/12/2020 - 22:56

        LoL I was waiting for the Blockchain comment. Blockchain is worst scam than gold.

        • whooah1979 on 19/12/2020 - 00:57

          Like I said. Trying to explain what a blockchain is would 💥 their mind.

        • raiseyoursteaks on 19/12/2020 - 07:25

          Everyone will buy Bitcoin at the price they deserve

  • Seraphin7 on 18/12/2020 - 18:47
    +3

    Realistically, pay off the house, get on the government pension. Based on the amounts in question, it's likely he'd qualify for it at full whack (or close enough to it).

    Other than the fact he's likely lost a shed load (in percentage terms) by pulling out and then missing the bounce back, there's not a lot else to say here. On $100k, we're not going to be talking sheep stations either way.

    • netjock on 19/12/2020 - 11:31
      -1

      likely he'd qualify for it at full whack (or close enough to it).

      In that case I'd suggest he go on a bit of a spending spree. Maybe an RV trip around Australia. No point saving it so government can give you less when you are so close anyways.

    • DemocracyManifest on 19/12/2020 - 15:52
      +1

      I second this, pay off the house, primary asset is exempt from asset test so thats the smartest

  • gromit on 18/12/2020 - 19:47
    +1

    Thankfully my mother decided to ask me before she panic sold a heap of shares for her self funded retirement and I convinced her to instead buy more shares in a few choice oversold selections around march. Unfortunately for your father the damage is now done, seek some financial advise and convince him to not make panicked decisions in future. He will almost certainly qualify for pension and should take full advantage of it as soon as he can.

  • Logical on 18/12/2020 - 22:17

    Tell your dad to get a model 3 Tesla and enjoy it before he ages and can't drive anymore…. It would be a real joy to drive. With the rest of the cash renovate the bathroom eg add some grab rails, walk in shower etc to future proof when he ages… Fix the place up while able to do it.

  • mousie on 18/12/2020 - 22:31
    +2

    Dragonlink at Penrith rsl is up to 14k.just hit golden century up with 5k and it'll pop at $10 hits

  • jtc13 on 18/12/2020 - 22:31

    Low cost ETF that tracks the market. I like VAS - Vanguard securities for oz market. NDA - Beta shares Nasdaq for exposure to the big tech giants taking over the world.

    As long as he does not sell in a crash year will make great returns year on year well ahead of savings accounts and he can sell them when needed as they trade like a normal share.

    There are many others similar. Good luck

  • psylence on 18/12/2020 - 23:32
    -1

    100k isn't gonna last him long may as well put it all in bitcoin and hope for the best

  • Wallyt99 on 19/12/2020 - 05:51

    Bitcoin

    • [Deactivated] on 19/12/2020 - 06:36
      +1

      Ye sure if you want to roll the dice until it crashes again

      an unregulated gladiator pit, easily manipulated by large investors, whos only value is based upon hype.

      Sure if you want to turn that 100k into 0 or maybe 1mill go to crypto. but at that age, is ultra high risk really your thing?

      Theres a reason at retirement age super funds put you into very low risk cash funds automatically unless you do otherwise.

      • ndea on 19/12/2020 - 07:23

        In my view bitcoin is only inappropriate because high-risk is unsuitable for a pensioner.

        As for it being based upon hype, compared to what?

        All markets are hyped, backed by the implicit guarantee that governments will provide unlimited stimulus.

        The difficult question is, what would be suitable for a 65 year old? The only low-risk option is to accept sub-inflation returns.

        • [Deactivated] on 19/12/2020 - 09:25

          Bitcoin is backed by nothing, its rise and fall is based upon nothing, its total supply is finite and fully released already, its not regulated and a wild west of scams. why it goes up and down who knows other than people hyping it thinking its a good "investment".

          Shares in companies are backed by profits and revenue. these can be hyped and pumped due to gov stimulus, but the underlying fundamentals are sound. We had weird moments in history such as the dotcom bubble but that resolved itself in a huge crash - some tech stocks now are in that territory now - FB / Uber / Tesla / etc

          Gold is backed by its scarcity (which decreases each year) as well as industrial (which cannot be replaced by anything else currently) and boutique uses

          • netjock on 19/12/2020 - 11:38

            @[Deactivated]:

            who knows other than people hyping it thinking its a good "investment".

            Only people selling it as an investment is people who have a vested interest. Either they are coin exchanges or people with it already there worried the coin is going to drop.

            Gold is backed by its scarcity

            And the fact that it is tangible (you can take physical possession). With bitcoin you get it on some piece of memory (USB stick, hard drive, specialised piece of electronic vault) but you still don't know if the coin is really on there until you got an verify it. Then again it might have be just cloned and fake.

            Watch out for 51% attack. As value goes up it is a bigger target.

            As CCN reported, a litany of altcoins have been hit by 51 percent and other similar network attacks in recent weeks, including Bitcoin Gold, Monacoin, and Verge (at least twice). The cost to launch a 51 percent attack against many altcoin networks is shockingly low, especially since hashpower can easily be rented from so-called “cloud mining” firms.

            • resisting the urge on 20/12/2020 - 10:03

              @netjock: "Only people selling it as an investment is people who have a vested interest"

              That can be said for dollars, the value of which is only set by regulations that successive governments have created, (whilst removing most of the requirements to 'back' their currencies, and even the banks they regulate) just so they could encourage credit and growth following WWII to help their mates fill their bags as economies grow to unsustainable levels. All that is different now and the outlook is no longer about what economy can produce of value, it is about what economy or more accurately, what individuals/classes can amass wealth, and how fast.

              "Gold is backed by its scarcity"
              That scarcity is artificially controlled. More is mined all the time, and the market is controlled by opaque corporations that do nothing more than exercise control over their resource market. Bitcoin OTOH is, and always will be limited to 21M and is not held/controlled by any one group.

              People have no trouble valuing 1s and 0s in their bank accounts, mortgages and properties, and to a lesser extent their credit cards. But we don't worry when the currencies we value things in are halved (printed) in the space of a year or two.

              Cryptocurrency is money, whereas fiat currency is barely paper/plastic or plain text displayed in your browser. And it can be withdrawn and backed up and not at risk of any one is insto failing, or agreements between trading nations to respect the value of something like the USD breaking down.

              • netjock on 20/12/2020 - 11:10
                +1

                @resisting the urge: Cryptocurrency is money?

                Does it have wide a acceptance as money? Gold isn't money. It is only interchangeable with money because there is a platform and buyers. If all the crypto exchanges go out then you are done. Cash in the bank if it goes bust the gov will reimburse up to $250k.

                You have to be very careful when pretending an investment is risk free and good as cash.

  • doubleclutching on 19/12/2020 - 07:08
    -2

    Bikies

  • Jimothy Wongingtons on 19/12/2020 - 10:47

    my dad did the same thing - granted, it was a fair chunk more than what you're mentioning, he locked it in a term deposit seeing that as 'safer'.

    • Bunnyburger on 20/12/2020 - 00:13

      Lol mine did something like that without talking about it.

      It's really astonishing how elders listen to non fiduciaries than their own family members who actually want to see them do well.

      They will buy financial products without even critically examining the infosheets.

      • resisting the urge on 20/12/2020 - 10:20
        +1

        @Bunnyburger: True, But by doing so they are showing they are very concerned over their super. And there is nothing wrong with moving it out when they can do so without significant loss, or cost. The thing is, it is now their monkey to bear, so they need to manage it.

        Some super funds give control over it, for example, allow you to put it in cash, or particular asset groupings. But if someone has the luxury (age, amount, situation, etc.) to be able take it out, you can put it in whatever they want, their investments no longer have to live inside the moribund settings placed on the Super industry, and you can diversify a portfolio to include your choice of gold, crypto or Index funds (cheap and market secure), ETFs (not expensive and market secure).

        Note: If buying an amount of physical gold, and opting to store it, you get the added benefit of being relatively war and currency devaluation/inflation proof- but of course, it is your job alone to keep it safe.

        • Bunnyburger on 20/12/2020 - 17:08

          And what a kingkong of a monkey it is sometimes :(

  • d-hunterz on 19/12/2020 - 11:28
    -3

    Warning!! there may be too many negs on my comment. But Hey you are asking for advise, here is my 2 cent- Considering markets are at ATH with not much to support it there, if I were you I do be investing 50% in Gold and 20-25% in BEAR funds. Invested the rest in good companies A2M, QBE, MSB ( they have been smashed lately and would bounce back)

    • netjock on 19/12/2020 - 11:48
      +1

      In the last 10 years if you invested at all time highs you would be only 2% off if you invested regularly.

      Check the 10 year data here

      Reason is time in the market, not market timing link

      • d-hunterz on 19/12/2020 - 12:03
        -1

        I understand and agree with you but the recent spike is too much and too quick hence making be doubting the support.

    • Enterz on 20/12/2020 - 12:30
      +1

      Gold still isnt back at its inflation adjusted 1980 high so be very wary of it

  • nikey2k27 on 20/12/2020 - 07:49

    put back into superfund now.

  • Enterz on 20/12/2020 - 12:29

    Put it back in super. Alternatively park it in a vanguard ETF which grows with sharemarket and is diversified. Thats what Warren Buffett advises his wife to do with his fortune when he dies

  • acersaurus on 20/12/2020 - 15:17

    Agree with others who have said put it back into super. Just put it into a fairly standard diversified fund nothing too risky.

    100k isn't much, but it would actually be very handy to someone living on the aged pension. He could for instance use it to pay for health insurance in perpetuity.

  • Dack Smith on 20/12/2020 - 18:51

    Why bother putting it back? Live like there’s no tomorrow!

    Coronavirus will probably get much worse…. why not spend and enjoy it before daddy dies lol

    • netjock on 21/12/2020 - 00:51
      +1

      If you could get anywhere given COVID rolling border closures

  • scrone on 20/12/2020 - 19:37

    The crisis isn't over. Stay cash and wait it out. There's no benefit going back into the market the upside is almost 0.

    • whooah1979 on 20/12/2020 - 20:25

      "The trend is your friend." Get some skin in the game and use SL.

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