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What to do with Inheritance

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B-Rock

B-Rock

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I am 17 years old and turn 18 next march which at this stage i am entitled to recieve a lump sum of around $150,000 - $200,000. This is mind boggling money to me and i want to invest most if not all of it. I am aware that the intelligent way to do this is to distribute it through a wide range of investments, i was just wondering what kind of investments would be appropriate in my situation. Im also open to any advice or tips anyone has to offer. Cheers..
 
I would speak with a boutique financial planner, they'll be licking their lips at the though of holding, and hopefully growing that kind of money over a very long period of time. But most importantly read up on investment for yourself so that you know what your money is doing.

Put it this way, would you really trust ANYONE with that much of your money without wanting to know ALL the details?

I would honestly, at your age, spend about $10k on a car, and maybe another $10k travelling - just because I personlly never had that oppurtunity and it's something that if you've got the means to do it, I think would make a world of difference to your personal growth and probably make you appreciate the rest of the money more.
 
B-Rock said:
I am 17 years old and turn 18 next march which at this stage i am entitled to recieve a lump sum of around $150,000 - $200,000. This is mind boggling money to me and i want to invest most if not all of it. I am aware that the intelligent way to do this is to distribute it through a wide range of investments, i was just wondering what kind of investments would be appropriate in my situation. Im also open to any advice or tips anyone has to offer. Cheers..
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Spend it all on booze.
 

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rick James said:
$10k travelling - just because I personlly never had that oppurtunity and it's something that if you've got the means to do it, I think would make a world of difference to your personal growth and probably make you appreciate the rest of the money more.
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Good advice.

Allocate a portion to blowing it on travelling i reckon, i'd do probably 20k but that would last a full year backpacking on the cheap, and through a lot of cheap countries too. Go to europe and it'll last 3 months, unless you go hungary czech turkey syria etc. I'd go back to sth america personally for 4 months, then over to africa for 3-4 months, then asia.

But i'm 35 and have done europe. An 18yo might want to go and experience the whole pamps to oktoberfest trek.

Whatever you do, allocate most of it to solid long term investments. The cynic in me though reckons a kid of 18 and 150k would be soon parted, without having travelled one bit.
 
Good options:
- a managed fund
- an investment property
- an owner-occupied home (ie you live there!)
- sportsTAB and/or centrebet
- world poker tour in the US (easy money for the lucky few)
 
I was thinking investment property, but how would that work? :confused: Someone would pay me rent, which in turn would bay off the house, but would i be much better off ?
 
Putting it all into one property would be too risky imo, I'd seriously go with shares or managed funds. Definitely get some good advice.
 
$150k? hmmmmmmm.....

Buy a commercial property for about $300k. Say a small factory or similar in a good industrial suburb.

Deposit $130k
Loan $190k (incl. $20k costs).

Rental income will be about $20k after costs. You won't get anywhere near this income with residential, and you shouldn't have tenant hassles (I did say shouldn't).

Your annual interest bill will be about $14k (assuming rate about 7.5% - commercial interest rates are about 1% > residential).

Take your $20k and go travelling the world, and you're already making $6k a year for doing nothing.

And drink lots of beer and ------ lots of women.

That's my advice, take it or leave it.
 
One of my best mates dads is a millionaire a few times over and he once pulled us all aside when were about 20. He told us to continue doing what we were doing until we were early 30's (ie drinking, travelling ********ing partying anythining basically) and then knuckle down and do the hard yards.

This is how he did it and is very well off now, he said he watched all his mates knuckle down at 20 have no fun , owned the house the car the 2.4 kids and then at 50 they all had this second coming and started buying convertible cars, ********ing young women and ruining their families. Ronnie Boy is now happy with it all at nearly 60, potters around on the share market, dissappears overseas for a few weeks when he is bored, gives us cricket tips and shouts the bar. He has a happy propersous family and is a top fella but his mates are now ruining families and wasting money because they never had no fun.

With the amount of money you are about to receive , waste 25% on travel wine women and song , experience some stuff. MOney cannot buy history, one day you will have another $15000 but being lost in a country ********ed out of your head riding a creaky bus full of non english speakers and chickens up a winding one lane path with a cliff drop off directly to your left can only ever happen once.

Invest the rest, but get sound financial advice, shop around to 2 or 3 advisors till you find one you are comfortable with. This sort of money at this age could set you up for a fairly easy ride through the next 30 years if used wisely, but an easy ride through life does not neccesitate it being 100% invested, Experience things that you cannot buy with cash alone.
 
B-Rock said:
I am 17 years old and turn 18 next march which at this stage i am entitled to recieve a lump sum of around $150,000 - $200,000. This is mind boggling money to me and i want to invest most if not all of it. I am aware that the intelligent way to do this is to distribute it through a wide range of investments, i was just wondering what kind of investments would be appropriate in my situation. Im also open to any advice or tips anyone has to offer. Cheers..
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Put it all on the first favourite at Doomben.
 

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fearlessone77 said:
One of my best mates dads is a millionaire a few times over and he once pulled us all aside when were about 20. He told us to continue doing what we were doing until we were early 30's (ie drinking, travelling ********ing partying anythining basically) and then knuckle down and do the hard yards.

This is how he did it and is very well off now, he said he watched all his mates knuckle down at 20 have no fun , owned the house the car the 2.4 kids and then at 50 they all had this second coming and started buying convertible cars, ********ing young women and ruining their families. Ronnie Boy is now happy with it all at nearly 60, potters around on the share market, dissappears overseas for a few weeks when he is bored, gives us cricket tips and shouts the bar. He has a happy propersous family and is a top fella but his mates are now ruining families and wasting money because they never had no fun.

With the amount of money you are about to receive , waste 25% on travel wine women and song , experience some stuff. MOney cannot buy history, one day you will have another $15000 but being lost in a country ********ed out of your head riding a creaky bus full of non english speakers and chickens up a winding one lane path with a cliff drop off directly to your left can only ever happen once.

Invest the rest, but get sound financial advice, shop around to 2 or 3 advisors till you find one you are comfortable with. This sort of money at this age could set you up for a fairly easy ride through the next 30 years if used wisely, but an easy ride through life does not neccesitate it being 100% invested, Experience things that you cannot buy with cash alone.
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those were the days!
 
Leper's advice is probably the most sound.

Invest it in a cash flow positive commercial property. THEN take the profits and go travelling. It means waiting another year or two to have your fun but remember that legal age for drinking and gambling in the US is 21. If you're going to Uni then the money can pay for your Uni expenses and the excess used for a year's travelling when you're finished.

Think about it:

* $400,000 commercial property.
* 10% return of $40,000.
* You're only paying interest on $250,000, plus expenses.

The rest is your spending money. After a fair few years you own that property AND you've had a good time AND you've still got a yearly income AND your property will be worth maybe $1m or more if you bought in a growing area.

Taking $20k off the top for travelling will cost you a lot more than $20k in the long run. Invest and THEN spend the positive cash flow travelling or on a car and you will be laughing.
 
Groves said:
Leper's advice is probably the most sound.

Invest it in a cash flow positive commercial property. THEN take the profits and go travelling. It means waiting another year or two to have your fun but remember that legal age for drinking and gambling in the US is 21. If you're going to Uni then the money can pay for your Uni expenses and the excess used for a year's travelling when you're finished.

Think about it:

* $400,000 commercial property.
* 10% return of $40,000.
* You're only paying interest on $250,000, plus expenses.

The rest is your spending money. After a fair few years you own that property AND you've had a good time AND you've still got a yearly income AND your property will be worth maybe $1m or more if you bought in a growing area.

Taking $20k off the top for travelling will cost you a lot more than $20k in the long run. Invest and THEN spend the positive cash flow travelling or on a car and you will be laughing.
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Fair enough, but how would the investment property idea work? I mean without a sufficient income (i work at maccas), how am i going to get a loan to pay for the remainder of the cost of the industrial property?
 
B-Rock said:
Fair enough, but how would the investment property idea work? I mean without a sufficient income (i work at maccas), how am i going to get a loan to pay for the remainder of the cost of the industrial property?
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you dont need to get it straight away. im sure youll get a better job outside maccas. just wait till then.
 

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I won't give you any advice where to invest your money, but if you don't travel for at least a year you are robbing yourself of some of the best possibilities of your life, and travelling IS the best education. $20k should do you easily for a year unless you want to stay in expensive cities and you can always work in countries with working holiday programs (UK, Canada, many EU countries etc.). Living rough and on a tight budget for a short period of time is good life experience if you aren't used to it.

Travelling and working lower paying jobs for a year or two is a good idea before going to uni as too many 17-18 year olds do not know what profession they want in life and end up committed to a profession they HATE. Uni ain't cheap these days so it's worth waiting until you are 20-21 before starting higher education.

Don't spend it all at once! ;)
 
Depends if you are planning to go to university or not.

If you are, the best form of travel by far is a semester abroad, usually for the 2nd semester of your 2nd year. If that's the case, you';; be spending one more year in Australia.

If that's the case, do something similar to Leper recommended. I would perhaps suggest splitting into 2 smaller commercial properties with leverage. Put it through a company, so you only pay 30% tax at the highhest margin.

The second year when you are off to do your foreign studies, draw the income from that source, as well as your 15 hours washing dishes or some pretend work wherever you are.
 
Kurt Angle © said:
Depends if you are planning to go to university or not.

If you are, the best form of travel by far is a semester abroad, usually for the 2nd semester of your 2nd year. If that's the case, you';; be spending one more year in Australia.

If that's the case, do something similar to Leper recommended. I would perhaps suggest splitting into 2 smaller commercial properties with leverage. Put it through a company, so you only pay 30% tax at the highhest margin.

The second year when you are off to do your foreign studies, draw the income from that source, as well as your 15 hours washing dishes or some pretend work wherever you are.
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And if im not planning on going to university?
 
B-Rock said:
And if im not planning on going to university?
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Well to be honest, I'd be just as inclined to do what leper says.

18 is not the best time to travel, wait until you're 21 at the youngest, I'd suggest 22-23.

Also, do you plan on any type of further education after you graduate ?

Occupy yourself until that 21-23 age group, if you work, reduce the principal of the commercial property, and excess funds in the next 5 years I'd diversify into managed funds. Residential property I say is a dud right now.

It's over priced, and even when it corrects itself, I'd say it's on a lean growth streak anyway.

Point is travel is a wonderful thing to do, it's even better when you have a passive source of income to supplement your stay in a foreign country.
 
Groves said:
Leper's advice is probably the most sound.

Invest it in a cash flow positive commercial property. THEN take the profits and go travelling. It means waiting another year or two to have your fun but remember that legal age for drinking and gambling in the US is 21. If you're going to Uni then the money can pay for your Uni expenses and the excess used for a year's travelling when you're finished.

Think about it:

* $400,000 commercial property.
* 10% return of $40,000.
* You're only paying interest on $250,000, plus expenses.

The rest is your spending money. After a fair few years you own that property AND you've had a good time AND you've still got a yearly income AND your property will be worth maybe $1m or more if you bought in a growing area.

Taking $20k off the top for travelling will cost you a lot more than $20k in the long run. Invest and THEN spend the positive cash flow travelling or on a car and you will be laughing.
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Yep that's probably best advice i agree.
 

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