We are about to become the very grateful owners of 70k and we want to make this money work for us and multiply long term and want to be smart about it.
If you had this amount to invest, how would you invest it to make the most out of it?
We are about to become the very grateful owners of 70k and we want to make this money work for us and multiply long term and want to be smart about it.
If you had this amount to invest, how would you invest it to make the most out of it?
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7 Replies
Just leave it in an interest account, it's high at the moment and no risk involved. Anything else comes with risk especially right now, anything going well now could come crashing down in the next few years due to inflation being super high right now..
We’re in the same position. Ours is going into a high interest bank account until we decide what we will do with it. We had thought about locking it into a term deposit but interest rates on savings accounts are steadily going up
If you have no investment experience and are looking long term I'd suggest seeing a financial planner. They can start with your 70k, and if you want, help plan an entire investment strategy based on your goals and risk comfort. There's many options.
Yes, it costs, but it's worth it. It's complex, very personalised and an informed choice makes a huge difference.
People are saying high interest bank accounts but there are defensive managed funds you can invest in that are very safe and provide a much better return. They invest in things like govt bonds (high rated low risk countries), really safe equities, cash and fixed interest instruments. They focus on stable income over growth, so are less affected by market movements.
You can have a look at different managed funds and they will tell you how much is invested defensively and how much in growth assets. Growth assets are generally market linked, so are subject to market volatility.
The other thing to consider is low cost passively managed funds versus higher cost actively managed. Passive funds aim to perform with market indexes whilst the more expensive active funds trade more, with the intent to beat the market. All funds show their fees and performance so you can compare.
Also remember, if you are investing long term, any on paper losses are not crystalised unless you actually sell at that time for that price. Obviously if you are only investing short term and need the funds at a certain date, you would invest more defensively because volatility is more likely and you can't ride out the low times.
Maybe have a look at the Colonial FirstState website, they have a heap of funds where you can compare their asset allocation, fees, performance.
Diversified funds like balanced, growth, high growth, conservative etc. are good options if you don't know miuch rather than picking an asset class like an equities funds or bond fund etc.
Even if you end up getting advice, you will know what they are talking about if you do your research.
I wouldn't recommend shares if you don't know much about the market.
Also remember too, when the market is down, it is a good time to invest.
You obviously want to buy low and sell high.
It's also hard to get a financial planner interested in investing only 70k.
With compliance, it just isn't worth their time.
If you are invested in an industry fund, you could see one of your fund's advisers and they could sort out your super as well as tell you how to invest the 70k (they provide advice outside their super fund).
They are also really good value.
If you have a mortgage I would put it towards that. Otherwise a interest account until you have enough to purchase a property.