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I'd have to spend half and invest half, in generally blue caps, with good dividends, but not property trusts or the like!!
How would YOU invest $1 Million?
- Thread starter investforwealth
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600 into investment property
100 into a high interest earning account
100 into blue chips
200 into mining and alt energy stocks like ABJ
100 into a high interest earning account
100 into blue chips
200 into mining and alt energy stocks like ABJ
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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??
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
No Ordinary Duck
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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!
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!
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.
This share has been numero uno performer in ASX for past 5 years.
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$1mil in STW
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.
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.
Hey Fella's
I have to say I'm with D-Chrome on this one.. Here's Why..
errr.. Yeah, you can.. but if you're positively geared it's not reducing your tax.. What is the real benefit??
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..
Banks love shares!!
Again, margin loans.. But it's still money YOU have to pay back if it all goes horribly wrong..
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..
errrr..
Regards,
Buster
I have to say I'm with D-Chrome on this one.. Here's Why..
errr.. Yeah, you can.. but if you're positively geared it's not reducing your tax.. What is the real benefit??
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..
Banks love shares!!
Again, margin loans.. But it's still money YOU have to pay back if it all goes horribly wrong..
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..
errrr..
Regards,
Buster
tech/a
No Ordinary Duck
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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?
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?
Hey Tech/a
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.
Yeah, I must admit it surprises me how adverse many of my peers are to investing in the Stock Market..
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
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.
Yeah, I must admit it surprises me how adverse many of my peers are to investing in the Stock Market..
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
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I would get a divorce. Priceless.
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read Pit Bull by Marty Schwartz to find out.
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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.
The $1.1 billion would be OK for just 3 weeks, then I need another $3 billion on December 1st 2009.
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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.
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
In Memoriam
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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?
$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...
$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...
