# 50k in bank, want to invest it



## ozi stocker (16 October 2013)

Hi all,

I am in my early 30s with about 50k currently in an ING saver account. I have just started a small company so need to start paying myself super..

My work does not allow a lot of downtime for trading, so I am looking to put my money somewhere with not too much of a requirement for management.

Can anyone suggest how I should proceed from here?

Thanks very much.


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## Country Lad (16 October 2013)

*Re: 50k in bank, want to invest it.*

I don't think anyone here is going to give you advice on how to invest your super funds, it is not permitted as we are not financial advisors.

Having said that, the grandson of a friend was recently in a similar situation which involved having to spend all his available time in building up his business.  I think he made a smart move in putting his super contributions with Australian Super on the basis that they can look after it until he has more time to devote to investing.  He can always transfer it into a self managed superfund when he has the time and inclination to start and manage one.

Cheers
Country Lad


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## ozi stocker (16 October 2013)

*Re: 50k in bank, want to invest it.*

Hi Country Lad,

Thanks for the reply. I agree, Australian Super might be the way to go. I already have some small funds in there from a previous employment.

Just to clarify, the 50k already in bank is cash that does not need to be put into super as it was generated sole trader, before I became a company therefor I need to know how to invest that extra 50k.

Thanks.


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## pixel (17 October 2013)

*Re: 50k in bank, want to invest it.*



ozi stocker said:


> Hi Country Lad,
> 
> Thanks for the reply. I agree, Australian Super might be the way to go. I already have some small funds in there from a previous employment.
> 
> ...




Have you considered Managed Funds?
From AMP to Zurich, they all offer products, one of which should suit your objectives and don't require more than an occasional performance checkup. At your age, you're probably sufficiently risk-tolerant to opt for Growth?

Without Prejudice, one random example I've bookmarked:
http://www.zurich.com.au/content/zurich_au/individuals/investments/find_a_fund.html


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## waimate01 (17 October 2013)

*Re: 50k in bank, want to invest it.*



ozi stocker said:


> Just to clarify, the 50k already in bank is cash that does not need to be put into super as it was generated sole trader, before I became a company therefor I need to know how to invest that extra 50k.




Have you got all your tax from sole trading paid up, or does part of that 50k actually belong to the tax man? 

Got any credit card debt, car loan, any other debt? Paying down debt gives you some of the highest and most reliable return.


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## Vixs (17 October 2013)

*Re: 50k in bank, want to invest it.*



waimate01 said:


> Have you got all your tax from sole trading paid up, or does part of that 50k actually belong to the tax man?
> 
> Got any credit card debt, car loan, any other debt? Paying down debt gives you some of the highest and most reliable return.




In order of importance in my eyes:

1. Make sure you don't have any outstanding liabilities - that is a valid and very important point that waimate01 made.
2. Is your business sufficiently capitalised? Is the best way to grow your business to invest in it further? Do you have sufficient funds should business be worse than expected for a prolonged period?
3. Do you have any personal debt - car loans, credit cards, mortgage? Eliminate that.

 I wouldn't be in a hurry to invest the money inside super, you won't get to touch it for 30 years so set yourself up for life before worrying about retirement. As a self-employed person in most cases you are under no obligation to make super contributions. You may wish to for the tax deduction if your cashflow allows it, but I wouldn't rush off to do it. Get some advice on that if you haven't already - in your situation you may be obliged to make contributions, or it might be sensible to maximise concessional contributions.

A big hurdle for the self-employed is getting finance to buy a house/investment property/investment loan. Make sure you are on track for the kind of income on paper that you will need to live the lifestyle you want.

Once all of those boxes are ticked then you can start looking at investments outside your business as an attractive proposition. With your house in order determine your focus - income? Or growth? Investing for income you will increase your taxable income from non-employment sources, which is great for allowing you to better your lifestyle or further invest, but it's going to create additional tax payable along the way. Conversely investing for growth you will have less ongoing income and more capital growth, meaning you can choose (largely) when to incur the tax bill by selling some investment assets. Do it in a lean year where you are down on taxable income from business, or when you take time off work to spend with family or on holidays.

Hopefully that gives you something to think about. You're in a position to take a step back and look at what the next 10 years hold for you. Don't rush to dump the money into super or invest it in something that puts your capital at risk.


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## ozi stocker (18 October 2013)

Such good advice. Thank you.


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