What would YOU do with $50,000 savings?

Firstly, man i feedchicken wings to my dogs, pretty sure people arent supposed to eat that crap haha.

I dont see why its so crazy for a 22 year old to have saved 50k?

I for one have been saving since i was 13 odd and when i was 20 i had a 40k share portfolio.

Now that im 22 i have almost 60k in shares and i own my 40k car. Add to that that i was studying engineering full time from 17 till 21.

I don't at all live conservatively with food, i eat very healthy and eat alot.

I'm generally pretty careful with my money, but if i want a new computer or something then its a done deal.

If i had been more frugal i could have easily had 50k in the bank + my shares. But who wants to live like that?

When i got my job i splurged a bit with a 40k car, home gym, big tv, amp, new fridge etc.

In hindsight the car was probably silly, but im rectifying that at the moment (going to novated lease it).

To answer the OP's question though.

I'll soon be in a similar position with the 35k i get for my car, I plan to invest it wisely in shares. Maybe look at some high return shares for 10k of it, and some other low risk slow growing high div shares with the rest. Probably keep 5k or so in my bank just for keepsafe though.

It's hard to know what to do, but just be mindfull that with everything there is a risk. Be prepared to lose money as much as your prepared to gain money.

It wasn't that difficult to get in the position i'm in with a 16k car and 32k in shares.

Been working 2 and a bit years, had no a scrap of money to my name before that as was a uni bum. Live at home cos my parents are legends and they are happy for me to do so for free at the moment because they know i'm putting my money to good use, not blowing it on the latest flash car or TV.

While I haven't actually planned my budget formally it works something like this:

$1,400 income a fortnight.

$400 to food/going out/whatever
$300 off margin loan
$100 to savings account for home deposit
$100 to savings account for personal items

leaves $500 a fortnight for odds and ends like margin loan interest, car insurance, or throwing more towards shares / margin loan repayment.

I've been pretty fortunate with the job i've got, and working in the finance industry as a paraplanner it gives you an appreciation for money and its worth. Not only in its current form/sense, but just the power that $1 invested today can give you in say 5 years time when used correctly.

I'm not interested at all in repaying my HECS/HELP at the moment. I mean seriously it goes up at CPI so at most 3% as thats the upper limit the RBA aims for, while I can have money in a bank account worst possible scenario earning 4.5%. Just don't see the benefit personally.

Back to working in the finance industry, you really see some good and/or miserable things. Some people up to their eyeballs in debt, some needing to continue working when they are 65 because of lacklustre savings, some still retiring at 60 even with inadequate super/savings and just hoping centrelink will help them live. Or the flip-side of this is people who are well managed and have $1-2 million and can comfortably travel, retire or do whatever the hell they like.

I definitely want to be one of those people, and i'm happy to miss a night at the pub here and there if it means i can have greater control over my lifes path in 5/10/20 years time.

You don't need to miss out on everything, its about compromise. Find the happy medium , oh and have awesome supporting parents

alexc2005; I guess everything is relative.

For you, you see your monetary worth everyday so this is normal. Perhaps your peers are in a similar boat to you, adding to the normalcy of the situation? But I can guarantee you that if you did a bell curve of savings amount at 22 years old I'd bet you'd be at least a couple of standard deviations from the mean. It's not easy to be rich; otherwise everyone would be.

One thing to note about the super co contribution: it decreases incrementally.

ie. if you earn under or equal to the lower threshold you get the 1 for 1 up to 1000 maximum.

if you earn over the higher threshold you get nothing.

if you earn halfway between the thresholds you get 0.5 to 1 up to 500 maximum etc...

Interesting to how alot of people here are saying how much their cars are worth, i dont think this should even factor.

Personally i look at how much my car costs me, it certainly isn't an asset

romeo said:

alexc2005; I guess everything is relative.

For you, you see your monetary worth everyday so this is normal. Perhaps your peers are in a similar boat to you, adding to the normalcy of the situation? But I can guarantee you that if you did a bell curve of savings amount at 22 years old I'd bet you'd be at least a couple of standard deviations from the mean. It's not easy to be rich; otherwise everyone would be.

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Actually no, most of my peers have not a dollar to their name. In savings or investments.

I don't by any means think i am normal. Up until i bought my car i was exessively carefull with my money (plus i didnt really drink throughout uni so that potentially saved me about $50/week over 4 years, which is substantial) . The car was like a big splurge for all the years of saving.

While i don't think im the norm, i dont think people should be like WOW at the money i have saved. But i guess its very dependent on peoples circumstances.. For example if you have kids when you are young, theres no way to hope that you could compete with someone who is single.

Only the cool kids have xx,xxx's and a their own home.

It is possible to live off $50 a week for food healthily also, a colleague of mine who is Indian feeds his wife and himself on such a budget. Markets + no meat diet is quite cheap.

inq said:

Only the cool kids have xx,xxx's and a their own home.

It is possible to live off $50 a week for food healthily also, a colleague of mine who is Indian feeds his wife and himself on such a budget. Markets + no meat diet is quite cheap.

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Yep I am a vegetarian and could live very cheaply if it were just me to feed. That would be living off a very basic vege diet but I tend to go for a lot of more exy foods which can cost a bomb if you are not careful.

NewOrder said:

Yep I am a vegetarian and could live very cheaply if it were just me to feed. That would be living off a very basic vege diet but I tend to go for a lot of more exy foods which can cost a bomb if you are not careful.

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I had this very same conversation with my friends the other week. I dont think its humanly possible to be a fat vegetarian.

youngone said:

I had this very same conversation with my friends the other week. I dont think its humanly possible to be a fat vegetarian.

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I worked with an adamant vegetarian from Pittsburgh once. He was nicknamed "Wookie" at work due to his giant frame of about 6 foot 5, excessive body hair and his Mr.Snuffleupagus shuffle. Although, I only observed his growls and grunts at a few workplace piss-ups. He ate 2 kilos of tofu, legumes and/or nuts a day. He certainly wasn't slim.

I don't know what he would do with $50,000. He would probably throw it on texas hold'em.

youngone said:

I had this very same conversation with my friends the other week. I dont think its humanly possible to be a fat vegetarian.

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Ahhh you have to add alcohol into the equation though. I would be slim if I didn't drink so much

If you do vegetarianism properly it is hard to actually maintain your weight.

That means eating the right amount of protein etc, which results in eating a lot of high calorie legumes, blah blah blah.

Pretend vegetarians have terrible nutrition, that's why aren't fat

inq said:

If you do vegetarianism properly it is hard to actually maintain your weight.

That means eating the right amount of protein etc, which results in eating a lot of high calorie legumes, blah blah blah.

Pretend vegetarians have terrible nutrition, that's why aren't fat

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Not sure what a pretend vegetarian is, do you mean vege v's vegan? I am not vegan so getting protein is easy, eggs, cheese, whey powder etc. Even vegans can get protein from tofu, heaps of veges etc so it doesn't have to all be about legumes. Chia seeds are also a good source of protein. For me the biggest problem is eating too many foods like pasta.

Anyway getting a bit OT, sorry about that. Not sure if this forum goes with the flow of threads or do they need to stay On Topic?

NewOrder said:

Not sure what a pretend vegetarian is, do you mean vege v's vegan? I am not vegan so getting protein is easy, eggs, cheese, whey powder etc. Even vegans can get protein from tofu, heaps of veges etc so it doesn't have to all be about legumes. Chia seeds are also a good source of protein. For me the biggest problem is eating too many foods like pasta.

Anyway getting a bit OT, sorry about that. Not sure if this forum goes with the flow of threads or do they need to stay On Topic?

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Nah, pretend vegetarian = only eats fruit and vegetables, however doesn't eat nutritionally, largely being deficient in protein etc. Hence skinny sick looking things

That's right NewOrder: Cheese, legumes, eggs, milk etc. Great way to get protein, also requires discipline for many to maintain their weight with maintaining their weight.

Anyway as you said, bit OT so back to the topic:

Revising what I said earlier, 40k blue chips, 10k speccies, then leverage up a further 60k in blue chippers.

inq said:

Revising what I said earlier, 40k blue chips, 10k speccies, then leverage up a further 60k in blue chippers.

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What does leverage mean and how does it work, is that the same as margin lending?

If OP decides to put $40k into home deposit, and $10k into shares. Is it advisable to borrow more money from the bank to leverage his shares?

youngone said:

What does leverage mean and how does it work, is that the same as margin lending?

If OP decides to put $40k into home deposit, and $10k into shares. Is it advisable to borrow more money from the bank to leverage his shares?

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Yes leveraging essentially means using borrow funds to increase purchasing of investments, like through margin loans, loans for investment properties etc.

Financial advice isn't allowed, however I can say that individuals who are taking on significant debt should understand that then leveraging into investments can potentially increase their risk portfolio. In other words its sometimes better to be safe, than lose the whole tower of cards to a stray breeze.