What's a safe investment for generating income?

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

  1. sammysilver

    sammysilver Well-Known Member Silver Stacker

    Joined:
    Apr 7, 2011
    Messages:
    6,142
    Likes Received:
    790
    Trophy Points:
    113
    Location:
    Sydney
    Buy burial plots.
     
    sgbuyer and Aurora et luna like this.
  2. SilverDJ

    SilverDJ Well-Known Member

    Joined:
    Nov 1, 2014
    Messages:
    3,727
    Likes Received:
    876
    Trophy Points:
    113
    Location:
    Australia
    In Sydney these have unfortunately shot up hugely in price in the last 4 years.
    As with commercial realestate which was always the goto "safe" return investment in super funds, I don't think rents have gone gone up, so the returns have dropped form an easy 10% to under 5% and are bordering on residential property returns.
    But if you can find the right one at the right price, yes, good thing to do.
     
  3. Eureka Moments

    Eureka Moments Well-Known Member Silver Stacker

    Joined:
    Oct 31, 2011
    Messages:
    6,829
    Likes Received:
    202
    Trophy Points:
    63
    Location:
    bosis
    I've got that down the end of my list next to "coffin" and "book Chad Morgan to sing "Sheik of Scrubby Creek" during the photo montage at my funeral."
     
  4. SilverDJ

    SilverDJ Well-Known Member

    Joined:
    Nov 1, 2014
    Messages:
    3,727
    Likes Received:
    876
    Trophy Points:
    113
    Location:
    Australia
    Look at the Vanguard exchange traded funds:
    https://www.vanguardinvestments.com.au/retail/ret/investments/product.html#/productType=etf
    An easy and relatively safe way to spread your investment in an asset class. One I've got pays dividends quarterly in either cash or re-investment.
     
    Aurora et luna likes this.
  5. sammysilver

    sammysilver Well-Known Member Silver Stacker

    Joined:
    Apr 7, 2011
    Messages:
    6,142
    Likes Received:
    790
    Trophy Points:
    113
    Location:
    Sydney
    The 10 most influential companies in Australia are the 4 banks, 3 miners, Coles and Woolies, and Telstra. They are also responsible for 50% of all corporate tax revenue for the government. They would seem to be a safe bet as keepers for your friend.
     
    milled and Aurora et luna like this.
  6. sammysilver

    sammysilver Well-Known Member Silver Stacker

    Joined:
    Apr 7, 2011
    Messages:
    6,142
    Likes Received:
    790
    Trophy Points:
    113
    Location:
    Sydney
    They'll be singing "Burning Ring of Fire" at my cremation.
     
  7. Eureka Moments

    Eureka Moments Well-Known Member Silver Stacker

    Joined:
    Oct 31, 2011
    Messages:
    6,829
    Likes Received:
    202
    Trophy Points:
    63
    Location:
    bosis
    Invest in a motorhome or other off-grid option. They are becoming popular as affordable housing for people on fixed or limited ability to generate income.

    Better still if you can buy land and get regulatory support to sell small plots to motorhome/ tiny house owners so they can live small in a more permanent setup without the lack of certainty around leasing.

    A motorhome may be good forward planning in case other investments fail or if it gets little use should retain reasonable value for selling in future. Also provides the option of driving away somewhere safer if any bushfires or epidemics erupt nearby.
     
  8. Eureka Moments

    Eureka Moments Well-Known Member Silver Stacker

    Joined:
    Oct 31, 2011
    Messages:
    6,829
    Likes Received:
    202
    Trophy Points:
    63
    Location:
    bosis
    If their all singing it's maybe due to the cold hard pews their sitting on. Instead of flowers suggest mourners byo soft cushion and suppositories if really painful. Then they can sing Amazing Grace and be less concerned about popping some more piles whilst hitting the high notes.
     
  9. SilverDJ

    SilverDJ Well-Known Member

    Joined:
    Nov 1, 2014
    Messages:
    3,727
    Likes Received:
    876
    Trophy Points:
    113
    Location:
    Australia
    And exchange traded funds like VHY that focus on dividend return have these companies in their portfolio.
    If the stock market crashes then these companies aren't suddenly going to stop paying dividends.
    So if you don't care about capital value and just want a quarterly dividend payment to live off, then something like VHY is what you want.

    https://www.vanguardinvestments.com...ct.html#/fundDetail/etf/portId=8210/?overview

    upload_2020-2-12_17-10-27.png
     
    Aurora et luna likes this.
  10. Aurora et luna

    Aurora et luna Well-Known Member Silver Stacker

    Joined:
    Jul 1, 2009
    Messages:
    6,418
    Likes Received:
    1,834
    Trophy Points:
    113
    Location:
    Sydney
    She's a big fan of Vern Gowdie!
    His easy sell of making big bucks in the near future when she can repurchase her shares back for half price is appealing
    I think she is happy to eat into her capital while she waits in cash
    She hates gold since her Newcrest shares has basically gone nowhere over the last 6 years.
    Be interesting to hear if anyone here can puncture holes in Gowdie's strategy.
     
  11. milled

    milled Active Member

    Joined:
    Dec 4, 2018
    Messages:
    320
    Likes Received:
    152
    Trophy Points:
    43
    IDK, but I'd think motorhomes depreciate rapidly, like most vehicles. Better maybe to research residential RE which has amenity, but has been relatively unaffected by the massive price hike. "Flyover" country might fit. That is, anywhere not too far from a regional airport, but far enough away to discourage big city investors. The eastern seaboard has several options in Queensland, possibly regional Victoria. NSW looks a little heated as there the countryside is sandwiched between Sydney and Canberra, with the northern part further influenced by Brisbane and the GC. Regional Vic does not have this problem and with the recent fires, maybe wait it out for a bit and see what comes of it.

    I don't know much about western Vic, other than it can be stinking hot, but regional Qld had a lot of bargains in the recent downturn. If commodities are routed again, this might pop up as an option.

    I read Gowdie's book several years ago and watched his doom presentation online. Nothing came of it.

    Our downturn will follow China, assuming China has one.
     
  12. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

    Joined:
    Nov 15, 2010
    Messages:
    18,967
    Likes Received:
    2,264
    Trophy Points:
    113
    Location:
    昆士蘭
    You want to give us an outline of his theory?
     
  13. Aurora et luna

    Aurora et luna Well-Known Member Silver Stacker

    Joined:
    Jul 1, 2009
    Messages:
    6,418
    Likes Received:
    1,834
    Trophy Points:
    113
    Location:
    Sydney
    Thanks everyone for your advice!
    Investing in real estate is not an option as she is a retiree with only a few hundred thousand dollars invested in shares and cash.
    To survive, she relies on a part pension and is slowly eating into her capital.
    Gowdie expects a market crash within a year and recommends cashing out of the stock market and remaining in cash.
    He expects the stock market to plunge down in value by up to 80%. His theory is that if you are top heavy in cash, you would be able to scoop up a lot of bargains at a discount when the stockmarket is in distress.
    If she cashes out there is a pretty good chance there will be no capital gains as she has accumulate quite a few duds. She loves clothes so it no surprise that she has shares in Myers which is her biggest dog
    It looks like she has already made up her mind so I am not going to push it.
    On the other hand even thought I am a confirmed gold bug, I do appreciate tips on any investment opportunities offered by members here!
     
  14. SilverDJ

    SilverDJ Well-Known Member

    Joined:
    Nov 1, 2014
    Messages:
    3,727
    Likes Received:
    876
    Trophy Points:
    113
    Location:
    Australia
    It's certainly not a silly position, in fact it's just a matter of when the next big market crash happens, not if.
    But the market loves Trump and I don't see a crash happening before the next election. And when he gets re-elected (a virtual certainty) you might be surprised how far they can continue to kick the can down the road.
     
  15. mmm....shiney!

    mmm....shiney! Well-Known Member Silver Stacker

    Joined:
    Nov 15, 2010
    Messages:
    18,967
    Likes Received:
    2,264
    Trophy Points:
    113
    Location:
    昆士蘭
    Sounds like Gowdie has a crystal ball.

    So Gowdie expects the stockmarket to plunge down in value by 80%. From when? Today’s value? It’s currently 7185. The value at the time he made that prediction whenever that was in the past? If it was a year ago then the market has made about a 15% gain since. If it was 4 years ago then the market has seen an increase of about 35%. Is it a time in the future? Maybe by then the stock market will have grown another 15 or 35% in value?

    And in the meantime of course we may get central banks injecting even more liquidity into the market and governments firing up their fiscal policy cannon - with infrastructure spending AND/OR tax cuts which will flood the markets with even more liquidity and drive the sharemarket higher and reduce the value of the AUD, AND before it’s too late we’ve got runaway inflation (not hyperinflation) that the CBs have no control over and the value of her cash pile is seriously eroded on living expenses so she may be fearful of buying shares faced with higher prices for everything. :oops:

    And then if the market tanks what is she going to buy? More duds but at a reduced price? Or does Gowdie’s crystal ball have a list of stocks to buy?

    For about $350 000 - $400 000 she can buy a 2 bed unit within 5 mins walk of a University, a state college with a combined primary school/high school and a catholic secondary college, 2 shopping centres all within walking distance and be less than a 15min drive from Mooloolaba. And probably rent it out for about $350 - $400 per week. And she’s got something to either sell down the track or leave for her family.

    She needs to play the market as she sees it unfolding over the next 2 - 3 months. Beyond that is anyone’s guess. If she doesn’t possess the attributes/skills to make a confident forecast of what the market may be like in 2 - 3 months then she shouldn’t be listening to doomsayers and their tarot-like predictions of an 80% annihilation.

    Edit to add: and last month I read an opinion piece from a financial adviser who reckons Myer is a potential bargain at the moment. Go figure.
     
    Ivykoin and Aurora et luna like this.
  16. Aurora et luna

    Aurora et luna Well-Known Member Silver Stacker

    Joined:
    Jul 1, 2009
    Messages:
    6,418
    Likes Received:
    1,834
    Trophy Points:
    113
    Location:
    Sydney
    Score one for a goldbug!
    She will keep her Newcrest shares!
     
    GF, mmm....shiney! and jultorsk like this.
  17. madaw1

    madaw1 Well-Known Member

    Joined:
    Dec 5, 2011
    Messages:
    1,092
    Likes Received:
    575
    Trophy Points:
    113
    Location:
    Great Western Country
    I've heard this advice in the last 10 years... Hopping he is right this time...
     
    Aurora et luna likes this.
  18. alor

    alor Well-Known Member Silver Stacker

    Joined:
    Jun 16, 2011
    Messages:
    8,048
    Likes Received:
    1,610
    Trophy Points:
    113
    Location:
    Pulau Alor ;)
    March 2000 was the peak in US tech stocks
    so a March or May 2020 peak is a likely possibility,election year is a wild card
    given the markets are near all time high

    keep Newcrest is a good hedge

    Retails business are lousy, the trend is getting worse with Coronavirus

    we never know the future, in case of hyperinflation then stocks can double easily, cash can be bad - watching the stocks run up each week
     
    petey and Aurora et luna like this.
  19. petey

    petey Active Member Silver Stacker

    Joined:
    May 19, 2010
    Messages:
    1,103
    Likes Received:
    7
    Trophy Points:
    38
    Location:
    Andorra
    "Safe" is subjective, but you may consider a global index fund. It is "the market" so you're not going to beat the market or have a massive loss vs the market. Just make average returns. Outside of this I am getting into investing in ecommerce websites. If you know what you are doing and the products they are selling are good, they can be quite good returns. But you need to have a system for operating them otherwise you just end up working 100 hours a week.
     
    Silver260 and Aurora et luna like this.
  20. Eureka Moments

    Eureka Moments Well-Known Member Silver Stacker

    Joined:
    Oct 31, 2011
    Messages:
    6,829
    Likes Received:
    202
    Trophy Points:
    63
    Location:
    bosis
    Over the last week Au is up 5% and AUD/USD is down 1.5%.
     
    Aurora et luna likes this.

Share This Page