Saturday 4 June 2016
Investment property
So, I have already organised my bank account to be earning high interest. I have negotiated a raise at work. Now I have to make the most of my resources by investing what I save.
I have a few thousand dollars worth of shares. Not much really, but I wanted to find out what the share market was like. Three were good bets, one was not. But I'm still working on it.
My next move is to invest in property. I don't have much of a deposit so it's not going to be a house. A unit then. But where, and in what price range?
So I went to the bank to see what finance I could get. Apparently I'm not a terrible bet, so that was encouraging. I then had my budget and I started looking at the local market. Now my local real estate market isn't likely to boom anytime soon (well at least I don't think so). But there is some demand for rental properties so there are some new developments and established properties.
I have two options. The first is to buy low and minimise my risk. The second is to buy a little higher for a possible better profit and rent but at higher risk. I'm a little stuck with this choice. I want the small risk. But I also want the potential for a better investment. So I'm letting the decision marinate at the moment to see what I end up with.
In the meantime I'll run all the numbers and do as much research as I can and hopefully my brain will sift it all down into a concrete decision. Any comments/ideas are welcome.
I have a few thousand dollars worth of shares. Not much really, but I wanted to find out what the share market was like. Three were good bets, one was not. But I'm still working on it.
My next move is to invest in property. I don't have much of a deposit so it's not going to be a house. A unit then. But where, and in what price range?
So I went to the bank to see what finance I could get. Apparently I'm not a terrible bet, so that was encouraging. I then had my budget and I started looking at the local market. Now my local real estate market isn't likely to boom anytime soon (well at least I don't think so). But there is some demand for rental properties so there are some new developments and established properties.
I have two options. The first is to buy low and minimise my risk. The second is to buy a little higher for a possible better profit and rent but at higher risk. I'm a little stuck with this choice. I want the small risk. But I also want the potential for a better investment. So I'm letting the decision marinate at the moment to see what I end up with.
In the meantime I'll run all the numbers and do as much research as I can and hopefully my brain will sift it all down into a concrete decision. Any comments/ideas are welcome.
Friday 3 June 2016
Investing while you're young with no money is a good strategy
To all those young investors or investor wannabes or those who think it's just too complicated for them.
I'm here to tell you:
1) The world of investing is not just for the over 30's;
2) It's not something you should think about later; and
3) It's never too early to start.
There are probably hundreds of investors, like me, who wish that they thought about these things earlier on. I constantly feel like chiding my blissfully ignorant 18 year old self. But the beautiful thing about investing is that it's never too late to start either.
Once you have $100 in the bank it's time to start thinking about what to do with it. The banks notoriously have the worst interest rates around and there is a lot of money that is sitting around doing nothing in particular. Make it work for you. Make your money make money.
Remember 1% makes a difference!
$1,000 at 4% interest:
Year 1: $1,040.00
Year 2: $1081.50
$1,000 at 5% interest:
Year 1: $1,050.00
Year 2: $1,102.50
A $10.00 difference becomes a $21.00 difference in year two and keeps compounding. Now, I started thinking, well it's only $20, what do I care about that? But every dollar helps. The next difference is $32.87. You see what I mean? That extra money is working for you. It starts as only $10 but in the course of a year it starts to add up.
Now interest is not that high currently. But do you have money in your account at 1.8% interest? It could be earning you 3% or 3.3% in a term deposit or high interest savings account. Little things make big differences later on.
I'm here to tell you:
1) The world of investing is not just for the over 30's;
2) It's not something you should think about later; and
3) It's never too early to start.
There are probably hundreds of investors, like me, who wish that they thought about these things earlier on. I constantly feel like chiding my blissfully ignorant 18 year old self. But the beautiful thing about investing is that it's never too late to start either.
Once you have $100 in the bank it's time to start thinking about what to do with it. The banks notoriously have the worst interest rates around and there is a lot of money that is sitting around doing nothing in particular. Make it work for you. Make your money make money.
Remember 1% makes a difference!
$1,000 at 4% interest:
Year 1: $1,040.00
Year 2: $1081.50
$1,000 at 5% interest:
Year 1: $1,050.00
Year 2: $1,102.50
A $10.00 difference becomes a $21.00 difference in year two and keeps compounding. Now, I started thinking, well it's only $20, what do I care about that? But every dollar helps. The next difference is $32.87. You see what I mean? That extra money is working for you. It starts as only $10 but in the course of a year it starts to add up.
Now interest is not that high currently. But do you have money in your account at 1.8% interest? It could be earning you 3% or 3.3% in a term deposit or high interest savings account. Little things make big differences later on.
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