Margaret3

Having sensibly , but very regrettably came to the realisation we will never buy property for probably the rest of our lives (getting a bit too late for us to take on a mortgage). I was wondering what to do about our teeny weeny deposit we have saved, I know absolutley below zero about finance and investing, but was wondering if we should look into investing a little bit of it somewhere.

I know there is a few peeps out there who have knowledge in this area and would be grateful if you could point me in some sort of direction.

Thanks very much, as i have said apologies for the question, coz when people start talking money on here it usually makes my blood boil

Deancm_MKII

a) Work out how much the monthly repayments would be if you bought a house and had a mortgage.

b) Subtract your current rent from the value of the hypothetical mortgage in 'a' above.

c) Invest the amount calculated in point 'b' above into silver and/or gold bullion each month. Use you current deposit to buy silver/gold as well.

Doing this will give you a similar result as buying property without actually buying property and without having the expenses associated with home ownership.

At the moment, investing in the share market is not a good idea as it looks like it is going to get worse before it gets better.

Big Galah

Hello.

Of course coming on to a forum like this means all sorts of people who are not qualified to will give you all sorts of financial advice (silver and gold?)

My unqualified advice would to be consider a small investment property while continuing to rent. However, this market is full of sharks, so actually the best advice I could give you would be to talk to a financial advisor. Your local bank may be able to put you in touch with one who doesn't charge commissions, though then of course you're then tied to the bank's advisors who will promote the bank's products. (I'm not sure what the situation for independent financial advisors is in Australia...)

You talk about money talk making your blood boil, and I can understand where you're coming from. The situation in this country is that the tax system is so chaotic that it effectively encourages people to take on huge loans (investment property mortgages) to lessen their tax bills. The downside is that the increased demand for property increases the prices, which is what prices people like you out of the market. Also, for all the talk of reducing their tax burden or financial security in retirement or investing in their children's futures and blah, blah, blah, the main motivator for many people with investment properties is the big G - greed. Of course a lot will try to convince themselves and others that it's not the case, but I don't buy it. An exception would be people in your situation, who don't already have a mortgage.

Hope this helps.

Big.

eddie007

If you have some money to invest my BEST advice is

Dont take advice from an internest forum.

As for never being able to buy a property... Are you 100% sure...

It may be worth looking at "buying" but having an interest only mortgage... Only pay the interest, but the house will increase in value over the years anyway... You sell, you make something.... Ok, ayou wont own the property, but you wont owe more than you borrowed and I defy anyone to tell me that in 20 years house prices wint have increased by SOMETHING

Its what clever people do, I think its called leverage... But they do it to borrow to buy more property...

Deancm_MKII

You hope you make something. Australia's property market is currently in a bubble. Highly unlikely for prices to go up any higher but like all bubbles it is inevitable that it will burst and the prices come crashing down. This will happen, it's only a matter of time.

An interest only mortgage is good if the property is an investment property to be rented out and the rental income is used to pay the mortgage. Interest only mortgages aren't particularly great if the house is to be owner occupied as at the end of the 20 years there is a good chance the you have paid more in interest than what the property is actually worth.

Deancm_MKII

The only problem there is that the market is already extremely over-inflated so it will never be a good investment, especially if the bubble bursts. Buying at a peak is never a good time to buy.

BadgeIsBack

I think she might be referring more to talking about money on BE!!

iamthecreaturefromuranus

Yet you recommend buying gold?

Deancm_MKII

Gold is not at it's peak and during uncertain economic times is considered a safe haven.

Deancm_MKII

iamthecreaturefromuranus

If you say so. I'll just settle in for the hour long movie !

Deancm_MKII

You might learn something.

verystormy

For what its worth as someeone in the gold buisness. We (multinational mining company) are forecasting gold will get over the US$2000 line in the next 12 months

Sherro

save it up and when you can take a couple of years off, spend it.. go see the world, get a life of experience, do things you never thought you'd see and do and when finally you get to the end of the road you will probably be thinking, wow, i am so glad we went ....... together and did ........ what an amazing thing..

instead of.. i wish we hadnt listened to that twa* on BE who told me to invest in xyz..

Turban Explorer

To be completely honest I'd stuff it into a 6.10% short term deposit or a high interest account. Looking at the global stock markets and commodities dumping this week nothing is safe other than cash in a bank. Property here is a bad bet and I think the whole global economy is pitching south now. Best safe than sorry because my own shares and commodities are covered in blood this week. It's not a buy - I think things are moving bearish.

Edit- Dean mkII may be right long term with gold in time but I don't think the correction is done yet.