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40k. Where?

Discussion in 'Other Asset Classes' started by Sonamic, 6th Apr, 2016.

  1. Sonamic

    Sonamic Well-Known Member

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    Did an Equity pull on an IP last year. Bought/ built another one. Had a further one fall through. As a result of the second deal falling through I'm left with a 40k surplus. Post APRA I'm in view of my serviceability ceilings and wish to save that last bit of serviceability for a new PPOR. Separate buffer is also in place.

    Looking for a safe place to "park" said 40k for "investment purposes" where it will get better mileage than simply offsetting the latest IP (and muddying Deductibility). This will be a new chapter in my personal investment journey outside of property. Kind of forced Diversifying. I'm sure to not be alone in this position over the coming months/years. Go easy on my ignorance.

    Serious suggestions?
     
  2. Hodor

    Hodor Well-Known Member

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    Read the LIC (listed investment company) and ETF (exchange traded fund) threads here.

    LIC usually have discretion over which companies they buy and sell - most of the older ones buy and hold forever, or near enough and hence have low fees

    ETFs tend to be rules based, such as buying all companies in an index weighted by their size to mirror the indexes performance.

    You could split the cash between a few different baskets. A simple example, 50% VAS - an ETF that buys the asx300 companies and 50% QVE - an LIC that doesn't trade the top 30 which VAS is fairly heavy on for better or worse. VGS is a nice ETF if you want international exposure too.
    You can choose to keep the dividends or automatically reinvest them to grow your portfolio with no further brokerage costs and have forced savings.

    I'm new to this and have just started building a portfolio around ETFs and LICs rather than individual companies.

    Good luck.
     
  3. Sonamic

    Sonamic Well-Known Member

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    Thanks @Hodor

    Started the ETF thread last night. A whole new world of acronyms to grasp. :confused:

    Agreed splitting is a good idea. Possibly even 4 parcels of 10k. Much more reading to come.
     
  4. Bran

    Bran Well-Known Member

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    Read the books recommended in Stock resources thread. It will all become clear.
     
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  5. BingoMaster

    BingoMaster Well-Known Member

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    Melbourne
    Bran and Hodor have covered it - all the info and directions on where to head for the info is on this site already in those areas.

    While you're reading them, you might also appreciate this article on the best ways to lose all your money on the sharemarket:

    Six ways to invest like a crazy person
     
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