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| Thread ID: 147375 | 2018-11-26 20:24:00 | How to invest ones small savings? | Digby (677) | PC World Chat |
| Post ID | Timestamp | Content | User | ||
| 1456035 | 2018-11-29 21:16:00 | Sorry, we got bogged down on Bonus Bonds. I was asking for advice on how to invest if you are on a limited income with small savings. Yea, and sorry for being quite blunt/rude around them. Here's my general take on it. I'd stay away from Bitcoin, Harmony, etc - extremely, extremely, extremely risky. Much more akin to gambling in my personal opinion. I can't really give any advice on Sharesies -I've heard of them but have never looked into them. As a general rule, I think the most important thing to consider is how long you plan on keeping your investment before touching it. If it's a substantial period of time (>10 years), I'd personally look at investing in shares, simply because you're investing long enough you shouldn't be affected too badly if there's a recession or downturn. Certainly, the longer you plan on investing, the more attractive shares become. I'm personally a fan of passive (eg Simplicity) over active (ANZ sharemarket funds), however either would be expected to deliver superior returns than things like a term deposit. An index fund is a great way to invest (Simplicity is not an index fund, however a substantial portion of it is). Smartshares is another one - https://smartshares.co.nz/ Here's a great link on some basics, and why index funds are attractive - www.stuff.co.nz If you don't want to risk of a sharemarket fund, consider going for a fixed interest fund. If you don't want the risk of that, go for a term deposit. If you're going with fixed interest or sharemarket, get into a diversified fund. Diversification is key. |
Nick G (16709) | ||
| 1456036 | 2018-11-29 22:18:00 | On this subject listen to Nick. He does know what he is talking about. | CliveM (6007) | ||
| 1456037 | 2018-11-30 05:19:00 | I didn’t like Harmoney because of the length that of the loans and lack of clarity around defaults - they will “try their best” to chase non payers, but it’s not their money so their incentive is low - they’ve already got their fees. Sharesies is a good option for low value investing - there are a range of ETF’s in different risk/return classes (including Smartshares ones with easier/cheaper access) and most can be had with transactions as low as $5 at a time and no transaction fees. $30 pa account fee. You can sell up and get your money out at any time. The web interface is easy to use to buy, sell and track what’s going on. ... and units are currently getting cheaper by the day ... ;) Smartshares (directly) is similar but costs and min investment limits are a little higher and is a bit more ‘hands off’. |
fred_fish (15241) | ||
| 1456038 | 2018-12-02 23:18:00 | The thing with managed fund is that the fee is quite a bit high. What we seen lately if the market goes down like Kiwisaver, Managed Funds would also go down and you would still have to pay fees. Fees are not just on performance. It's also on custody and on advice. There are also sharemarket index like the NZX50 but again it can go down, fees can be less. What I am saying is if you do anything you have to understand that it can go down. Term deposits, savings account on the other hand, does not go down but the return isn't as high. Small savings? How small are we talking about? If you are not doing a min of a $3k single transaction the fees would prob be higher than market return. Usually if you buy an index or shares the min fee is $30 up to $10k or maybe $15 with ASB if you have a small amount up to $1,000. What I mean is if you fees are 1 or 1.5%. Currently the market isn't doing v good. Let's say it does 5%. You then only have 3 or 3.5%. It's higher than a bank but at the end of the day in dollar amounts how much do you gain ... and of course the market could actually do nothing or go into negative territory (and you still have to pay the fee). |
Nomad (952) | ||
| 1456039 | 2018-12-02 23:37:00 | Small savings? How small are we talking about? . I think this is the key to all the answers.... |
bevy121 (117) | ||
| 1456040 | 2018-12-03 00:38:00 | I think this is the key to all the answers.... OK, so i'll tell you mine if you tell me yours first! |
Digby (677) | ||
| 1456041 | 2018-12-03 00:43:00 | It is often said on various sites that in NZ $200K in the bank is the minium for a good retirement. If you put that on term deposits its safe and you get maybe $200 in interest that you can spend on clothes, shopping, travel etc. But If you only had say $50K, then on the same basis, you only get $50 a week which means you have to be careful what "luxuries" you spent it on. Then if you only had $10K, then its $10 a week which will not even buy you a dozen beer. So the question is how can you build that $10K or $50K up into a larger amount. |
Digby (677) | ||
| 1456042 | 2018-12-03 01:40:00 | So the question is how can you build that $10K or $50K up into a larger amount. Simple answer. If you are willing to bear the ups and downs the long term return IMO is about 8% PA. This is using the sharemarket. Doing individual buys of a min of $3k or pref $5k at least. With the Get Sorted savings calculator. sorted.org.nz If you have $10k and it just sat there and you didn't add anymore in, with a 8% return. 40yrs you get $100k adjusted to inflation. ($217k not adjusted to inflation). But if you only do this for 10yrs, you would only have $17k. ($21k not adjusted to inflation). 20yrs you have $31k. ($46k not adjusted to inflation) 30yrs, $55k. ($100k not adjusted to inflation). It is often said on various sites that in NZ $200K in the bank is the minium for a good retirement. It becomes a lifestyle. You adjust your life to put savings aside. It does not appeal to every character. If one put aside $50 per week, cuting back their lifestyle if need be. Do this when they are 25yrs and do this for 40yrs due to the 8% they would have $700k or $300k adjusted to inflation. Even if you have been with Kiwisaver for 40yrs and each year the govt gives you $500. With the 8% you would get $130k or $60k adjustecd to inflation after 40yrs. Even deciding against having a dinner and a lunch out a week helps a lot ... |
Nomad (952) | ||
| 1456043 | 2018-12-03 01:57:00 | It's what the TV show Mind Over Money was about. It's due to the person's personality. Get in early and let compounding work for you. If you do this late by saving more you still might not catch up. In reverse debt compounding can keep you in a hole. A car that is $2k cheaper is $40 per week you didn't have to save. Which is the equiv. to one $40 dinner out every week. Even if you put aside just $25 per week for 40yrs that amounts to $350k or $160k adjusted for inflation. Instead of $2.5k over the 2yrs say phone and computer / video card upgrades. | Nomad (952) | ||
| 1456044 | 2018-12-03 17:03:00 | @Nomad That is good advice for younger ones. But my OP refers to someone who is on super and who may have already retired. They do not have 40 years. |
Digby (677) | ||
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