I've recently been gifted $10K on the provision it has to be invested.I'm not wealthy by any stretch and have not invested for over two decades and realise there are likely many ways to skin a cat. I'm on a Pension and so I've some issues with tax, but really it's more just ensuring I get a reasonable return without paying a fortune in fee's. I've considered just investing it in my meager super, but I realise that makes it harder to access if I need it. I've no intention in investing in Crypto, I'm pretty risk averse, just looking for something local and simple, if such a thing exists. Any suggestions appreciated!
Looking for Suggetions on a Low Fee Legit Way to Invest $10K
Comments
Put it into your super
So Albo can raid it.
Please explain?! If you're referencing an increase in tax on super balances above $3 million… I don't know how many of us OzBargainers are in that boat. https://www.afr.com/policy/tax-and-super/why-your-super-is-t…
If you're talking about something else, do enlighten me please.
I think most voters would've been more concerned about the ability to access super to buy a house as proposed by the LNP, which even the AFR called out as likely to raise house prices. As did many sources.
an increase in tax on super balances
It's not an increase in tax, it is theft. Taxing where there is no profit realised.
Once in place they will also start to drop the threshold catching more and more people… They are basically stealing money that does not belong to them.
@jv: I mean… sure? But no one has to keep 3+ million dollars in their super. If you're hoarding that much as an individual, I don't really have any sympathy if you get taxed some more. Put the money somewhere else (which will possibly get taxed there also?!) Sympathy for millionaires makes absolutely no sense to me when the vast majority of individuals don't have one let alone three millions of dollars at their disposal.
@JownehFixIT: Take it out of super if you can. Buy assets eg gold, or whatever that keeps it value at least. Then as long as you only sell small amounts of it when below the tax free threshold, plus will it to someone, no tax will be paid ever! Death is not a capital gains event. So do you really think Albo or the greens can resist not extending unrealised capital gains to everything?
I think most voters would've been more concerned about the ability to access super to buy a house as proposed by the LNP,
Works fine in Singapore… and it is your own money anyway. The government are not stealing it from you…
@jv: The point of this was if people CAN take out super, the likelihood is that prices will increase by that amount able to be taken out and used to buy a home. Then everyone is competing to buy homes AND they have less super. Or they don't access that super, and they've got less to buy their home with.
the likelihood is that prices will increase by that amount able to be taken out and used to buy a home.
It was only for first home buyers…
Also, it already works well in Singapore…
Then everyone is competing to buy homes AND they have less super.
That's only if you don't fix the supply issue, and Albo does not have an answer to that… (Other than use unqualified labour)
@jv: Yeah let's see what the next term brings hey. Not heaps of real change on the housing front so far. I mean there's the Housing Australia Future Fund, but we'll see if that helps. I've seen varying viewpoints.
@jv: It took 30 years of bad policy to get us into this housing mess, we're never getting out of it in 3 years, or even 6, I think it's going to take more than a decade plus to fix, at least (I'm banking on 20 years), so hopefully Labor remains in power.
It took 30 years of bad policy to get us into this housing mess
Nope…
https://images.sbs.com.au/99/c2/d06bce4644e0bc34fc8a146ab114…
So Albo can raid it
Or The Grim Reaper.
Whoever is first.
For the next 2 years Gold will outperform all other asset classes.
Its bull run is just getting started and has another 1-2 years to run.
You can invest in Gold via a Gold ETF such as ASX:GOLD
How long are you looking to invest for?
A high interest savings account will give modest returns with very low risk, but the returns will drop if the interest rate drops.
Term deposits are also very low risk, and they let you lock in an interest rate for several years (and you agree to lock your money up for the same amount of time), but of course that rate is lower than the HISA.
If inflation is high then either of the above options might lose value overall, but it seems like maybe it's settling down so perhaps you will come out ahead.
Personally, I'm fairly confident that over the next 20 years an ETF (bundle of different shares) like VGS (international) or VAS (Australian) will go up. I wouldn't make the same claim for the next 5 years.
I have read briefly about EFT's, still not really sure about them if I'm honest, but appreciate the info.
ETF is different to EFT
watch this video together with the link I post earlier, if it too much for you and you have no idea, bank deposit probably a better option
It's difficult to say which ETF (if any) would be best for you without knowing more about your financial/tax/age circumstances. For example, some ETFs invest heavily in dividend paying shares while others focus more on capital growth. If you are still paying tax and are investing for the long term it is almost certainly best to deposit it to your super.
I hear you re the super, it makes sense, I guess it just seems like it's 'gone', but it's the long-term planning of it that's the whole point. I'm sure when I'm older I'd appreciate the decision, hopefully by that stage I'm not though regretting all the other dumb things I've done that's led me to where I'm at!
read briefly about EFT's, still not really sure about them
What aren't you sure about?
The vague level of information you are giving will only lead to vague answers.
Will having an extra $10k in assets affect your government benefits? If that $10k turns into $15k over 10-15 years will that affect your benefits?
What level of extra income will affect your benefit?
How long are you expected to "invest" for?
How old are you?
Unfortunately the less financially educated people are means they often have a low risk tolerance or make poor choices that don't work.
Having a pension is the bigger issue - depending on what type, you have income and asset thresholds you need to investigate. Centrelink are actually pretty good at working this out.
Assuming you can have an income and you're earning nothing elsewhere, then you can look at shares (remember any CGT obligations, which may be $0), or a high interest savings account. But that's only going to give you maybe $600 pa ($1 trigger deposit, no withdrawal)
Yeah, I'm just trying to work out the Centrelink stuff now, they have lost of info on 'gifting' but more as the 'gifter' not the 'giftee'. I was thinking maybe just a bank savings account, seems that way fee's are negligible. Thanks for the info.
In broad terms, the govt doesn't want you to qualify for benefits when you intentionally make yourself "poor" by giving your money away, hence the info on being the gifter.
In the other direction, the money you receive as a gift just becomes part of your assets, it doesn't matter whether your assets are gifted or earned.
However if someone pays for your normal living expenses on a regular basis, these regular gifts can sometimes count as income for Centrelink purposes. A one-off gift is unlikely to be income for Centrelink purposes.
Yes, from what I've found out, it seems it's more about updating your assets to show you've received it. The ATO don't count gifts as income, it's more if you receive earnings from the gift moving forward, like any other investment I guess. I'm sure if I got $1mil they'd be thinking differently…
You asked for low fee but none of the other commenters actually gave you recommendations for your different options
Savings account: ING - 5.4% (free; note that you have to jump through some hoops but they are achievable even on a pension if you bank with ING). Macquarie Bank - 5.1% (free, no hoops). UBANK - 5.1% (free, no hoops).
ETFs: Vanguard Personal Investor Free to invest in Vanguard ETFs but you pay a fee to withdraw. Its very useful if you plan of putting money in every week/month as even small contributions are possible then.
Less likely I'll add to it regularly, not an ING customer either I'm afraid, but thanks.
Watch this space, studying horses this Saturday
I'll be watching, my old man would approve that's for sure.
Placing into a ~5% interest saving account or mortgage offset account is the simplest and safest option.
Buy VGS, VAS, DHHF or VDHG.
If you want slightly higher risk, NDQ for Nasdaq coverage.
If you're actually retirement age, a high interest saver might be most appropriate though. You need time to ride out the volatility of higher risk options.
Investing in super will usually be better due to the simplicity of managing it and because of the tax concessions in super. And you can usually decide how it will be invested (broadly speaking) when in super by choosing the investment option. But Im a bit confused by the information you have provided. You are on a pension, but what type? If an aged pension then you would already have met the conditions for release of any super in an accumulation scheme. If a disability pension then it might be a bit different.
Disability, spoke w Centrelink, all good thankfully on that front, but yeah, thinking super might be the way. Thanks for your insights it's much appreciated.
For long-term tax-effective, put in super. For short-term put it in high interest savings account (~5%). For medium-term, shares, ETFs, managed funds, etc are good, but I wouldn’t recommend unless you’re already invested there, or likely to be adding to it over the years, as it requires learning and managing (deposits, withdrawals, tax, etc) for a relatively small investment.
If you believe in Bitcoin put the whole 10k into MSTY with the tax treaty you would have received a roughly $800-$900 payment this month. Pays monthly. Or split it three ways. 1/3 into MSTY, 1/3 into its underlying MSTR and a 1/3 directly into BTC. Personally I would go the latter, it gives you a decent monthly additional income stream while also capturing the upside movements. Just my opinion and as always do your own research on anything you do plan to do so you can fully appreciate the risks & rewards.
Let's face it $10K is a very small amount to invest.
Many banks offer >5% on their accounts.
Deposit and forget.
Minimum income tax if any.
Withdrawal if needed.Simple
Not financial advices but maybe look at broad ASX market ETFs like betashares A200
https://www.betashares.com.au/fund/australia-200-etf/
yield is around 3-4% depending what price you are entering.
I DCA for the last 6 years so my price varies from $90 - $138
buy and forget and get your dividend (varies from year to year based on 200 asx companies reported profit and payout)
they pay dividend 4 times year