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3 Year Investment... What to Choose?

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  • 3 Year Investment... What to Choose?

    I have a $30,000 student loan.

    I want to pay this off in a lump sum in 3 years time. I have regular savings of roughly $10,000 per year.

    I'm wanting to know which would be the best investment for me?

    - term deposits
    - smart shares (fonz or tenz)

    I don't mind a bit of risk, I also don't want big entry and exit fees.
    Last edited by ENP; 20-01-2010, 09:52 AM.
    "You’re neither right nor wrong because other people agree with you. You’re right because your facts are right and your reasoning is right"

  • #2
    Why do you want to pay it off. Provided you stay an NZ resident, it is interest free. Or are you planing on going overseas in 3 years?

    Term deposits are safe
    my kiwi saver is in smart shares and the unit price has never been above its starting value (except the first few weeks) - i have been as termed in the business - averaging down!. While that has been a bad period, do you want to risk that when you have a short timeframe.

    I here copper has down well recently, why not buy copper futures

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    • #3
      Originally posted by CJ View Post
      Why do you want to pay it off. Provided you stay an NZ resident, it is interest free. Or are you planing on going overseas in 3 years?

      Term deposits are safe
      my kiwi saver is in smart shares and the unit price has never been above its starting value (except the first few weeks) - i have been as termed in the business - averaging down!. While that has been a bad period, do you want to risk that when you have a short timeframe.

      I here copper has down well recently, why not buy copper futures
      Yes planning to go overseas, also want it out of the way so I can get on with life. Well with term deposits over 3 years it's not like I'll make my fortune, higher risk, higher return for the smart shares?

      Also the 10% discount when paying off lump sums. And copper futures? haha no thank you!!
      Last edited by ENP; 20-01-2010, 10:34 AM.
      "You’re neither right nor wrong because other people agree with you. You’re right because your facts are right and your reasoning is right"

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      • #4
        Originally posted by ENP View Post
        And copper futures? haha no thank you!!

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        • #5
          It's not the fact that they don't have good returns, it's just that I have no interest in them really.

          I'm beginning to think either term depsoits or maybe corporate bonds since it's only a short term thing.
          "You’re neither right nor wrong because other people agree with you. You’re right because your facts are right and your reasoning is right"

          Comment


          • #6
            Originally posted by ENP View Post
            I have a $30,000 student loan.

            I want to pay this off in a lump sum in 3 years time. I have regular savings of roughly $10,000 per year.

            I'm wanting to know which would be the best investment for me?

            - term deposits
            - smart shares (fonz or tenz)

            I don't mind a bit of risk, I also don't want big entry and exit fees.
            ENP,

            You owe $30k. You want to have it paid off in 3 years.

            Each year you save $10k. Why complicate things? Pay this 10k, off the 30k debt each year as you save it. In 3 years the debt is gone.

            All the best,

            Niall

            Comment


            • #7
              Do you have the $10,000 now, and will slowly save it up i.e. will you be making regular deposits?

              If you are making regular deposits, then a term deposit won't suit.

              Why don't you go into an Australian shares managed fund...some of them have done 15% over the last 5 years and you can make regular deposits into the managed funds.

              But with a 3 year time frame this is risky.

              Comment


              • #8
                Originally posted by sarahd View Post
                Do you have the $10,000 now, and will slowly save it up i.e. will you be making regular deposits?

                If you are making regular deposits, then a term deposit won't suit.

                Why don't you go into an Australian shares managed fund...some of them have done 15% over the last 5 years and you can make regular deposits into the managed funds.

                But with a 3 year time frame this is risky.
                Regular deposits of $200 per week. Don't know about the management funds because they would be costly to enter and exit.

                Maybe thinking about art prints ranging from $2000-$5000?
                "You’re neither right nor wrong because other people agree with you. You’re right because your facts are right and your reasoning is right"

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                • #9
                  You are wrong about managed funds. I would check them out before dismissing them. Art prints = speculation not investment!

                  Comment


                  • #10
                    Do you mean these types of managed funds?

                    http://www.fundsource.co.nz/FindAFund.asp
                    "You’re neither right nor wrong because other people agree with you. You’re right because your facts are right and your reasoning is right"

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                    • #11
                      Originally posted by ENP View Post
                      Do you mean these types of managed funds?

                      http://www.fundsource.co.nz/FindAFund.asp
                      You can do managed funds through Raboplus it's a lot cheaper - last year they had a promo where Entry Fees were 0%.

                      But be warned - a poor choice of fund will burn you. The men in stripped suits still clip the ticket even when they make a loss. Ideally, you only want to use managed funds if your time horizon is > 5 years, otherwise just put your money in the bank - after factoring risk, tax and inflation you will probably break even.
                      Success is An Attitude!!

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                      • #12
                        Yes, a unit trust.

                        I suggested Australian shares as if you want shares, I think the Australian market has held up better, and may do in the future. But 3 years is a short time frame for shares - should really be in for 7-10 years.

                        If you don't want to take the risk, you could consider a unit trust that invests in corporate bonds (fixed interest). That way you can invest in relatively low risk investments, but pay in monthly.

                        Fees are about 1-2%p.a. depending upon the provider. Entry and exit fees also depend upon the provider.

                        Comment


                        • #13
                          Originally posted by ZimbabweanKiwi View Post
                          You can do managed funds through Raboplus it's a lot cheaper - last year they had a promo where Entry Fees were 0%.
                          Wow these Raboplus ones look interesting...
                          "You’re neither right nor wrong because other people agree with you. You’re right because your facts are right and your reasoning is right"

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                          • #14
                            Is 3yrs a long enough time frame for share investing?

                            Perhaps a fund invested in corporate bonds.
                            Or just a Rabo cash account.

                            Preferably elegable for the PIE tax loop hole (not available to small property investments for some reason).
                            The three most harmful addictions are heroin, carbohydrates and a monthly salary - Fred Wilson.

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                            • #15
                              Originally posted by PC View Post
                              Is 3yrs a long enough time frame for share investing?

                              Perhaps a fund invested in corporate bonds.
                              Or just a Rabo cash account.

                              Preferably elegable for the PIE tax loop hole (not available to small property investments for some reason).
                              The thing is that I'll be saving/investing regularly with about $150-200 per week going into them, so lump sum type investments like term deposits may not be so good...
                              "You’re neither right nor wrong because other people agree with you. You’re right because your facts are right and your reasoning is right"

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