How To Invest $5000 in Australia

invest 5k australia
If you’re about to invest for the first time, then we recommend starting off with small amounts. In this article, we’ll discuss how to invest $5000 while living in Australia.

An amount like $5000 may not seem like a big deal at all. However, if utilized correctly, you can still get a decent return. Over a long period of time, even $5000 can yield a significant total. Furthermore, it’s quite a safe amount if you’re an amateur. You can use it to get a feel for how investing works.

Where To Invest $5k In Australia?

Even with $5000, you still have a decent number of investment options available to you in Australia:

1. Stocks

As long as you do your homework, you can make money on the stock market. While you won’t be able to buy into high-risk assets like Bitcoin or the Nasdaq Composite Index with $5000, you still have lots of options available. For example you can buy apple stocks.

2. REITs

Real Estate is always a great investment market. According to a 2018 report by ASX, one can expect 8% annual returns by investing in Australian residential properties. But how can you expect to buy properties with just $5000?

The good thing is you don’t have to. Instead, you can buy shares in Real Estate Investment Trusts (REITs). REITs lease different types of property and then collect rent on them. Afterward, that income is distributed as dividends to shareholders. Hence, with $5000 you can still profit off of the real estate market!

There are many different types of REITs you can invest in, including:

  • Equity – These funds own and rent out properties. Hence the income comes from rent and not the sale of properties
  • Mortgage – These REITs earn money by charging interest on mortgages they lend
  • Hybrid – Rents out properties and lends mortgages as well
  • Publically Traded – These are REITs that are listed on national security exchanges

3. Gold

As mentioned above, gold is a very stable investment. You can use it to counter the effects of economic crises on your assets. The thing to remember about gold is that it isn’t really a way to make money. While it does retain its value, it takes ages for that value to rise.

In Australia, there are three ways to invest in gold:

  1. Physically owning gold assets – this includes gold in the form of coins, jewelry, bullion..etc. When buying jewelry, you should be careful to buy as close to the market value of gold as possible. Things like the design of the jewelry shouldn’t account for the price because it doesn’t retain value as well.
  2. Buying into ETFs – gold-backed ETFs are a way to invest in gold without physically owning it. You also don’t have to pay storage fees.
  3. Owning shares in mining businesses – share prices of mining businesses correlate to the rises in gold’s value. However, if these companies continue to fail at mining gold, then their future (and thereby your investment) becomes volatile.

While $5000 may not seem like a big amount, you can still invest it in a number of things. Before you invest, consider how much risk you can handle. Your current financial situation and your future goals should give you some idea of this.

There are two main things you need to consider: the current financial situation and future goals.

Risk

Each investment venture carries a certain amount of risk. It’s something you can’t get rid of. Of course, you can take measures to minimize it.

For instance, billionaire Warren Buffet always does thorough research before he buys up shares. Unlike a lot of people, Buffet hardly ever pays attention to trends in the stock market. Instead, he focuses on the company itself. The question he tries to answer is: “does this company have a good future?”

In order to figure this out, he looks at details like the following:

  • Company’s performance over the last 10 years
  • The goals of the management
  • How much debt and equity the company owns
  • Changes in profit margins over the company’s existence

By doing this kind of research, Buffet is able to determine whether the company’s stock is currently undervalued. If that is the case and he foresees growth in the future, he buys into it.

Your Current Financial Situation

Your current financial situation determines exactly how much risk you can handle.  Warren Buffet can afford to lose millions of dollars, while you probably can’t.

Consider how tight money is right now? Do you find yourself living paycheck to paycheck? Then it’s likely you might have to dip into the $5000 in question in the near future.

If that is the case, you can’t afford to have it tied up behind a risky investment. Instead, a more stable investment instrument is more appropriate, such as a cash investment. These don’t give you much in terms of returns at all. On average, cash investments in Australia yield gross annual returns of only 3.6%.  That’s the trade-off when you want to be ‘safe’ with your money.

If you don’t mind having the $5000 in a long-term investment, then consider government bonds. When you invest in these bonds, you’re basically lending money to the government. In return, the government pays you back at an average interest rate of 6.2%.

Why Invest The Money If You’re Struggling?

People don’t always invest money in order to make a profit. Sometimes they do so because they want to retain the value of their assets. For instance, during inflation, the purchasing power of a currency goes down. As a result, the value of your assets can plummet. However, if you invest in the right instruments, you can hedge against inflation.

Gold is the best possible example of this. It always retains its worth and shoots up in value during times of political and economic crisis.

Your Future Goals

Your life’s goals should be taken well into consideration when choosing what to invest in. The choice to have or not have kids, for instance, is a very influential factor. If you plan on having children, then you need to have a decent repository of money. Hence, you absolutely cannot do risky things with it.

 

How to invest in Gold

invest in gold in australia

If you’re wondering how to invest in gold, then you’ve come to the right place. In this article, we’ll talk about the methods, pros and cons and what to expect in general.

Both the average person and the billionaire are able to make money on the stock market. If you do your research on stocks right, you can ensure huge gains for yourself. By looking into factors such as performance, changes in profit margins and debt/equity ratio, you’ll be able to anticipate which stocks are about to rise in value. You don’t have to invest 100k if you’re interested in investing in gold. Smaller investments are ok.

However, at the end of the day, the stock market still carries a lot of risk. No matter how careful you are, it’s very sensitive to factors that are outside your control. We’re talking about shifts in the economic and political landscapes.

In comparison, gold is more stable. It retains its value even during times of great instability. In fact, when the stock market experiences a downturn, gold prices typically spike up! As a result, it’s a great instrument for diversification and to hedge against inflation and deflation.

The only trade-off is that you typically can’t expect huge gains from investing in gold. While gold retains its value it takes a long time for it to increase. As a result, it’s more an instrument for stability than for making lots of money.

Best Ways To Invest in Gold in Australia

There are three different ways for Australians to invest in gold:

  1. Physically purchasing gold
  2. ETFs
  3. Stakes in mining companies

Each has its own pros and cons, and different levels of risk.

1. Physically Purchasing Gold

The most obvious method is to own a physical asset made of gold. These include items such as coins, bullions, jewelry and more. There are plenty of gold dealers in Australia (including online) so it’s very easy to make a purchase. The downside here is that you have to find a way to securely store these gold assets. Certain gold dealers provide storage facilities but they’ll still charge a fee for it.

When purchasing jewelry, you have to be careful about other things that add value. For example, factors like the design shouldn’t really account a whole lot for its value. Try to buy as close to the market value of gold as possible.

2. Exchanged Traded Funds (ETFs)

The second way is to buy shares from an ETF that’s backed by gold. As a result, the ETF owns a reserve of gold and you own a percentage of it. This way, you don’t have to physically own any gold and pay storage fees.

Buying into gold-backed ETFs is quite easy nowadays, with brokers like eToro and Plus500. Both platforms allow you instant access to marketplaces from all over the globe. As a result, you don’t have to just stick to Australian ETFs.

Hence, with eToro or Plus500, you can take advantages of geopolitical changes in another country. Generally, the price of gold rises when confidence in the government decreases. Therefore, if a certain country is heading towards a political crisis, you can quickly buy stakes in a gold-backed ETF based in that region.

In order to make smart decisions like this, you need to have the ability to predict accurately. With eToro, you can cheat a little bit. Its CopyTrader system allows you to automatically mimic trading decisions made by experienced investors. So if traders start investing in gold, you’ll be notified and will have the opportunity to follow their actions.

While Plus500 isn’t as intuitive as eToro, it’s very user-friendly. Accounting opening is a seamless experience with the platform, plus there aren’t any trading fees! In addition, you can easily access different markets, updates and statistics on stocks.

With platforms like eToro and Plus500, you can easily enter into CFD trading as well. By trading on a margin, you don’t have to pay the full ask price of ETFs. CFDs are a great way to profit off of upcoming gold price hikes. Again, with eToro’s CopyTrader system, you’ll have enough cues to jump on a few CFDs for gold-backed ETFs.

3. Stakes in Mining Companies

The third way to invest in gold is to buy shares in mining companies through brokering platforms. The share price of these companies correlates to the value of gold, which means it’s somewhat similar to owning a stake in a gold-backed ETF.

However, the amount of risk involved in this method is significantly higher. This is especially true if you choose to invest in mining companies that are still in the exploration stage. The reality is that a large portion of them don’t end up finding gold. As a result, the future of these companies may be threatened.

And that covers all the basics of investing gold in Australia. First of all, you need to understand that gold is a long-term investment instrument. It’s primarily used to give stability to wealth and to hedge against political and economic shifts. There are many benefits to investing in gold, which all stem from how stable it is. Lastly, there are three ways to invest in gold: owning physical assets, buying ETFs and investing in miners.

Why and How to invest in gold in Australia

Here are several excellent reasons why you should consider investing in gold:

It’s Historically Great At Holding Its Value

For centuries, gold has been a reliable way for households to pass on wealth to the next generation. Gold isn’t susceptible to corrosion like a lot of metals, meaning that its aesthetics don’t change. That’s one of the biggest reasons why gold has held its worth over the ages. In addition, people are always drawn to gold and it’s consistently been a symbol of wealth and luxury. Here you can see the current gold price.

It’s A Great Hedge Against Inflation

The value of gold in a country is directly proportional to the expense of living. That’s why you always see the price of gold shooting up whenever the economy plummets. This is because when a currency’s purchasing power decreases, everything starts to become more expensive. This includes gold as well.

In addition, more people may be encouraged to purchase gold during times of inflation due to its stability. As a result, demand for gold goes up and with it, the price.

It’s The ‘Crisis Commodity’

The price of gold isn’t just sensitive to the health of the economy, but to geopolitical influences as well. The effect is the same as the former: its price rises when the situation is going downhill. In fact, earlier this year, the value of gold increased in response to the EU crisis.

It’s Great For Diversifying Your Portfolio

The point of diversifying your portfolio is to increase the stability of your investments. For instance, if you’ve got all of your money on stocks, then you’re going to lose big. On the other hand, if you’ve got a similarly-sized investment in gold, you can hedge against it. This is because the value of gold rises as the stock market falls.

How To Invest 10k in Australia

invest 10k australia

If you’re considering investing money for the first time, then it’s best to start off with smaller amounts. In this article, we’re going to look at the best ways to invest 10k in Australia.

What Are The Best Way To Invest 10k in Australia

So you have AUD 10.000 and you want a good and safe investment?

One of the most effective ways to gain financial security is by having multiple streams of income. Not only will you earn more but you’ll ensure that you don’t rely on just one avenue for your livelihood. Hence, in addition to your full-time job, consider investing in a few different passive income streams.

Regardless of whether it’s $10,000 or $100,000, you need to think about a few things before you invest. Most importantly, your current circumstances will dictate how much of a risk you can handle.

Think About Your Current Financial Situation

From the wealthy to the low-income earners, risk is something that everyone worries about. It’s something you can never factor out of an investment.

Even if you do the most thorough research, some unforeseen factor can suddenly cause you to suffer massive losses. This includes things like economic slumps and major geopolitical events. For instance, large tax increases in certain industries can shake investor confidence. Before you know it, you’re suddenly in the midst of a bear market.

As an investor, you must be prepared to face some risk. However, your current financial status will determine just how much you can handle. For instance, if you can’t afford to lose the entire $10,000, then high-risk investments are a bad idea. Instead, you’ll have to find something stable, like government bonds. According to a report by ASX, average returns of 6.2% per year can be expected with these.

At the same time, you may need to access the $10,000 again in the near future. In that case, it definitely can’t be tied up in something long-term like a bond. What you need is an investment that can be liquidated easily like gold or cash. The trade-off is that these type of investments don’t give you many returns.

If you can afford to lose the $10,000, then high-risk, high return investments might be good enough. If you’ve already attained some financial security, you could also afford to invest in long-term ventures.

Think About Your Future Goals

Your future goals should factor into how much risk you can take. For instance, if you’re planning on having children, then you need to have a decent amount of savings. Hence, you should look for relatively safe investments that give you steady returns.

If kids aren’t going to be in the picture, then perhaps you can take on more risk.

What Should You Invest In?

Below are some of the best investments options available to you, if you live in Australia:

Stocks

A lot of people view the stock market as a high-stakes game of chance. In reality, it’s a game of precise calculations and accurate predictions. Hence, if you want to be able to make money from it, you have to do your research on both the stock and the company.

For instance, here are a few details you need to look into before you invest:

  • Company performance over the last decade
  • Debt/Equity ratio – If this is high, then it means the company is using more debt than equity to finance its assets
  • Profit margins – Increasing yearly profit margins signify continuous growth
  • Whether the company relies solely on commodities – Companies like this turn volatile when something negatively impacts the availability of the commodity

Once you chose the right stocks, you’ll easily be able to get more than a 10% return on investment.

Cryptocurrencies

Blockchain-backed currencies are now increasing in popularity. Things like Bitcoin are now being accepted by many vendors all over the world, including Newegg and Microsoft. In addition, countries like the UAE are planning to integrate blockchain into all of their government operations.

What does all this tell you? That cryptocurrencies are going to be huge in the future. That’s why even Facebook is coming up with its own currency!

It’s true that the values of coins like Bitcoin or Ethereum seem volatile now. However, all signs point to the crypto market stabilizing in the future. Hence, if you buy stakes in a reliable cryptocurrency now, it may pay off in the long-term.

If you want to check cryptocurrency prices go to https://coinmarketcap.com/.

Gold

Gold is seen as a very stable investment instrument as it always retains its value. Why is that? First of all, gold is seen as ‘everlasting’ because it doesn’t corrode. Secondly, it has always been considered an indicator of wealth and luxury. This has been the case throughout the ages and across many cultures.

Gold is so stable that its value doesn’t plummet in response to negative economic and geopolitical shifts. As a matter of fact, its value rises when the stock market goes into a downturn.

There are two reasons for this:

  1. When the stock market crashes, inflation rises. This makes everything more expensive, including gold.
  2. During times when standard currency is seen as volatile, people view gold as a more stable way to maintain the value of their assets.

Living in Australia, there are three ways to invest in gold:

  1. Physically owning gold – You buy gold in the form of coins, bullions or jewelry and store it in a secure location. The downside of non-stock investments in gold is that you have to pay storage fees.
  2. Gold-backed Exchanged Traded Funds (ETFs) – In this scenario, the ETF actually owns the physical gold and you own a percentage of the fund. As a result, you’re not responsible for storing the gold.
  3. Buying shares in mining companies – the value of shares in mining companies are directly proportional to the price movements of gold. Hence, you can theoretically expect the same stability in value. However, the future of the company itself depends on the ability to keep finding gold. Hence, this method carries the most risk.

Before you invest $10,000, there are a lot of factors to consider. Most importantly, you have to think about how much risk you can handle. This, in turn, will determine what you should invest in. With $10,000 you can’t really invest in real estate. However, the stock market, cryptocurrencies, and gold are viable options.

How To Invest 100k

invest 100k australia

If you’ve currently got $100,000 in your bank account, you might be considering investment opportunities. In this article, we’re going to discuss the best ways for Australians to invest their accumulated savings.

What is the Best Way to Invest 100k in Australia

A lot of people view investing money as gambling. While there is a certain risk involved with such a venture, not all is left to chance. The key is to do your research and be able to differentiate safe investments from unsafe ones.

Take the stock market. A lot of amateur investors try to jump in on upward-trending stocks and make a quick profit. They do this without researching important factors such as company assets/liabilities, profit margins, commodity reliance and more, all of which ultimately affects the future value of the stock.

That’s why you should think carefully before you invest a large amount like $100,000.

How Should You Invest $100,000?

Here are a few of the best investments options available currently:

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VISIT SITEHighLow Review
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Plus500 Disclaimer: 80.6% of retail CFD accounts lose money.

1. Stocks

A lot of people make money on the stock market. This includes billionaire Warren Buffet, the ‘Oracle of Omaha’. It’s quite simple in theory. You buy stocks that you anticipate will rise in value and then sell them off when they do. The hard part is figuring out which stock to invest in.

invest in stocks

As mentioned above, doing thorough research can help. Before Warren Buffet buys up any company’s stock, he really gets into the nitty-gritty. In particular, he looks at factors like these:

  • Overall company performance – He doesn’t just look at recent times. Instead, Buffet goes back several years, or even decades if he can.
  • Debt/Equity Ratio – The higher the debt, the more volatile a company’s future looks. This is because of the large interest expenses that await the business.
  • Profit margin – What Buffet is concerned about is increasing profit margins. This shows signs of efficient management and company growth.
  • Competitive advantage – Buffet tends to shy away from companies that don’t stand out from the competitors. Such businesses tend to not to last very long.

If you do your homework well enough, you could definitely make more than a 10% return on investment easily. You can start with companies you know and love, for example Apple or Amazon.

Easiest way to invest in Stocks: Visit EasyMarkets (Regulated broker with offices in Sydney).

2. Gold

Gold is generally considered a safe investment as its value tends to remain quite stable during times of economic instability. This is because it isn’t affected by nearly as many factors as the stock market. Gold is also a great instrument for diversifying your investment portfolio.

invest in gold

There are three main ways for Australians to invest in gold:

  • Owning the physical asset – You can buy gold in the form of bars, coins, jewelry and so on. However, you must make sure that it is stored in a safe place. Ideally, you would use a secure deposit box in the vault of a bank.
  • Gold-backed exchange-traded funds (ETF) – In this scenario, a fund owns physical gold and you own shares of the fund. This way, you can avoid storage fees.
  • Investing in gold-mining companies – This is perhaps the riskiest method as it can either mean huge gains or huge losses for you. We recommend caution when looking at companies in the exploration phase. Most of them do not actually end up finding gold.

Gold is definitely a long-term investment with very little gross annual returns. However, it’s the perfect instrument for those who seek stability, above all else.

Easiest way to invest in Gold: Visit EasyMarkets (Regulated broker with offices in Sydney).

3. Cryptocurrencies

The Cryptocurrency investment market is relatively new compared to others on this list. Bitcoin is, of course, the most popular cryptocurrency and is currently valued at over AUD 14,000! At the time of writing, the value of Bitcoin is on the rise following a significant dip last year.

invest in cryptocurrency

While its price fluctuations might make it seem like a volatile investment, we can see it stabilizing in the future. Cryptocurrencies are slowly being accepted around the world. In fact, certain governments, including the UAE, are gearing to make a shift to completely blockchain-backed systems. Cryptocurrencies appear to be the future and it might be a good idea to invest in them during a slump.

Easiest way to invest in Cryptocurrency: Visit HighLow (Trusted Australian Broker).

4. Real Estate

Real estate is one of the best non-stock investments you can make.

invest in real estate

According to the ASX/Russell Investments Long-term Investing Report, investing in Australia’s residential property market can be quite rewarding. As per the report, residential property investments averaged an attractive 8% in annual gross returns. This value is definitely credible, having been based on real estate transactions spanning over a decade, from 2007 to 2017.

Get started with REITs on Plus500.
Plus500 Disclaimer: 80.6% of retail CFD accounts lose money.

Consider Your Current Financial Situation

Risk isn’t something you can completely factor out.

Even if you’re well-prepared with your research, there’s always the tiniest possibility of losing out. Some unforeseen condition could suddenly come into play and spiral the entire economy into a downturn.

They say the flap of a butterfly’s wings can bring about a hurricane. What’s to say a couple of misguided financial decisions by important people won’t suddenly bring whole industries down?

Consider how tight money is for you right now. Do you foresee yourself having to dig into $100,000 in the near future? In that case, you’ll have to be extra careful.

Simply go to Highlow if you want to get started with an investment under $1000.
On Highlow you can invest in binary options.

Not only will you have to find a safe investment venture, but you also need to make sure it isn’t inaccessible for too long. In other words, ease of liquidity is something you need to be concerned about.

Cash investments such as term deposits are the most liquid but they also yield very low returns. As of last year, Australians can expect average yearly gross returns of 3.6%.

Slay Your Fear Of Investing

If you’re already financially secure to a point, then you may consider long-term investments.

Since you’ll be able to handle some risk, why not scope out a few high return investments? For instance, real estate is something that a lot of Australians get into for the long run.

They may buy property for cheap in the hopes of selling it in the future when values increase.

invest $100k

You should also consider your life goals before you invest.

For instance, if you want to start a family, then high-risk investments may not be the best option. In that case, you may want to look into fixed-income assets like government bonds.

You basically lend money to the government, which is paid back to you with interest.

According to an investment report by ASX, average returns of around 6.2% per year can be expected with government bonds.

That’s $6200 per $100,000 per year, which you can put aside for a college fund for your kids.

On the other hand, if your kids are all grown-up and independent, then perhaps you could afford to be a bit more frivolous.

Investing $100,000 isn’t something to be taken lightly. There are many things to be taken into consideration when choosing your investment instrument. First and foremost, your current financial situation will dictate how much risk you can handle. Your future goals should be factored in as well.