Say one has 300K-400K and want to put into high interest cash accounts.
Is below the best way to manage that?
A. Open ING Saving Account that is highest rate in market for over 35 year olds (looks like it is 5.25%). That has max limit of $100K.
You need to do bit of hassle of increasing balance, withdrawls, etc.
B. Ubank: This is next highest interest of 4.6%. Their max limit is $250K and no hassles.
Is above the best strategy you can do for saving accounts? Ignore the introductory offers.
@deme: Are you blind? I'll copy and paste my reply from above.
It sure can be. It can also be luck. It can also be an inheritance. It can also be putting everything you own on the line and taking a massive risk.
@brendanm: So to answer for you:
Does hard work always result in more money?
Is false.
What about:
Does hard work most of the time result in more money?
Does hard work most of the time result in more money?
Depends on the person, what they do, what you class as hard work, etc etc. Like most things in life, it's not set in stone, as much as you want it to be.
@deme: Medium. I work less than full time during the week, so I can drop my daughter to school. I put a few hours and some hard work into my side hustle and get great returns from it. The more I choose to work, the more I get paid. Anything else?
@deme: No idea. It would take something else I mentioned above, taking large risks. Putting in massive hours, possibly losing everything. Not something I care to do.
Not sure what point you are trying to prove. Everyone cannot make a billion dollars. If it was easy, the dollar would have no value, and a glass of milk would be a million dollars.
On the sensible end, effort/risk/skill is generally rewarded. If you are better at your job than someone else, you get paid more. If you worked hard in school, went to university etc, you could be a surgeon and making good money, because you put in the effort. If you sacrificed good pay and did an apprenticeship, you can go on to a tradesman, and make decent money.
If you do nothing, don't put in effort at school, don't get a qualification in anything, don't put any effort into your job, you will likely get paid diddly squat.
@deme: I don't think you understand that their answer is not black and white, yes or no, but implies the possibility, even probability, that hard work can result in more money.
@deme: Hard work can be used to get out of poverty.
It has to be directed correctly though (working hard at wanking, or working a dead-end job doesn't necessarily earn you a lot of money)
I think the issue is, Donaldhump said: "maybe just worked hard".
Blindly working hard would rarely make you wealthy.
That being said, OP is talking about 300k so they're not particularly wealthy
Maybe it's Maybelline.
Tall poppy syndrome, many such cases.
Not true for me. Still a long and slow journey to get to that stage. No hecs is true. I finished uni when it didn't used to cost at it does now. Those days everyone would easily pay of their HECS after 4-5 years of working. Its difficult for students now days as it seems like it would go on for 9+ years.
People could easily pay hecs off in 4-5 years these days as well, provided they make a good choice on what they want to study. Of they can drop that amount of money on a new car, and pay it off over the same period, with interest, they can pay off something that has (should) set them up for life.
People could easily pay hecs off in 4-5 years these days as well, provided they make a good choice on what they want to study. Of they can drop that >amount of money on a new car, and pay it off over the same period, with interest, they can pay off something that has (should) set them up for life.
Whats a good choice of what to study? Where in Australia are you making the judgement for? Minimum pay for a bachelors degree under the professionals award (assuming you can get in without experience, rather than another award)
Level 1 Graduate professional—Pay point 1.1 (3 year degree) $56,180
Level 1 Graduate professional—Pay point 1.1 (4 or 5 year degree) 57,619
https://library.fairwork.gov.au/award/?krn=MA000065
7.1% indexing this year for a ~$20k degree in science/Engineering is $1.4k, minimum 2% repayment is $1150.
Its a strong job market but that doesn't mean it will be for the next 4-5 years, it wasn't this strong 5 years ago that's for sure. We just had the covid slowdown, 10 years ago was the mining bust and before that GFC.
You're assumption is that everyone in all parts of the country can pick a degree and go out and be on good money from day 1. Certainly there are lots of people in Engineering/IT/Business that get really good jobs out of uni, but that's not the standard.
How long do you want to lock the money away for?
One of the most thinly-veiled brag posts Ozb has ever seen.
internet speeds yesterday, savings balances today
cant wait for the day someone wants to compare man sausage size
OF inbound ✈️
No bragging. Not my situation. Just conversation with friend around what is the maximum you can have in cash. Beyond that you pretty much have to look at other investment options and take on risk.
Looks like this is general consenous on what to do and most people replied.
Never hurst to educate oneselves.
Cash is not risk free. Its also devaluing every day even @ 4 percent or whatever you can get in the bank. Is there a reason you need to hold 400k, seems unwise unless its just short term until other things are in place.
'Never hurst to educate oneselves'
so oneselves don't make wurst decisions
unless of course you're talking about sausages again …
invest some in asx:pl8. get 7.8% returns paid monthly
Not seeing these benefits from Plato
?
!
@wetwork: Not seeing these benefits from Plato
what benefits do you not see
it is 7% it has changed slightly
Stake shows div yield 4.84%?
divide by .7 , 4.84% is fully franked
Why not VHY? Quarterly distribution and annual yield is like 5.8% with 90% franked
last div was 56c for a 6682c purchase, that is 3.3% even if fully franked is 4.7%
what figures are you using
either way if it pays more do that, least with pl8 the dividend is static more or less and monthly, this vanguard one is hectic
is probly holds the exact same shit in slightly diff %'s
VHY has 4 distribution a year. They were 56.43, 78.96, 128 and 125 so total 388c for the whole year, roughly about 5.8%
Put it in MOVE bank, like someone else did the other day ;)
249k in Rabobank for the first 4 months, 90k in ING. Remainder in Ubank.
Once Rabobank intro rate expires, shift the 249k into Ubank, keep ING, with the remainder in Rabo/EFT/Dividend Shares.
Thanks
List of high interest savings accounts (select 'Savings Leaderboard' tab at the top):
https://docs.google.com/spreadsheets/d/145iM6uuFS9m-Rul65--e…
List of ADI's with FCS:
https://www.apra.gov.au/list-of-authorised-deposit-taking-in…
If you are under 35 you still have a ways to go till retirement. Unless you expect to buy a property or use the funds elsewhere within the next year or two, you may want to look at higher risk investments for better long-term returns.
@Yoman55555
Is their a particular reason why in this high inflationary time you wish to literally guarantee you come out with less purchasing power from your investment? i.e inflation 6-8%, while you get 4.6-5.x%
What do you suggest as an alternative earning >8% with no risk?
Sometimes the winner is the one that loses the least
There's so many variables to consider in such a matter……hence my question. Only the OP knows why they feel this is best path of action, not you nor me.
As you are 100% certain to have less 'effective' capital via bank interest right now. So unless there's significant variables its a pretty terrible strategy - as shown by historic returns of it vs just about any other financial asset.
That doesnt answer the question though. Its easy to take pot shots by saying 'why invest in something less than inflation' but, unless you can show an alternative, its a pointless comment.
And investing in shares is not an equivalent, unless you have a 7year time frame
@dtc: Oh my you are a clown.
Asking why they're placing it in a HISA is not a potshot. As i said there are so many variables that may make such a move logical i.e planning on buying a house within 12mths - or completely illogical i.e OP is in their 20's and holding as a long term investment.
One can't show 'alternatives' until the underlying conditions are known - stop being a know it all when you're clearly anything BUT.
Inflationary risk preferable to market risk, should they wish to, for example, purchase property soon.
This so much
Loss to inflation is a known risk, vs say, the stock market shitting the bed.
What would be another risk free alternative? Government bonds? Do they give higher yield?
Government bonds are only risk free if you hold them to maturity. If you need to cash them in earlier, their market value go up and down inversely to interest rates. My opinion - bonds are pretty useless for an individual investor.
300k is very much in the sweet spot to be looking at index funds. It's too much to be parking all of it in cash, and too little to be buying a property.
Would you have any recommendation on where to start with index funds? Are there any start popular ones like how everyone knows Vanguard for the ETFs.
@yjun355: Have a read through r/fiaustralia on reddit.
Look up https://www.etfbloke.com/best-australian-etfs/
Google ‘financial independence portfolio Australia’
Or just buy DHHF or VDHG, which are all in one investments
You comparison is incorrect/incomplete.
Your listed inflation rates is historical (over the previous 12 months).
The stated savings rate is over the coming forward period (over the next 12 months).
Unless you expect inflation over the coming 12 months to be higher than the listed savings rates, then the real return will be positive.
Don't compare apples to oranges.
I would put $200k into the best HISA you can cope with. I cant cope with ING so its AMP. Ubank, Macquarie or Rabobank (last 2 are honeymoon)
then i would wait until fixed term have increased (hopefully in the next week or so) and load up the balance for a 3 or 4 year term. Assuming you dont need the money for that long. If you do, then $250k in the higher interest one above and the balance in the one with slightly lower interest
Thanks
Allocate some to Birkin bags. Look into how much they appreciate in value.
Not sure what is birkin bags
https://en.wikipedia.org/wiki/Birkin_bag
secondary market very hot! obviously not risk free, beware of extremly hard to detect imitations.
Take a trip to Columbia and invest there
You might like to have a read of the article about financial advisors on moneysmart.gov.au.
As with other things in life, the more you know about a topic, the less chance of being ripped off - good luck
don't "save", instead "invest".
Save by definition is to conserve (to stay the same).
Invest by definition is to grow (to increase).
The "high interest" savings rate is only relative to things like high inflation and CPI, so over time, it doesn't grow.
You'll get 3k in interest but by that time you'll be paying 3k more for things.
Don't forget banks are more suspectable to collapse during hyperinflation, especially the smaller banks.
Put it or a part of into your super. If you're with an industry superfund, they are generally one of the safest, lowest costs and highest long term yield investments I can think of.
Compare the Pair
My managed fund is like 10% on average. waste of money keeping it in the bank
what is managed fund? sorry for stupid question
thanks for the answer. Will it work better than you actually putting money in the bank or buying bonds/shares? Again, I am noob
@ntt: Better than putting money in the bank, may depend on the bonds/shares but i think it performs well enough. I would invest in something like this if you want something for mid to long-term.
thanks.
how do you educate, compare different manager funds?
i a thinking of looking into them as well
Just use an index fund. They outperform manage funds on average over time due to fees. Something like VDHG or DHHF. As long as you don’t need it at short notice.
I have family members who were previously chartered accountants. This stuff was their bread and butter - they had access to platforms that compare all the funds and performance.. unfortunately not available to us plebs - there may be alternative platforms though but i dont know them.
saving
expected gain = 5.25 %, risk = 0 %
ETF
expected gain let say around 10% , set stop loss 10%, or the max draw down is 10%
ETF compare to saving
the potential gain is 4.75 % more but the potential risk is 10% more.
above is just an example
how you should plan and calculate the risk and reward ratio before you investing
Thank you for explaining this way . I really couldn’t understand the risk but now I have an idea.
Which eft are high on your list?
Don't forget to shop around for term deposits too. Some of them are fairly attractive atm too if you dont mind locking your money away for 12 months or more.
I plan on doing that for a portion of incoming money to cover CGT that mr tax man will want the next financial year.
financial advisers are human beings, greed is written on their forehead.
ETFs via Vanguard
VAS is a Vanguard etf that tracks the asx 300 and gets an average 10% after distributions.
I just googled asx:vas to compare it with some US-focused Australian ETFs like asx:ivv, asx:moat, asx:fang
and clicked above the graph on Max, 5Y, and 1Y then looked at the green text percentage return top left of the graph for each
here's my summary of what I saw:-
VAS up 80% in 14 years, 16% in 5 years, 0.6% in 1 year
IVV up 350% in 14 years, 70% in 5 years, 7% in 1 year
MOAT up 176% in 14 years, 95% in 5 years, 15% in 1 year
FANG up 55% in 14 years, 55% in 5 years, 29% in 1 year
dunno how much Australian tax franked credits improve the net result, but on the figures above I'm not attracted to VAS over the other three - que ?
Well done on having that much savings.
I think until you are able to assess your own risk profile and appetite (that's one of what Financial Planners do) and decide which investment to go, best to put it into high interest accounts like ING / BoQ in $250k and $50k split.
300k isnt much. You need to ask yourself how much access do you need to 300k and how fast in order to determine the best investment options.
wish I have 300k to spare :(
I'd probably do:
ING (5.25%) -> $80K
BOQ Smart Saver (4.85%) -> $100K-150K
BankOfMelbourne Incentive Saver (4.75%) -> $100K-$150K
And use BOQ Smart as the main day-to-day bank as there is no requirement to grow balance, i.e. put money that require immediate access there.
The best strategy for distributing $300K into savings accounts depends on your individual needs and goals. However, one option would be to open an ING Savings Account for the first $100K, as it offers the highest interest rate on the market for over 35 year olds. For the remaining $200K, you could open a Ubank account, which offers the next highest interest rate. This strategy would allow you to earn the most interest on your savings while still having access to your money when you need it.
Another option would be to open multiple savings accounts with different banks. This would allow you to take advantage of different interest rates and promotional offers. However, it is important to keep track of your accounts and make sure that you are not paying any fees.
Agree with others invest in some stocks probably divided paying ones pretty sure some of the mining ones were paying close to 9% and in theory with all this climate change stuff they need to keep mining copper and resources for batteries.
Another wealthy beneficiary of our nation’s capitalist skewed system where 1% owns 70% and the filthy rich casually asks what to do with 300K.
It’s just so sad.
300k is not filthy rich
OP could be 50 years old and saved up how is that sad/unfair
I’d say put it into coke and hot girls. Order doesn’t matter.
It does matter, your standards drop if you do coke first
but I thought they said 'things go better with coke!' ?
My thoughts for your 400k situation. Always go for highest interest rate. OZB has a always up-to-date google sheet that tracks latest interest rates across banks.
100k in ING - play the game to make sure u get 3 ticks
If the remaining 300k not required - lock 250k into virgin
remaining 50k - chuck into whatever is the highest rate atm?
If money is needed, chuck your monthly transactinal requirement with UBANK, you get the flexibility earn above average interest on your working capital.
Never have more than 250k in each bank (or banks that holds the same ADI license) because it's not insured. I.e., Bank of Melbourne /WestPac and St George are all under the same mob i believe. So never put a total combined of more than 250k in either 3 of them. Aussie bank run is not likely, but not impossible.
If I have that kind of money, i'll probably put a bunch into the stock market (AU,UK,US and emerging). But you probably gotta spend at least 1k reading up on good books to make sure you know what you are doing. Google books recommended by Warren Buffett, Bill Ackman etc - the interent got loads of it.
Like everyone else here, I do not believe in financial adviser. Skin in the game yo, they earn fees on service and they do not take a cut of the losses you make if they give you crappy suggestion. Spending heaps of time to read and educate yourself on financial literacy and investment trumps paying 5k to financial advisers. It's more rewarding, gives you better control and flexibility.
'I do not believe in financial adviser'
last I looked there were only something like 3 independent financial advisors in Australia, and they probably all charged $2K or so for that advice
all the others were apparently associated with big banks or other vested interests, so were duty bound to 'recommend' related products.
so as others say, I also avoid financial advisors, and have done just fine.
What currency is Say?
South Australian Yen
lol
Yuan, the world leading currency.
https://docs.google.com/spreadsheets/d/145iM6uuFS9m-Rul65--e…
Click the link above for the best deals on investment savings accounts OP.
I would just buy Vanguard: High Yield (VHY) ETF.
You can get more info on this at https://www.vanguard.com.au/adviser/products/en/detail/etf/8…
@brendanm: How about I word it in English for you:
Does hard work always result in more money?
or
Does hard work most of the time result in more money?
I'd bet you will fail to answer and go off about how working hard sometimes leads to it but it's not luck.