How would you invest $50k today

[Mr Ed]

Say you won $50 000 on a scratchy today how would you invest it?

I ask this question because of what we know today or don’t know with world unrest (staying politically correct here), the share market at the bottom or very near it and with the property cycle at or near the top of it’s.

So when you bought the paper this morning and had a Scratch and say won $50k what would you do…

Would you buy a Neg g’d property say up to $500k in a potentially high growth area.

Or would you play it safe and buy two cheaper properties c/f+ with low LVR.

Or would you say easy come easy go and take a well-deserved holiday

Or would you run against the herd and pick some Blue Chip shares do a 30% margin lend and put them in the draw for a rainy day?

Or maybe you’d invest $10k into Peter Spann seminar & learn how to manage the other $40k

Or maybe buy that first IP that you’ve been saving the deposit so hard for…

Or would you look for and opportunity somewhere other than what we post here?

I don’t believe there would be any right or wrong because everyone is somewhere different in there life, but I also believe it could be and interesting discussion.

Mr Ed

[JumJones]

Instead of 10K on Peter Spann, how about 20K for one hell of a partay, all somersoft forumites invited.

[see_change]

Or maybe use the money as a deposit to buy a business ?

see change

[adrian_see]

Mr Ed

I'd simply put it into my IP loan to reduce interest/increase equity, ready to redraw when I find a good deal.

Assuming you did win 50k, it is Real money and should be treated like hard earned money in my opinion. Why treat it any differently to money you invest elswhere? I say stick with your current strategy, if it is working and you're comfortable with it and count the 50k as a bonus.


Regards

Adrian See

[voodoo]

50k would be a great help, I would pay out my PPOR.

[Jamie]

Hi all,

I would use it to expand my burgeoning business as an internationally respected Adult Feature Film Producer/Director.

This would allow me to expand my erotic empire to the far reaches of the largely untapped, yet lucrative Asia-Pacific market.

Jamie.

[geoffw]

Originally posted by voodoo
50k would be a great help, I would pay out my PPOR. ... and then used the increased equity in my PPOR to buy more property :D

[JFEWSTER]

Mr Ed,

This is a great question.

My thoughts are- (and I'm ultra conservative) common sense tells me that the property boom is at or near its peak. Having purchased a property in 1993, I know what it feels like to have an investment go nowhere for an extended period of time. (it was negative geared, low growth)

The stockmarket is at or near its trough. Having purchased managed funds in 2000, I know what its like to have an investment show initial promise, only to be worse off than when I started by 2003. Funny how the financial adviser said I was buying in at the right time and how property was dead!

If we look at the previous property boom of 1989, it is obvious to me that anyone investing their hard erned money into real estate at the moment may have to wait 11 or so years before the next boom comes along. Bugger all in between. Unless neutral or positive geared. In which case it doesn't matter.

At the same time, anyone investing in the share market at the moment may have to wait 8 years for the good times to come again.

If I was cashed up, I would be putting spare money into an offset account, linked to the PPOR. Available for re-draw should the deal of a lifetime (i.e. about once every six months) come along. Most likely a positive geared deal, even if reno,development or sub division required.
If no PPOR loan, then an offset acc. against the most negative geared rental.

In about 5 years time, once the share market really starts to lift it's game- buy in.

Once all the mums and dads get involved in the share market, and everyone at work starts talking about the money they've made, say 10 years time, (i.e just before the bust) back into property. But with one big difference- now that I've experienced one full cycle, and with DSR and LVR and cashflow at its best- next time I'll buy up big! Real big!

I wish i could remember the saying Ive read on this forum before- something about living thru a cycle and wondering about what happened, living thru a cycle and realising what happened etc etc.

Regards.

[brains]

Originally posted by Jamie
Hi all,

I would use it to expand my burgeoning business as an internationally respected Adult Feature Film Producer/Director.

This would allow me to expand my erotic empire to the far reaches of the largely untapped, yet lucrative Asia-Pacific market.

Jamie.

HAHAHAHAHAHA..............:D

[geoffw]

In the meantime, Jamie has been studying Interent pornography on the net for some ttime.

His aims has been to write a book on the subject, following the line of Jas's books, "Gardening Online" and "Web Sites for Infants".

At least, that's what he tells his partner he's doing.

[Mark Laszczuk]

Jamie,
Do you need any people? I'll work for free.

Mark
'no hat, some cattle'

[geoffw]

Mark,

Are you sure you haven't already been researching the area already?

[Sunstone]

Dear Geoff,

We already know that 25% of all internet traffic is related to it.

Now if we can make money and syphon more off the top like adultshop.com ......... Yes good ways of getting money out of investors after you list your own company............

Too many grey areas..........

Cheers,

Sunstone.

[Les]

You are right, Sunstone,

The only question I have is "How do I stop this garbage filling my Hotmail address?" And it DOESN'T all go to "Junk Mail" either ....

Regards,

[geoffw]

People have been studying the topic for many years (according to stories I've read)- even going back to BBS days. I'm not old enough to know these things :D

Has anyone written a book like Jas's on the topic?

Considering the number of men who've told their wives their reserching their next book, there must be thousands of books out there- even if only .01% of those actually did write a book.

[Sunstone]

Dear Les,

Solution. Donate some money to the "mailwasher" guy and he will invent the anti-spam program that you are looking for.

Certainly has improved my spam management and decreased the amount that I get. Some can't get the hint but it is certainly more easy to handle.

Yes Geoff. Oldest trade in the business. Hey yes I used to used BBS's. 2400 was faster than 300 but no comparision to cable.

Technology..... some parts are worth paying for.

Cheers,

Sunstone.

[Jas]

Originally posted by Mark Laszczuk
Jamie,
Do you need any people? I'll work for free.

Mark
'no hat, some cattle'

Careful Mark,

There's a lot of pressure to perform in those areas. Anyone remenber the first race aroudn the world documentory?

First time star couldn't perform... There went his career

Jas

PS. I don't think anyone needs to write a book on the subject. All they have to do is get a hotmail account for a month...

[gad]

"Say you won $50 000 on a scratchy today how would you invest it?"

That doesn't sound like a real sound investement to me :) (What are the odds)

[GameBoy]

I would use the 50k to buy shares in Steve Navra’s Managed Fund. There you go, tip of the decade imo ;)

[dtraeger2k]

I'd use it as a deposit on like an 8plex or something.

[dtraeger2k]

It was just the other day I was thinking about something similar to this. About the $30mil powerball.

I figured if I bought 150 $200k properties outright (or mixed with a combination of multiplexes), my income for life would be fairly good. Plus the possibilities with the huge amount of equity would be endless. Anyone have any better idea's on the spending of such a winfall?

-Dave
Dreams are free. Goals can be free if you have a good tenants and tax accountants.

[Jas]

I';d use it to buy a big ticket on lotto. for 50k, you'd get pretty good odds.

Jas

[natmarie73]

Hee hee I was thinking the same thing myself! $20000 approx for a system 20 which gives you a pretty good chance of getting something back. The other $30000 I would put into my home loan and use the subsequent equity to purchase another IP or two.

The fun is in the dreaming I guess!

:rolleyes:

[brains]

Id buy $50k of QANTAS shares. I just bought $6.5k of 'em and looking to buy a lot more. But if i had a $50k that i didnt have yesterday and didnt come from my bank account thats what i'd be doing with it.

If QAN bombed and i lost it (highly unlikely) well i didnt have it to start with so thats ok.

But i expect that $50k to be $75k in less than a year, possibly 6 months.

[Lotana]

Brains,

If you are so sure about QAN, why don't you buy $50000 worth of a call warrant? Example:
WANWME
Exercise price: $4
Conversion ratio: 3:1
Current Price: $0.026
Current QAN price: $3.45
Expiry day: 26/6/2003


It will give you the right to buy about $2 million warrants at this price. If by end of June QAN is, say, $5.17 (50% growth as in your example), you can exercise your warrants making - please be prepared to a shock ---
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
$726,666
.
2,000,000 warrants / 3 = 666,666 shares
@ $1.09 profit per share.

And you don't need to go to a bank to achieve this sort of leverage.

Cheers,

Lotana

[brains]

Lotana,

Its all hypothetical but i would do that on a smaller scale. I dont undrerstand call warrants. Can you recommend a book?

I use discount DIY internet broking, can i do a call warrant on that or do i need a proper broker.

I better hurry tho, i think its going to be moving up pretty quickly.

[Lotana]

Brains,

Yes, you can trade warrants through discount brokers. I've been using e-trade for a number of years. To activate warrant trading on your account you have to call your broker and request a warrant trading pack, which contains ASX booklet on warrant trading and an the form to sign. Warrants, like other derivatives, are highly risky.

ASX website has a lot of valuable information on warrants. (http://www.asx.com.au/markets/Warrants_AM2.shtm)

As opposed to company options, warrants are issued by financial institutions, which are required to "make" markets for their warrants. This means that they are required to keep buy and sell orders with a reasonable difference guaranteeing certain level liquidity. The biggest danger in warrant trading is that warrants have expiry day and if the underlying share price moves in the wrong direction the warrant can quickly loose value and there is not enough time for it to recover.

On the positive side is that you can select warrants with the level of gearing you are comfortable with. There are several major types of warrants. Please read the ASX site - it has it all.

Regards,

Lotana

[INVESTRON]

i havn't read all the replys yet, but what we should be asking is

what is a smart person doing wasting good investment money on scratchies anyway.

[brains]

Thanks Lotana

I dont know much about warrants/options, probably not enough to buy without a broker but i'll do some quick research.

[Ross Sneddon]

Hi Natmarie


I know that we are all joking about what we would do if we won $50,000 etc., and your response to invest it back into a system 20 or whatever.

Some years ago, I was holding up the bar at the local with a group of my mates and were looking at those patrons working on the one armed bandits, and tried to guess how much money they would lose each week.

The conversation went along the line of none of us smoked or gambled on the pokies or horses so why don’t the 20 of us put $20 each into a fund for 20 weeks, a total of $8,000 and then sink the lot into one Lotto. The idea spread and over the next several weeks a total of 5 groups were established, $40,000 invested, we have to win a bucket load.

Well 21 weeks later, Lotto was drawn and we “won” about 15 prizes of less than $50 each and only one of $1500. We stuck it back in to the next week’s Lotto and lost the lot.

The following week we were back holding up the bar at the local still wondering about these people playing the pokies. Ah well.

Regards

Ross

[geoffw]

Ross,

That's the great thing about property investment.

In the current climate, you've got perhaps an 80% chance of getting good cap growth- no matter where you bought. Much better than lotto odds. (well, maybe if you had bought last year).

But there's probably a chance of a decline in prices as well. I'll be treading carefully.

[brains]

That reminds of a story i heard years ago about a friends office syndicate collecting about $20 000 to buy scratchies, the idea was to reinvest all smaller winnings into buying more scratchies until they hit the big one (or ones).

Well, it lasted for ages, where they kept buying more scratchies with minor winnings but it got less and less until it petered out to nothing.

On the other hand a mate of mine bought a scratchie with his change from buying a newspaper about 5 years ago and won $10 grand.

Gambling is like that i think, when you try to win you cant, when you least expect it, it falls in your lap.