What would you buy for $1M cash?

Discussion in 'Investment Strategy' started by ATANG, 14th Sep, 2017.

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  1. ATANG

    ATANG Well-Known Member

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    Some of the ones i can think off randomly...

    - Use 250k as deposit to get 4 standalone houses in outer suburbs and wait for growth
    - Use the whole lot on a dream home in dream suburb and get another loan
    - Use the whole lot on getting a big block of units and get another loan
    - Use 200k as deposit and get 5 apartments and do airbnb.
    - Use 500k on getting two houses in any cities
    - Invest in shares and financial products
    - Invest in bank deposits
     
    Last edited: 14th Sep, 2017
    ATANG, 14th Sep, 2017
    #1
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  2. DaveM

    DaveM Well-Known Member

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    Adelaide & Sydney
    Quality commercial property or two and collect my $90k pa rent.
     
    DaveM, 14th Sep, 2017
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  3. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    I would leverage the $1m into $2m by borrowing $1m
    Thats rule #1 of property equity
    :D

    Then collect $180K of commercial rent and pay the bank $70,000. Net $110K.
    No outgoings
    No land tax.
     
    Paul@PAS, 14th Sep, 2017
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  4. Plutus

    Plutus Well-Known Member

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    Assuming I had $1m cash, no other assets, no tax owing on my $1m windfall.

    Given that i'm (relatively) young.
    $350k for a 2 bed, 1-2 bath, 1 car unit <5k from Brisbane CBD that is <5 years old. Ideally something someone punted $400+ on in the last few years and now wants to get out of while the slide continues.. I don't care if it does, its a long term home, its my fortress of solitude. I know exactly which areas I'd target to get into the right school catchments in case I decide kids are a good idea at some point.
    $300k into VAS
    $300k into VGS
    $40k in cash
    $5k Japanese econobox (totally frivolous convenience, I don't drive to/from work or use a car monday to Friday, just a nice to have)
    $2k misc stuff (basic furniture, a toaster, 2nd hand fridge, etc)
    $2k wardrobe (need something to wear to work, no other assets)
    $1k second hand computer and phone


    That gives me:
    • #1 spend category (housing) ticked off
    • $24k-ish a year in cash flow based off the 4% rule.
    • 12 months living expenses in cash
    • The fundamentals to keep earning a decent wage.
    Its not 100% of the way there, but is very close to getting me here ()

    Time and the magic of compounding is on my side, bugger leverage at that point, I've already won the game, no reason to keep spinning the wheel or chase higher risk:reward building up a tonne of paper wealth that could just as easily collapse.

    If I was 50+, living in a HCOL city, had dependents who couldn't support themselves, this would be totally different (I'd probably take a punt and go all in, ideally getting a 2-3 tenant commercial property)
     
    Plutus, 14th Sep, 2017
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