How should I "invest" my savings?

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Forums › Finance and wealth management › How should I "invest" my savings?

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nickb800

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#906712 2-Oct-2013 21:19

jpoc: Do you really think that having a $45K deposit instead of a $40k deposit will make a huge difference to the house that the OP can buy?

In other words, does the OP want to spend $5000 on lotto tickets between now and the time they buy a house? Its all about personal preference for gambling and nothing to do with strategy

jpoc

1043 posts

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#906758 2-Oct-2013 22:16

nickb800:
jpoc: Do you really think that having a $45K deposit instead of a $40k deposit will make a huge difference to the house that the OP can buy?

In other words, does the OP want to spend $5000 on lotto tickets between now and the time they buy a house? Its all about personal preference for gambling and nothing to do with strategy

So:

Option 1. Invest 8K now in a high rate savings scheme and a monthly amount bringing the total to $45k in 10 years and then buying $5k of lottery tickets. That gives you one chance in 6000 of a life changing win.

Option 2. Put the money in bonus bonds and reinvest the winnings. That gives you one chance in 700 hundred of a life changing win and one chance in 200 of a win that will double your deposit.

Batman

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#906798 2-Oct-2013 23:09

can I ask you - how does one spend $5000 in lotto tickets?

go to shop and circle out 2000 tickets?

online - spend an eternity doing it?

just curious

resurrect

80 posts

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#906882 3-Oct-2013 09:03

joker97: can I ask you - how does one spend $5000 in lotto tickets?

go to shop and circle out 2000 tickets?

online - spend an eternity doing it?

just curious

you can just ask for $5k of triple dips etc. and with the online one i think you buy it by the line? that or you write a program to do it all for you.

Trunks2

224 posts

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#917609 20-Oct-2013 00:42

Hi all,

I currently have savings of about $7k, going up by $500-1000 per month so I'm looking at what I should do with it instead of sitting in a savings account.

I've come across something called smartshares http://www.smartshares.nzx.com/ that follow a few NZ/AUS indexes, seems like this would be ok for a beginner? Not too much risk/ lowish fees.

P1n3apqlExpr3ss

853 posts

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#917611 20-Oct-2013 00:49

Trunks2: Hi all,

I currently have savings of about $7k, going up by $500-1000 per month so I'm looking at what I should do with it instead of sitting in a savings account.

I've come across something called smartshares http://www.smartshares.nzx.com/ that follow a few NZ/AUS indexes, seems like this would be ok for a beginner? Not too much risk/ lowish fees.

I've heard a lot about this recently, how does 16% after fees and tax sound? Seems to have a nice spread of investments. Have been looking at is myself as well so keen to hear if others have any input

http://www.milfordasset.com/

afe66

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#917645 20-Oct-2013 09:34

I got into them (nzx ) about 10 years ago as a general savings method. At the time I had done some reading that suggested that passive index funds outperform active management in 2/3 of cases because of their low fees and that managers aren't as good as they think they are. (Haven't relooked at this since then though)

When funds were launched, I couldn't find any other passive index funds in nz (could have been wrong) so I bought into them when they launched. The two funds I am in have been returning a yield of about 4-5% within a PIE tax structure which is ok for me.

I have a monthly savings plan and take all dividends in the form of further units rather than the cash, I'm satisfied enough to keep them going as I don't need the funds for anything.

If I was getting into passive trackers now I would look into funds that buy overseas shares to spread some of the risk there is in nz being such a small economy which is my I have one of the Australian funds too.

A.

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Free kids accounts - trade shares and funds (NZ, US) with Sharesies (affiliate link).

TinyTim

1042 posts

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#918858 20-Oct-2013 21:23

Index trackers/passive funds are great because they give you diversity across shares in one easy go. (As well as the fact that they can't perform worse than average). Read up what local columnists Mary Holmes and Martin Hawes say about them (and diversity). And for a seriously pro-passive fund opinion, look up "Canadian Couch Potato".

Also, ASB Kiwisaver - one of the Kiwisaver biggies - uses passive funds.

Hollow

35 posts

Geek

#927772 5-Nov-2013 18:18

P1n3apqlExpr3ss:
Trunks2: Hi all,

I currently have savings of about $7k, going up by $500-1000 per month so I'm looking at what I should do with it instead of sitting in a savings account.

I've come across something called smartshares http://www.smartshares.nzx.com/ that follow a few NZ/AUS indexes, seems like this would be ok for a beginner? Not too much risk/ lowish fees.

I've heard a lot about this recently, how does 16% after fees and tax sound? Seems to have a nice spread of investments. Have been looking at is myself as well so keen to hear if others have any input

http://www.milfordasset.com/

It's a tough one, the NZX has been going great guns over the last couple of years so companies like Milford have had great results but more and more people seem to be saying that the NZX is now generally overvalued so returns of anything like 16% seem pretty unlikely in the near future at least in my opinion

TinyTim

1042 posts

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#927993 6-Nov-2013 08:59

Hollow:
P1n3apqlExpr3ss:
Trunks2: Hi all,

I currently have savings of about $7k, going up by $500-1000 per month so I'm looking at what I should do with it instead of sitting in a savings account.

I've come across something called smartshares http://www.smartshares.nzx.com/ that follow a few NZ/AUS indexes, seems like this would be ok for a beginner? Not too much risk/ lowish fees.

I've heard a lot about this recently, how does 16% after fees and tax sound? Seems to have a nice spread of investments. Have been looking at is myself as well so keen to hear if others have any input

http://www.milfordasset.com/

It's a tough one, the NZX has been going great guns over the last couple of years so companies like Milford have had great results but more and more people seem to be saying that the NZX is now generally overvalued so returns of anything like 16% seem pretty unlikely in the near future at least in my opinion

You need to determine if you're a speculator (buy and sell shares to maximise your capital gains) or an investor. The advice I've seen (not personal advice but Martin Hawes newspaper column advice ) is if you're an investor and you want to maximise your long term return and you have regular money to invest then just make sure you buy into smartshares-type funds regularly - your $500-$1000 every month - and it'll all work out. You'll get fewer for your money when the prices are overvalued and more when they're undervalued - which will increase your returns when prices go up.

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