What would you do with 40K ?

Hypothetically, if you were to start investing from scratch.
What would you do with $40,000?

I know everyone here is different, so I'm curious to hear some of the different options / opinions.

Cheers.

 

Looking forward over the next 2 - 5 years, I'd probably spread it roughly out something like the following:

10K Cash
10K ASX 200 Index Fund
10K Asian/Chinese Index/Managed Fund
5K Gold
5K Other Commodities or Commodities Based Stocks

I'd also be avoiding any sort of debt based investments at this stage (so wouldn't be using any margin loans etc) which is also why I'd be steering away from property in the short term.

 

I'd loan it to my trust as start up capital for my enterprises

Regards,

Jason

ps. Now seriously - where do you want to be in 5 years time? Where is 10 years time? The come up with a plan working towards this. Think of a few likely deviations from your goals and see how flexible your plan would be.

 

Hi Compleks

My $40k startup is based on me being 25 and investing for 10+ years. The distributions are reinvested and the funds are rebalanced yearly.

10K Cash 25%
10K ASX index 25%
5K China index 12.5%
5K India index 12.5%
5K World index (ex Australia) 12.5%
5K World Comodities (ex ASX) 12.5%




This portfolio is for entertainment purposes only.


Johny.

 

I'd use it as capitol for day trading (actually end of each business day trading, Daryl Morley style). I've signed up for a workshop in March, and hope to have about 15k starting capitol when I start trading soon after. 40k would be much nicer...

 

Earlier this year I would have put it all in shares.
Now I'd use it as a deposit for a $300K property

 

Thanks for the replies.

I'm just trying to get an idea of what some more experienced investors might do in this situation.

I have 10K invested across 5 different managed funds. Which have not done very well at all (down about %50 across the board). But I'm ignoring that and hoping to start fresh.

My time frame is long term. As long as it takes really, I'm happy leaving money tucked away (invested) indefinitely at this stage. Whether or not that changes down the track I can't say. But 10 years would surely be manageable.

My goals. I guess initially I just want some financial security. Some knowledge that I could live 'comfortably' without having to worry about every pay check.
I'm self employed and my job is fairly secure. I'm not particularly worried about that. Plus I still live at home and have no debt or bills. I probably save 90% of everything I earn currently. Saving 6-7 hundred dollars a week.

I would love to set myself up with a nice flow of passive income eventually. I don't plan on making millions through investing, or even becoming wealthy (although I'm not against that obviously). I would just like to eventually replace my income and know that I could choose to stop working if I felt like it.
(Obviously that depends on my lifestyle. But I live very modestly anyway)

So I was just curious to see what other investors might do. Maybe you might change your strategy knowing a little more about my situation?

Property? Shares? I'm pretty clueless.

PS. Sorry about the essay.

 

Thanks Sim.

I do like the idea of owning my own property, but I have borrowing issues. My income isn't great and because I'm technically self employed I really don't have much documentation to help me out.
I'm not sure if I would be comfortable using a guarantor either.

Also, if I were to buy a property I would probably lean towards renting it out. At least initially. It's not as though I really need to free up cash flow, but it would be nice to not be completely tied down.

I haven't made any contributions as of late to my managed funds. I lost heart when they were depreciating, and I'm questioning if they are worth it. I was maybe considering some direct share investing?
Although indexes seem to be quite popular around here. I'm not really familiar with these (or anything else) to be honest.

Hmm...

Thanks for the input

 

Hi Compleks,

Wouldn't direct shares be more volatile than your managed funds?

Cheers,

Dan

 

Yeah, I assume they would be just as (if not more) volatile than my funds. I didn't mean to suggest them as a safer option, not sure what I was getting at really.

Someone was recently trying to explain to me how dividends work. I didn't really understand completely though.
If through shares in a company is the dividend pain on a percentage of my total investment? Or is it a set price per unit/share?
I'm not sure if that even makes sense.


What do you think is the most effective method of generating passive cash flow?

Cheers.

 

Hi Compleks,

A company may pay a dividend usually based on cents per share. Though for comparison reasons most people will calculate the yield (ie, dividend per share divided by the share price).

There are many different ways of generating passive income and it is usually up to the preferences of the individual.

Cheers,

Dan

 

Thanks AsxBroker.
It's too late for my brain to make sense of that. But I will look into it further in the morning.

I'm not after immediate passive income, though I would like to start with that as my long term goal I think...

Time for some rest.

Cheers