How would you invest $50k today

[D.T.]

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!

 

[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 ---
.
.
.
.
.
.
.
.
.
.
.
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.
.
.
$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.

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.