What would YOU do with $50,000 savings?

[tech/a]

If you put it away until your 60's you could have a million dollars to do all that.

In 34 yrs (When the poster is 60) a million dollars will be like $395K now if inflation over the last 34 yrs is a guide.---not a lot---hardly a deposit on a decent home in 34 yrs!

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If the Property thread is anything to go by most will STILL be waiting for property to become--"affordable"

 

[Silhouetteau]

Hey Matt,

I'm 22 this year turning 23 and the thing that I think about the most is what do you want to do with the money?
I personally invest a lot of my income now because I hope by the time I'm 30 I will have enough passive income to be able to work 9 months a year and be able to travel for the remaining 3 months every year.
I don't like contributing extra to my super fund because I back myself to out-perform their results so I want to keep as much as I can for myself. But I also enjoying investigating stocks etc and studying investing topics so I'm happy to put in the time to get the results.
It also takes a lot of sacrificing of spending now for future gain, which you may not want to do?

 

[againsthegrain]

haha super is such a scam, why would anybody waste their time making voluentary contributions, inflation, unstable world in 30+ years, death or sickness in young age will all be laughing at you.

When you are 60 it is too late to impress a few girls here and there with your ss or wrx.
Not saying to splurge all your savings but don't keep waiting till you are in your coffin to start using your money.

You are much better off managing/investing the cash now in your own hands not having it locked in until you are 60 and having somebody dictate to you when you can have it or not.

 

[Reasons]

In 34 yrs (When the poster is 60) a million dollars will be like $395K now if inflation over the last 34 yrs is a guide.---not a lot---hardly a deposit on a decent home in 34 yrs!

View attachment 42224.

If the Property thread is anything to go by most will STILL be waiting for property to become--"affordable"

Trying to define between the two broad assets classes; property and everything else can trick you in the perceptions of what happens over time. They both act the same in that neither stays still inflation-wise or cash input-wise.

Properties are always being improved, built on, made better, repaired, refurbished over a 34 year period which both adds value and appreciation, but has a definite cost against it (that most people choose to ignore as it does not make the end result look anywhere near as good). If you did nothing to a property over 34 years, you are unlikely to have it appreciate anywhere near as well over time compared to its neighbours, and it could only be worth land value at the worst case scenario.

For example. the last PPOR I owned for 10 years and it exactly doubled in that time when I sold, which sounded great. As I do not consider my PPOR to be an asset, I am here to tell you I do not spend any money on it if I can avoid it until the last minute to make it look really good for sale. Once I took out lost opportunity costs, minor repairs over that time, ducted evap A/C, some bank interest in the first 4 years and rates, a very small amount to make it look good (my hard work) and the agents fees (not high), I made an actual return of 54% over those 10 years.

The same happens with equities etc, they appreciate with inflation and dividends over the years. In the case of salaries they go up with inflation and therefore so does the Super Guarantee %. Both of these mean that at age 60 there will be double, triple, or who knows how much in there at 60. It just keeps pace with inflation as long as you attend to the details to make sure it does.

So property goes up over time roughly proportionate to input and inflation the same as all other assets. They just do the same thing, but differently. Both require attention if you want to ensure the end game meets your expectations, and neither gives you a free ride or a theoretical better outcome when you project 34 years into the future.

You just have to do your calculations in todays dollars and manage the outcome across your lifetime.

 

[nioka]

If you put it away until your 60's you could have a million dollars to do all that.

A friend of mine the other day said something often heard. " I've saved all my life to afford the things only the young can enjoy".

So you need to strike a balance as a lot of people my age did enjoy their youth and now cant afford good dental,medical etc without even thinking travel, a new car or luxury foods.

 

[Bill M]

A friend of mine the other day said something often heard. " I've saved all my life to afford the things only the young can enjoy".

That is so true...

To the OP, if I was 22 and I knew back then what I know now I would put put 40k in a UBANK account and get 6.51% interest on it and then take the other 10K and do a real good back packing adventure around South East Asia. Hook up with some like minded travellers and drift about for 6 Months or so. Whilst on the trip just think about what you are going to do with the money. 50K for me now (much older) would go straight into super.

 

[So_Cynical]

Blue chips can also go down. Nothing guaranteed there, look at a 2 or 3 year chart for any of them. I don't own ANY blue chips.

And you also don't get much if any dividend yield.

This was said with respect to blue chips.
Seems a peculiar comment when you consider that most of the banks, with franking included, offer around 8 - 9%!

I said 'you' as in Nokia...Nokia doesn't own any blue chips or to my knowledge any light blue chips....so there fore doesn't get much if any dividend yield.

 

[niwire]

I would like to ask where is money come from?
As you can earn $50K as you are so young, then you must have more plans to invest those money. If I have, I will establish my own business

 

[Julia]

So property goes up over time roughly proportionate to input and inflation the same as all other assets. They just do the same thing, but differently. Both require attention if you want to ensure the end game meets your expectations, and neither gives you a free ride or a theoretical better outcome when you project 34 years into the future.

The phrase "both require attention if you want to ensure the end game meets your expectations" is so true.
Most of the people who claim "Super is a scam" don't appreciate that Super is just a tax advantaged vehicle for holding assets, and you need to actively manage those assets, not just leave it to some overpaid fund manager who has only his own interests at heart.

A friend of mine the other day said something often heard. " I've saved all my life to afford the things only the young can enjoy".

So you need to strike a balance as a lot of people my age did enjoy their youth and now cant afford good dental,medical etc without even thinking travel, a new car or luxury foods.

So true, and the point I was trying to make earlier.

 

[Wysiwyg]

I would like to ask where is money come from?
As you can earn $50K as you are so young, then you must have more plans to invest those money. If I have, I will establish my own business

I know what you mean. These internet posters that claim they are young with X amount must have very well paid jobs at their age. My first year wage was $110/week.

 

[Silhouetteau]

It is possible with hard work and making sacrifices though too.

I had $4k around this time last year starting my first graduate job on an average graduate engineer wage and now have more than $50k.

 

[suhm]

I think all the young posters would probably have decently paid jobs or seed capital from family or else we wouldn't have the opportunity to accumulate enough capital to make investing worth the time it takes to be good at whilst still young.

 

[Reasons]

It is possible with hard work and making sacrifices though too.

I had $4k around this time last year starting my first graduate job on an average graduate engineer wage and now have more than $50k.

Therefore being considered sacrifices, it proves conclusively why we BB's need to charge you lot rent or evict you all ASAP

 

[nioka]

I said 'you' as in Nokia...Nokia doesn't own any blue chips or to my knowledge any light blue chips....so there fore doesn't get much if any dividend yield.

The only dividends I have received in the last three years has been from CFE which is not really a dividend but rather a share of trading profits. Anyone following CFE will know what I mean. Also a small distribution from CER and I mean small. However CER returned me 1200% so far in about two years so looking for dividends is the last thing on my mind. I want capital growth in large doses. I'm happy to cash in some stocks now and then.
Check out the charts for ADI,AUT,EKA,TXN,SDL,NTU &CER. Even a loser in some eyes like EDE has returned close to 300% lately with plenty of opportunity to buy in at less than 5c for the faithfull.

I do however rate some stocks like LYC and AUT as "light blue stocks"

 

[LiL_JaSoN]

I know what you mean. These internet posters that claim they are young with X amount must have very well paid jobs at their age. My first year wage was $110/week.

Compound interest and exponential growth is your friend.

I'm a 22yo uni student, and i work whenever i can, especially during the holidays.

I still go out, enjoy a few drinks with mates, buy a few things, and spend ~ 150-200$ a wk on food.

I just don't blow money on useless things.

 

[Julia]

spend ~ 150-200$ a wk on food.

Wow, that seems a lot for a young single person to spend on food. Are you including meals out in this?

 

[LiL_JaSoN]

Wow, that seems a lot for a young single person to spend on food. Are you including meals out in this?

Reason so high is due to recreational sport, so i have a very high calorie requirement.

Lately iv been able to get to down to $100 from buying in bulk. So that saves a fair abit.

Like some people say, avoid hobbies - save money lol.

Jason.

 

[Wysiwyg]

Compound interest and exponential growth is your friend.

I'm a 22yo uni student, and i work whenever i can, especially during the holidays.

I still go out, enjoy a few drinks with mates, buy a few things, and spend ~ 150-200$ a wk on food.

I just don't blow money on useless things.

If you're a part time worker then you might be able to save 100 bucks per week. So maybe 5000 per year saved if you use newspaper to wipe your botty.

 

[youngone]

Reason so high is due to recreational sport, so i have a very high calorie requirement.

Lately iv been able to get to down to $100 from buying in bulk. So that saves a fair abit.

Like some people say, avoid hobbies - save money lol.

Jason.

That is quite a lot of expenses on food alone if you are trying to live smart. My average expenses is about $50 a week (not including bills, rents, fines, cars, random important crap), that means no eating out or going out unless i have to meet clients. I have learn to cut down to 2 shopping trip per week. If you are like me and lives in Adelaide, Central Market in the Adelaide city is quite nice on a Friday. You can buy almost anything at $1 per kg.

On a good productive week i reward myself. like last week with a dozen of Oysters

Probably buy a productive small business.

Do explain.. What business can one buy? Im looking to start up a graphic/web design business with a couple of friends. If anyone can give me advise that would be great, I have many clients and now looking to move from freelance work into a team company base in the industry.

Develop a few APPs.

Do explain..Im currently working for a client developing an iPhone game. Its not going to be as big as Angry Bird. But the game is almost in the final stage of development. I have been fortunate enough to work on this game, as have been contracted to gain a small percentage of the games income if and when it sells.

I'm in pretty close to the same position, i'll give you a run down of where I am at and some small suggestions that may help you also. Not sure if you are working or a student either but will assume that your working.

I'm 24 yearsn old. I have only about $3k in the bank, however i've just finished paying off a car worth about $16k, I have $67k in shares however $35k of that is owing on a margin loan. I pay a portion off of this margin loan each pay (fortnightly) and as it reduces, if I see any more opportunities in the stock market I buy again and extend on the loan again. Note this is not a strategy for everyone, however I work in the finance industry, understand the risks and lucky enough to still be mooching off the parents hehe. Theres a couple of other bits and pieces i've got but nothing else of any significant value.

The first thing I would 100% suggest in regards to superannuation, is that if your annual income is low enough throw $1,000 into your super each year so that you maximise the government co-contribution. This is just money for jam and you will be absolutely amazed at the difference contributing $1,000 of your own money and getting even a $600 co-contribution for the next 5 or so years will make to the compounding of your superannuation assets through to age 60.

Other options depend largely on your personal situation, my sister doesn't have much against her name but has seen europe, new zealand, thailand and bali. I've only been to Thailand and will probably do the rest later in life, its all personal preference, but don't be afraid to put $5k to the side and give yourself a holiday with mates.

If your looking at buying a home in 4 years time then the first home saver account is a viable option, but i'd suggest you do some in depth research to some of the fineprint in regards to the account. i.e. you have to contribute $1,000 at least per year across 4 financial years to gain access to the funds and many other small parameters. If you'd like more details feel free to PM me and i can try help out.

If buying a home isn't on your radar just yet, or you'd like to take the more aggresive route like me, then investing in shares has the potential to be very rewarding, but also has the risks attached as well. Do some research, learn the ins and outs, and work out what type of investor you'd like to be as there a many niche's, combinations etc etc. I learnt the hard way that you can't just buy willy nilly and that having a strategy in place really helps.

I don't think anyone can tell you exactly how to split the $50,000 but in basic terms this is what i'd look at if it was me:

$5k ready for a holiday or any other personal luxuries i decide on at a later date
$10k in high interest bank accounts (take your $1,000 super contributions from this annually) and also contribute some of your pay to this as well.
$35k in shares to build funds toward a home with the possibility of also having an additional $20k markin loan if you can handle to risk to try build these funds at a faster rate and for the tax advantages (i'd also add money to this each pay to help build faster)

Hope that helps, feel free to PM me to discuss further. Its good to hear others in their 20's looking to secure some of there future, not just throw cash around partying and travelling.

Josh

My thick, dumb, 24 years old skull is ringing like a bell, and nothing is going through. I dont like numbers But can we be friends? I need to have more smart friends at my age, who knows how to control and manage their money, instead of clubbing and spending money of luxury.

No pain no gain!
(how to insert banana dance)

 

[tigerboi]

$50.00 expenses per week...sheesh how do you do it?

My average expenses is about $50 a week (not including bills, rents, fines, cars, random important crap)

Me...i would seriously like to know how you live on $50 a week...TB