what would you do with $500k??

[finicky]

Ok, a fleeting thought to what your benfactor would have liked done would be nice.

Now, completely ignoring that, on to the nitty gritty

Here's a scheme:

- You mortgage the house because, not being your principal place of residence, you can claim tax deductibility on the paid interest (right property buffs?) Now you are retaining a cash producing R/E asset and avoiding the hassles and expense of selling.

- You buy silver and gold bullion up to an amount that makes it feel a significant position to you.

- You set aside whatever's left, if any, into a quickly accessible account and await a possible share market plunge - you'll hear about it on forums if share hounds think it's a buying opportunity. Then you buy dividend paying quality stocks at a discount.

Possible objections:

- The value of your property might go down over the decade, because of a general downturn, or qualities particular to your house or location

- The share market might not go down

- Silver and gold might go down.

 

[goldpanner]

We all feel and know silver will continue to go up and that silver is quite cheap at the moment.

If only we could be that positive about the silver price wouldn't we all put everything we had into buying it and become rich! - fact is, there is no certainty, it is a gamble, commodities could crash like everything else, we live in unpredictable times, at least a house is a useful asset that can be lived in or rented out.

Don't put all your eggs in one basket!

 

[smeagol]

wow, thanks everyone... they're all really interesting opinions!

lol i didn't want to sound like some spoilt ungrateful brat, but tbh $1350/month out of a $500k investment doesn't really seem like a great return... the reason i'm interested in pm's is because i think pm's will appreciate at a much faster rate over the next 2-5 years than property... my hunch is kinda in line with Mike Maloney's wealth cycles theory...

only problem is, if i was to go into silver where would you hold thousands of ounces??? i obviously wouldn't dare putting anything anywhere near home or work... not to mention gold... is there any unallocated pm's places that anyone can vouch for??

what i want is something that can make me real money... i'm relatively young, so i see this as an opportunity to really set up my life for the future... if i was to put the money in gold it'd be less of a gamble than silver but still a decent chance to double my money... whereas atm i'm only making around $13500 a year after council rates are paid and insurance... only thing i worry about in pm's is the capital gains tax when i go to sell... unless you were to offload it in stages while selling it privately... i'm not really sure :S

seriously, given the current economic climate... what are the chances that gold or silver (either) would incur an net loss?? the next round of QE is definitely coming by year's end, and that alone would mean a jump of about $200+ in gold... so even in the short term i looks good... but how would QE affect the Aussie property market?? would property prices rise or fall and why?

thanks for your input

 

[toto]

Silver has broken many hearts over the years and if it truly is the Achilles heal of a corupt system then expect everything to get thrown at it. If your going through this now what do you think you'll be like having sold the house and riding a bull that wants to shake you off? It's one thing getting into silver but it's a totaly different ball game when it's time to exit. If you didn't pay anything for the house you havn't lost anything if it goes down %20 but you still have an income bearing asset. At most I'd take out a small mortage for 2000 onces of AG and continue dollar coast averaging.

 

[finicky]

willrocks said:

Perhaps somewhere like Hawke's Bay:

http://www.realestate.co.nz/1843155

Not to derail the thread, but that is almost incredible. Sterile, but very adequate, well presented, wood floors. The price at NZ$90,000 is only AU$70,043! You could almost borrow it from mum.

This is partly what is meant I believe by an article that I read from Daily Reckoning today. They believe the AUD is toast - so logically you look for overseas assets that are depressed and use the currently strong AUD to buy them. One example, Irish real estate, but N.Z R/E looks stuffed too! The other tack DR takes is to buy Australian companies that export - more on this in a different thread probably

 

[Walbertross]

Sell the property, go to tassie, buy a large farm land block that can be self sustainable for around 200k. spend around 100k on metals. Split 50/50. keep the rest as cash and live a nice comfortable simple life!

 

[Yippe-Ki-Ya]

I'd buy 485 of these babies...

 

[dex]

5% of the total 1oz silver snakes produced

 

[Guest]

80% silver
10% gold
10% Chinese Yuan (in notes)

That's what I'd probably do anyway

 

[mmm....shiney!]

10% Chinese Yuan (in notes)

There's an interesting suggestion.

Is it because you wouldn't trust cash in a Yuan denominated bank account geewiz?

 

[Silverbullet08]

IMO I think it would be foolish to sell the house, a main asset u already entirely own..
If I want to travel the road of PMs, how bout with interest rates being so low, get a investment
loan against the property, pickup ur PMs, negative gear the house so it's tax claimable,
while at the same time claiming tax of the interest on the investment loan itself...
Then u should get the best of all avenues

 

[Philski]

It depends on the houses location. If its coastal. get rid of it while you can. Before the rush

If not, a steady income like that is far better than to hold something in the hope it grows. And you can buy all the gold and silver you want with that income. Perhaps start making sand bags out of the PM's. Just in case and claim it as improvements

 

[Silverrider]

I would buy roughly 15,000 silver 1 oz coins and give 1 each to all silver-stackers members

 

[goldpelican]

IMO I think it would be foolish to sell the house, a main asset u already entirely own..
If I want to travel the road of PMs, how bout with interest rates being so low, get a investment
loan against the property, pickup ur PMs, negative gear the house so it's tax claimable,
while at the same time claiming tax of the interest on the investment loan itself...
Then u should get the best of all avenues

I like this line of thinking. Something like taking out a fixed interest loan against the property that costs $1350/month to service, and buy PMs with the loan.

Basically use equity in the house to buy PMs now, and let the rent pay off the big stack of PMs rather than just slowly building a stack of PMs by buying each month. Hope that the tenant stays and PM prices rise. No money into or out of your pocket, but house AND PMs.

 

[alor]

not sure :lol:

but this will clean up the banks balances, and turn them to red

 

[VRS]

Diversify, diversify & diversify. 20% share portfolio (half on co's with low exposure to debt, consistent growth & dividends - the other half speculative higher risk for growth), 20% bonds, 20% silver & gold, 20% for mortgage deposit on another property in well-researched area for capital growth & rental income, 20% cash on term deposit. Depending on your age and life expectancy you might want to stick all or some into your Super as a voluntary contribution. On the other hand you may want to leave all your clothes on an eastern beach, fake your own death and hail a passing submarine bound for Thailand/Brazil/Polynesia... x

 

[mmm....shiney!]

Open a brothel in it.

 

[Silverbullet08]

IMO I think it would be foolish to sell the house, a main asset u already entirely own..
If I want to travel the road of PMs, how bout with interest rates being so low, get a investment
loan against the property, pickup ur PMs, negative gear the house so it's tax claimable,
while at the same time claiming tax of the interest on the investment loan itself...
Then u should get the best of all avenues

I like this line of thinking. Something like taking out a fixed interest loan against the property that costs $1350/month to service, and buy PMs with the loan.

Basically use equity in the house to buy PMs now, and let the rent pay off the big stack of PMs rather than just slowly building a stack of PMs by buying each month. Hope that the tenant stays and PM prices rise. No money into or out of your pocket, but house AND PMs.

Exactly what i was trying to get at, just didnt have time to word it right as i was scrabbling it into my iphone in the last few mins of lunch...
This is precisely what id do in ur shoes...

 

[gazzahere]

hi,

I doubt if anyone can tell you what to do - that is up to you. However, a couple of points may lead you to what you really want - and sorry, they are pretty basic.

1. You never have to paint silver or gold ------ you are forever maintaining real estate - over the years, if you add it up, it is a major pain in the butt and it is bloody expensive.

2. If you have gold or silver - you can basically put it somewhere safe - and bugger off and live.

Decades later you can retrieve it and it will still be valuable - end of story. Possibly it will give you more purchasing power than it does now or possibly less ------- but, it will still be valuable.

Real estate - there is no guarantee of that - it might have run down, it might have burnt down, it might have been confiscated (so might your pm's - but they can't take them if they can't find them).

Honestly, it comes down to how you want to run your life.

Me, what I would do if I were young? ------------------ live.

If you have excess to what you need ------ spend it on a life -- yours - you never know when it will end - do what you want to do whenever you can do it. Pretty simple really. Most people die regretting what they didn't do --------- simple answer to that problem is to do what you want when you have the opportunity ------ don't salt it away for a rainy day - live for today, you have no power over tomorrow.

Basically - live or live in fear.

have a good night

gazza

 

[smeagol]

IMO I think it would be foolish to sell the house, a main asset u already entirely own..
If I want to travel the road of PMs, how bout with interest rates being so low, get a investment
loan against the property, pickup ur PMs, negative gear the house so it's tax claimable,
while at the same time claiming tax of the interest on the investment loan itself...
Then u should get the best of all avenues

I like this line of thinking. Something like taking out a fixed interest loan against the property that costs $1350/month to service, and buy PMs with the loan.

Basically use equity in the house to buy PMs now, and let the rent pay off the big stack of PMs rather than just slowly building a stack of PMs by buying each month. Hope that the tenant stays and PM prices rise. No money into or out of your pocket, but house AND PMs.

hmmmm yea this does sound pretty good, best of both worlds... i guess one reason i'd want to sell the property would be because i'd need a large lump of cash to jump into pm's, but if i can get it anyway and still keep the property that sounds alright... only negative is that i'd have to pay off the interest too (which may be lost oz's) but thats the sacrifice for keeping the property...

i've been buying pm's with the monthly rent money, but comon $1350 a month doesn't really get you much especially if the prices are starting to accelerate... i mean its not exactly going to make you rich... maybe i'm just being really impatient

what happens if i have a loan with the bank and the bank falls into this credit crisis? would they then ask me to pay up immediately, meaning that i'd have to sell my pm's stack to pay it off??

also, what happens to property prices if QE3 is announced? i know pm's react favourably, but does the huge influx of cheap credit into the US economy affect house prices in Australia?