Money

[Humodour]

If you had $50,000 dollars at the start of 2011 and the basic interest rate on a long-term deposit account was about 7% (and likely to be so for a long time to come) while inflation was about 3%, what would you do with the money? Assume you have no debts or financial obligations and won't touch this money for 5 to 10 years. I'm guessing high-growth options on the stockmarket?

[kirottu]

**** enlargement pills.

[213374U]

Wait, wait. Are you seriously asking for financial advice? Here?

 

\o/

 

Ahem, seriously now. I have a friend that can help you double or even triple that amount in the blink of an eye. Something to do with Nigeria, guaranteed profit. I'll PM you the account # where to make the deposit.

[Humodour]

Wait, wait. Are you seriously asking for financial advice? Here?

 

There are a lot of smart people on here who've invested money before. I on the other hand have never invested before, and as I said, I do plan to see a financial adviser eventually. Oh, wait I didn't say that, I deleted that part of the post for some reason.

 

Ahem, seriously now. I have a friend that can help you double or even triple that amount in the blink of an eye. Something to do with Nigeria, guaranteed profit. I'll PM you the account # where to make the deposit.

 

Have you done it yet? It hasn't arrived. Maybe you didn't hit 'send'. I am very interested in this plan. Please respond.

[Moose]

I don't know enough about the stock markets to effectively gamble away large portions of money. Property has always been a safe investment though since my grandfather's days. Depends if you can stomach the word mortgage.

[Gorgon]

Coke and hookers ?

 

A transmorgriffing machine that could turn 50000 into 500000.

[Humodour]

I don't know enough about the stock markets to effectively gamble away large portions of money. Property has always been a safe investment though since my grandfather's days. Depends if you can stomach the word mortgage.

 

Housing prices here will increase by about 20% by 2012, however I doubt $50,000 is enough to invest in the property market. I don't think they sell quarters of a house.

 

Edit: And maybe I'm missing something, but 20% by 2012 is supposed to by a high increase, yet that's less than 7% per year. I could make that kind of appreciation on a basic long-term savings account. Hmm or maybe that was by the start of 2012 making it 20% in two years - that would make more sense.

Edited October 21, 2009 by Krezack

[Oerwinde]

I don't know enough about the stock markets to effectively gamble away large portions of money. Property has always been a safe investment though since my grandfather's days. Depends if you can stomach the word mortgage.

 

Housing prices here will increase by about 20% by 2012, however I doubt $50,000 is enough to invest in the property market. I don't think they sell quarters of a house.

 

Edit: And maybe I'm missing something, but 20% by 2012 is supposed to by a high increase, yet that's less than 7% per year. I could make that kind of appreciation on a basic long-term savings account.

 

Apparently with all the car companies getting beat, Detroit's real estate market was ridiculous. Average price of a house was like 18,000 because there were/are no jobs so no one can live there. Eventually it will get better so that would be a sweet investment.

[Guard Dog]

Take it to Las Vegas and play $100 hand Black Jack. Just go easy on the booze!

 

 

Seriously, $50k with a five year turn around I would split it up of course. Stock/Securities are a bad bet right now despite the recent uptick in world markets because of the weakness of the US dollar and the fact that the US is still just one bank failure away from disaster. So I would diversify by splitting the total three ways with the largest going into real estate somewhere with high growth potential and low tax (in the US I'd look at empty lots zoned for residental near Dallas/FT Worth, an area largely unaffected by the recession but prices are a bargain). The next largest I'd put into commodities but not gold I think because it is already very high and has to be nearing it's ceiling. Silver or some other real commodity would be a good bet with good growth potential and low risk. The last I'd use for bonds from a stable source with preditcable interest to hedge against any downturn in the real estate investments. That strategy will not make you rich but barring a disaster will give you a much better than 7% return on your 50k after 5-7 years. Of course over the 5-7 you will have to watch what you have and the market becuase un upturn in the market will lead to a downturn in commodities (usually) and you may need to make a move.

 

If you want to invest for 5-7 years and not worry or think about it, you really need to think bonds or low risk mutuals. But you will not get a very good return.

[Moose]

I don't know enough about the stock markets to effectively gamble away large portions of money. Property has always been a safe investment though since my grandfather's days. Depends if you can stomach the word mortgage.

 

Housing prices here will increase by about 20% by 2012, however I doubt $50,000 is enough to invest in the property market. I don't think they sell quarters of a house.

 

They do actually, it's called a joint lease. Not what I would recommend though, normal people go for a mortgage - and at the ridiculously low rates available at the moment it's a good time to invest before the economy recovers.

[Humodour]

Thanks heaps Oerwinde, GD, and Moose. I have enough info to start doing some reading.

 

I've always sort of wondered this:

 

Suppose I invested $100,000 in American shares while the AUD was at parity with the American dollar, and then a year later the AUD dropped to, say, 50% of the USD (i.e. 1 AUD = 0.5 USD) as it regularly does... if I were to then withdraw those shares and convert them to AUD, would I then have about $200,000? If that's true, isn't that pretty much a guaranteed get rich quick scheme, given the regularity of Australia's currency cycles?

 

OK, so having money in the share market for only 1 year is silly, let's say it was in a savings account in America for a year instead.

[Hiro Protagonist]

If you wanted to play with currency, you just do a straight currency exchange. Buy American dollars (at parity) and wait for the AUD to go down and then change the money back to australian cash when the exchange rate is low. No need to put money into the American share market.

[Humodour]

If you wanted to play with currency, you just do a straight currency exchange. Buy American dollars (at parity) and wait for the AUD to go down and then change the money back to australian cash when the exchange rate is low. No need to put money into the American share market.

 

Well, I was thinking about the long-term. Put money in an investment in America, then wait 5 to 10 years for the next currency cycle when the AUD hits a low, and pull it out. I just wanted to confirm there wasn't a flaw in my thinking. That's pretty sweet. Better still, the AUD should be at parity with the USD for another year or so which meshes well with when I intend to start investing what I've saved.

[kirottu]

Oh sorry, I was un-professional.

 

Buy stocks of a company that makes **** enlargement pills.

[Humodour]

Oh sorry, I was un-professional.

 

Buy stocks of a company that makes **** enlargement pills.

 

That's the first thing I thought of when I read your original post.

[Hiro Protagonist]

My girlfriend works from home and trades shares on the sharemarket. She mainly concentrates on Blue Chip shares that are volatile but still good. Shares like Rio Tinto, BHP, Woodside Petroleum, Newcrest Mining, Lihir Gold, Kingsgate Consolidated, etc Notice a trend here? There all mining and resource stock. Also, at the moment, the Banking shares are going gangbusters.

 

In March/April this year

$15.00 Westpac

$25.00 Commonwealth Bank

$16.00 NAB

$12.00 ANZ

$15.00 Macquarie Group

 

Now

$27.00 Westpac

$55.00 Commonwealth Bank

$32.00 NAB

$24.00 ANZ

$55.00 Macquarie Group

 

But you really need to know what you're doing with Shares. It's not as simple as buy some shares and hope for the best. It can also be very stressful and you will have many sleepless nights when the shares go down as my girlfriend does. She also gets up at 3 or 4 in the moring to check up on the overseas markets because they influence our market so much.

 

Personally, I would put half in shares and forget about it and put the other half into a deposit for a property. After 5-10 years, sell the property and buy another property and keep buying and selling property. eg. Buy a small 1 bedroom flat for around $300K with a $30K deposit and live in it. After 10 years, you might have that property paid off. If you don't and have say 1/2 paid off and still have $150K left, sell it. If the property is worth $400-450K after 10 years, you can pay out the $150K on your loan and still have $250-300K left. Or $400-450K if you've paid it off.

 

With that $400-450K, split the money up and you buy two properties. One to live in and one to rent out. The rent pays for say 90% of the investment property mortgage and you pay the difference + pay off your own mortgage. You'll get a great tax deduction from your investment property every year (I'm talking thousands every year if you know what you're doing). By that stage, your shares should be worth a motza. And then sell your properties and buy three properties and have two as investment and one to live in. That's what I'm doing at the moment.

 

You won't get rich just by buying one property and living in it for 20 years.

 

You really can't go wrong with property in Sydney. Some areas are defintine no-no's. There may be exceptions, but usually, with Sydney the closer you go to the CBD, the more expensive you get. So a unit at Erskineville will be more expensive than a similar sized unit at Caringbah. A 4 bedroom waterfont house at Sylvania will usually be worth less than a 2 bedroom unit in Point Piper. etc

[Walsingham]

I'd start my own business and quit being managed by **** heads. Which is of course what I did.

[Guest The Architect]

Yeah but when you think about it, you're still stuck with the same problem.

 

**** enlargement pills.

 

More than likely something all Finnish men need to be investing in for themselves.

 

Sorry for not contributing anything helpful to your thread (hey, I set up a joke for you guys), Krezack, but I don't know **** about finance and investments (again, another joke set up).

Edited October 21, 2009 by The Architect

[kirottu]

I blame cold winters.

[Walsingham]

Yeah but when you think about it, you're still stuck with the same problem.

 

Then there's all the sexual harassment...

[Wrath of Dagon]

Just because something happened before is no guarantee it'll happen again. Depends how much you're counting on your money still being there in 10 years. Even at 7% it'll double, of course that's not counting inflation and taxes. If you want more risk, probably a diversified international mutual fund is a good bet, overweighted in China. Personally I wouldn't invest in US economy until the budgetary mess is under control, if it ever will be.

[theslug]

Have to agree with gd. Essentially you've already missed the boat bro and by a long shot. The American market (and gold) are so overvalued right now that you wouldn't be able to make any meaningful money unless you happen to be a hedge fund manager with a few billion at your disposal. But that's really how the system is set up, you can only make money in the market if you have a ton of it available. If you can't put forth more than 50k you might as well not even do it becuase you'll just be making chump change, not to mention if you actually have an income there's tax consequences. Two of my particular stocks went up like $5+ which is huge and I still only came out of it with like $400 over the course of 2 months.

 

There's a lot of money to make out there but for the little guy you're lucky if you can find scraps, you're just not even in the same game as these guys and you can't win.

 

Edit: btw when I say you shouldn't even try I mean playing the stock market, if you have a large sum of money lying around you should do something with it even if its a crummy CD.

Edited October 21, 2009 by theslug

[Gorgon]

In other words we are back to coke and hookers.

[Walsingham]

You could get a professional qualification. Surely 50k will get you a PhD. That would boost your earning potential.

[Gfted1]

In other words we are back to coke and hookers.

 

It always comes back to coke and hookers.