What's a safe investment for generating income?

Discussion in 'Other Investments' started by Aurora et luna, Jan 15, 2020.

  1. Aurora et luna

    Aurora et luna Well-Known Member Silver Stacker

    Joined:
    Jul 1, 2009
    Messages:
    6,404
    Likes Received:
    1,810
    Trophy Points:
    113
    Location:
    Sydney
    A retired friend asked me to recommend a few safe investments that will generate a reasonable income.
    Currently she is invested in franked shares and term deposits that are not earning much interest.
    She is a very conservative investor so not looking for anything risky
    Appreciate any suggestions.
    Thanks
     
    Silver260 and ozcopper like this.
  2. barneyrubble

    barneyrubble Well-Known Member Silver Stacker

    Joined:
    Jan 30, 2017
    Messages:
    612
    Likes Received:
    296
    Trophy Points:
    63
    Location:
    Brisbane
    Safe is relative as I’m sure you are already aware. Return is directly related to risk.

    Having said that, possibly look at peer to peer lending such as ratesetter.com.au
     
    Aurora et luna likes this.
  3. JulieW

    JulieW Well-Known Member Silver Stacker

    Joined:
    Oct 14, 2010
    Messages:
    13,023
    Likes Received:
    2,169
    Trophy Points:
    113
    Location:
    Australia
    If she can buy something outright, then I suggest real estate. It's been a go to for many many years.

    "Safe as Houses" is a common saying for a reason and provided you're not sucked into the banking machine and are actually operating as a landlord for yourself and not the bank, then you'll always find a tenant.
     
    Aurora et luna and wrcmad like this.
  4. Shaddam IV

    Shaddam IV Well-Known Member Silver Stacker

    Joined:
    Mar 22, 2010
    Messages:
    7,364
    Likes Received:
    2,363
    Trophy Points:
    113
    Location:
    House Corrino
    Strata title self storage units in a good facility. Cost 90-100K to buy and the right one can return 8-9% rent.
     
  5. JulieW

    JulieW Well-Known Member Silver Stacker

    Joined:
    Oct 14, 2010
    Messages:
    13,023
    Likes Received:
    2,169
    Trophy Points:
    113
    Location:
    Australia
    I've not heard of that before. Sounds promising, though probably quite a barometer of affluent times.

    Taking the scale down a little, car spaces in the CBD is another quiet earner that a friend did for a while. Said it was trouble free and reliable.
    (What would a car space cost now? 40-50k?)
     
  6. wrcmad

    wrcmad Well-Known Member Silver Stacker

    Joined:
    Jan 2, 2012
    Messages:
    6,190
    Likes Received:
    354
    Trophy Points:
    83
    Location:
    Northern NSW
    You are correct- about $40-50K.
    However, DYODD on car spaces in Sydney CBD.
    I owned one for many years, and it was the easiest real estate investment you could have - essentially a 14m2 concrete patch - no land lord insurance necessary, no building insurance, no power or water etc.
    Raw yields are good, but then the State Gubmint decide to gouge owners and put a "Parking Space Levy" on all owners in the Sydney CBD in attempt to discourage car ownership - mine in Pyrmont copped a $2500 levy at the time, so I was behind the 8-ball by 5% before Council rates and corporate body fees were added. I found a loophole to get my levy down to $0, so it still made sense while I was claiming 4 trips a year to Sydney to "talk to the property manager :p)", but when the Feds abolished travel related deductions, it no longer made sense and I offloaded it about 2-3 years ago.
     
    Last edited: Jan 15, 2020
  7. Bullion Baron

    Bullion Baron Well-Known Member Silver Stacker

    Joined:
    Sep 15, 2009
    Messages:
    2,513
    Likes Received:
    143
    Trophy Points:
    83
    Location:
    Adelaide
    Aurora et luna likes this.
  8. wrcmad

    wrcmad Well-Known Member Silver Stacker

    Joined:
    Jan 2, 2012
    Messages:
    6,190
    Likes Received:
    354
    Trophy Points:
    83
    Location:
    Northern NSW
    The Holy Grail is conservative risk for good returns - everyone wants a piece of that!
    What do you consider a reasonable % return?
     
  9. Aurora et luna

    Aurora et luna Well-Known Member Silver Stacker

    Joined:
    Jul 1, 2009
    Messages:
    6,404
    Likes Received:
    1,810
    Trophy Points:
    113
    Location:
    Sydney
    I think 5 - 6% is a reasonable ask!
     
    Shaddam IV and wrcmad like this.
  10. madaw1

    madaw1 Well-Known Member

    Joined:
    Dec 5, 2011
    Messages:
    1,068
    Likes Received:
    559
    Trophy Points:
    113
    Location:
    Great Western Country
    If he/she/ has a lot of money, maybe buy business like Bunnings or part of it.
     
    66rounds and Aurora et luna like this.
  11. wrcmad

    wrcmad Well-Known Member Silver Stacker

    Joined:
    Jan 2, 2012
    Messages:
    6,190
    Likes Received:
    354
    Trophy Points:
    83
    Location:
    Northern NSW
    If it were me, I'd go for a High Dividend Yield Share ETF.
    For example -
    IHD 4.8% yield (82% franked),
    RARI 6.1% yield (7% franked),
    SYI 7.9% yield (57% franked),
    VHY 5.5% yield (86% franked)

    Or a dividend harvesting trust eg -
    THIS ONE HAS YOUR NAME ON IT! - AOD Aurora Dividend Income Trust Australia 6.39% Franking 100%
    HVST Betashares Australian Dividend Harvester Fund Australia 11.74% franking 66.06%
    YMAX Betashares Australian Top 20 Equity Yield Maximiser Australia 10.42% franking 46.46%
     
    Silverling, jultorsk, madaw1 and 2 others like this.
  12. bigsky

    bigsky Active Member

    Joined:
    Sep 25, 2011
    Messages:
    233
    Likes Received:
    97
    Trophy Points:
    28
    Location:
    melbourne
    FGX or future generation investment company

    At $1.18 yielding 4.2% fully franked divy and they have a couple of years of franking credits
    already banked and up their sleeves

    Ii is a fund of funds with the likes of bennelong, wam, regal funds mgmt and many
    others looking after the funds investments....pro bono
    These funds are not just long, but long/short and market agnostic so to speak, so wont do as
    well as long only funds in a bull market, but will offer some protection if the market falls IMO
    They have lower volatility than the market as a whole

    You also get the feel good factor as 1% of their NTA goes to childrens charities every year, also
    if you buy through comsec then they will refund your brokerage so you can buy in smaller amounts
    over a longer timeframe and not get stung with lots of brokerage fees

    It is also trading at roughly 6% discount to NTA at present

    It has traded at a premium to NTA before the Labors franking credit scare at the last election, when it
    did then fall to a largish discount to NTA but still has not fully recovered mainly because the market
    just keeps going up, and a long only fund is the way to go...until it isnt

    Anyway...worth having a look

    cheers grant
     
  13. Davros10

    Davros10 Active Member Silver Stacker

    Joined:
    Aug 6, 2014
    Messages:
    399
    Likes Received:
    222
    Trophy Points:
    43
    Location:
    Canberra
    buy silver or gold low and sell high.

    Easy
     
  14. sgbuyer

    sgbuyer Well-Known Member Silver Stacker

    Joined:
    May 25, 2018
    Messages:
    1,672
    Likes Received:
    944
    Trophy Points:
    113
    Location:
    Singapore
    Have to agree. Stocks need a lot of research and luck. Gold and silver, just buy, wait 10 years.
     
  15. Aurora et luna

    Aurora et luna Well-Known Member Silver Stacker

    Joined:
    Jul 1, 2009
    Messages:
    6,404
    Likes Received:
    1,810
    Trophy Points:
    113
    Location:
    Sydney
    Unfortunately my friend relies on dividends and bank interest for income!
     
  16. RBrowny

    RBrowny New Member

    Joined:
    Jun 9, 2019
    Messages:
    13
    Likes Received:
    1
    Trophy Points:
    3
    Location:
    Netherlands
    What about dating affiliate programs like https://www.affiliate-programs.biz/category/dating-affiliate-programs/ ? Are they really that profitable as promised? I am a starter in affiliate marketing and I am hunting for info (I did expect this to be more straightforward, silly me)
    thank you, good ideas, its nice to see members actually help each other.
     
  17. Aurora et luna

    Aurora et luna Well-Known Member Silver Stacker

    Joined:
    Jul 1, 2009
    Messages:
    6,404
    Likes Received:
    1,810
    Trophy Points:
    113
    Location:
    Sydney
    Thanks for all the comments and advice guys!
    She is still undecided!
    She is in the mold of Vern Gowdie, conservative and ultra careful
    She thinks the stock market is going to crash soon and wants to sell her stocks and remain in cash.
    However if she stays in cash for more than a year, the interest rates won't cover her living expenses, forcing her to dip into her capital.
    Her current thinking is to sell half her stocks now, stay liquid and go back into the stock market after the next crash.
    Her stock portfolio consists of your standard well know banks, retail and miners , a mix of duds and winners.
    The only advice I gave her was to keep her only gold miner Newcrest which she absolutely hates as the yields are abysmal.
    What are your opinions of Vern Gowdie and his strategies? He seems like a perennial bear!
     
  18. sgbuyer

    sgbuyer Well-Known Member Silver Stacker

    Joined:
    May 25, 2018
    Messages:
    1,672
    Likes Received:
    944
    Trophy Points:
    113
    Location:
    Singapore
    A lot has happened since mid-Jan. Many interesting stocks that will be affected if the wuhan virus starts spreading. I'm making a buy list. Transportation, oil, etc.
     
  19. Aurora et luna

    Aurora et luna Well-Known Member Silver Stacker

    Joined:
    Jul 1, 2009
    Messages:
    6,404
    Likes Received:
    1,810
    Trophy Points:
    113
    Location:
    Sydney
    Some feedback!
    My friend is going to lighten up her share portfolio and remain top heavy in cash for the time being
    She intends to sell a mix of duds and winners to reduce or eliminate capital gains.
    After the "Crash" which she thinks will be coming soon, she intends to repurchase shares.
    She is interested in Argo Investments as it invests in a broad range of industries.
    Anyone with a better suggestion?
     
  20. Eureka Moments

    Eureka Moments Well-Known Member Silver Stacker

    Joined:
    Oct 31, 2011
    Messages:
    6,812
    Likes Received:
    186
    Trophy Points:
    63
    Location:
    bosis
    Holding cash at historically low interest rates wont produce much income and if exchange rates fall only a small amount they will be losing wealth. Why not some Au to hedge inflation/AUD and make $$ gains on spot increases.

    AUD will weaken when the Reserve lowers interest rates again, it was half expected to last week and looks very likely in the near term.
     
    Aurora et luna likes this.

Share This Page