Investment Ideas for Year 12 students

PTG Benny on 31/03/2021 - 08:56

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

Financial

Comments

  • dust on 31/03/2021 - 08:58
    +5

    VDHG, VAS, DHHF.

    Or perhaps something like Spaceship.

  • anglais on 31/03/2021 - 09:03
    +3

    Spaceship or standard index funds.

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

    • PTG Benny on 31/03/2021 - 09:05

      How does Spaceship work?

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

      • techlead on 31/03/2021 - 09:22

        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.

    • techlead on 31/03/2021 - 09:20
      -1

      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.

      • Godric on 31/03/2021 - 09:33
        +1

        Spaceship has no fees up up to $5k

        • Autonomic on 31/03/2021 - 10:36

          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.

          • techlead on 31/03/2021 - 10:44

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

  • Unorthodox on 31/03/2021 - 09:14
    +9

    Invest in experiences, especially at that age.

    Go on a trip with friends, solo travel etc

    • PTG Benny on 31/03/2021 - 09:16

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

      • Randxyz123 on 31/03/2021 - 10:10
        +1

        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.

    • Cheaplikethebird on 31/03/2021 - 12:00

      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.

      • Gumster on 08/04/2021 - 21:24

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

        • Cheaplikethebird on 09/04/2021 - 18:48

          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.

  • techlead on 31/03/2021 - 09:19
    -5

    A portion of your portfolio should be in Bitcoin. Buy it and then put it into an interest bearing account, such as Blockfi earning 6% pa interest paid in Bitcoin.

  • Fredfloresjr on 31/03/2021 - 09:23
    +1

    YOLO and start exploring.

    • Hearthstone on 08/04/2021 - 15:51
      +1

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

  • knasty on 31/03/2021 - 09:29
    +1

    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.

  • Seraphin7 on 31/03/2021 - 09:40
    +1

    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.

  • Tiredman on 31/03/2021 - 09:45
    +4

    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.

    • techlead on 31/03/2021 - 10:48
      +2

      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.

      • Tiredman on 31/03/2021 - 16:46

        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.

        • Indomietable on 01/04/2021 - 01:59
          +1

          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)

    • Kail on 31/03/2021 - 16:20

      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?

      • Tiredman on 31/03/2021 - 17:15

        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.

        • Kail on 31/03/2021 - 18:22

          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!

        • mr_asstight on 09/04/2021 - 18:51

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

  • Trying2SaveABuck on 31/03/2021 - 09:57
    +3

    Bitcoin

    • techlead on 31/03/2021 - 10:49

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

      • Tiredman on 31/03/2021 - 17:59

        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.

        • techlead on 31/03/2021 - 18:31

          People like debt too much haha.

          • jv on 08/04/2021 - 16:05

            @techlead:

            People like debt too much haha.

            Nothing wrong with gearing…

            • techlead on 08/04/2021 - 21:15

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

  • redfox1200 on 31/03/2021 - 10:48

    gochain, thank me later

    • techlead on 31/03/2021 - 10:50
      +2

      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

      • redfox1200 on 31/03/2021 - 11:00

        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.

      • [Deactivated] on 31/03/2021 - 14:01

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

        Blue Horseshoe loves gochain!

  • amos83 on 31/03/2021 - 10:57
    +1

    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

    • techlead on 31/03/2021 - 11:05

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

  • Dean29 on 31/03/2021 - 11:28
    +1

    GME

  • FreeUyghur on 31/03/2021 - 12:43

    just spend

  • JIMB0 on 01/04/2021 - 09:09

    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.

  • oldrustytuba on 01/04/2021 - 10:13

    Barefoot Investor has good recommendations

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

  • Thinkscape on 01/04/2021 - 10:54

    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).

  • OzHunterNSW on 05/04/2021 - 10:07
    -1

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

  • Stingy Student on 08/04/2021 - 13:30
    +1

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

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