Cashed in family home Now What???

Hi all,

Absolutely love this site and am pretty much addicted to it,thank you all.
Now to my situation.

I left Ireland 2 years ago for a new life down under (Oz).
Sold the house in Ireland two years ago and made a nice little profit.

Bought a house in Brisbane thereafter and have absolutely no regrets about the move.

I have now recently sold our home in Brisbane too, due to job promotion we are relocating to another part of SE Queensland (job offer to good to refuse relocation).
I have also made another tidy little profit here too.

I am of the opinion that the only direction for Australian property is downwards from now on. So have decided to rent for a year in the new town we are moving to until I see how all this turmoil in the world pans out and also to check the area’s before we buy another house.
Do think this is the right thing to do??

My worry is that I now have a very large cash sum sitting in our bank account AU600K+ for the next year. My view is that this is our home sitting in a bank account.
I know the Aussie Goverment has now guaranteed all deposits, but I don’t think I would like to fully rely on this backstop.
Any advise on what I should do with our cash for the coming year?? keeping in mind I am a family man and this is the money from our family home & our savings, the last thing I want to do is lose it.
Divorce territory if that happened!!

We want to but a home again in the next few years, but don’t want to rush into it.

I went into one of the big banks last week and they tried to get me to put 100k into a share portfolio…!!! If I had took their advise I would have been down big time the very next day.

I am not too up on a lot of all this financial stuff, don’t have any share portfolios or anything like that. Most of what I know is what I picked up from here over the past couple of years…:slight_smile:

Any advise would be much appreciated.

Once again thank you all for such a great site.

Government bonds. But also make sure that you buy them through a custodian who does not have the ability to rehypothicate your bonds (ie loan them out to someone else without your knowledge)

If the entity holding your bonds goes bust you want to have first claim on your asset and not have it thrown into a ‘pool’ where everyone will end up getting a fractional recovery on what they are owed. People who had Lehman holding assets on their behalf are learning this the hard way

Buy a small amount of Australian Gold. There are Ausi Sovereigns. Perhaps a few gold bars - put them in a Bank Safety Box. Just a small amount. Make a decision on whether you will come back to Ireland in the near future or not - because the longer you stay in Australia the more unlikely you will come back to Ireland as the children will form relationships. There is a very deepening recession here - possible for at least the next 5years as there arn’t any strong enterprises to pull us through. All the European Banks have been (robbed) because we would not partake in the Iraqe War.

Think of an Enterprise that would be successful here in Ireland - do some research into producing something of value - produce a product that would be required here in Ireland or Europe. You see things differently when you are away. Spread your money to at least two or three nearby Banks. The strongest Banks in Australia possibly one with an strong English (England Connection) as the British Pound will probly hold its value more than the Euro. If you are thinking of coming home send some money to your Bank in Ireland from time to time. The Bank of Ireland and the AIB are the best here - even though their interest rates are low. 8% over 18 months - not too bad. Open a Swiss Bank Account if you wish to be enterprising as the Swiss Franc has always kept its value against other currencies. It is now worth 4 times the USDollar since 1975. Best wishes with your decisions.

I know nothing about Australia but I’d guess as things are going well and you’ve got money in the bank calling a babysitter and taking the wife out for a good meal would be a wise investment at this juncture. : )
Others here have claimed to have negotiated higher deposit rates one on one with their bank managers due to their excellent negotiating position of removing all cash from the bank and putting it elsewhere. The rate they’re paying you on deposit is almost certainly lower than the cost of money on the open market.

I would have no hesitation recommending that you put your money on Term Deposit with one of the Big Four.

Interest rates in Australia are falling faster than Brian Cowan’s approval ratings, so I’d get a move on if I were you and lock it in at a fixed rate pronto.

Both NAB and Westpac are offering 6.00%pa for 24 months, but with $600k I bet you could get one of them to give you 6.00% over 12 months if you don’t want to lock your money away for 2 years.

You probably could have got closer to 8% a couple of months ago, but 6% gross is still pretty reasonable when inflation is 4.5% and tipped to fall substantially.

In all fairness, you are never going to get a stronger guarantee than that over your savings.

The above is, in my opinion, bad advice. Gold, although talked about as a being store of value in risky times, is a speculative asset. Speculating on currencies (Swiss Franc, Sterling or Euro if you intend staying in Aus) by depositing money abroad is a bad idea for someone in your position. As Cypress suggested the best course of action would probably be to buy govt bonds or depositing in the Aus equivalent of the An Post savings schemes if such a thing exists.

WV

Agreed. I also think Gold is very very vulnerable. This market has a knack of hurting people when they least expect it. There comes a point when there is no-where to hide as too many people are hiding in the same place. People thought Oil was safe haven and they got badly hurt. Gold is touted by many as the only remaining safe haven for ones cash, but dont be surprised if some day we all come in and its price has collapsed as all the speculators run for the door at once. When every commentator starts saying the same thing you need to start worrying. Bit like all the mugs who said buying EUR/$ at 1.60 was a no brainer for many of the reasons they now think Gold is a safe haven…They are the people now being forced to sell at 1.325!

There is no need for boghopper to take any risk whatsover with his money when there are rock solid, hassle free, government guaranteed, inflation beating returns available.

It would be different if inflation was 10% and deposit rates were 1%, but that is not the position.

It’s ok, I’ll mind it for you. 8)

But is inflation really lower than 10%? The ECB, for example, has been expanding the money supply at around 11% in recent years.

Also, if every government is guaranteeing everything, then is a guarantee really worth the paper it’s written on?

What, now? :open_mouth:

If you intend in coming home I would put some of it in euros as with the commodity bubble bursting the Aussie dollar may well flop. In any case the US dollar will probably do better over the next few months than either the euro or the aussie dollar.
You would need to get a pretty good rate on the aussie dollar to justify keeping it out of dollars.

Dunno mate - If I had the money I reckon calling a babysitter and getting the wife to take the kids out for a good meal would be more fun… :imp:

This is quite an interesting statement. Care to back it up with some, er, evidence?

lol.

Don’t take what I say as investment advice, but I have read that it will be difficult to hedge against global currency depreciation. There are three likely outcomes of this globalisation debacle, so itulip have told their subscribers to prepare for these three different but likely outcomes, even though it will cost a little. (I hope I haven’t broken any copyright laws here).

  1. Have a foreign bank account open ready to transfer your 600K at a moment’s notice.
  2. Put 10% of the 600k in gold bullion in Switzerland. bullionvault.com is an example.
  3. Buy a few gold coins, but under the amount at which you have to tell the government (£5000 for one purchase in the UK, £10,000 within a year). 22 carat gold, as 24 is too soft to use as bartering currency. It wears out and chips. (think soverigns)

I would also recommend putting your money in the lowest interest, government guaranteed account which is completely liquid (the post office in Ireland). It’s all about safety at the moment, not performance.

Gold is insurance, not speculative. Don’t put in more than 10%.

If there is deflation (unlikely), then your 550k cash increases in value. If there is strong inflation, then your 10% gold bullion increases in value. If there is hyperinflation, you will need your gold coins to buy stuff with.

That’s basically it.

Hedge against all scenarios.