# How would YOU invest $1 Million?



## investforwealth (16 April 2007)

This is a purely hypothetical question, and is not a solicitation for advice.  I am interested to know how you would invest one million dollars.  Suppose you were a professional person, earning an average salary and suddenly had $1M.  

Although it's completely irrelevant, if it helps to set the scene, you can imagine that you came up with an idea or invention that had commercial application but didn't want to develop it yourself.  You approach a few parties you think may be interested in your idea and end up selling the intellectual property outright to the highest bidder, for a million dollars.

What do you do with the money?  Some people might go blow some or all of it on things they've always dreamed of having... fast cars, first class round-the-world trips, etc. then go on living their life the way they used to.  I imagine ASF participants are a bit smarter than that, though, and would like to see it grow substantially before they go spending some of it on luxuries.

Obviously there is no wrong or right answer, and the question is very subjective. There will probably be as many different ideas as there are responses.  

As for my own opinion, the anwer is... I just don't know!  I'd certainly be investing the majority of it, if not the entirety, but I'm not sure where or how.


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## CanOz (16 April 2007)

*Re: How would YOU invest $1 Million*



investforwealth said:


> This is a purely hypothetical question, and is not a solicitation for advice.  I am interested to know how you would invest one million dollars.  Suppose you were a professional person, earning an average salary and suddenly had $1M.
> 
> Although it's completely irrelevant, if it helps to set the scene, you can imagine that you came up with an idea or invention that had commercial application but didn't want to develop it yourself.  You approach a few parties you think may be interested in your idea and end up selling the intellectual property outright to the highest bidder, for a million dollars.
> 
> ...




I would try to learn more about property, and then try to buy good income generating property at good value with some of it, enough to earn a decent income. 

I would build a new home, in a good undervalued area to live...and then i would trade with the rest.

A bit more general than you were looking for no doubt, just got dreaming a little.

Cheers,


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## new_trader1984 (16 April 2007)

*Re: How would YOU invest $1 Million*

Hi investforwealth,

Im at uni currently studying financial planning, my main assignment for the subject was to invest 1 million dollars that a couple had just inherited over 5 years into 4 investments.

Its similar to what your asking, except had set amounts of the 1 million for the diffrent investment choices. I had to invest int property with growth and income with only 200,000. Bonds and shares with 300 000 each but the shares were all dividend paying shares that i was allowed to choose for income earning purposes. Also the last investment was cash management trust. 

I guess the assignment was to show us different investments available that could be invested into to earn income and capital gains after a set period of time. The case study that we were provided with had goals for the family that planned to retire in 20 years. 

Depending on the time frame you want to invest the amount of money in would limit your choices. Longer time frames would allow many different investment choices from bonds shares property. Shorter time frames shares and cmt i think are good since can get access to the money if needed in a short amount of time compared to property. 

If i had 1 million i would probably buy 2 small rental properties that were close to the beach and very popular holiday places, aim for a good rental return from each, possible to find a couple of good places around 200-250 grand since i found one for my assignment a 1 bedroom unit 50 meter from beach returning 220 a week for 200 000. Would invest the other 500 000 into short term and long term stocks maybe 300-400,000 in short term trading so can make most of opportunities when find them, and the other 100 000 in stocks that are maybe speculative but with good long term goals.

Thats what i might look at doing if i had a million dollars to invest.


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## tech/a (16 April 2007)

The answer is relatively simple.
But determinate upon the age of the person with the Million.

Mind you a Million isnt a great deal of money these days and in 10-15 yrs time wont be the benchmark for success it has been---3 to 5 will be!.

(1) Positively gear with the view of passive income. This can be a variety of investments from Business to Property to Shares to Art---(buy and rent out).

(2) Look to have the investment returning a passive income returning capital growth---at least ahead of inflation and general market conditions.

(3) Gearing into those investments will be determinant on *AGE *and on *OPPORTUNITY.* Remain flexible---always (in my view) have the ability to borrow against equity.

(4) I would be looking to sensibly gear around 2-2.5:1 this way maximising return. In other words putting the Million to work!

*Importantly*--Remain in *COMPLETE control of your funds*,dont invest in any developements/investments unless they are your own.


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## nizar (16 April 2007)

I would trade the lot.
Yes, seriously.

People think properties more "solid" or whatever but thats very old fashioned thinking.

Indivisible and illiquid just doesnt appeal to me.

(actually i would get a house for myself, probably spend about 500k on that, not for investment purposes, but because i need a place to live)


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## CanOz (16 April 2007)

nizar said:


> I would trade the lot.
> 
> 
> (actually i would get a house for myself, probably spend about 500k on that, not for investment purposes, but because i need a place to live)




Can you imagine that trading room!


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## professor_frink (16 April 2007)

nizar said:


> I would trade the lot.
> Yes, seriously.
> 
> People think properties more "solid" or whatever but thats very old fashioned thinking.
> ...




Would you stick with the small caps though Nizar?


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## Realist (16 April 2007)

Okay assuming you already own a house you live in and love outright, and you've got a car and got holidays booked etc. and you have $1M in cash spare I would invest it along these lines roughly.

$300K into a $700K investment property (along with a $400K mortgage that the rent pays off)

$200K into 10 or so high dividend bluechip Aussie shares. Reinvest dividends.
$200K into 10 or so bluechip US shares. (your coca cola, Proctor and Gamble, etc.)
$100K into 10 or so speculative shares (mining, IT, scientific companies yet to make a profit)

$200K in 3 different high interest yielding term investments, preferably one or 2 outside of Aus.


That's it...

So I would buy 30 or more different shares, focusing mainly on dividend yield.

I'd always keep about 20% in cash (high interest bank account).


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## kevro (16 April 2007)

I would invest 900k in booze, women and song. The rest I'd just waste.


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## nomore4s (16 April 2007)

kevro said:


> I would invest 900k in booze, women and song. The rest I'd just waste.




lol, can I join you


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## kevro (16 April 2007)

nomore4s said:


> lol, can I join you




Sure, no probs, BYO $million


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## nizar (16 April 2007)

kevro said:


> I would invest 900k in booze, women and song. The rest I'd just waste.




haha... george best... watta legend...


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## Julia (16 April 2007)

I'd buy STC a house!


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## nomore4s (16 April 2007)

Julia said:


> I'd buy STC a house!




lol, He'd probably sell it and put the money into his super.


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## nizar (16 April 2007)

nomore4s said:


> lol, He'd probably sell it and put the money into his super.




LOLOLOL 
Great call champ!


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## YOUNG_TRADER (16 April 2007)

nizar said:


> haha... george best... watta legend...




He gives me something to work towards


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## kevro (16 April 2007)

YOUNG_TRADER said:


> He gives me something to work towards




hi YT, if you plan on following in George Bests footsteps I would consider hiring a stunt liver to handle  the more advanced sessions until yours is up to it.


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## investforwealth (16 April 2007)

Julia said:


> I'd buy STC a house!




How sweet are you!  It would be a pretty nice house for a million dollars.  Probably not quite as nice as John Symond's new place, though!

I probably should add some qualifications to this hypothetical to create a level playing field... some of the comments posted already have highlighted the fact that I've omitted some important info.

Let's suppose that you're 25-30yo and have a fairly high tolerance to risk.  After all, if it all falls in a heap, you can go back to your professional job and life will go on.  

Living off your investments, whatever they may be, is probably preferable to working for someone else, but you know that whatever investments you make, there's going to be some sort of "work" involved in managing them.  I guess retirement would be something you'd think about when you had made enough so that you could live comfortably from passive income alone.


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## YOUNG_TRADER (16 April 2007)

kevro said:


> hi YT, if you plan on following in George Bests footsteps I would consider hiring a stunt liver to handle  the more advanced sessions until yours is up to it.




I'm training mine as best as I can , you hiring yours out?


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## Dukey (16 April 2007)

kevro said:


> hi YT, if you plan on following in George Bests footsteps I would consider hiring a stunt liver to handle  the more advanced sessions until yours is up to it.




Guys - if you study tissue culture on the side - you could probably grow your own spares in the fridge!!!  :bonk:


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## Mousie (16 April 2007)

Julia said:


> I'd buy STC a house!




wish STC will read this and repay you in kind if it ever happens, though the super thingy takes the cake lol


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## kevro (16 April 2007)

YOUNG_TRADER said:


> I'm training mine as best as I can , you hiring yours out?




To many holes in already.


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## stevo (16 April 2007)

Posting this question to a trading blog is obviously going to get some seriously biased answers!

I'd just keep doing what I do now - trade systems that I have been trading for some time now. $1 million isn't the sort of money that requires a rethink on approach. Maybe $20 million.....

http://drawdown.blogspot.com/2006/12/revised-yearly-results.html

If I knew what I now now when I was 25 and had access to capital, software and data I would have had a lot of fun with the markets over the last 25 years!


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## nat (16 April 2007)

Id find the best interest rate i could get in a bank then just live off that it would be way more then ive lived on ever and am content now ,if got 8% interest thats 80000 $ a year and with no debt i dont c a problem with that .To many things to do places to c and not enough time ,but this could buy huge amount of time. Nathan


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## Halba (16 April 2007)

300k mtn

300k bmn

300k ern

rest: living expenses


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## The Y-man (16 April 2007)

nat said:


> Id find the best interest rate i could get in a bank then just live off that it would be way more then ive lived on ever and am content now ,if got 8% interest thats 80000 $ a year and with no debt i dont c a problem with that .To many things to do places to c and not enough time ,but this could buy huge amount of time. Nathan




Problem there Nathan is that if that was in Australia, you'd see about $25~30k of that go to tax, and you'd be fighting inflation  

Cheers,

The Y-man


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## The Y-man (16 April 2007)

investforwealth said:


> As for my own opinion, the anwer is... I just don't know!  I'd certainly be investing the majority of it, if not the entirety, but I'm not sure where or how.




I supose how suddenly you came into the money - you'd be surprised how "mundane" an amount it is once you get there..... it's just a few more zero's on the end of your trade values or quantities... (although I must say the brokerage gets better and better  )

Cheers,

The Y-man


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## investforwealth (16 April 2007)

nat said:


> Id find the best interest rate i could get in a bank then just live off that it would be way more then ive lived on ever and am content now ,if got 8% interest thats 80000 $ a year and with no debt i dont c a problem with that .To many things to do places to c and not enough time ,but this could buy huge amount of time. Nathan




Apart from the previously mentioned issues of taxation and inflation, which would be serious problems by the time you were 40 let alone by the time you got to your 60's (going on the hypothetical age of the investor in question),  $50-$60k a year to live off isn't bad, but it's not the kind of money you could really party with.  With all those places to see and things to do, you might not be able to do it in too much style... more kombi and sleeping bag than airlines and 5-star hotels.

Can you get 8% from a bank atm anyway?



The Y-man said:


> I supose how suddenly you came into the money - you'd be surprised how "mundane" an amount it is once you get there..... it's just a few more zero's on the end of your trade values or quantities... (although I must say the brokerage gets better and better  )
> 
> Cheers,
> 
> The Y-man




That's very true Y-man, having a million dollars certainly isn't what it used to be.  I used to think that if I had that much money, I'd feel rich... but I don't think I've had a day where I've felt even remotely wealthy... maybe when I get to $10 or $20M, then I'll start to feel that I'm on my way at least.


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## Brujo (16 April 2007)

This reminded me of a question I was going to post when the news last week was full of the statistic that there were 134,000 "millionaires" in Australia...or was that "new" millionaires?

It made me wonder how, in that statistic, they classified someone as a millionaire?

Is it total net assets?  Assets less debt?  Do you include the family home in that valuation?  Do you include superannuation assets that are not yet accessible?  With house prices in Perth and Sydney being what they are, there are certainly many people living in million dollar homes.

How does everyone define "millionaire"?  At what point do you stop, assess and brag to your mum that you are a "millionaire"?


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## nizar (16 April 2007)

Halba said:


> 300k mtn
> 
> 300k bmn
> 
> ...




Now theres an idea...


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## nizar (16 April 2007)

investforwealth said:


> That's very true Y-man, having a million dollars certainly isn't what it used to be.  I used to think that if I had that much money, I'd feel rich... but I don't think I've had a day where I've felt even remotely wealthy... maybe when I get to $10 or $20M, then I'll start to feel that I'm on my way at least.





True.
1million isnt much these days.
But its a start.
100million is the real jackpot, after that you cant get anything else only multiples.


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## Kimosabi (16 April 2007)

I'd put it up as a 5% down payment on a $20 million property.

If this is good enough for a $500,000 property, why not a $20 million property...


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## Freeballinginawetsuit (16 April 2007)

Chip in with a few mates and buy a Caravan Park on the Cape region down South, license to print money (cash persuasion)!.


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## kromey (17 April 2007)

WMT shares without hesitation.


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## nizar (17 April 2007)

kromey said:


> WMT shares without hesitation.




Brother i knew you would say that!
About 2.3million shares, that would get you >4million shares.
Nudging the top20 Id say.


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## kromey (17 April 2007)

nizar said:


> Brother i knew you would say that!
> About 2.3million shares, that would get you >4million shares.
> Nudging the top20 Id say.




Awesome!


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## jtb (17 April 2007)

Freeballinginawetsuit said:


> Chip in with a few mates and buy a Caravan Park on the Cape region down South, license to print money (cash persuasion)!.




Endangered species these days bro'.
The park at Yall's would be the ticket, nice leisurely stroll up the path to caves house- beautiful.............
But you'd need a few mates .


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## bvbfan (17 April 2007)

I'd put some into my next 10bagger, some into my next 5bagger...

Just got to find them


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## nat (17 April 2007)

The Y-man said:


> Problem there Nathan is that if that was in Australia, you'd see about $25~30k of that go to tax, and you'd be fighting inflation
> 
> Cheers,
> 
> The Y-man




Hi ther ,i relise one would pay tax funny thing is everyone one on that income a year does to, one has to pay tax if earning the money its a fact of life ,i suppose on income it depends on what sort of life ones happy with, if needs to be extravagent to be happy then i agree would need more ,thing is up here in sunny QLD most people i know are on way less then 80000 a year and forking out at least half of that on morgage for house ,car ,kids, ect so really how much do they have to live on a year for the next 25 years even .Just look at all the people that have won million on lotto the majority of them have blown it all by 2  years then back to where they started,thing is a lot of them seem to be on pension or low paid jobs so for them a no brainer at the very least would be for them to put in bank till sort out a better option they would be on way more then they had per year including tax .On the 8 % its just a figure i put out there ,im sure if shopped around with banks and said has a million to in vest they would come up with about that figure ,im only surmising but maybe some one with a million invested could tell us for sure .Nathan


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## The Y-man (17 April 2007)

Brujo said:


> How does everyone define "millionaire"?  At what point do you stop, assess and brag to your mum that you are a "millionaire"?




I always assume it is net worth. Some people go so far as to say net worth not including super, and also if you are married, you should really have a net worth over $2m (i.e. $1m each).



You never brag to your mum (assuming she is not as wealthy as you) - as the following will happen:
1. you are now rich enough to support all you siblings who happen to be big spenders
2. she will tell all her friends and relos - who will suddenly appear at your door  

Cheers,

The Y-man


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## The Y-man (17 April 2007)

nat said:


> ... one has to pay tax if earning the money its a fact of life ....





Hi Nathan,

This is very true. I suppose what I am trying to allude to, is that cash investments may not be the most tax effective method of investing/generating passive income (although probably one of the least volatile).

For myself, I am willing to take on slightly more volatility, in order to try and pay less tax (I agree you can not get it to "no tax") and hopefully higher returns.

Cheers,

The Y-man


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## The Y-man (17 April 2007)

nat said:


> On the 8 % its just a figure i put out there ,im sure if shopped around with banks and said has a million to in vest they would come up with about that figure ,im only surmising but maybe some one with a million invested could tell us for sure .Nathan




Unfortunately, the banks won't even consider you as a serious private banking customer unless your net worth is over $2.5m........and even then, they just offer to put your money into managed funds  

Cheers,

The Y-man


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## Junior (17 April 2007)

Set up a margin loan and invest $2 mill into Aus blue chips.  Should generate at least $80,000 p.a. in franked dividends plus long term capital growth of at least 10%.

Well I'd waste at least $100k on cars/holidays first and then gear the rest.


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## krisbarry (17 April 2007)

Julia said:


> I'd buy STC a house!





Ohh thanks, I will take you up on that offer if you do happen to come into the money 

But in all honesty you and I are richer than the other 5.5 billion people who live on this earth, so I could see plenty of people much worse off that need the money (or the house for that matter).

I don't need charity, and neither does any other young person, what we need is affordability....something that has been robbed from us, again, thanks for your concern!


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## investforwealth (17 April 2007)

nat said:


> On the 8 % its just a figure i put out there ,im sure if shopped around with banks and said has a million to in vest they would come up with about that figure ,im only surmising but maybe some one with a million invested could tell us for sure .Nathan




Believe me, the banks just aren't interested in doing anything for a million bucks in cash.  I tried very hard to get a competitive rate when parking that amount recently and nobody was really willing to do anything.  So I'm guessing Y-Man is probably right about the 2.5 needed to get any kind of concessions from the banks.


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## krisbarry (17 April 2007)

Thats not true at all.....I went to the bank, with a cheque for $12,500 and the lady bent over backwards to try and convince me to start a high interest bank account.  I said thanks but no thanks, as I already had plans to deposit the money elsewhere.

Every other time I went to the same bank, and the same branch, they didn't want to know me at all and kept declining me for loans or credit cards etc over a 10 year period!


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## tech/a (17 April 2007)

Stop_the_clock said:
			
		

> But in all honesty you and I are richer than the other 5.5 billion people who live on this earth, so I could see plenty of people much worse off that need the money (or the house for that matter).
> 
> I don't need charity, and neither does any other young person, what we need is *affordability*....something that has been robbed from us, again, thanks for your concern!




Get a grip Kris.
You have the OPPORTUNITY.
The other 5.5 billion will *NEVER* have the same opportunities you have.

To be in the position of opportunity and NOT take advantage of it is just as tragic as those who wont ever be in that position.

Just take a look at how some of our immigrants have embraced that opportunity way way beyond those who have been living with it for years.

*Affordability* get outta here---ask the other 5.5 billion what affordability means to them.


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## Freeballinginawetsuit (17 April 2007)

jtb said:


> Endangered species these days bro'.
> The park at Yall's would be the ticket, nice leisurely stroll up the path to caves house- beautiful.............
> But you'd need a few mates .




Yalls would be nice, as would prevelly , probably 10 mates would be the ticket..........for the lease, LOL!.

50 bucks a nite for an unpowered piece of dirt and they stack em in by the hundreds...............better than a U stock and with views (especially Yalls) .


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## krisbarry (17 April 2007)

tech/a said:


> Get a grip Kris.
> You have the OPPORTUNITY.
> The other 5.5 billion will *NEVER* have the same opportunities you have.
> 
> ...





Get a grip tech/a, I am taking massive risk right now, gearing, and its paying off well.  Thanks again for your concern....and yes the other 5.5 billion people on this earth have the same opportunity we do.

Plenty make it rich in their own countries too, but its all relative!  What is considered rich in one country is poor to another.

I am taking all the risk possible to make more and more money.

Like I said I have increased my wealth 8 fold in less than 3 years, if thats not risk, then what is?

Has your wealth grown 8 fold in the last 3 years?  if not then you are not taking enough risks and therefor not following your own advice of taking advantage of opportunites.


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## krisbarry (17 April 2007)

...I consider myself rich now, even with very little wealth, because I can compare myself to the top 1.5 billion people, or compare myself to the bottom 5.5 billion.

...anyway this year I have been working on a different kind of wealth and that is E.Q.

Emotional Intelligence - Now that is worth far more to me that monetary wealth could ever be.

Increasing levels of Self Esteem, Confidence etc


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## tech/a (17 April 2007)

Stop_the_clock said:


> Get a grip tech/a, I am taking massive risk right now, gearing, and its paying off well.  Thanks again for your concern....and yes the other 5.5 billion people on this earth have the same opportunity we do.




They do????



> I am taking all the risk possible to make more and more money.
> 
> Like I said I have increased my wealth 8 fold in less than 3 years, if thats not risk, then what is?




Well I hope that "Risk" is quantified. Risk certainly isnt proportionate to wealth creation.



> Has your wealth grown 8 fold in the last 3 years?  if not then you are not taking enough risks and therefor not following your own advice of taking advantage of opportunites.




Hahaha.
The 30k I started with (similar to your nett worth) 4 yrs ago is now $400,000 
you do the maths.(public knowledge http://lightning.he.net/cgi-bin/suid/~reefcap/ultimatebb.cgi?ubb=get_topic;f=74;t=000029;p=6).
Its not a competition Kris.
and its *NOT* about RISK. Infact quite the opposite.


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## investforwealth (17 April 2007)

Stop_the_clock said:


> Thats not true at all.....I went to the bank, with a cheque for $12,500 and the lady bent over backwards to try and convince me to start a high interest bank account.  I said thanks but no thanks, as I already had plans to deposit the money elsewhere.
> 
> Every other time I went to the same bank, and the same branch, they didn't want to know me at all and kept declining me for loans or credit cards etc over a 10 year period!




They were offering you over 6% pa on your $12,500 with it *available at-call*?

I'd love to know which bank it was, because I approached all the majors and many of the smaller banks and couldn't get any better unless I went into mortgage funds or something similar, with slightly higher risk than a bank deposit.  Perhaps it comes down to what you view as "high interest".

I've never had a "friendly call just for a chat" from a bank manager before, but I do get it now from the local CBA branch manager, who likes to ensure that I'm happy with the service I'm getting; but he's been unable to get me a better rate than 6% on call on over $1M so far.


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## krisbarry (17 April 2007)

Investing $1 million dollars as some have already discussed may be determined by age as to where to put it.

We must also factor in for the fair majority of grey nomads on this board $1 million dollars might be pocket change to them but a wild fortune for the young, like myself.

So its like comparing apples with oranges as to how much value is placed on $1 million dollars and how the best way is to invest it.


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## tech/a (17 April 2007)

> fair majority of grey nomads




I doubt that any here are nomadic. $1 mill is $1 mill regardless of age.
How you deal with it (The mill) and the prospects of getting it in the first place also differ with age. 

All part of the discussion on what people would do with it or in some cases are doing with it.

I would say that from the comments posted you can spot those who see it as a dream more so than a reality or possibility.


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## investforwealth (17 April 2007)

Stop_the_clock said:


> Investing $1 million dollars as some have already discussed may be determined by age as to where to put it.
> 
> We must also factor in for the fair majority of grey nomads on this board $1 million dollars might be pocket change to them but a wild fortune for the young, like myself.
> 
> So its like comparing apples with oranges as to how much value is placed on $1 million dollars and how the best way is to invest it.




I did provide further information after the first few responses, qualifying the age and the risk profile of our hypothetical investor to provide "a level playing field" so that we're comparing apples with apples, as you put it.  As you have said, other posters pointed out early in the thread that this information was important in determining how they would invest the money.  

As for how much value is placed on it by our hypothetical investor, my first post asked readers to imagine they were a professional on an average wage.  At the hypothetical age of this imaginary person, obviously they wouldn't have accumulated too much wealth, and the million would probably be a lot more money than they had seen before.

I'm more interested in knowing which bank was offering you big bucks on your $12,500?


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## Julia (17 April 2007)

The facetiousness of my earlier response aside, (sorry STC), I would donate $100,000 to the RSPCA, give $100,000 to a young family who were once tenants of mine, who put a lot of their own energy into maintaining the property, and who have kept in touch for about 20 years long after the property was sold.  They are still renting, because of various circumstances, and deserve some help.

The balance I'd simply parcel out on a pro rata basis into my existing investments, i.e. growth and income stocks, including property trusts rather than have direct property investments with the present low yield, and cash.

At a different point in the economic cycle I'd consider direct property but really can't be bothered with all the worry of tenants, maintenance etc.

Btw, the expression "grey nomads" is inappropriate in this discussion.
It refers to those retirees who spend their retirement travelling, usually with a caravan.  Many of us posting on this forum are neither grey, retired, or nomadic.


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## The Y-man (17 April 2007)

investforwealth said:


> So I'm guessing Y-Man is probably right about the 2.5 needed to get any kind of concessions from the banks.




Ooops...sorry, Westpac do it for much less!!
$250k pa income and any combo of loans, depsoits and investments with Westpac  above $1mill

http://www.westpac.com.au/internet/publish.nsf/Content/PBSVPB+Membership+criteria


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## ROE (20 April 2007)

Paid off all my debt and use the rest for investment...not that I have much debt  and fund my parents retirement with the return on my equity.


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## tech/a (20 April 2007)

Roe.

Glad you made contact!!
Ive been looking everywhere for you!!

DAD.


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## steven1234 (27 April 2007)

If i was handed the Mil today I would wait for the next major correction and then invest it all in the market.  Too good an opportunity to give up in my opinion  (i believe we will have a major correction later this year)... if the correction fails to hit property looks good atm.


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## resourceboom (28 April 2007)

I'd have to spend half and invest half, in generally blue caps, with good dividends, but not property trusts or the like!!


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## shinobi346 (30 April 2007)

600 into investment property
100 into a high interest earning account
100 into blue chips
200 into mining and alt energy stocks like ABJ


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## d_crome (26 June 2007)

I have to ask the question - WHY do so many of you put a substantial amount into property?

Property wont' appreciate like a stock will, the gains over a long term will always be on the market - rents are quite low in comparison the price of the property.

So my question stands - why not invest it all on the market for a min 10% annual return??


----------



## UPKA (26 June 2007)

d_crome said:


> I have to ask the question - WHY do so many of you put a substantial amount into property?
> 
> Property wont' appreciate like a stock will, the gains over a long term will always be on the market - rents are quite low in comparison the price of the property.
> 
> So my question stands - why not invest it all on the market for a min 10% annual return??




Because property prices are usually more stable compared to shares, so the risk is a lot lower than equities. and u r gonna need a place to live in, so unless u buy it outright, u'll have to pay interest on it. anddddddd whos there to guarantee a 10% return in shares?


----------



## tech/a (26 June 2007)

*Here is why.*

I can claim all the interest on every loan as a deduction.
My tennents pay MORE than the cost of securing the property.So I'm positively geared.
I can leverage 5:1 (have done so on 6 of 10).
Banks love property.
I love the use of leverage--other peoples money.
Property wont get delisted!

That doesnt mean to say I dont do similar with my portfolio.

But no way do I have the same invested in Shares as I do in property.
How many trade more than $400,000 the cost of a decient home?
Mind you wish I had!


----------



## greenfs (26 June 2007)

Buy JBM shares and use the dividend to rent a decent shack and watch your capital continue to grow. If you read the Australia it ain't over yet with a 12 month forecast of $23+ against $17 today.

This share has been numero uno performer in ASX for past 5 years.


----------



## stoxclimber (26 June 2007)

$1mil in STW


----------



## Spaghetti (26 June 2007)

I invested in property and what a waste of money. A drain for your dollars. If you buy property the whole amount would have be just a down payment on a place that would get good captial gains.

I would research, research, research and then when I thought I was done I would research more to get maximum out of about 500,000. I would put some in high risk, maybe even 100,000. $300k on blue chips and 100,000 in the bank.

I would buy a small business for passive income, or maybe two...also as an interest.

But I do live for now so would go on a spending spree with a lot of it. I do not agree with saving everything for later as life has passed by then.

The best investment is a sabbactical from work, will add 5 years to your life. travel, spend up and take lots of photos as it may never happen again.


----------



## Buster (27 June 2007)

Hey Fella's

I have to say I'm with D-Chrome on this one.. Here's Why..



tech/a said:


> I can claim all the interest on every loan as a deduction.My tennents pay MORE than the cost of securing the property.So I'm positively geared.!




errr.. Yeah, you can.. but if you're positively geared it's not reducing your tax.. What is the real benefit??



tech/a said:


> I can leverage 5:1 (have done so on 6 of 10).!




As with a Margin Loan.  You can obtain 70% on blue chips, which you can buy more Blue Chips and then obtain 70% of thier value and so on and so forth.. that's some serious leverage at the end of the day.. and also some serious risk.. 



tech/a said:


> Banks love property.!




Banks love shares!!



tech/a said:


> I love the use of leverage--other peoples money.!




Again, margin loans.. But it's still money YOU have to pay back if it all goes horribly wrong..



tech/a said:


> Property wont get delisted!!




Shares don't have aircraft landing in them..

Property just gives me the sheites with the nickle and diming.. It seems that everyone has thier hand in your pockets.. The property managers, the state government the local government, the water board the property managers brother in law (the maintenance man) the property managers sister in law (the gardner) and on and on it goes, then you pay your marginal rate of tax on any/the profit

As an example a 400k property (owned outright) pulling in $400 a week will earn you approx 21k.  Subtract management fee's (typically 10% but vary from state to state and negotiable if a number of properties managed), general maintenance, land tax, rates, insurance etc etc and you're looking around the 15k mark.. subtract the marginal rate of tax and you are probably looking at about 8k.  Remember, That's not even considering interest payments if you can't/don't own it outright!! 

The property may or may not appreciate/burn down/flood/be reduced to dust by termites or be destroyed by loser tennants..

On the other hand you have 400k invested in quality Blue chip shares returning a dividend of somewhere in the order of a 4 - 6% fully franked dividend. Thats 16k - 24k that has the majority of the tax already paid, and nobody else dipping into your return or capital!!

The Company/Shares may or may not appreciate/delist/be bought by private equity etc etc etc

I've owned a reasonable investment property portfolio previously, now I simply own my own home and a small property investment, and yes I've made some good money from property over the years but theres no more property on the horizon for me, I'm picking up shares and squirreling cash away (for the correction..). If it's ROI you're after the share market wins hands down as far as I'm concerned..

[Strictly on Topic..] I'd invest the 1 Million in the share market in a heartbeat.. Obviously careful consideration on _which_ stocks to buy and not all in one foul swoop, but into the market it goes..



tech/a said:


> How many trade more than $400,000 the cost of a decient home?




errrr..

Regards,

Buster


----------



## insider (27 June 2007)

$300,000 - MTN
$100,000 - CTS
$200,000 - CAV
$50,000 - DYE
the rest on a house and a Lotus Elise

wait...

$300,000 - MTN
$300,000 - CTS
$200,000 - CAV
$100,000 - EME
$50,000 - DYE

the rest on a trip


----------



## tech/a (27 June 2007)

Buster dont disagree with most of your comments.

Mine are based around 1996 as entry level. Makes a difference to the equation if looking at now.
Same or better returns could have been made in the market over that period.

Is one better than the other.---to me no,both should be an intergral part of investment.
For most who have no idea about the stock market then housing has better general appeal. Its seen as safe/accepted/understood.
To Joe average the Markets are a mystery.

To suggest investing $400,000 into the market to most would be un thinkable.

So where is that course Better Investment 101?


----------



## insider (27 June 2007)

Well I guess you better bury your million dollars under a Big T for it to be safe


----------



## Buster (28 June 2007)

Hey Tech/a



tech/a said:


> Mine are based around 1996 as entry level. Makes a difference to the equation if looking at now.  Same or better returns could have been made in the market over that period.
> 
> Is one better than the other.---to me no,both should be an intergral part of investment.?




Really doesn't matter when you bought them, you're still getting diddled by the myriad of pickpockets.. I bought one of my Sydney properties in 85, an Adelaide in 89 and Canberra in 92 (I now live in WA hence the requirement for property management) and I'm tired of the constant nickle and dime treatment.. 

However, as they (and you) say, don't put all your eggs in one basket, and everything in moderation.. really can't argue with that.



tech/a said:


> For most who have no idea about the stock market then housing has better general appeal. Its seen as afe/accepted/understood.
> To Joe average the Markets are a mystery.?




Yeah, I must admit it surprises me how adverse many of my peers are to investing in the Stock Market..



tech/a said:


> So where is that course Better Investment 101?




Ha.. If I ever thought it was required I'm tipping it would amount to nothing more than a 10 page (Common Dog) leaflet.. which, incidently, I believe most 'books' on the subject floating around the place could be condensed to.. especially the 'Rich Dad' types.. mostly fluff and patronising crap, but some absolute gems mixed in amongst it.. 

Just my opinion though..

Regards,

Buster


----------



## Jonfrodo (3 November 2009)

I would get a divorce. Priceless.


----------



## kam75 (6 November 2009)

read Pit Bull by Marty Schwartz to find out.


----------



## noirua (6 November 2009)

At the moment I need about $1.1 billion and $1 million is only just about a drop in the ocean. $1 million would go in about 10 minutes as I move to protect the Australian Moolarben mine from the Chinese.
The $1.1 billion would be OK for just 3 weeks, then I need another $3 billion on December 1st 2009.


----------



## Dreadweave (6 November 2009)

Hell 1 million? Just put it in a savings account and youll be getting $45k a year in interest. 


But seriously, Id probably put 600k in a high dividend yield bluechip like TLS or to be a little safer maby spread it around 4 or 5 bluechips, then allocate about 400k to 'Play with' on other stocks.


----------



## Julia (6 November 2009)

Dreadweave said:


> But seriously, Id probably put 600k in a high dividend yield bluechip like TLS or to be a little safer maby spread it around 4 or 5 bluechips, then allocate about 400k to 'Play with' on other stocks.



You'd put $600K in one stock?   OK, let's say you do this (disregarding all the rules about diversification and risk management), and they cut the dividend in order to plough profits back into growing the company.

That's a minor matter, however, compared to the fact that the stock is trading sideways after being in a downtrend.  All it would take would be one negative announcement for TLS to revert to a downtrend.

Do you think the loss of capital is going to balance out your 'high dividend'?

How are you going to feel if your $600K becomes $500K or less?

Perhaps I'm missing something in your proposed strategy?

I've already made the point about risk management.  Additionally, I'd have to wonder why you'd be ignoring dozens of great stocks out there which are growing your capital?


----------



## condog (8 November 2009)

$50 K of physical gold
$950K of direct Australian shares across a range of sectors and with diverse economies for earning....

Some holdings would include the big 4 banks, WOW, JBH, WDC, FXL, FWD, upt to about 20- 30 stocks....  All with ROE 30% + and low or no debt...


----------



## stl_08 (8 November 2009)

What will I do when I have a mill?
I would buy 30-50% of a company and then turn it in the direction I would like it go


----------



## Gerkin (8 November 2009)

stl_08 said:


> What will I do when I have a mill?
> I would buy 30-50% of a company and then turn it in the direction I would like it go




By buying 30% to 50% of a company, you would get the companies share price going in the right direction


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## nunthewiser (8 November 2009)

Use that 1 million to borrow 10 million .......... use that 10 million to borrow 100 million ........... use that 100 million to borrow 1 billion ........

Transfer 500 millions worth of liquid assets and property to the people in the " circle " 

Spend the rest on wine women and song until the party came crashing down......

Say "sorry have a lovely day" and go banktrupt.


----------



## Wysiwyg (8 November 2009)

1) House and land package in new estate - Price: $417,000 rented at +$500/wk
2)Fixed term deposit at 6.85% for 3 years - $283,000 = gross estimate $58,156.
3) Share portfolio of increased dividend paying blue chips - $300,000.

*Note the purchase of shares would involve select timing and possibly DRP's.

Is that a typical newbie approach and could it be refined?


----------



## andione1983 (8 November 2009)

buy about 7 different motorbikes, one for each day of the week, a Fort GTVm pay off my home and put the rest in banks shares. LOL


----------



## Wysiwyg (8 November 2009)

andione1983 said:


> buy about 7 different motorbikes, one for each day of the week, a Fort GTVm pay off my home and put the rest in banks shares. LOL




Hello, the question is invest. It's a tricky one if you don't read or miscomprehend the question.


----------



## MrBurns (8 November 2009)

I reckon  - 

25% in the biggest safest shares, banks , resources.
75% in property when it tanks, just have to wait for it.

If you have unemcumbered property it will hold you in good stead through thick and thin.

Now, if you're really smart like one guy I know you buy businesses and build them up.

He's now seriously wealthy, takes application and smarts, he did the Harvard Business course in the UK, learned a lot and applied it.


----------



## Joe Blow (8 November 2009)

I trust that the controversy that motivated the deletion of a couple of dozen posts this evening is now at an end and there shall be no further mention of it. 

By the way, it is not "anonymous in here". Every post on this forum is time and IP stamped. That means all those who haven't been dashing frantically from internet cafe to internet cafe to post on ASF can be identified so please only post things about people that can be *proven* to be factual.

Now, back to the topic of the thread.


----------



## MRC & Co (8 November 2009)

Thx Joe.


----------



## MrBurns (8 November 2009)

Joe Blow said:


> I trust that the controversy that motivated the deletion of a couple of dozen posts this evening is now at an end and there shall be no further mention of it.
> 
> By the way, it is not "anonymous in here". Every post on this forum is time and IP stamped. That means all those who haven't been dashing frantically from internet cafe to internet cafe to post on ASF can be identified so please only post things about people that can be *proven* to be factual.
> 
> Now, back to the topic of the thread.




You cant be specifically identified by your IP address Joe, and posting things that can be proven to be factual, fair enough but it goes both ways.

This thread got seriously off topic over this and I should take my share of the blame I just cant let go of something that I believe , except to take a bigger bite.

I will try to be more passive.

More specifically - 



> There is no public look up relating an IP address to individuals. Your IP is related to your ISP. Your ISP could certainly look up who has been assigned a particular IP, which is related to your cable modem, etc. and certainly law-enforcement might have access to this, but it is not generally available.


----------



## nunthewiser (8 November 2009)

nunthewiser said:


> Use that 1 million to borrow 10 million .......... use that 10 million to borrow 100 million ........... use that 100 million to borrow 1 billion ........
> 
> Transfer 500 millions worth of liquid assets and property to the people in the " circle "
> 
> ...






Joe Blow said:


> By the way, it is not "anonymous in here". Every post on this forum is time and IP stamped. That means all those who haven't been dashing frantically from internet cafe to internet cafe to post on ASF can be identified so  .





My previous post was merely a figment of my warped imagination and i would like it known i am an honest hard working Nun that shudders to think that the scenario posted would actually ever happen in the modern business day world 


Thankyou for understanding.


----------



## Garpal Gumnut (8 November 2009)

nunthewiser said:


> My previous post was merely a figment of my warped imagination and i would like it known i am an honest hard working Nun that shudders to think that the scenario posted would actually ever happen in the modern business day world
> 
> 
> Thankyou for understanding.




Nun, mate,

If I were given 1 mil , and given that you and I are the most well behaved posters on asf tonight, I would have to say that there is something crook about the world and that the financial system is probably headed for another crash.

I therefore would turn it in to gold bars and bury it in the corner where garpaldog goes every morning for a ****.

gg

gg


----------



## nunthewiser (8 November 2009)

Garpal Gumnut said:


> Nun, mate,
> 
> If I were given 1 mil , and *given that you and I are the most well behaved posters on asf tonight*, I would have to say that there is something crook about the world




We are , arent we 

But have to agree on your sentiments , we are obviously heading for armageddon and therefore I have changed my strategy of seeking world domination and now i will bring peace on earth with that million bucks instead ......

More things out there than just making money to invest in .


----------



## Macquack (8 November 2009)

Joe Blow said:


> I trust that the controversy that motivated the deletion of a couple of dozen posts this evening is now at an end and there shall be no further mention of it.......
> 
> ........so please only post things about people that can be *proven* to be factual.




Mental note : It is not acceptable to highlight spelling mistakes on another  website as they may not like it and sue you!


----------



## gooner (8 November 2009)

$250k on red wine
$250k on beautiful women
$250k on a new Ferrari
And waste the rest...........

Oops, the missus just saw that. So what I meant so say is:

$500k in the missus's superfund in case my mate Kev brings back limits on tax free superannuation. All shares, the usual, with an energy bias.

$500k in shares outside the superfund. Again usual stuff, energy bias. But might try and pick a few minnows for a change instead of my normal boring blue chip stuff


----------



## MRC & Co (8 November 2009)

In this case Burns, you could consult a regulator if you wanted proof.  Then you could report your findings.  It is rather straight forward, rather than make outlandish remarkes, that is Joes point.  I have been guilty of it previously too.  

Onto the topic:  I don't believe the market is due for continued long-term growth, so the 'buy and hold' strategy is a bit out the door.  The vast majority here would not be full-time traders and therefore wouldn't have time to continuously update their portfolio and trade, nor would they do the many years to get the skills.  

The only other option I see as returning above market returns and the returns everybody came to expect after the long-sustained bull run, is to find a hedge fund (need to profit from fluctuations both ways), that you trust and one that you understand and believe in as far as strategy and invest your money there.  

Otherwise, you may simply be treading water after tax and inflation.  I certainly know I would rather my money be working for me.


----------



## Garpal Gumnut (8 November 2009)

gooner said:


> :
> 
> $500k in the missus's superfund in case my mate Kev brings back limits on tax free superannuation. All shares, the usual, with an energy bias.





You are only allowed $450,000 which I've done recently , $150,000 pa , can do 3 years in advance.

Do it soon or he'll change the rules before you can do it.

Also gives you an extra $50,000 for cigars and gals.

gg


----------



## cutz (8 November 2009)

MrBurns said:


> I reckon  -
> 
> 25% in the biggest safest shares, banks , resources.
> 75% in property when it tanks, just have to wait for it.




Hey Burnsie,

Much safer bet to stay away from the banks till after the property market collapse.


----------



## MrBurns (8 November 2009)

cutz said:


> Hey Burnsie,
> 
> Much safer bet to stay away from the banks till after the property market collapse.




Probably right but they will win in the long term as they call the shots in AU


----------



## Naked shorts (8 November 2009)

If I had ONE WHOLE MILLION DOLLARS!....

I would buy a house made out gold!... look at the market today, if gold prices go up that means house prices go up and if house prices go up, gold prices go up!! You CANT LOSE!
In effect what Im doing is supercharging my returns for double ROE!! Oh and the risks are sooo low, the safety of bricks and mortar combined with the protection that only gold can give you from those nasty nasty fiat currencies! (which are really just worthless bits of paper).  

See with some logical thinking, a little smarts, and a pinch of luck, you all could be as prosperous as me and have great ideas like this!

PM me if you want to learn about my book.


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## skc (9 November 2009)

Naked shorts said:


> If I had ONE WHOLE MILLION DOLLARS!....
> 
> I would buy a house made out gold!... look at the market today, if gold prices go up that means house prices go up and if house prices go up, gold prices go up!! You CANT LOSE!




LOL. Great idea... 

I think the answer will greatly differ depends on whether you are still working and generating other income or not. To me $1m is nowhere near enough to stop and be contended. 

Given that trading is my income, $1m actually would not change a thing compared to my current allocation.

1. ~5% in cash / high interest - just for everyday use
2. ~0-10% in index fund - for flow of income when trading is quiet
3. ~5-8% in some hedge fund - taking MRC & Co's angle
4. ~80% in trading capital - same process, same risk management, just a larger capital. 

You can make a reasonable living making 20% a year, or very good living make 1000% 

I read from somewhere that, if you approach trading from a position of _financial strength _rather than _financial need_, you are more likely to be successful. $1m will certainly enable that.


----------



## alter1217 (9 November 2009)

Buy a $300,000 house in some other city and rent it out. Use the rent to pay for a $250/week room in sydney + train/bus ticket to university.

Put $300,000 in blue chips, tilted towards resources.
The remaining $300,000 I'd buy some aussie government bonds.

Pay off my hecs debt with $45,000
Put $45,000 in my day trading account. Income generated from this will go into more blue chips.

Go on a shopping spree with my remaining $10,000. I'll probably go home with $9,995 after only buying an ice cream, though. I might also boast I suddenly got an extra $10,000 to appear more attractive to the ladies. That might lead to buying dinners and such.


----------



## Wysiwyg (9 November 2009)

The results are typical. Most go straight for spending the money on themselves or using the money to trade shares, buy toys, live off etc. 

The word invest must be a blind spot or is non-comprehende. Maybe the thought of $1 mil. sends people crazy. Who knows and who cares really.


----------



## RP_Automotive (9 November 2009)

$250k on speccy stock that I've been backing for years / have a identified large resource (SDL, LNC etc) Probably divided over 4 stocks.

$50k on CBA

$50K on MQG

$100K on RIO

$100k on BHP

$350k on a decent size house with a big garage, not too close to the city, but not too far away. (somewhere like Adelaide Hills)

$60k on a immaculate totally original Mustang...and it would be a investment.

$40k for day trading.


----------



## Naked shorts (12 November 2009)

Naked shorts said:


> PM me if you want to learn about my book.




Just thought I should update, It appears no one wants to learn about my book!! Whats wrong? is the house made out of gold a bad idea? Assuming a house weight of 25tons, you would have made $17,637,000 by now! 

Thats a 1763% gain over 4 days Thats 160,469% p.a.! That number is so big I had to use a comma to separate the numbers.

And for all those visual learners out there. Here is a graph illustrating just how good my ideas really are.


----------



## ChilliBlue (12 November 2009)

kevro said:


> I would invest 900k in booze, women and song. The rest I'd just waste.




Being female and able to sing I'd be happy to take that 900K off you. 

Easist money ever made.


----------



## 4eyesnb (12 November 2009)

600K on property, 250K on small cap stock, 150K on RIO/BHP :


----------



## lasty (12 November 2009)

Put it all on Black.


----------



## lukeaye (12 November 2009)

1 Million doesnt go very far these days?

I think i would invest in artworks.

If not artworks then i would invest in property,

Gold, and energy.


----------



## Mr J (12 November 2009)

Wysiwyg said:


> The results are typical. Most go straight for spending the money on themselves or using the money to trade shares, buy toys, live off etc.




I guess I'm boring then. I'd likely hit the road immediately and trade while I travel.



			
				ChilliBlue said:
			
		

> Easist money ever made.




You may want to wait until you have heard his demands.


----------



## skyQuake (12 November 2009)

Throw it on something incredibly risky likeeee XJOXOQ (4825 Barrier Puts)
Maybe walk away with a 5 bagger or nothing at all

:


----------



## adobee (12 November 2009)

aside from having the home paid off which cost $1m anywhere near sydney city and leaves be with jack all..

$1m of CTP Options ..


----------



## awg (12 November 2009)

lukeaye said:


> 1 Million doesnt go very far these days?




yeah, i spill that much drinking on a friday night

aiming for return of 10% after tax, range of stocks, bias toward energy and commodities, plus some hybrids


----------



## jono1887 (12 November 2009)

Why have so many of the people here gone for a major portion into a RIO/BHP combo... does everyone seem to think that the mining boom will start up again or have they simply forgotten the events that happened just over a year ago


----------



## Wysiwyg (12 November 2009)

jono1887 said:


> Why have so many of the people here gone for a major portion into a RIO/BHP combo... does everyone seem to think that the mining boom will start up again or have they simply forgotten the events that happened just over a year ago



Interesting question and valid points but really, the  (eek7) smiley was uncalled for.


----------



## grace (12 November 2009)

On the education of my four children.


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## Soft Dough (13 November 2009)

I'd put it on red. Do other posters not realise that black is overvalued atm.... fools!


----------



## bloomy88 (13 November 2009)

All on 1-18 for me on Roulette thanks


----------



## Wysiwyg (13 November 2009)

bloomy88 said:


> All on 1-18 for me on Roulette thanks




Hey Bloomy, what is the difference between these two pictures?


----------



## wayneL (19 August 2021)

>10 years later.

Bearing in mind the cautions in the OP re advice etc, what are people's thoughts in 2021?


----------



## tech/a (19 August 2021)

RP_Automotive said:


> $250k on speccy stock that I've been backing for years / have a identified large resource (SDL, LNC etc) Probably divided over 4 stocks.



All delisted so say Down $250K


RP_Automotive said:


> $50k on CBA



Now $200K


RP_Automotive said:


> $50K on MQG



Now worth $350K 


RP_Automotive said:


> $100K on RIO




Now $297000


RP_Automotive said:


> $100k on BHP




Now  $173K


RP_Automotive said:


> $350k on a decent size house with a big garage, not too close to the city, but not too far away. (somewhere like Adelaide Hills)




Now 500K


RP_Automotive said:


> $60k on a immaculate totally original Mustang...and it would be a investment.



Say $100K


RP_Automotive said:


> $40k for day trading.




Say $40K

Total $1,660,000

OK


----------



## Greynomad99 (19 August 2021)

A serious answer? $500K on vanilla flavoured contributory mortgage funds (low risk pay about 7%pa on average and put $100K into 5 mortgages of my choice) with the balance on the market. Today I'd spread the $500K over 10 stocks - ABC, ASX, BOQ, BXB, CSL, FPH, IFM, MQG, COH, WTC. I'd manage the stocks on a trendline trading plan I use. Might keep $10K aside for a very big drink!


----------



## wayneL (19 August 2021)

tech/a said:


> All delisted so say Down $250K
> 
> Now $200K
> 
> ...



Not a bad return.

I'd say upside and downside has changed a bit now.

Add in cryptocurrencies. 

So if someone was starting from now, what then?

A lot of macro guys talk in terms of the everything bubble, and a lot of asset have had a really good run up till now... But also the inflation trade is getting some chatter.

I'm thinking in terms of hard assets or companies that deal in hard assets over the medium to long term.... But I am suddenly risk-averse these days.


----------



## qldfrog (19 August 2021)

vanilla flavoured contributory mortgage funds? 7% in 2021?


----------



## Greynomad99 (19 August 2021)

qldfrog said:


> vanilla flavoured contributory mortgage funds? 7% in 2021?



Yep. I've set a couple of funds up in the past. More or less retired these days and recently retired as a Responsible Office for 2 funds with $100M under management. Still provide compliance for those funds which have never lost a $ for any investor in the past 10 years and pay about 7.5% (retail fund) and 10%+ (wholesale fund). I have no financial interest in either fund any longer (so not ramping them) but still consider contributory mortgages one of the best investments around for the risk adverse. For those unfamiliar with the product the LVR's are about 55% on average generally backed by metro residential 1st mortgages. Contributory mortgages are where the investor chooses the mortgage they want to invest in. The other type of mortgage fund is pooled where you invest in all the mortgages in the Fund and the Manager decides on which loans the Fund invests in - ie you are stuck with the Managers credit choices - not yours. Not many contrib funds around these days but look at www.millbrookgroup.com.au for a few details if you like. Download a PDS for more info.


----------



## The Triangle (19 August 2021)

Greynomad99 said:


> Yep. I've set a couple of funds up in the past. More or less retired these days and recently retired as a Responsible Office for 2 funds with $100M under management. Still provide compliance for those funds which have never lost a $ for any investor in the past 10 years and pay about 7.5% (retail fund) and 10%+ (wholesale fund). I have no financial interest in either fund any longer (so not ramping them) but still consider contributory mortgages one of the best investments around for the risk adverse. For those unfamiliar with the product the LVR's are about 55% on average generally backed by metro residential 1st mortgages. Contributory mortgages are where the investor chooses the mortgage they want to invest in. The other type of mortgage fund is pooled where you invest in all the mortgages in the Fund and the Manager decides on which loans the Fund invests in - ie you are stuck with the Managers credit choices - not yours. Not many contrib funds around these days but look at www.millbrookgroup.com.au for a few details if you like. Download a PDS for more info.



10% you say?  never lost money you say?  Risk adverse you say?  

I prefer to invest with my friend who is a Nigerian Prince...


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## Dona Ferentes (19 August 2021)

funny how these contributors emerge and, within 4 posts, are telling you how the surefire pathway to success is there for the taking.


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## Garpal Gumnut (19 August 2021)

Greynomad99 said:


> Yep. I've set a couple of funds up in the past. More or less retired these days and recently retired as a Responsible Office for 2 funds with $100M under management. Still provide compliance for those funds which have never lost a $ for any investor in the past 10 years and pay about 7.5% (retail fund) and 10%+ (wholesale fund). *I have no financial interest in either fund any longer (so not ramping them) *but still consider contributory mortgages one of the best investments around for the risk adverse. For those unfamiliar with the product the LVR's are about 55% on average generally backed by metro residential 1st mortgages. Contributory mortgages are where the investor chooses the mortgage they want to invest in. The other type of mortgage fund is pooled where you invest in all the mortgages in the Fund and the Manager decides on which loans the Fund invests in - ie you are stuck with the Managers credit choices - not yours. Not many contrib funds around these days but look at www.millbrookgroup.com.au for a few details if you like. Download a PDS for more info.



Any associated entities or family have any interest?

Just asking for an ASIC. 

gg


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## tech/a (19 August 2021)

Greynomad99 said:


> Yep. I've set a couple of funds up in the past. More or less retired these days and recently retired as a Responsible Office for 2 funds with $100M under management. Still provide compliance for those funds which have never lost a $ for any investor in the past 10 years and pay about 7.5% (retail fund) and 10%+ (wholesale fund). I have no financial interest in either fund any longer (so not ramping them) but still consider contributory mortgages one of the best investments around for the risk adverse. For those unfamiliar with the product the LVR's are about 55% on average generally backed by metro residential 1st mortgages. Contributory mortgages are where the investor chooses the mortgage they want to invest in. The other type of mortgage fund is pooled where you invest in all the mortgages in the Fund and the Manager decides on which loans the Fund invests in - ie you are stuck with the Managers credit choices - not yours. Not many contrib funds around these days but look at www.millbrookgroup.com.au for a few details if you like. Download a PDS for more info.




Just buy a property.With or without a bank.


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## Greynomad99 (19 August 2021)

Garpal Gumnut said:


> Any associated entities or family have any interest?
> 
> Just asking for an ASIC.
> 
> gg



No - not even any money invested in those Funds. Just making a comment that I consider that type of investment as one that has relatively low risk for a return almost as good as the market's historical average. As for the link, I'm just using them as an example of how a contributory mortgage fund is structured and operates.


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## Greynomad99 (19 August 2021)

Dona Ferentes said:


> funny how these contributors emerge and, within 4 posts, are telling you how the surefire pathway to success is there for the taking.



Not at all - I was simply answering the question how I would invest. I'm not suggesting that plan would suit everyone. And yes, only 4 posts but it's my first day here after several years and a few thousand posts on the Commsec forum which closed recently.


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## Greynomad99 (19 August 2021)

The Triangle said:


> 10% you say?  never lost money you say?  Risk adverse you say?
> 
> I prefer to invest with my friend who is a Nigerian Prince...



Ah your friend must be the one that keeps sending me those emails.


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## divs4ever (20 August 2021)

Greynomad99 said:


> Not at all - I was simply answering the question how I would invest. I'm not suggesting that plan would suit everyone. And yes, only 4 posts but it's my first day here after several years and a few thousand posts on the Commsec forum which closed recently.



welcome 

 i was hoping it was you and not somebody else using the username 

 regarding the vanilla mortgages   , are you sure 7% will be enough to resist ( actual ) inflation   because to my mind  a mortgage  erodes the capital ( via inflation )

 cheers

 ( a  fellow Comsec refugee but using a different username )


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## Greynomad99 (20 August 2021)

divs4ever said:


> welcome
> 
> i was hoping it was you and not somebody else using the username
> 
> ...



Hi - well inflation isn't running at 7% so anything paying 7% should see you in front. But the real question investors need to ask themselves is whether a higher paying investment in say crypto (God forbid) or perhaps a second mortgage or a marginal property development mortgage (paying say 15%) is worth the potential risk. Most people on a site like this can make their own value judgements but many retail mums and dads simply don't have a clue and a highly regulated retail first mortgage fund mitigates many of the risks they probably don't think about. There is no such thing as a risk free investment, but apart from almost paying a bank to hold your money options are limited. Also most retail mortgage investments are relatively short term (about 12 months) and while there is no right to withdraw until the borrower repays the loan, investors money isn't tied up for long periods of time.


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## qldfrog (20 August 2021)

Greynomad99 said:


> Hi - well inflation isn't running at 7% so anything paying 7% should see you in front. But the real question investors need to ask themselves is whether a higher paying investment in say crypto (God forbid) or perhaps a second mortgage or a marginal property development mortgage (paying say 15%) is worth the potential risk. Most people on a site like this can make their own value judgements but many retail mums and dads simply don't have a clue and a highly regulated retail first mortgage fund mitigates many of the risks they probably don't think about. There is no such thing as a risk free investment, but apart from almost paying a bank to hold your money options are limited. Also most retail mortgage investments are relatively short term (about 12 months) and while there is no right to withdraw until the borrower repays the loan, investors money isn't tied up for long periods of time.



I would happily put some money on low risk 7%return.
Just do not see how investing in mortgage based tool can return 7% when mortgage rates are below 2%
Did you mean average return on xx years of 7%?


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## Greynomad99 (20 August 2021)

qldfrog said:


> I would happily put some money on low risk 7%return.
> Just do not see how investing in mortgage based tool can return 7% when mortgage rates are below 2%
> Did you mean average return on xx years of 7%?



Oh - now I see your question. Well every mortgage fund is different but the one thing they have in common is that their borrowers are not able to borrow from mainstream lenders like banks. Now while that immediately suggests this type of loan is risky it needs to be recognised that most mortgage fund lending is not your typical home loan because these are so highly regulated they are almost exclusively the domain of the banks. To lend on a consumer mortgage, such a home loan or just about any loan to an individual that is not commercial in nature or involves residential property contrary to a very long list of compliance checks a lender needs to do runs the risk of said lender being unable to collect interest as well as opening up risk to financial penalties including loss of credit licences AFSL's etc. Now some lender do bend those rules to build their loan books (and you definitely wouldn't want to invest in one of those funds). The fund I mentioned previously, like a number of mortgage funds does not provide these regulated mortgages to avoid that risk. As such they are not providing 2% home loans. Property investors using companies as investment vehicles are not subject to the same rules and you would be suprised how many investors and developers want a quick loan against the value of asset without a need to prove financial capacity. An investor might be a tradie who wants to buy a property to renovate for resale or a developer who needs to hold a property for 6 - 12 months while they get plans, pre-sales and development funding in place.. These 'asset lends' attract rates of 6% - 10% depending on perceived risk, hence the 7% yield to an investors (the Fund manager usually picks up a 1% - 1.5% margin). All mortgages are backed by a valuation arranged by the Fund from a major property valuer and with loans of 50% - 65% on a standard suburban house (even if run down and worth land value only) I believe the chance of loss by an investor is low. Even if the market fell by 40% and there was blood in the streets and a lender should get the loan back. Even (especially) in the bad times there are always people with money prepared to buy a bargain.
I hope that answers some of your questions.


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