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How would you invest if you have $25K

Discussion in 'Off Topic' started by CLK, 24th Sep, 2006.

  1. CLK

    CLK Member

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    Just want to hear what you will do if you have $25K to invest?

    Cheers : )
    Jas
     
  2. Nigel Ward

    Nigel Ward Team InvestEd

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    I guess that depends on your needs and financial goals. No doubt mine (and everyone else's) are much different to yours :D

    Do you need additional income or can you put that 25k to work for a few years to generate capital growth and reinvest the earnings to enjoy the miracle of compounding?

    Perhaps if you outline your investing objectives we could all toss around some options to consider and discuss with your financial advisers.

    Cheers
    N.
     
  3. CLK

    CLK Member

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    Yes, I am thinking of a bit of mix ie income through shares/managed fund and also invest it for capital growth and lifestyle ie an overseas holiday. I am thinking of working lesser hours in the next 5 - 6 years. My objective is to accumulate as much cash/assets.

    What would you do?

    Jas
     
  4. Simon Hampel

    Simon Hampel Co-founder Staff Member

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    Right now, I would take that $25K and add it to my fund portfolio, leveraged to about $60K or so.

    According to my analysis spreadsheet, I would add $25K to my existing holdings of CFS Wholesale Global Resources this week and then next week I would add $25K to my holdings in NavraInvest AUS Wholesale (assuming it doesn't jump in price before then).

    Then, once I have another $15K available from somewhere (eg, other income sources or from growth in my fund portfolio), I would add to to the $10K I had left over from the original $60K I had allocated, to add a further $25K to the NavraInvest US fund.

    Of course, this is just what I would do based on my own personal strategy, and is not a recommendation.

    Email me and I'll send you my bank account details to deposit the $25K in ... thanks !! You're so generous to give away your money like this! :D :D
     
  5. Nigel Ward

    Nigel Ward Team InvestEd

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    Jas that's a good start but I think you're still too "product" focussed in your thinking. You don't even get to that stage until you have a plan, with specific requirements. Just saying I want more income plus some growth is not enough.

    Realistically say you can generate 10% income from this money that's about $20/week pre-tax. That unfortunately isn't going to add much to your lifestyle (a movie ticket's getting up towards that price these days :( ).

    Conversely if you could get 10% pre-tax and compound that for 5 years you'd have a whisker over $40k. That might fund a reasonably extensive holiday :p .

    Perhaps an alternative strategy, if your cashflow and risk profile permits, is to borrow say another 25K and put $50k to work from day 1. That would give you a gross sum of over $80k. But of course you must repay your $25k loan thus you have about $55k. Then there's the interest you've paid over the 5 years on the loan. Say it was 9%pa that would mean a bit over $11k interest you've paid. But bear in mind that the interest should be tax deductible so the pain is lessend by say 30% up to 46.5%...

    Can I recommend you determine what sort of income/lump sum needs you'll have to live the lifestyle you're desiring and then work backwards based on realistic earnings rates to figure out how much capital you need to accumulate?

    Alternatively you could see a good financial planner. Mark Raymond and the team at Navra Financial Services are very good.

    Best regards
    N
     
  6. Leandro

    Leandro Well-Known Member

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    Jas, Nigel is very right in his response. You need to lay down your requirements more concretely.
     
  7. CLK

    CLK Member

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    Thank you everyone for your suggestion - I will take it on board!

    Cheers : )
    Jas