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First post and a question!!

Discussion in 'Introductions' started by Mark88, 9th Feb, 2010.

  1. Mark88

    Mark88 Active Member

    Joined:
    7th Feb, 2010
    Posts:
    31
    Location:
    Sydney, NSW
    Hello,
    I have been reading this site for quite a while and I finally decided to join! I am a 21 year old in my final year of uni and I have 20K in a 'high' interest bank account.
    I want to take the first step and start investing - I am thinking of putting either 5 or 10K in bluechip shares via commsec (buying share packs) and putting the rest in either a term deposit or balanced CFS managed fund.
    Does anyone know much about commsec share packs? I am a total newbie so I am pretty nervous ..I want to invest so I can buy an investment property in 2-3 years time.
    Any criticisms/suggestions would be appreciated
    Mark
     
  2. Johny_come_lately

    Johny_come_lately Well-Known Member

    Joined:
    1st Jul, 2009
    Posts:
    703
    Location:
    SE Queensland
    Hi Mark

    For a short term of two to three years I would pick the following:

    1 an internet bank account
    2 a cash management account
    3 a term deposit
    4 a fixed interest/bond fund
    5 RBA bonds

    With these you are unlikely to make a loss, before you purchase your property.




    Johny.
     
  3. Mark88

    Mark88 Active Member

    Joined:
    7th Feb, 2010
    Posts:
    31
    Location:
    Sydney, NSW
    Thank you for your input John.
    I feel most comfortable with term deposits since they give guranteed interest. The only down side I can see with a term deposit is that I can not continually add to it.
    I am not in favour of an internet bank account because they seem to pay low interest (my currently netsaver bank account is only paying about 3.5-4%pa).
    What would be the advantage of a fixed interest fund over a term deposit? ..The fixed interest funds I have reasearched tend to pay about 4.5% ..so wouldn't a term deposit be better?
    Also, I don't really know what RBA bonds are and the dividends that they pay

    EDIT:
    Another question that just came to mind; I will be graduating uni at the end of this year with a 40K HECS debt. Should I pay this off with the money I currently have ..or invest as normal and slowly let the HECS debt be paid out of my wages?
     
    Last edited by a moderator: 9th Feb, 2010
  4. Johny_come_lately

    Johny_come_lately Well-Known Member

    Joined:
    1st Jul, 2009
    Posts:
    703
    Location:
    SE Queensland
    RBA bonds are loans to the Australian Government. They pay a coupon over a term and at the end you get your money back. Safe as the Government.

    HECS Debt.
    I still have 11000 to pay. Thats from the 90's. You can:

    1) pay it early. No pressure of debt, feeling of responsability, do the right thing, start from scratch. or,

    2) pay later. build wealth, create a portfolio, get some assets, take on a bit of risk.


    Its your choice.





    Johny.
     
  5. Johny_come_lately

    Johny_come_lately Well-Known Member

    Joined:
    1st Jul, 2009
    Posts:
    703
    Location:
    SE Queensland
    The difference between a fixed interest fund and a term deposit is, you can withdraw cash from the fixed interest fund at any time (1-3 days).


    I am an indexer, so I hold the ASX200. I have a strong stomach ATM.:eek:

    You are very lucky to have 20k. Need a bit more for a deposit in 2013.
    What are you studying if you don't mind me asking?:D



    Johny.
     
    Last edited by a moderator: 9th Feb, 2010
  6. Mark88

    Mark88 Active Member

    Joined:
    7th Feb, 2010
    Posts:
    31
    Location:
    Sydney, NSW
    Thank you for all of your advice John. I will definately do some research on a fixed interest fund and then decide between that and a term deposit.

    I am studying veterinary science ..hence the relatively high HECS debt.