Im new to investing.

Hi, my name is Hui.

Im 21 and live with my parents. I will have about 50,000 in a online saving account and have no debt. I earn about 40k gross a year.

What do you think the best investment would be for someone like me?

 

An accountant and a financial planner... If failing that time or education!

Just read around here at how many people are selling out (or regretting) buying assets in the wrong entity, if you seek the professional advice first you can give yourself the best platform to work from, Depending on your state there are plenty of people around...

as for where to invest your money, there are numerous options which will mainly depend on your risk tolerance, the financial planner will determine where you should start

If you spend 7.5k on structures, 7.5k on advice or education, you would still have 35k to invest, which is more than most people start with...

 

What sort of time frame are you looking at? How much risk can you tolerate?

I wish I was your age again with all the products that are available now as long as I still know what I know now

 

Take your $50k, start a $50k margin loan, and:

* invest $90k in some Colonial Geared share fund, and
* invest $10k in the Navrainvest fund or a property fund to provide some income to pay your margin loan.

 

Hi Zman

I'd see a financial adviser to get a feel for your options and your risk profile and preferences. You're young so you should err on the aggressive side...but as the amp ads say "everyone's different".

ps. free financial advice... stay at home as long as you can!

 

Cheers guys.

Would you reconmend the fianancial advisors at my local CBA bank and such?

Risk wise, i love to take gambles

 

Zman,

My financial advisers are Navra Financial Services. Google them. There's no vested interest in my naming them as I don't get any kick back. But I can say that I tried a few others first and suffered a long period of mediocre performance as a result. Since I got to know the Navra group my finances have kicked along nicely.

There are certainly many and varied FPs out there, but from my own personal experience (which is all I can talk from authoratively), you could do worse than talk to Navra. They should offer you a no-cost initial consultation to assess your situation if asked.

When you learn and grow you might start doing things your own way and lean less on your FP, but in the early days they would be an invaluable member of your team.

Just my humble opinion. As a wise friend of mine on this forum might say; take with a pinch of chillies!

Cheers,
Michael

 

Short answer - NO

Bank planners have a conflict of interest

 

G'day Hui.

One of the best things I ever did was go to see the resident FP in my local 'big four' bank, as it taught me in an hour or two that there were far better things to do with my money than let them invest it (so that's a 'no!' from me).

First, take some time to acquaint yourself with investing lingo. I reckon you'll be much better served if you have a bit of understanding before you dive in. Sure, see a FP, but I suggest you need to learn about:

* asset classes and asset allocation
* diversification
* expected returns & volatility across asset classes
* the benefits and risks of borrowing to invest
* tax implications.

At $50k in the bank at age 21, you are very well established and well poised to start a life of happy investing.

But you will already know a bit about investing: you'll be paying about $1000 a year in tax on your savings ($50k x 6.3% x 31.5%)!
I suggest to you at least some of that money is better working for you!

One more thing, investing is not about gambling! But it is about understanding risk vs return. Your comment (and your age) put you in the 'growth' spotlight, suggesting investments in shares & property, probably with the help of gearing.

Now of course I can't give financial advice. So you need to get reading and then book an appointment with an accountant, and/or a FP.

And ask questions constantly. It's your money.
(There are many willing folk here to bounce ideas around with you.)

 

Nice post Rod, well done!

Hui, read Rod's post again and take it in. Especially the bit about asking questions. This is a great place to do so by the way.

Cheers,
Michael.

 

The Australian Shareholders Association (Australian Shareholders' Association) has a good range of independant education courses for sharemarket beginners to advanced...I've found the last two I went to really helpful for a begginner. Just check out if they have a begginners one coming up in your state - Australian Shareholders' Association.

Also, Alan Kohler's Eureka Report (Eureka Report) is a great investment newsletter and he has some very good points on being wary the investment advice that you seek.

And I really like Scott Pape's The Barefoot Investor book (Barefoot Investor - Undergoing a foot massage) - it speaks to the younger generation and covers all bases for beginners. Barefoot Investor - Yahoo!7 Money Matters

 

And if you want some great free reports to get you started, check out these ones by Shane Oliver:

Access past Oliver's Insights - AMP

There's some good reading there for you to understand the state of the relative markets and what drives their performance. But be careful not to get inundated in all this information. There's a heap of it out there that you could conceivably drown under. That's why I recommended a good financial planner like NFS that will cut through the rubbish and give you a sound recommendation on how to get moving now.

Alternatively, given time is on your side, take the several years it will take to become knowledgable about the markets and investing strategies and form your own view on how to act. But recognise that this is no small undertaking and you've got a whole lot to learn grasshopper before you'll be a solid investor in your own right.

Again, just my 2c,
Michael.

 

I would start by taking a look around Investsmart. Set up a watchlist of funds you like the look of. Read as much as you can.

Look at a margin loan. 50% is fairly safe for a start. Capitalised interest option is best long term.

Pick 2 to 5 funds with a high LVR from your margin lender to invest in, you may need pro help in picking them.

Play the ASX stock market game next time it is running.

Learn from your mistakes and successes.

 

Hiya,

Personally, I believe that the only difference between investing and gambling is knowing what you're doing.

If you have no idea how to make money with real estate, it's just dumb luck if you win.

If you have a good idea of how to make money at Crown, then it's just bad luck if you lose

Spend some time and money educating yourself. As Sim' said above, it does not need to be thousands and thousands of dollars. Learn so that you feel confident about what you are putting your money into, confident that you are going to come out of the deal with more money than you started with.

And most importantly, learn from your mistakes. If you lose, find out why and try something different next time.

Good luck mate,

James.

 

Ditto. I have had clients come to me after they've seen their banks planner and in each instance the end result was poor for various reasons

 

Well im kinda back and reread all those replys.

I thank all of you for replying. I am ready to educate myself and get the ball rolling. Seeing as most people have suggested it, i will be seeking out help of a FP.

Can anyone recommend any for me?

 

You chose a good time to disappear........

Spend some time studying the last six months of activity on the ASX etc.

Tailcat

 

Would you like to elaborate?

 

This is where difference experience levels come into play.

There aren't too many planners who don't have a "conflict of interest"...

Does it matter if the client knows about the "conflict of interest" and they are happy to proceed? Conflicts of Interest are more a disclosure issue and not that big an issue as clients are usually more focussed on the strategy or return issues...

Cheers,

Dan