Getting partner into investing.. 'has about 40k'

S

stockt12

I would like to get the other half into investing..

She just finished uni, so she's more about paying off all those hecs fees and
consolidating the credit cards. So after that.. she'll have around 40k to play with
from a loan standpoint.

Do I get her to put a deposit on a block with a long settlement? Do I risk her putting a deposit on an OTM app in syd/mel. I'd like for her to get involved in this stuff early, so any help greatly appreciated.


And yes.. I have looked at shares/bonds et all, but at this point in time.. it'd be nice for her to have something of a physical nature rather than just a piece of paper that states how many shares she owns - if that makes any sense to you guys.
 
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You haven't said anything about what your partner actually wants. Has she read any of the basic books? How does she feel about property (e.g. taking on so much debt for a mortgage)? Property doesn't always work out short-term. What if she buys a place, feels that you pushed her into it, and it drops in the short term? Long term she'll probably be ok, but that might be years.
Alex
 
Agree with Alex.

Ultimately it has to be her decision. Nothing wrong with slowly educating her of the benefits of investing, but you can't make her do it. Maybe bring her along to some investor meetings, allow her to meet others with a passion for investing, leave some (basic) books around for her to browse through.

If a partner isn't interested, it doesn't mean they will always have that view, but it can take a long time (could be many years) before they become comfortable with it & you, being the supportive partner, need to give them all the time they need.
 
SHE is the one who wants to do it..

thanks for the concern guys, but she's seen what i have achieved in the last couple of years [only a small fraction of time in property] and just would like to see her assets grow rather than settling on her salary.

just need fresh ideas on what to do with that money..
whether it's inov technique, or solid strategy.. or whatever... just want her to put that money to use.
 
I'd still start with giving her the basic books first. Get the basic concepts right, then maybe just research one suburb a week or something.
Alex
 
OK, if SHE is the one that wants to get started, then maybe get her to read the forum too. Mix that with some basic books & if there are any investor meetings near you, take her to those too so she can meet others with a similar interest. Do all that & she will be off to a brilliant start.:D
 
stockt12 said:
And yes.. I have looked at shares/bonds et all, but at this point in time.. it'd be nice for her to have something of a physical nature rather than just a piece of paper that states how many shares she owns - if that makes any sense to you guys.
Click to expand...

It would also be nicer to actually make money even of it is in shares rather than having a piece of RE that you can "feel physically" that is going down in value or staying flat even and costing $'s to service!

Here's my 2c worth, which btw if I was being given this advice, I would ignore along with all the other hot stock tips that come my way.

WA RE is probably going to run flat or negative for a few years to come. (Just like SYD did after its boom).

OTP is probably a safer bet (and it is a gamble) in SYD right now.
MEL is getting / running hot in some parts and probably hard to do right now without being on the spot.
Share market will probably have a few years of resources boom left in it. If it were me, I'd buy all the BHP I could and sit on it (or RIO). Pays good dividends and is undervalued in terms of fwd PE's.
Then when that boom is over - sell and use the money to buy back into a buyers market in your local PER area in a couple of years.

As I said all my opinion only - not advice.

Aimy
 
Aimjoy said:
If it were me, I'd buy all the BHP I could and sit on it (or RIO). Pays good dividends and is undervalued in terms of fwd PE's.
Click to expand...

To get $1k in dividends last year, you would have had to buy over $75k of BHP stock. I like BHP, but I don't know if you can call a <1.5% yield "good"
 
HiredGoon said:
To get $1k in dividends last year, you would have had to buy over $75k of BHP stock. I like BHP, but I don't know if you can call a <1.5% yield "good"
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Yes, I agree 1.5% is a low yield. The bank shares are paying considerably higher yields than many of the resource stocks, (around 4.5% or so).

Although, BHP and RIO are expected to do well over the coming years to support China's growth. So I guess it comes down to whether you require a higher yield with reasonable anticipated capital growth, or a lower yield and anticipated higher rates of capital growth. (Naturally anticipated capital growth is just that, and cannot be guaranteed).
 
looking more and more like the money will be poured into stocks..

she didn't want to do that just yet, but it seems like the only option that is viable.
 
stockt12 said:
looking more and more like the money will be poured into stocks..

she didn't want to do that just yet, but it seems like the only option that is viable.
Click to expand...

Hi Stockt,

Not necessarily true. Firstly, HECS debt is about the cheapest debt you can have - no rush to pay that off, which may or may not increase her income/savings. We pay the minimum HECS each year, as it's money you could put elsewhere for much better return. If your partner is geniunely interested in property, I would push her in that direction - or maybe a bit of both? What about $5k in shares to get her feet wet (or if she doesn't want the hassle, in a mananged fund) - geared or ungeared - or into a geared fund, now that's getting tricky (and risky!) ! ;)

Then $25k deposit into a well researched, affordable IP (maybe use FHOG and live in there for 6 months, do a bit of spruce up while she's there). Since straight out of uni, go for a cheap 2-bedder, or nice 1-bedder, close to city, transport and shops that will always attract tenants.

That leaves her with $10k to keep in an offset account against the IP, and something in the bank in case things go wrong.

Have her read this forum (and other investing forums) - and all the recommended books said previously, see what her passion is. If she's not overly excited, something like a managed fund might be much more her style. Everyone wants the perfect investment - but property is certaintly a much more "high maintenance" investment compared to shares or managed funds.

Cheers,
Jen
 
JenD said:
Firstly, HECS debt is about the cheapest debt you can have - no rush to pay that off, which may or may not increase her income/savings. We pay the minimum HECS each year, as it's money you could put elsewhere for much better return.
Click to expand...

But don't you get a 10% discount if you pay off a lump sum early?

DJ
 
Not sure $40k would get you anything much in cities apart from a small 1 or 2 bedder apartment. The trouble with this idea is many lenders won't lend below a certain floor space area. There are other lenders but they will charge a premium to give finance.
Maybe figure out a way to make the $40k grow on its own before looking at inner city apartments? The whole name of the game is to make your money grow faster than inflation levels and make it grow faster than everyone else who is trying to do the same. :)
 
If you don't like the poor yield from BHP, Santos (STO) is paying 70c half yearly while giving exposure to the oil/gas industry.

NOTE! It is volatile in the short term and a newbe would never want more than 10% weighting in it. Actually, nobody should. LOL

Similar story for Zinifex (ZFX). Both will increase in price if/when the market believes their income is sustainable.

Disclaimer: I hold both (and BHP).
 
JenD said:
What do you consider to be "standard options"?
Click to expand...

stocks/managed funds/et all.

was hoping to find new avenues of interest..
was debating of a way for her to put down a 10-20k deposit with 2008-2009 settlement on some mel/syd apartment developments, but nothing has come to fruition as of yet...
 
stockt12 said:
stocks/managed funds/et all.

was hoping to find new avenues of interest..
was debating of a way for her to put down a 10-20k deposit with 2008-2009 settlement on some mel/syd apartment developments, but nothing has come to fruition as of yet...
Click to expand...

Hi stock12,

Interesting comments. I don't know if I would consider "stocks/managed funds" standard investments. They (stocks particularly) can be SO volatile, it can be very intimating for a first time investor. I have money in both stocks/managed funds, so I do agree they are a good investment - but I wouldn't choose them over property in terms of "standard" or "risk factor" - in the past 3 months, my shares have changed between 10-30% up/down - it's crazy but I'm comfortable sitting, waiting, watching - it's not always like that, but it is now.

Something to clarify - do you mean your partner has 40k sitting around waiting to invest - as has $40k cash and she can use her income as leverage to obtain an investment loan of much higher value, or do you expect the total loan she can obtain is for $40k (no cash/deposit)?

If the first - sit into a high interest online saver (ING for example) until she decides what she wants to do - with that and her income, she should be able to afford a nice investment loan to use towards shares/managed funds/properties, using the leverage to her advantage. i personally go into the layout of funds I outlined in my previous post - but I was considering the $40k as a deposit and she could borrow much more to invest.

If in total you expect she'll be able to borrow $40k - well property is out of course. Again, stick into an nice paying online saver while you research the stock/managed fund market to see what she wants to do.

What you mean by $40k makes a massive difference in advice!

Oh, and I stick by my HECS fund advise of not paying it out in full (if you're planning to invest - if not, pay it and clear it, it's a great bargain) - but doing the sums of not paying it, the interest rate is so low - it's better to use that $20-30k (or whatever it is) to gear into a $200-300k property/managed fund/investment of some sort - you will find a much better return than 10% on that $20-30k HECS devt (which might be a $2-3k savings by paying of the HECS debt - if you use those funds towards an investment instead, you may be controlling as asset worthin $200-$300k). 10 years later, you may have a HECS balance of zero - or a property (or other investment) worth $400-500k.

I know what I'd perfer :D

Cheers,
Jen



Cheers,
Jen
 
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