Spending a tax refund

Discussion in 'General Precious Metals Discussion' started by mongrelmaple, May 23, 2019.

  1. mongrelmaple

    mongrelmaple Well-Known Member Silver Stacker

    Joined:
    May 19, 2018
    Messages:
    538
    Likes Received:
    724
    Trophy Points:
    93
    Location:
    Brisbane
    Hello stackers!

    While I was away travelling overseas and living the nomad lifestyle for a few years, I was naive and didn’t keep on top of my tax returns for a number of years. Fast forward to today and with the help of an accountant, I have recieved a refund of $10K+ from the ATO.

    My question is simply, what would you do with it? Would you allocate a good portion to precious metals while spot is low, and leave the rest for another purpose? And if so, what would you put it into?

    Just for background, I’m in my early 30’s. I have no debts, own my car, no partner/dependents, and I have a secure full time job. I currently have nearly $20K saved for a deposit (that took about 15 months), but would obviously like to triple it and look into buying an entry level apartment in around 2 years.

    Would love to hear everyone’s opinions :)
     
    Silverling likes this.
  2. ParanoidAndroid

    ParanoidAndroid Well-Known Member

    Joined:
    Dec 2, 2015
    Messages:
    1,011
    Likes Received:
    647
    Trophy Points:
    113
    Location:
    Over there
    I'd advise putting at least some portion of it into crypto, as unpopular among some as that idea may be.
     
  3. brisbane-coins

    brisbane-coins Well-Known Member Silver Stacker

    Joined:
    Mar 3, 2016
    Messages:
    2,864
    Likes Received:
    825
    Trophy Points:
    113
    Location:
    Brisbane
    If you understand the share market, invest a large portion. If you do not have any knowledge, then don't do it. You may loose it.
    Investing in precious metal is like an emergency fund. It is very unlikely that you will get your money doubled/trippled from investing on precious metal, not at least in few years.
    crypto is too risky.
     
  4. SilverDJ

    SilverDJ Well-Known Member

    Joined:
    Nov 1, 2014
    Messages:
    3,935
    Likes Received:
    1,297
    Trophy Points:
    113
    Location:
    Australia
    Great position to be in.
    Do you have your existing $20k in cash or elsewhere?
    If putting anything into metals I would suggest the Perth Mint or other depository so you can sell your metal easily at any time. Forget physical metal in your possession., too much hassle and expense.
    Assuming you have $30k to play now with I'd say stick $5-$10k into crypto and keep the rest in cash or maybe half in cash half in easily transferable online metals account. Downside on metal isn't large, but neither is the upside.
    I wouldn't touch stocks at present, they are sky high, keep cash on hand for the inevitable fall and then jump into the share market.
    Another 2 years isn't much time to grow extra investment income (about $32k more at your current saving rate), that should give you $66k for a deposit.
    I'd be going mostly low risk cash with that time frame.
     
    Silverling likes this.
  5. mongrelmaple

    mongrelmaple Well-Known Member Silver Stacker

    Joined:
    May 19, 2018
    Messages:
    538
    Likes Received:
    724
    Trophy Points:
    93
    Location:
    Brisbane
    I have limited knowledge about cryptos, and haven’t decided if I’m willing to dip my toe into it yet. I simply need to learn more before I go and start putting money into it. But if I did, I’d keep it to $5K max to start with.

    I got out of the share market last year, just before one of the big daily drops (around 800 on the dow). I’m wary of a potential bubble, but maybe I’ve just been watching too many Chris Duane videos lately? :D

    The existing $20K is locked up as a term deposit, maturing in a few weeks. After reading the opinions of many forum members regarding the safety of cash at a bank in a bail-in scenario, I’m wary of doing it again. That money is designated as part of any future deposit for an entry level apartment, so it’s not something I treat lightly. So at the moment, the $10K is in play.

    I’ve already accumulated a few hundred ounces of silver since I joined this community about a year ago, and a couple ounces in each gold and platinum. So I have some sort of “emergency fund” in the form of physical PM’s, but looking to expand on PM’s, since I love being able to hold and see all my hard work and tangible savings.
     
  6. Silverling

    Silverling Well-Known Member Silver Stacker

    Joined:
    Aug 13, 2017
    Messages:
    1,586
    Likes Received:
    1,947
    Trophy Points:
    113
    Location:
    NSW
    Hello, well done on the savings and the 10k refund. I am a little conservative and as you are saving for a home deposit I would put it together with the 20k you already have do another term deposit.

    I wouldn't trust cryptos. Bitcoin hit an all time high in 2017 at around 25k AUD and it fell right down to about 5k AUD. Now it is around the 11k AUD mark. Something as wobbly as that is not what I would call a safe investment at all. I bought 2 kilos of silver for bitcoin at around the 16k mark in 2017. Had a great face to face with the seller and he was selling a lot of his assets to get more btc. I said to him, are sure you are doing the right thing, he said yes. Shortly after, I sold my silver for a little more than I paid and he suffered catastrophic losses. There is much more to cryptos that just BTC, all I'm doing is saying what has happened before can happen again and it doesn't matter which crypto you are going for.

    As for the sharemarket, I hold stocks too. They have still not recovered from the GFC where our market hit around 6800 on the XAO. It is now 12 years after that time and we are still below 6800. During that time the DOW has quadrupled. No one can predict where markets will go but the DOW looks very top heavy. If they sink then without doubt our market will sink too. The saving grace is that we get around 5% in dividends for holding.

    Gold seems to have gone ok and with the AUD sinking it seems as though you got that emergency covered.

    The one thing we all need is that roof over our head. Paying off a 25 year mortgage and then living rent free for the rest of your life is best most secure feeling any human could ever want. I hope you can buy a nice place soon, good luck.
     
  7. Ad1

    Ad1 Active Member

    Joined:
    Jan 19, 2018
    Messages:
    175
    Likes Received:
    72
    Trophy Points:
    28
    With a 2 year time horizon, I'd go for a term deposit. If you really do want to try and grow it at a higher rate, perhaps put 60-70% in Fixed deposits, 10-15% in metals (as close to spot as possible and buy the dips), 10-15% in index funds and 5-10% in Cryptos. You can choose to be more aggressive than this,but the risk of losing capital gets higher as you shorten the investment time frame. As said above, metals are more of an insurance policy than investments. You could do quick flips of better bullion/semi numi on eBay etc but you need to understand the market well and time that too
     
  8. SilverDJ

    SilverDJ Well-Known Member

    Joined:
    Nov 1, 2014
    Messages:
    3,935
    Likes Received:
    1,297
    Trophy Points:
    113
    Location:
    Australia
    Forget all that bail-in talk, it's borderline ridiculous. Technically possible, but practically zero change in practice. And even if it did you'd have a a massive heads-up.
    If you are still concerned, spread the money around several accounts and an online gold facility, fully allocated if extra paranoid.

    In an "emergency" it's kinda hard to sell physical PM's unless they are in an online account stored with them. Cash is vastly superior as an emergency fund.
     
  9. mrsilverservice

    mrsilverservice Well-Known Member

    Joined:
    Feb 10, 2019
    Messages:
    821
    Likes Received:
    358
    Trophy Points:
    63
    Location:
    North of Tasmania
    Uniting it with your 20k to building your dream sounds best to me seeing that are committed to buying your own home :)

    I know that you are talking about silver but I would buy gold if you were determined to buy precious metal,nothing fancy just 1oz blobs,but saying that 1k silver and 9k gold :D you can never go wrong with gold :p insurance for the ages ;)

    Just remembered the "bail in laws" definitely something to remember if you intend to trust the bank with your term deposit,thanks to the Goldman Sachs veteran merchant banker malcolm turnbull :mad:

    I hope this gives you more things to think about :)
     

Share This Page