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All cashed up and no place to go

Discussion in 'Investing Strategies' started by Gonzo, 18th Aug, 2005.

  1. Gonzo

    Gonzo Well-Known Member

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    I'm wondering is there is anyone else in a position today where they find themselves cashed up after releasing some assets but having trouble finding anything to do with the cash ?

    Other than some leveraging into equities and funds, and without the ability to have a good look around for more property due to distance, what else is there ?

    Despite my own belief that in this market cash is king and that I should be patient, it seems like a waste of resources to sit it in a bank account earning 5.5%.
     
  2. ani

    ani Member

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    Hi Gonzo

    I know that feeling:)

    I am still actively considering property but I'm here and you are there.

    If you still are holding some property consider putting the cash in an offset against the mortgages maybe?

    cheers
    ani
     
  3. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    If you aren't looking to invest in more property, and aren't willing to leverage into equities and funds, then there's probably not terribly much else out there other than cash in the bank. I'd be interested to hear anyone elses suggestions ?

    Why not at least park the funds in a fund like NavraInvest - even if you don't leverage, I would hope that you'll return better than 5.5% on your money there.

    Obviously your investment timeframes and goals may make this inappropriate - there is always a risk of short term fluctuation in your capital value ... but I guess that's one of the risks of seeking higher returns. If you can't cope with this risk (which is completely valid - I'm not criticising !!) ... then maybe cash in the bank is the only real alternative until you are ready for your next move ?

    Just a suggestion.

    EDIT: like ani said ... if you have any existing loans that have offset facilities, parking your money in there is always a good plan until you decide what to do.
     
  4. Gonzo

    Gonzo Well-Known Member

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    Thanks for the tips. At the moment I'm playing the time honoured game of convincing the wife that some risk is good, but we're not there yet.

    Unfortunately we don't have any property at the moment (more due to selling what I had in 2003 and not realising that keep at least 1 would have made a lot more sense) so an offest wont cut it. I've had a look at Navra and might just try something there at some point. Buying property overseas is something we're considering so maybe the 5.5% isn't a bad resting place for now as it affords me instant access.

    Ah the joys of investing .....
     
  5. ani

    ani Member

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    I'm not quite sure on the time but think you can get your funds out of Navra in a few days. A lot of people I know park money there between purchases.
     
  6. See Change

    See Change Well-Known Member

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    It also depends on whether you have something specific that you want to do with the money in the short / medium term.

    We have recently sold various IP's and went with parking the money in offsets etc , however we're just about to start building a new PPOR , so I was more concerned about preserving what we had than getting a good return in the next 6-12 months.

    Any managed fund will have short term fluctuations and parking funds there will make that money subject to that fluctuation.

    If you look at the product disclosure of most managed funds you will find that they talk about investment frames of several years rather than 6 months.

    However in about one years time , assuming we have sold our current PPOR ;) , we will have funds again burning a hole in our pockets with no specific projects to park the money. At that stage I plan to diversify that money , with gearing, into managed funds .

    See Change
     
  7. Andrew

    Andrew Active Member

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    There are other investments out there, Google for "Viatical settlements" for
    instance.

    andy

    n.b. this is NOT a recommendation, DYODD (do you own due diligence)
     
  8. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    mmm ... that sounds like one for the pedia once it is up and running!
     
  9. Nigel Ward

    Nigel Ward Team InvestEd

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    Seech makes a very valid point. Risk, i.e. the variability of returns over a set timeframe, is directly related to reward. Putting funds into the share market (whether directly or indirectly through a managed fund) has the potential to outperform cash at bank, but it cuts both ways. The return from the bank is certain, but the returns from the market could be a loss of some or all of your capital. Total loss of capital would be highly unlikely if you invest in a spread of blue chip stocks...but still possible. Thus if your timeframe, or personal risk tolerance, won't permit you enough time to ride out any short term downturn in the market then a high-yielding bank account is really your best option.

    Cheers
     
  10. See Change

    See Change Well-Known Member

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    hmm.

    I used to wonder about the ethics of making really low offers for IP's where the person is in some sort of personal / financial problems....

    Might give viatical settlements a miss :eek:

    See Change
     
  11. TryHard

    TryHard Well-Known Member

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    The partnership

    I hear ya Gonzo. Two years ago the smartest thing I did was take my arguably better half to Steve Navra's 2 day seminar. Since then we haven't looked back. But the missus admits if she had not come with me, there was no way she would have agreed (or understood) most of the stuff we're doing.
    Other People's Money. I love it !
    Good luck ...
     
  12. Bundy

    Bundy Active Member

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    I agree, perhaps look at parking you money in a manged fund such as Steve Navras'.

    Much better returns than a bank and you can get you money in a few days. Very liquid, no fees.

    BUNDY
     
  13. Jacque

    Jacque Team InvestEd

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    If you have stacks of time and like doing your own research, you can also check out other funds/unit trusts/bonds etc and more information on them in Personal Investor magazine- their Money Guide at the back has heaps.
     
  14. Nigel Ward

    Nigel Ward Team InvestEd

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    Hi Bundy. I agree it's a great fund (we've got money in it!) but it's not correct to say there's no fees. There is a management fee which is charged when the fund manager outperforms their benchmark index (the ASX200 price index).

    Also, whilst not strictly speaking a fee, there is a buy-sell spread of 15 basis points to move into and out of the fund.

    Have another look at the product disclosure statements for the wholesale and retail funds (you can get them at www.navrainvest.com.au). The fees are also spelt out on the website.

    As always, read the pds and get proper advice before investing in any fund.

    Cheers
     
  15. gqsydney

    gqsydney New Member

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    Hi Gonzo

    A great alternative to consider is the use of property unit trusts, there are many unlisted and listed types out there in the market. These can offer income returns in the ranges of 6-12% p.a and often have tax advantages attached to them which is good if you simply just investing cash or even if you are gearing. You can also receive some capital growth depending on the nature and direction of the trust. I suggest you seek professional advice first to ensure that it suits your current situation and investment risk profile.

    all the best :)
     
  16. Gonzo

    Gonzo Well-Known Member

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    Hi All,

    Thanks for the responses. I guess I wasn't too clear in the first post. We have about 60% of our assets in various things including Funds (predominantly International Shares), Margined Aus Equities inc some Commercial property trusts, and a couple of pre-IPO startups. It's the other 40% that I'm having trouble convincing my wife to do something with.

    I guess in retrospect the balance is pretty good considering as a couple we're are risk adverse. My thoughts were more along the lines of what other types of investments, other than the norm, are out there.

    Viatical settlements is something new to me, but like See Change, I'm not sure I could get into that market purely for the moral ethics of it all.

    Cheers

    gonzo
     
  17. Nigel Ward

    Nigel Ward Team InvestEd

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    Gqs has raised a good alternative. A couple of additional observations:

    1) unlisted property trusts can be illiquid i.e. it can be difficult to redeem when you want to or as much as you want to.

    2) unlisted property trusts are often fixed term, i.e. you suffer early withdrawal penalties if you take your money out prior to say 7 years' time.

    3) in the LPT sector times have changed. Property managers are building and developing and builders are managing property trusts... Many of the stalwarts of the LPT sector now have a different risk profile than they used to have...and considerably more debt. That isn't necessarily a bad thing...but in my opinion the sector isn't solely the high-yield play it used to be.

    But as gqs says...see your financial advisers before taking any steps.

    Cheers
     
  18. Medine

    Medine Active Member

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    Hi Gonzo,

    You said: "We have about 60% of our assets in various things including Funds (predominantly International Shares), Margined Aus Equities inc some Commercial property trusts, and a couple of pre-IPO startups. It's the other 40% that I'm having trouble convincing my wife to do something with."

    Do you have much in property?

    Cheers, Medine
     
  19. Gonzo

    Gonzo Well-Known Member

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    Hi Medine,

    No, we don't. The bulk of our assets come from the sale of our IPs. Unfortunately I sold them before I found a good accoutant and forums like Somersoft which would have made me keep at least one of them.
     
  20. Steve Navra

    Steve Navra Well-Known Member

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    Property is still GREAT!!

    With lots of due diligence and coated with rental reality there is a fair bit of opportunity out there :)

    Regards,
    Steve