What to do with a sudden windfall?
We all dream about it, but what would you really do if you came into a sudden windfall? switzer.com.au asked four professional moneymakers what they would do with an extra $10,000, $100,000 and $1 million.
Shane Oliver, head of investment strategy and chief economist at AMP Capital
What would you do with $10,000? I would put 30% in Australian Shares and 70% in traditional global unhedged shares.
What would you do with $100,000? I’d probably spend $10,000 and split the rest 30/70 between Australian shares and global.
What would you do with $1 million? I would spend $50,000 – probably put it towards a boat, and split the rest 30/70 again.
Peter Switzer, founder of The Switzer Group
What would you do with $10,000? I would slam it against my mortgage to reduce the principal.
What would you do with $100,000? I would make a non-concessional contribution to my super fund and I would put it into the SPDR S&P/ASX 200 exchange traded fund on the basis that I think that over the next one or two years the index will rise by at least 20% plus dividends.
What would you do with $1 million? I would use my wonderful relationship with my wife and roll up both our 3-year non-concessional contribution limits and make a non-concessional contribution to our self managed superannuation fund (SMSF). Within our SMSF I would use $500,000, plus a small loan, to buy an investment property where tenants really want to live. That would ensure that I will always have a tenant and that, in all likelihood, I will get pretty good capital gain. But I would want to do that before there are any changes to superannuation rules, which could effect that strategy.
And with the other $500,000 I would buy great quality dividend paying stocks on the dips I expect to see in this volatile stock market.
Paul Rickard, founding CEO of CommSec and co-founder of the Switzer Super Report
What would you do with $10,000? I’d put it straight into the share market and probably top up one of my existing holdings.
What would you do with $100,000? I manage my superannuation contribution limits pretty carefully, so I wouldn’t put it in super but I’d probably put it into the share market with a bit more thought about the structure of that investment.
What would you do with $1 million? I’d be thinking about investing in, or buying into, a business or start up. I might consider venture capital, either directly or via a private equity fund. I’d also be thinking about property and I’d probably be looking more at something coastal in NSW and Queensland.
Craig James, Craig James, chief economist, CommSec
What would you do with $10,000? I’d pay off debt.
What would you do with $100,000? I’d invest in an Aussie shares exchange traded fund.
What would you do with $1,000,000? I’d pay off debt, and split the remainder with half in higher yielding shares and half in property.
What would you do?
Jason Thomson | Mortgage Adviser and Finance Broker | Smartline Cairns