Investing cash?

DAN-427 · 20-09-2011, 06:24 PM

Just seeking a bit of advice before I go to a financial advisor on some money I made last year when I sold my house.
Ive had the money sitting in a savings account but since the tax man wants to take a bit of a share im just wondering what my options are on where to put it for a couple of years so the tax man cant touch it (not real estate).
The sum is around $120,000

Cheers!

**Giant Cranium** · 20-09-2011, 06:35 PM

ill invest it for you. other than that i need the same advice

anto · 20-09-2011, 06:39 PM

GOLD !! with all the economic turmoil in the world its value is sky rocketting. Silver also..

trippytaka · 20-09-2011, 07:04 PM

Residential property, apparently you double your money every 7-10 years, without fail

In all seriousness, I would study up on what is happening in the rest of the world right now. And then make sure that I put my money as far away from that turmoil as possible.

Resources etc do carry risk = EU and USA are China's biggest creditors. China is ours.

And I would find an advisor that is switched on.

Good luck. Man nice work pulling out of property at the right time. Cash in the chips and move to the next table. Nice work.

xisled · 20-09-2011, 09:01 PM

Send it to me, I will invest it in the Give Andrew Your Money Foundation!!!.

It all depends how easy you want to access the cash if you want to have access to it any time. keeping it in the bank may be the best bet. If you are in it for the long run, such as when you retire. Maybe into your super fund.

Franco Cozzo · 20-09-2011, 09:07 PM

Go down to your local TAB, up to an amazing 1000000000% return! WOW!

Russ · 20-09-2011, 09:13 PM

Term deposit with fixed interest. Interest can be paid monthly into your savings account if you need a couple of extra $'s each month or alternatively paid on maturity. You then have the option of either using the cash if you need it or reinvesting it again. With the market being a bit up and down at the moment I would suggest short term deposit of 6 months or so, as an example I bank with the Greater B.S. and the current rate for the amount you have to invest is 5.8 % for between 4 - 6 months with interest calculated daily and paid on maturity.

Simple6 · 20-09-2011, 10:00 PM

CUA & ING (only because I use them) currently both have 6month @ 6%

http://www.cua.com.au/wps/wcm/connec...df?MOD=AJPERES

http://www.ingdirect.com.au/savings/...m_deposits.htm

I currently used their e-saver account (which you can also see in the above link) which has a promotional rate of 6.30% until 31st October 2011, but thats just a regular transaction savings account.

Simple6 · 20-09-2011, 10:13 PM

I'm sure you can do the maths on that but your amount at 6% for 6 months would equal $3,600 in interest. Then if the economy is still good and 6% (or higher) is offered then you could potentially take home an extra $7,200pa. Which by judging the Australian Stock & Property market recently is not a bad return when you factor in the security. Wish I was in your position!

Only thing is of course is that the Tax Man would absolutely love that option as he gets his cut...

Road_Warrior · 20-09-2011, 10:15 PM

Chuck it into your super?

**ebxr8240** · 20-09-2011, 11:17 PM

Term deposit.. Or in children's accounts ???

DAN-427 · 21-09-2011, 12:01 AM

I currently have most of it in a 6% account, just seeing if there was another avenue so the tax man cant take his share for a little while. No kids yet! Thanks all for the replies.

wildxy · 21-09-2011, 12:16 AM

What types of investment are seen as 'a loss' in the eyes of the tax man? Is super better than shares for example or ISA loss a loss

Fev · 21-09-2011, 10:20 AM

A friend of mines buying up as much silver as he can afford

BrandonJWessels · 21-09-2011, 10:43 AM

Term deposit, a little birdy friend of mine has 125k, which was built from 80k in term deposit accounts for the last 2 years.

Glen 5150 · 21-09-2011, 11:00 AM

Quote:

Originally Posted by BrandonJWessels

Term deposit, a little birdy friend of mine has 125k, which was built from 80k in term deposit accounts for the last 2 years.

Isn't that 25% p.a?

Buy a couple of car spaces in the city and then rent them out. You've got an appreciating asset, and a monthly return with virtually no outgoings.

nuthin' fancy · 21-09-2011, 11:00 AM

Quote:

Originally Posted by xisled

Send it to me, I will invest it in the Give Andrew Your Money Foundation!!!.

I'm not investing in G.A.Y.M.F.

Leave it in the bank, you should get 6%, pay some tax on the interest and sleep well. Everything else is volatile at the moment, cash is king. If you pay tax you are making money.

A 12 month time frame is too short for the risks of investing elsewhere.

John

290GTP · 21-09-2011, 11:16 AM

Blue chip bank stocks ( Commonwealth, Westpac NAB etc) are a little volatile right now but are relatively cheap & they pay an excellent fully franked dividend (tax free).
Certainly a better return than a 6 percent term deposit & if the sp goes up you get a capitol return as well.

dave289 · 21-09-2011, 11:57 AM

Quote:

Originally Posted by xr6wpn

Just seeking a bit of advice before I go to a financial advisor on some money I made last year when I sold my house.
Ive had the money sitting in a savings account but since the tax man wants to take a bit of a share im just wondering what my options are on where to put it for a couple of years so the tax man cant touch it (not real estate).
The sum is around $120,000

Cheers!

I believe interest rates will get lower and lower over the next year or so , so having your money in the bank will become far less desirable . My house of 17 years will be sold soon and I will be in the same position as you , that being where to park my money. I have thought about putting some on term deposit for now and investing some on the gold scene. You are wanting to avoid paying so much in tax, who would,nt.

So considering you are staying away from property and probably the share market too , your options are limited . To avoid paying so much tax you could invest some in gold , hold it for over a year , and reduce your taxable income on this by half .

To do this as safely as possible ,you will need to have a good plan in place . It may go something like this , of your $120,000 , you could buy say $30,000 in gold , put $30,000 on three months term deposit , and the other $60,000 on a six month term deposit. You will then need to follow the market fairly closely and reevaluate your situation evry three months . After three months , see what the old gold price is doing , if for example it had gone up say more than 10 % , and things are looking like still surging forward ,you now have a bit of a buffer in place . If you are confident you could either place another $30,000 on the gold scene or reinvest that three month term deposit for another six months . You will then reevaluate your situation at the next three months when your other six month term deposit finishes , if by this stage ,the gold has a big buffer because it has gone up enough and you are confident , invest another $30,000 on the gols scene and put the other in term deposit for another six months. If your are not confident or the buffer has not grown as much as you would have liked put it back on term deposit .

The bottom line is to invest a portion of your money into gold , and when the buffer is up enough for the next lot to be covered fairly safely you can go in again . This is one way to reduce your tax ,by holding for a period of over 12 months , your capital gains tax will be halfed , just something for you to think about anyway . dave289

dave289 · 21-09-2011, 02:31 PM

Quote:

Originally Posted by BigRed220

Blue chip bank stocks ( Commonwealth, Westpac NAB etc) are a little volatile right now but are relatively cheap & they pay an excellent fully franked dividend (tax free).
Certainly a better return than a 6 percent term deposit & if the sp goes up you get a capitol return as well.

you mean bluechip shares like nab that were worth more ten years ago than they are now and all other banks were worth more five years ago than now. What most people fail too see is that the australian economy has been going backwards very fast since the end of 07. I have looked at many bluchip shares and probably 90+% were worth more four years ago than now , and many were worth more 10 years ago than they are now .

I have done a fair amount of research on both the australain and world economy over the last few years and an extremely extensive research of both over the last six months . From my extensive research I know the majority of bluechips are a shocking investment as has been proved over the last five years and I am now 100% certain that house prices will be worth a lot less in both 12 months time and also 5 years time than they are now .This will also be the case with your bluechip bank shares ,just as it is the case as has been over the last five years not to mention ten for some . I would highly recommend not buying any bank shares , unless you plan on losing money , cause thats all that will happen there .

Below is a graph of the actual asx price chart over ten years , this pretty much reflects not only the state and direction of our economy but also shows how the majority of other other bluechips have been going over the years. You will see that four years ago the asx was double what it is now , and was also more six years ago than it is now . This my friends is the actual state of the economy and most people out there have absolutely no idea whatsoever , by the time they are pointed to this and educated a bit more , it will be far to late which is usually the case .

To anybody that thinks mining is so great , I will point out that mining in australia has helped kill our manufacturing industry and is now killing our retail and other industries by way of us not being able to compete with overseas , that being said china could have sorced from other countries ,so we may as well take something on the way down .

Mining contibutes less than 8% directly to our gdp, so as you can see its not enough to keep the country going , while at the same time killing it in other ways . Its a bit like this , you are losing a leg but growing another arm , now while another arm might seem good ,it does not look so good when you have to lose your leg to get it . So we would be better of with two arms and two legs , the problem is, even if we did not grow another arm by helping china , they will still be chopping of our legs none the less. So you need to be very carefull where you park your money.

The asx chart I mentioned earlier, below , feel free to look into other bluechip markets , you may then see things a bit more clearly.

http://hfgapps.hubb.com/asxtools/Cha...&TimeFrame=M10

290GTP · 21-09-2011, 03:58 PM

Quote:

Originally Posted by dave289

you mean bluechip shares like nab that were worth more ten years ago than they are now and all other banks were worth more five years ago than now. What most people fail too see is that the australian economy has been going backwards very fast since the end of 07. I have looked at many bluchip shares and probably 90+% were worth more four years ago than now , and many were worth more 10 years ago than they are now .

I have done a fair amount of research on both the australain and world economy over the last few years and an extremely extensive research of both over the last six months . From my extensive research I know the majority of bluechips are a shocking investment as has been proved over the last five years and I am now 100% certain that house prices will be worth a lot less in both 12 months time and also 5 years time than they are now .This will also be the case with your bluechip bank shares ,just as it is the case as has been over the last five years not to mention ten for some . I would highly recommend not buying any bank shares , unless you plan on losing money , cause thats all that will happen there .

Below is a graph of the actual asx price chart over ten years , this pretty much reflects not only the state and direction of our economy but also shows how the majority of other other bluechips have been going over the years. You will see that four years ago the asx was double what it is now , and was also more six years ago than it is now . This my friends is the actual state of the economy and most people out there have absolutely no idea whatsoever , by the time they are pointed to this and educated a bit more , it will be far to late which is usually the case .

To anybody that thinks mining is so great , I will point out that mining in australia has helped kill our manufacturing industry and is now killing our retail and other industries by way of us not being able to compete with overseas , that being said china could have sorced from other countries ,so we may as well take something on the way down .

Mining contibutes less than 8% directly to our gdp, so as you can see its not enough to keep the country going , while at the same time killing it in other ways . Its a bit like this , you are losing a leg but growing another arm , now while another arm might seem good ,it does not look so good when you have to lose your leg to get it . So we would be better of with two arms and two legs , the problem is, even if we did not grow another arm by helping china , they will still be chopping of our legs none the less. So you need to be very carefull where you park your money.

The asx chart I mentioned earlier, below , feel free to look into other bluechip markets , you may then see things a bit more clearly.

http://hfgapps.hubb.com/asxtools/Cha...&TimeFrame=M10

Its all about buying & selling at the right time isnt it? In early 09 Commonwealth was around the $25 mark per share, 3 weeks later they were $35 per share (i know because i traded them) & just over a year ago they hit $57 per share.
Dont think i would call them a shocking investment.

dave289 · 21-09-2011, 05:07 PM

Quote:

Originally Posted by BigRed220

Its all about buying & selling at the right time isnt it? In early 09 Commonwealth was around the $25 mark per share, 3 weeks later they were $35 per share (i know because i traded them) & just over a year ago they hit $57 per share.
Dont think i would call them a shocking investment.

Well maybe if you want to sit there everyday and play the up and down game you got lucky , you still playing that game ? ... good luck there buddy , you will certainly be needing it and will more than likely lose more than you gained previously .

As far as buying for the long run it has been crap , I mean to buy it and to sit on it like the majority of people do .

So $57 two years ago and $43 dollars today , so if I invested 1 million two years ago on what is the strongest of bank shares I would have lost. So I would be down almost $25% , sounds like a real good investment , so now my million in commonwealth shares is worth $750,000 two years later , and as I said a shocking investment . The graph below for the strongest banks shares in the country. And as you can see commonwealth bank shares were worth more at the end of 2005 than they are now .

http://hfgapps.hubb.com/asxtools/Cha...&TimeFrame=M10

And below is the national bank share history which shows that they were worth more ten years ago than they are now .

http://hfgapps.hubb.com/asxtools/Cha...&TimeFrame=M10

And wespac below you can see the share price was higher at the end of 2004 than it is now , another brilliant investment , not .

http://hfgapps.hubb.com/asxtools/Cha...&TimeFrame=M10

And just for good measure ANZ below , the share price was also higher at the end of 2004 than now .

http://hfgapps.hubb.com/asxtools/Cha...&TimeFrame=M10

290GTP · 21-09-2011, 05:49 PM

Yes mate i am still playing the game & have been playing for 15 years or more now. As i said its all about timing, theres still money to be made in a downward trend market as it is at the moment.
You say buying in the long run is crap? LOL! So if bought CBA shares at $25 back in 09 & still had them today at $43 plus my bi-annual dividends you call that a crap investment? Not to mention if sold those shares back in May last year at $57!
Anyway, im not gunna get into a fight with you over this, it doesnt really help the op.

flappist · 21-09-2011, 06:02 PM

Stick to the topic and don't bicker or try to one up each other.

If the usual suspects cause this thread to be closed for the usual reasons then the usual warnings will be given.....

Clear enough?

mr smith · 21-09-2011, 06:03 PM

Term Deposit and pay tax. Its not a big deal IMO, its too easy to out smart yourself with schemes that I belive ultimately make financial advisors and others rich off this fear of paying tax.
Compound interest and tip in a bit yourself and you will see your bank balance move up at a great rate.
Cash in the bank feels good as well.

All my investments (including super) are in cash and have been for many years.

GT0132 · 21-09-2011, 06:03 PM

Depends on whether you will need the money in the short term or not...If short term then a term deposit is my choice even though you'll lose part of the interest income in tax.

If it's medium to longer term then property or shares. The housing market is nearing the bottom of its boom/bust cycle (if not there already) so you may be able to pick up a bargain. Another option is to gear a share portfolio by borrowing a further sum so that you are 50/50 geared and then buy a mix of blue chip and medium risk stocks and reap the rewards of capital growth and franking credits on dividend income

If a much longer term (ie you don't need the money ever) then superannuation for sure. Where else can you get a tax deduction for your capital contribution (up to aged based limits) and then pay only 15% on the income ?. Invest in super with a risk mix that suits your aversity. Downside is you can't access the funds until after retirement age.

I have a mix of all four...cash, resi property, shares and super with no regrets

z80 · 21-09-2011, 08:03 PM

Get a term deposit, put it in the name of someone you trust who is not working, like a student.

They will pay virtually zero tax as it the interest would just scrape the tax free threshhold.

or find someone else who you trust...put it in their mortgage offset account and only charge them 6% instead of what the bank is charging them.

of course finding someone you trust is the key.....cause it has to be in their name.

Dont trust super with fund managers...its loserville in the game of life, unless you run the fund yourself...

Pis-ton broke · 21-09-2011, 09:14 PM

Quote:

Originally Posted by dave289

To avoid paying so much tax you could invest some in gold , hold it for over a year , and reduce your taxable income on this by half .

As I understand it , the op. is due to pay capital gains? tax on a property.
And are you saying that ,if its put in to an investment , even a provitable one, for over one year then the capital gains is reduced?

I,m unaware of tax rules on investments. you have many links, do you know of a good one, so as i can learn some of this stuff. as i have just invested some money in woolsworths shares.

cheers mick

Ben73 · 21-09-2011, 09:35 PM

Yeah I want to know what Capital gains tax applies too.
Any money you make from selling? Or just teh big things like houses etc.

I personally have a decent lump of money in a 6% interest account.
Sure I have to pay tax on iyt, but it is money for nothing and I always have quick and easy access to it if need be.

I got a little bit of money in shares, but I don't really like them.
I don't follow the market, I don't know whether my shares will be good in the long run but I'm just seeing what happens.

I personally want to invest in real estate soon. I know house markets always go up and down, but In the long run it's probably always going to increase in popular areas.
I planning on studying some real estate soon to see what's hot and what's not.

dave289 · 21-09-2011, 10:36 PM

You guys may find your answers in here you can always ring and speak to somebody if needed. theres about 5 billion pages of info, I just could not be bothered looking into right now.

http://www.ato.gov.au/

One question this thread has raised in my mind is . What if I was to put my money on fixed term deposit for three years paid on maturity . Would the interest paid on maturity after three years then be classed as a capital gain and therefore making half of it free from tax ? anybody , if not I will ring the tax office tommorow as I could not be bothered reading through all the bs in the link above, but it should be very helpfull to others none the less.