So we have 2.15M in USD.

Discussion in 'Investment Strategy' started by GoldCoastBound, 18th Mar, 2020.

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  1. GoldCoastBound

    GoldCoastBound Well-Known Member

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    Due to a US ecommerce sale this week, we have 2.15M in our Commonwealth USD account, (plus another 700K USD soon from stock)...

    Amazing timing for a US business sale i know, considering the craziness currently going on & the AUD dropping like a stone..

    Considering the current state of the economy, should we just leave it there for now?

    We are also looking at investing in VAS, but it seems everything (AUD/SHARES) may well just keep tanking, so curious what others more experienced might do in our situation?

    We're 50, own our PPOR outright and have no immediate need for the money....but would like to invest and live on a dividend income stream going forward...

    thank you
     
    Last edited: 18th Mar, 2020
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  2. Lacrim

    Lacrim Well-Known Member

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    Please adopt me.
     
  3. Jess Peletier

    Jess Peletier Mortgages, Finance & Property Strategy Aust Wide Business Member

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    Congratulations :) I would not be putting it in the market right now. I'd leave it until things find some kind of equilibrium.
     
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  4. Player

    Player Well-Known Member

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    Oh, wow! 4.75 M AUD. The world is your oyster. Your liquidity is outstanding. IMHO, you should wait and watch the carnage from the sidelines. Not advice. My 0.02...
     
  5. Properwin

    Properwin Active Member

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    The Aussie dollar may yet fall a bit further. Might wait and then convert before it bounces back. Factor in CGT potentially. It’s a good time to have cash in USD at the moment.
     
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  6. The Falcon

    The Falcon Well-Known Member

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    Have you put aside cash for tax?

    At this level you can outsource management and will cost you bugger all really, as well as a good accountant certainly worth considering an advisor here to be across structures, tax, estate planning, management etc but you really need to know what you are looking for. Most are pretty *****. You are at a level where HNW specialist types would be worth a chat with. Beware as costs vary significantly for the same thing..and most are full of ****..There are some variables but broadly it’s trust / company / super (poss SMSF). Diversified portfolio covering Oz, Int’l, Emerging market equities, Int’l property, bonds, cash etc implemented in a low cost fashion. Or whatever takes your fancy. Each year a bit of tax / distribution planning. You don’t really need to bother yourself with this stuff :)
     
    Last edited: 18th Mar, 2020
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  7. Lindsay_W

    Lindsay_W Well-Known Member

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    What a great position to be in!
    However it does really surprise me that you're asking a forum for this kind of advice - I guess it says a lot about this community and the high level of knowledge within it!
     
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  8. datto

    datto Well-Known Member

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    Lindsay I take it you're referring to me as well lol.

    At the moment I reckon investing the money in a dunny roll factory. Then drop the rolls off at a shopping centre carpark at half price and film all the crazies fighting.

    Throw in some mud and jelly, download it on youtube and watch the sponsors flow in.
     
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  9. Lindsay_W

    Lindsay_W Well-Known Member

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    Of course, and you just perfectly illustrated my point - thinking outside the box :D
     
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  10. willair

    willair Well-Known Member Premium Member

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    That's well played and with a ppor zero debt free then depending if the Aussie dollar goes below 50 cents then the compounding factor kicks in again you both could keep this real simple...

    I don't know how to link posts but this is part of a post from last monday from a gentleman called Handy-Andy about a company i have invested in for over 25 years ..imho..

    Quote Handy Andy..
    The number are astounding.

    I am interested in CBA, CBA has been giving a consistent dividend of $4 for the last 5 years

    at a price of $60 you will get 20,000 shares and potential $80,000 dividends + franking credit at 100%
    at a price of $50 you will get 24,000 and potential $96,000 dividends + franking credit
    at a price of $40 you will get 30,000 and potential $120,000 dividends + franking credit
    at a price of $30 you will get 40,000 and potential $160,000 dividends + franking credit

    I just wanted to illustrate that you must try and get the lowest buy price possible even if for a period the dividends are impaired.

    Now you could do the same with VAS (or similar) which will spread your investment across the a range of shares. They have been giving a dividend of $3-3.50 over the last 5 years.

    $60 you will get 20,000 shares and potential $70,000 dividends + franking credit at around 80%
    at $50 you will get 24,000 and potential $84,000 dividends + franking credit at around 80%
    at $40 you will get 30,000 and potential $105,000 dividends + franking credit at around 80%
    at $30 you will get 40,000 and potential $140,000 dividends + franking credit at around 80%

    The call is yours but I think I have illustrated that with your $1.2mil you can achieve much more the your wished for $75k pa
     
  11. GoldCoastBound

    GoldCoastBound Well-Known Member

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    yes, we will put the 700K aside for tax.

    The money is set up within a company/trust structure
     
  12. GoldCoastBound

    GoldCoastBound Well-Known Member

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    Yes there are plenty of experienced people amongst this forum, so why not put it out there
     
  13. GoldCoastBound

    GoldCoastBound Well-Known Member

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    thanks for sharing that post, i appreciate it....i was actually around 20 years ago when Somersoft first started and Handy Andy would post some awesome property stuff.

    The 2.15M USD will actually convert to about 3.6M AUD, and i would really like to invest 1/3 of it into VAS, so using this example of 1.2M is perfect.

    Aside from the current volatility, is CBA generally as safe as VAS going forward?
     
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  14. The Falcon

    The Falcon Well-Known Member

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    Perhaps consider 3 year bring forward on non concessional super contribs ($600k if a couple) given the large tax event.
     
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  15. The Falcon

    The Falcon Well-Known Member

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    No. A single stock presents high idiosyncratic risk. An index does not.
     
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  16. GoldCoastBound

    GoldCoastBound Well-Known Member

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    Yes very true
     
  17. MTR

    MTR Material Girl Premium Member

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    Loving currency play
    Hit 59 today, am calling 55

    But hey timing is perfect
     
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  18. FredBear

    FredBear Well-Known Member

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    Shouldn't you at least immediately split the funds between several banks? The Commonwealth Bank Deposit Guarantee is $250k, so if the worst was to happen you could loose a lot, or at least have to wait a while to get the funds.
     
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  19. GoldCoastBound

    GoldCoastBound Well-Known Member

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    I am hoping you're on the money about 55c lol
     
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  20. GoldCoastBound

    GoldCoastBound Well-Known Member

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    Didn't know about that..thanks for the heads up