All dressed up but nowhere to go

[Glenn]

Inheritance

Hi johnnyb,

Welcome to the forum.

Congratulations on having the foresight to set up a trust to invest the money gifted to you through inheritance. It will be nice in years to come being able to show your family the constructive things that you have done with this money and how the efforts of the deceased relative/friend shall live on past his physical life.

Glenn

 

[johnnyb]

Thanks Glenn. It is actually from my mother-in-law's estate. I really do feel obligated to her and my wife (who is supporting me in this investment process) to make good use of the money to improve our own quality of life, and that of our (yet to be) children and others in need. My MIL was one of those people who was always willing to give of herself (time and money) through her church and in society in general, to anyone in need, so I want to continue that in some way.

Always_learning, thanks for your further explanation (and piccies). I think what I said in my point 3 a few posts ago is what you have just said. Is that right?

John.

 

[always_learning]

My point is:

• Set up a LOC against your PPOR.
• You buy your new IP(s) with about 100K from the LOC.
• Park your $100K cash in an offset account held against the PPOR.

You will still have a low interest bill, but if in the future you want to spend some of that $100K to trade up your PPOR or buy a new car etc you are maximizing your tax-deductable interest bill rather than personal use non-deductable interest bill.

 

[XBenX]

bit late in the discussion but....

www.bankchoice.com.au - for all rates

too lazy for a href

ummmm

IMO your timeframe is too short for a managed fund

 

[Rickardo]

Hi johnnyb,

If you don't want to set up an LOC, a cash account is the best place to park your money in the short term, more specifically an internet account. Fixed interest is not as flexible as cash and most of the term deposits have lower or similar interest rates to internet accounts anyway. If you put your money in a term deposit and you find an IP, how easily will you be able to get your money out on short notice? With an internet account you get a very competitive interest rate, good flexibility and no fees.

I would recommend Easy Street Financial Services - Easy Savings account. The current interest rate on this is 5%, it is going down to 4.8% (compounded monthly so the effective rate is around 4.91%) on the 1st of July, however this is still the market leading rate for internet accounts. No fee's (except a $2 joining fee that you get back when you close your account) and you can get your money out as necessary usually within 24 hours. A managed fund is probably not the best place to put your money short term because there is a greater chance of volatility, and you wouldn't want to find a suitable IP and have to take out your money at a loss because of a short term fluctuation.