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Finaly saved up 10k, what can I do with it?

Discussion in 'General Investing Discussion' started by uz3r, 20th Nov, 2008.

  1. uz3r

    uz3r Member

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    Ive finally saved myself up 10k. I will be looking to buy a house in the next year or so and this will eventually be my deposit. However I would like to know what to do with it in the meantime. Right now its sitting in an open access bank account with a very average interest rate (less than 4%).

    I want something fairly low risk so that I have have the deposit when I need it. I would like to be able to access the money when I want BUT I would consider locking it down for up to 6 months if the rewards were right.

    Obviously I can look at online savings accounts or term deposits to get a bit of a better interest rate - but even they are all falling and dont have much to offer.

    Anything else you guys can think of? Im really a newbie when it comes to investing.

    Cheers!
     
  2. crc_error

    crc_error The Rule of 72

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    keep it away from the share market! just put it in a term deposit....

    you have a better chance at winning at the casino than the stock market..
     
  3. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Unfortunately for the timeframe you are considering, there's not much better than a term deposit or online savings account.

    Will this be your first home ? Have you looked into the First Home Saver Account options ?

    Here's some more info: First Home Saver Account - Guide for First Home Owners
     
  4. Sacko

    Sacko Well-Known Member

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    In that case put it all on Red!
     
  5. Sacko

    Sacko Well-Known Member

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    Why red? :confused:

    Because that's what my holdings screen has looked like on most days for most of the past 3 months! :mad:
     
  6. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Not wanting to take this thread off topic ... but that's just your fear showing crc_error ... you made a choice to invest, you've been burned - that much is clearly showing based on the change in tone in your posts in recent weeks. You've been calling the bottom of the market for months, and you've been wrong every time. Now you're scared - I can understand that.

    But that doesn't mean that a casino is better than the stock market - it just means that you haven't learned how to make money from the stock market yet (or more importantly, how to not lose money).

    That being said - I agree that the sharemarket is not the place to be investing your deposit for a house ... but I would also say that in a bull market!!!
     
  7. crc_error

    crc_error The Rule of 72

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    same here.. I just think this is a good lesson for investors.

    Basically investing is a gamble. Regardless of how much research you do, there is no way you can pick a good investment. Its more to do with luck.

    Look at the banks, many of them are at 10 year lows, so anything anyone invested in the last 10 years is losing. Property trusts, many even below 10 year prices.

    I think your better off going to the dog races, and placing a bet there, at least you will know your result there and then.

    In a nutshell, the stock market is a big pyramid scheme, and in the end, it always collapses.
     
  8. crc_error

    crc_error The Rule of 72

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    yes, I agree.. I was wrong.. who would think the market would continue to fall like it has.. basically what looks cheap today, may be even cheaper tomorrow, but is it really a bargain? Thats the lessons I have been learning..

    Really, I would like to hear from anyone here who today can say they have made money from the stock market? If they did, and got out last year, I would say that would be more luck than skill, but I'm happy to be proven wrong?
     
  9. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    No - investing has risks. Being successful involves learning how to manage those risks.
     
  10. crc_error

    crc_error The Rule of 72

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    how do you manage those risks? how long have you been investing, and can you say that today after all that effort your ahead?
     
  11. voigtstr

    voigtstr Well-Known Member

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    As others have said, I would be looking at an online savings account. You get a guaranteed interest rate (until the next rate cut) and the flexibility of taking the money out earlier if you need to (you lose this flexibility with a term deposit but are rewarded with a higher interest rate). Funds and shares are too volatile to used for a savings goal. When you need to take the money out, only half of it might be there!
     
  12. crc_error

    crc_error The Rule of 72

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    or even 13% may only be left... as per one great crash!
     
  13. uz3r

    uz3r Member

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    Thanks for the replies all.

    Yes it is my first home.

    These first home saver accounts look great, pitty you have to lock it in for four years. With a 15% return, I could hold off for a year or two if I really wanted but 4 years is a bit much I think.
     
  14. bella

    bella Well-Known Member

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    online savings account sounds best.

    remember when comparing term deposits vs. online savings accounts that the interest is calculated differently, for the equivalent interest rate on paper, the online saver will pay better as it is calculated daily and paid monthly.

    you don't have many options for such a short time frame.
     
  15. crc_error

    crc_error The Rule of 72

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    bella, thats true, however with interest rates expected to drop 1.5% in the coming months, online saver accounts wont be paying much at all, however if you invest today with a term deposit, your rate will be fixed in.
     
  16. Cherry Pro

    Cherry Pro Active Member

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    Hi UZer

    If you went through all these previous posts... with these Home Saver Accounts ...you could lock in for 2 years and 2 days which would still
    cover 4 financial periods.

    My 19 year old has been really hit with this mess, all his earnings carefully saved and invested in managed funds over the last 3+ years (from working part time) have all but disappeared .. so now ..he just puts his money in an online savings account with a view to open a Home Saver Account in June 09.
    St George at over 7% does not look too bad, I reckon neither does Bank West.

    Good luck.
     
  17. uz3r

    uz3r Member

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    Thanks for the reply Cherry. Sorry to hear about your sons plans!

    Im a little confused, when you say you can lock in the home saver accounts for 2 years and two days. When I read the information on these accounts it clearly says that you cannot access the funds until you have contributed over 4 financial years?
     
  18. Chris C

    Chris C Well-Known Member

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    I don't know if anyone here did it, but shorting the market today would have made you a pretty little penny...

    :D

    However back on topic, everyone is recommending investing in term deposit, but I think there is another alternative that is worth considering, gold.

    Times are getting scary, the AUD along with most world currencies are a bit all over the place at the moment, but more importantly I think the international economy is all over the place and the root of the problem is the US and I think their fiat currency system is in MASSIVE trouble when the world stops buy their debt and as such there may well be a reversal of this "flight to quality" mentality, will be replaced by a "flight to real quality" ie the oldest form of currency in the world - gold. I'm expecting this to happen over the next couple of months/years.


    [​IMG]

    Please bare in mind, that I have no money gold personally, I'm not in anyway recommending it as a place to park money you expect to spend on a house, I'm just suggesting that it may be an option if you really wanted to look into it.
     
  19. AsxBroker

    AsxBroker Well-Known Member

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    SO many posts in a day for one thread...

    CRC, i can say that I've made more money than I have lost in the stockmarket. Back in November 01 I bought DJS and sold in June 07. I rode the good times from $1.18 to about $5.20 per share. Similarly with ASX in 1998 at $4.02 and riding it up for a couple of years to $16 (yeah I know it kept on going up alot more, they do say don't be greedy and leave some for someone else...). I've also lost a couple of $$$ in warrants which are definitely for the short term trader...I've worked in stockbroking and I know far too well how it all works, each time you buy or sell your broker takes a clip. That's why it's so hard making money day trading, you'll make a couple of % and your broker will take their cut...then when you lose money they still take their cut...

    Why would I waste my time trying to research stocks when I can stick to what I'm good at? (Financial Planning) People ask me why I don't trade in my lunch time...As if, I'd rather use my lunch hour to enjoy and relax than stress over stock movements...

    Invest (buy and hold)...

    Good to see Cherry has been reading my posts...Uzer as Cherry said, 4 financial years can be as short as 2 years and 2 days. Starting on the 30th June 2009 until 1st July 2011 would include the following financial years...2008/2009, 2009/2010, 2010/2011 and 2011/2012

    Uzer, the government contribution to a FHSA is 17% plus what the interest you will earn (which will be taxed at 15% like interest in a super fund being taxed at 15%). I'm still getting over the fact that there are only bank account style FHSA and no investment accounts. Imagine your FHSA buying shares and getting half the franking credits back!!! Such a missed opportunity!!!

    Gold doesn't guarantee your capital, it's like buying an empty block of land, you make no income and rely on capital gains to make money. At least with stocks and usual property you can make income and growth...

    Stick to government guaranteed investments as these funds are exactly what you want to risk...

    Cheers,

    Dan

    PS Before making an investment decision speak to your FPA registered Financial Planner.
     
  20. uz3r

    uz3r Member

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    Thank you AB! Great info, the 2 years / 2 days idea is very interesting!