50k in bank

Hi Loanwolf,

Some people may disagree but I think travel can be very beneficial to you investing career. If you don’t have the opportunity to see other countries and cultures through work you will have to pay for it yourself I suppose. Although you can do this on a budget if you research.
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The other problem, ie, how do you stop yourself wasting the cash on booze and tarts.Get the tarts to buy you the drinks.) Sorry its 4am should not have said that.
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Seriously, if you dont get spending under control now this wealth creation jouney you are on may be pointless. There will always be a new doodad out there for you to buy. Stick the money in a term deposit. Take a deep breath and sit down and write yourself a plan of action.
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Good Luck.

Hi,
In my mind I see $50k as being a lot of money, but also a very small amount of money.

On one hand you would have to work hard in a 9-5 job to earn that much in one year and many (most?) take 2 years to have earned that much let alone saved up that much. On the other a 10% return is only $5k / year which might be enough for your groceries, but not for a place to sleep.

So congratulations are in order, but don’t do what my anti-mentor does (he’s the guy I do the exact opposite of in order to succeed). The main crime my anti-mentor commits is counting his chickens before they hatch and from the way he does his counting they must be golden chickens in those eggs!

1. If you are young and haven’t got out in the world then this is a good opportunity to do so. BUT: write a budget and a plan and ensure you don’t return to Australia with a head full of memories and a pocket full of nothing.

2. Don’t “quit” your day job as it were because that $50k does not a cashflow make and you can’t eat big ambition (though my anti-mentor seems to think you can, after all he’s going to be rich so what does it matter if he blows it all + some?) By all means be brave and take a step into the unknown, just make sure you have a map to get there!

3. Remember that cashflow (positive) is what will allow you to be free, a dwindling supply will inevitably lead you back into servitude.

4. Could you give me some of your money? I’m getting married in March 06 and haven’t even paid for the engagement ring yet… then there’s the honeymoon… [biggrin]

Also, do yourself a favour and visit Canada. Beautiful place, great people and there is nothing like the mountains in Autumn.

$50k can be the start of a beautiful business no doubt. If it’s just paying the rent that’s your concern and you think you can deal your way into greater cash (but still need money to pay the rent) then you might consider NEIS (New Enterprise Incentive Scheme).

Essentially you go to Centrelink and register to go on NEIS. They tell you when the next workshop is on and you’re off. You work up a business plan, develop a budget, get a mentor, attend small business workshops and all the while collecting the dole without searching for a job (as you are presumably creating one). I’ve got a couple of friends who have done this. One now runs her own massage / beauty therapy shop for instance.

If you think you can make a buck buying land in early release then reselling / reno resell / buy and rent / property repairs whatever then give it a shot. Set up a systematic process for money creation and off you go! [biggrin]

Me, I work to keep up a solid cashflow to fund my acquisitions (just signed a contract on some land in Melton) and so does my fiance (she works at a bank in financing so…). My plan and budget has me investing full time in 5 years and retired in 10 (though the advent of kids may draw that out some).

The reason I don’t take larger risks is because I’ve got such an easy option to fall back on. The less comfortable you are the harder you’ll work on the risks…

Another option is to find a good property for around $100,000 that’s cash flow +ve or neutral. $25,000 for deposit plus costs. Leave it with a good PM. Put $15,000 in a redraw or offset account to reduce the interest you’re paying, and go overseas with $10,000. I spent about about that much during 6 months in Europe (backpacking). Keep in touch with the PM via email and set up internet banking. When you get back, you’ll have $15,000 more or less cash on hand and hopefully a bit of equity.

But whatever you do, do it soon before you spend all that money.

‘sup loanwolf,

One of the biggest mistakes people make in their journey to financial freedom is increasing their lifestyle expenses as their investment income increases. ie. – new car, holiday or whatever.

But it’s not all bad, just a matter of personal choice.

A holiday would be great. Have you considered setting yourself a benchmark allowance for lifestyle expenses with your investment income?

eg. 5% only of my investment income goes to increasing my lifestlye expenses.

Dan Lewis

I’d use 30K of it to go and purchase a small 100K comm. prop that was +CF with a secure tenant.

I’d use 10K for acquisition costs and a small cash buffer left over…let it sit and gather interest – this is you safety buffer..

Then I’d zip off around the world with the remaining 10K, and have the time of my life.

Cheers,

Dazzling

“No point having a cake if you can’t eat it.”

Dazzling, what an inspired post. How truly intelligent you are! [grad]

wait a minute, you don’t need 10k for an overseas trip. When I wore a young lad I went on a 3 month overseas trip that cost me under 3k including the RTW airline ticket (ok that was a while ago), but really you don’t need to spend lots to have fun. Here are some tips
1. spend as little time in London as humanly possible
2. in cities with expensive accomodation (eg venice, NY) catch the overnight train or bus in early, buzz around and head out on another overnighter.
3. bring along a tent
4. use mcdonalds toilets for showers and pitstops instead of using paying toilets/showers.

You can definately have plenty of fun on a shoestring (ie $20/day in todays $) and meet lots of nice girls along the way, some of whom may be able to inspire you with ideas on how to stretch a $ further than you ever imagined possible.