Investment Ideas for Year 12 students

Hi OZB finance gurus,

I had my best friend ask me on the weekend what his son in Year 12 should do with his savings (approx $5,000). It is currently sitting in an interest account earning, well, no interest.

This got me thinking..

My initial thoughts would be to invest in blue chip shares with low risk, and even better that have a DRP to allow him to accumulate new shares over the coming years. I would suggest initially 5 x $1000 of quality companies and to ensure that he diversifies the sectors that he invests in. For example companies that I am thinking of would be something like WBC, WOW, WES, JBH and TLS. The reason I would suggest these shares to an 18 year old is that I personally believe you should only invest in companies that you understand the business model and how they make their income.

With interest rates at record lows, I think it is important to make your hard earned savings work.

I am certainly interested to see what the OZB community think would be a smart investment decision.

Cheers

Benny

Comments

  • +5 votes

    VDHG, VAS, DHHF.

    Or perhaps something like Spaceship.

  • +3 votes

    Spaceship or standard index funds.

    Blue chips are not really comparable as a savings option. They are speculation.

    •  

      How does Spaceship work?

      Sorry I just did a quick Google search and that is the first I have heard of it.

      •  

        Its like a fund, they hold a basket of shares. You invest in it, your profits will depend on the performance of those companies within that basket.

        Its good for people who don't want to do their own research and don't want to invest in an index fund.

    • -1 vote

      Don't invest in Spaceship or Acorn, their fees are insane. You can do the same thing yourself at a much lower cost. Don't let your investment get eaten away by fees.

      • +1 vote

        Spaceship has no fees up up to $5k

        •  

          Even beyond that it's only 0.1%. If you're after exposure to a broad range of technology stocks, I don't think there's anything cheaper.

          •  

            @Autonomic: How does that compare to the ETFs on Hero? There's no brokerage trading those, which is pretty good, no management fees either.

  • +9 votes

    Invest in experiences, especially at that age.

    Go on a trip with friends, solo travel etc

    •  

      I agree, however this student is going to Uni so is hoping to do all that once he finishes or during holidays etc.

      • +1 vote

        This. He should invest some of it maybe and leave a bit for a post year 12 trip and random weekend trips with uni mates.

    •  

      I don't think domestic travel has as much ROI if you will on personal growth as international travel. I would suggest they invest now with the plan to do long-term OS travel in a few years once it's back on the cards. For now they can get life experience by living in a few sharehouses.

      •  

        You need to get out more, have you explored the top end at all. Its a completely different Australia

        •  

          You've misunderstood my comment. I'm not saying that Australia is boring, but the growth that comes from international travel stems from having to navigate different cultures, laws, languages, etc without being able to rely on the support network of your family and friends . Anyway you can explore the top-end without going all out and blowing your savings, probably better done on the cheap.

  • +1 vote

    YOLO and start exploring.

    • +1 vote

      can do both, the earlier you start the better it is, the longer the time line the better the compounding

  • +1 vote

    Take an interest in how super works. Understand about super fund choice and investment option choice. Whether they like it or not the choices they make about their super are going to have a big impact on how much money they have later in life.

    In the short term, as @Fredfloresjr above "YOLO and start exploring". I saved 5k when I was 20/21 and went overseas after uni. That experience set me up for life from a financial, emotional and experience perspective. Sure things are on hold now but when the world opens up again that's where I'd be investing my money too.

  • +1 vote

    Australian shares index fund/ETF. Plenty out there. Set and forget, but also look to build in a regular savings plan (might only be $20 a week). Will be a nice pool in 10 years' time.

  • +4 votes

    Throw a bit into Bitcoin (even $1000) if you get a good dip and don't look at it for ten years. Thank me later. Time is on his side.

    • +2 votes

      I said the same thing and got downvoted haha. People really doesn't understand Bitcoin on OzB.

      A portion of the portfolio should definitely be in Bitcoin, its a no-brainer.

      •  

        People has been hating on Bitcoin since $1, $10, $100, $1000, $10000 and soon $100,000(?). When will the tulip/ponzi talk end? Most Bitcoin proponents are not asking people to do a Michael Saylor. Just allocate 1-5% of your portfolio to Bitcoin. Will never understand all the hate.

        If i have $1000 in my pocket and you tell me to put $50 into something that could double/triple/quadruple in the next ten years or it could go down or stay the same. Will you take that bet? I certainly will. Tesla is accepting Bitcoin as payment and Visa Mastercard is allowing people to pay with crypto and people are still calling it a ponzi/scam.

        Understand the Bitcoin cycles and consolidation years are not "Bitcoin is dead" years.

        • +1 vote

          I put 1% into bitcoin and for me it's more of an insurance. The unregulated nature of bitcoin might put off some people (ie if your wallet / exchange is hacked you have no one to complain to)

    •  

      I feel like now's a terrible time to buy Bitcoin, it's up so high compared to previous years.

      How big of a dip do you think needs to happen before it's worth buying?

      •  

        No idea TBH. No one knows. My feel is next leg could bring us to mid to high 60s then maybe back down mid 50s. Or it could go down to mid 50s again tomorrow. If your investing time frame is 5 years or more, shouldn't matter really.

        •  

          Thanks for the advice. I've been watching bitcoin for ages but never bought. I would be in a much better position if I had!

        •  

          $75k by May. Then $100k sometime later this year.
          Then bear market come back in 2024 for another pump lol

  • +3 votes

    Bitcoin

    •  

      Community doesn't like me haha, I said Bitcoin got downvoted. :D

      •  

        Welcome to the club. I've been getting Bitcoin hate here for ages. We have since doubled and tripled in price so i'm good.

        •  

          People like debt too much haha.

          •  

            @techlead:

            People like debt too much haha.

            Nothing wrong with gearing…

            •  

              @jv: haha, nice way to put it. Let's gear up!

  •  

    gochain, thank me later

    • +2 votes

      Do you have a bag of gochain? You are shilling this everywhere. This is ranked 435 on Coinmarketcap, $83 mil USD marketcap even after the recent pump, its very deep in the alt coin forest, even for me haha.

      I think Bitcoin is good enough as a crypto exposure for a year 12 student. :D

      •  

        its my 2nd biggest holding after btc 10x-100x from here :)

        I got in at the ico in 2018, but have been loading up 5x my initial amount over the last 3 months.

        it won't be at $83 mill USD for long, at least have a look at it.

      •  

        https://m.youtube.com/watch?v=h8PLrkEXWnc

        Blue Horseshoe loves gochain!

  • +1 vote

    It is ok if you do not invest in Bitcoin. But i would say just consider it.. it just changed my perspective on things.

    But i understand its not for everyone… i was always interested in economics so i kind of get the value proposition of Bitcoin.

    Most people will call it scam just because they have not bothered to do any research. and the same people will call you lucky once you make a decent profit.

    There is enough material available so i dont want to influence you in any way. so DYOR..

    stay away from alt coins and use only reputed Aussie exchanges like btcmarkets, independent reserve.

    FYI: see the other AMA thread for more info. im relatively new too. but i see there are others who have been in Bitcoin space for a while

    •  

      Very well said! Do your own research and keep an opened mind.

  • +1 vote

    GME

  •  

    just spend

  •  

    How about a car. Will be rather useful at his age given that it will open up more opportunities for employment and going to University.

  •  

    Barefoot Investor has good recommendations

    https://www.google.com.au/search?q=barefoot+investor&source=...

  •  

    Spend some time on Youtube to learn about designing investment strategy (portfolio structure).
    It should be a % combination of indexes, shares, crypto (at least 2 coins), bonds, maybe real estate, art etc. Each has different risk profile, that's why it's often individual decision on how many % dedicate to each category.

    Once you have your investment strategy, decide on recurring (i.e. monthly) dollar contributions. Set it up to invest set amount of $ into % distribution of different things (according to your strategy), automate it, and forget about it. People make fortunes due to compound interest effect. Don't look at the numbers, graphs, don't follow trends, don't listen to "financial gurus" or make too many adjustments. Assume 10-year perspective and keep on topping up via the recurring contributions.

    If you get more income (i.e. a raise, new job, sale etc.), increase your recurring contributions accordingly, be vigilant against lifestyle inflation. If you follow this for next 10-20 years you should be in a position to retire early as needed or reduce work hours (look up FI/RE).

  • -1 vote

    Are you paid to post this. It sounds like an advert

  • +1 vote

    Westpac offer 3% interest PA for 18-29 year olds - might be worth looking into.