What to do with 500K

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From: Adrian Johnson


The following is a fictitious scenario.
This is my first post so please be gentle. I have read many posts on this site with great interest and wonder how some of you would approach the following. This is a big question but anyway in for a penny in for a pound

What would your investment strategy be given the following set of circumstances.
Your goal is obviously to build wealth over time but also to spend some cash generated to finance day to day living.
Your current property is 100% paid for.
You have an income of say 40 - 60K pa
Someone comes to your door and gives you 500K (nice)

Would you:
Go on holiday.
Drop dead.
Invest all of it in stock/shares or managed funds.
Invest 50% in property and 50% in shares or managed funds.
Buy 3+ properties outright rent them and use income to fund further IP or IP's.
Buy 6+ properties with 50% finance and rent them.
Borrow as much money as possible with equity in your home and go for max.
Buy land and subdivide.
Buy land and have properties built then rent or sell.

?????????
 
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Reply: 1
From: Sergey Golovin


All of the above...

Serge.
 
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Reply: 1.1
From: See Change


Adrian

What I would do would depend on my circumstances.

Do I want to Quit my job?

How soon do I want to benefit from my windfall?

Do I want extra income now or am I interested in maximizing my cap return in X years time ?

How much time do I want to spend looking after my investments?

How much risk do I want to take?

Once you know where you're aiming for, you would have a better idea on which route to take. What would be ideal for one person would not work for someone else. All of you suggestions would be appropriate for someone.

Happy investing see change
 
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Reply: 1.1.1
From: Jeremy Laws


Buy 8-9 (Sydney prices) neutral overall properties. Some neg geared, some positive. Buy a couple of potential renovaters. IE Terraces in inner city you could add a room to later.
 
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Reply: 1.1.1.1
From: Sergey Golovin


I guess it is all depends on two things -

1. Do you have money now or someone (like your grandma) promised give to you in near future.

2. Do you have an income from other source right now as we speak or not? Which breaks down to two possibilities -

# If you do, you can borrow quite lot and do all sorts of tricks;
# If you do not, you might as well buy 2-3 properties out right and stay low till equities will increase bit(while you are getting rent out of it), refinance it and buy more later.

Serge.
 
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Reply: 2
From: Ian Findlay


I would

Invest 33% in shares to give some income and some capital growth.
The other 67% I would buy properties at 75% LVR. Also remove 50% equity from
home and buy more property.

Compromise between high risk and high returns. I wouldn't want to lose the
lot so would hedge at about 70% LVR.

Ian

> Would you:
> Go on holiday.
> Drop dead.
> Invest all of it in stock/shares or managed funds.
> Invest 50% in property and 50% in shares or managed funds.
> Buy 3+ properties outright rent them and use income to fund further IP or
IP's.
> Buy 6+ properties with 50% finance and rent them.
> Borrow as much money as possible with equity in your home and go for max.
> Buy land and subdivide.
> Buy land and have properties built then rent or sell.
>
> ?????????
>
>
>
> To reply: mailto:propertyforum.11433@bne003w.webcentral.com.au
> To start a new topic: mailto:propertyforum@bne003w.webcentral.com.au
> To login: http://bne003w.webcentral.com.au:80/~wb013
>
 
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Reply: 1.1.2
From: Adrian Johnson


On 9/14/01 9:31:00 AM, See Change wrote:
>Adrian
>
>What I would do would depend
>on my circumstances.
>
>Do I want to Quit my job?
>
>How soon do I want to benefit
>from my windfall?
>
>Do I want extra income now or
>am I interested in maximizing
>my cap return in X years time
>?
>
>How much time do I want to
>spend looking after my
>investments?
>
>How much risk do I want to
>take?
>
>Once you know where you're
>aiming for, you would have a
>better idea on which route to
>take. What would be ideal for
>one person would not work for
>someone else. All of you
>suggestions would be
>appropriate for someone.
>
>Happy investing see change

Many thanks for your reply

1. I would love to quite my job or have the choice to work when I want
2. A.S.A.P
3. As much of each as possible
4. Full time if needed
5. Not to much, I would rather do things over time
 
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Reply: 1.1.1.1.1
From: Adrian Johnson


On 9/15/01 9:23:00 PM, Sergey Golovin wrote:
>I guess it is all depends on
>two things -
>
>1. Do you have money now or
>someone (like your grandma)
>promised give to you in near
>future.
>
>2. Do you have an income from
>other source right now as we
>speak or not? Which breaks
>down to two possibilities -
>
># If you do, you can borrow
>quite lot and do all sorts of
>tricks;
># If you do not, you might as
>well buy 2-3 properties out
>right and stay low till
>equities will increase
>bit(while you are getting rent
>out of it), refinance it and
>buy more later.
>
>Serge.

Thanks for your reply

Money will be with me in 6 months or so when we come to AU QLD from sale of house in UK

I will still keep an interest in my company based in UK until I no longer need to.

Thanks again
 
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