So you have $200 a week to invest but where should you put it? The best place can vary depending on your end goal. We get the experts to put together portfolios aimed at helping you achieve a different financial aim.
Saving for a home is likely to be the biggest financial outlay you will make for one single item. According to CoreLogic, the average house in Sydney, for example, has increased in value from $650,000 in 2012 to over $1,066,000 in 2017 – a 64% rise in five years.
Putting aside the affordability and housing bubble debate, to get on the property ladder you have to save up a deposit of between 10% and 20% of the property value.
Investing in a balanced low-fee portfolio of exchange traded funds (ETFs) is one smart way to maximise your savings and get you closer to your property goal.
There’s a lot to consider before you buy a home. First, is it right for you or are you suffering FOMO (fear of missing out) just because everyone else is doing it?
If buying is definitely right for you, consider the practicalities. Where do you want to live and where can you afford to live? Can you cover the repair and insurance costs? When interest rates go up (and they will) can you service your mortgage?
INVEST EARLY AND REGULARLY
Start investing early and regularly. Investing just $200 a week might not sound like a big amount but it will make a real difference in the long-term.
Investing early means you can take advantage of compound returns, which is simply earning additional returns on profits that are re-invested. Setting aside a small amount on a regular basis can help you reach your goal faster.
Assuming growth of 7% a year, the initial $200 investment with weekly top-ups of $200 would end up being around $60,000 after five years with compounding. If after two years of investing you increase your weekly investment to $300, you could get closer to $80,000.
DIVERSIFICATION IS KEY
This story is from the May 2017 edition of Money Magazine Australia.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the May 2017 edition of Money Magazine Australia.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 8,500+ magazines and newspapers.
Already a subscriber? Sign In
Is the public market shrinking?
Australia needs a healthy stock market to give companies access to funds and to allow retail investors to build wealth.
India: three steps to transformation
Massive investment and extensive reforms turbocharge the economy.
The ballet of business
Changing direction, products, models and marketing is a hard task for a business. We chart what it takes to turn a business around, plus profile four successful pivots.
Save money and the planet
Could the high cost of living give us the incentive we need to reduce how much water and energy we use or waste? These eco-friendly household tips will help you do just that.
AI adoption is the new black
Artificial intelligence is set to reshape the commercial world, and small enterprises can’t afford to miss the boat.
Spam attack! Murky laws jam our inboxes
Unwanted marketing material is one of the pain points of modern life.
From rags to riches in style
Rich Tran sported a bowl cut until he was 14 years old and had no intention of becoming a hairdresser.
New work deals are killing the 'old' office
The Covid pandemic and the subsequent lockdowns accelerated the trend to more people working from home. It was a mixed experience.
Points taken: the truth about rewards
Can hopping between credit cards really boost your frequent flyer haul and give you cheap or free travel - or is it doing more harm than good behind the scenes? Money puts it to the test.
Shortcuts to own a home
Innovative ideas with a focus on low costs and sustainability could help solve the housing crunch.
