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Hello..just a little hypothetical situation i've been wondering about.
If someone gave you $100 000 and said you could do whatever you like with it, but you had to return the $100 000 to them in 2 years time, what would you do with it?
How would you utilise the money? How would you maximise returns from it?
thanks in advance
Well I wouldn't just blow the lot if I had to give it back LOL. Hmmm, probably invest it in a property, do it up and then hopefully sell for profit.
If I had to give it back I would probably just invest it in something 'safe' like a bank account or term deposit or something, then once the money was given back I'd have the interest that was earned to spend, without having to 'find' the money to give back.
mmmmm 2 years isnt very long inwhich to invest and see much of a return, you need 7-10 years for that. sooooooo :dunno: pop it in a term deposit and get the interest, though you'll have to declare the income i think, which may mean a lose of some centrelink benefits. but it would look nice in your normal bank account :D
run away. :p
and take me with you :lol:
Put it on the mortgage (reduce the interest you are paying) and keep paying the same amount into the mortgage you have been paying. DON"T let mortgage close though, if you get almost to pay it off, keep putting away your mortgage payments into separate account and transfer when you lose the $100,000 again.
$100 000 is not worth running away with......is it? LOL
what would happen to the mortgage when you have to give the money back though kate?
wouldn't they charge you some sort of fee for pulling the money out?
100k? I wouldn't bother. If you have to give it back in 2 years you have to play safe so you can't take the kind of risks that might see a great ROI. I don't do interest or mortgages so for me I'd just tell them to keep it lol.
Maybe I'd buy a house boat lol.
Depend on the bank, i reckon.
We have the mortgage with a credit union and are $x,000 ahead. So we don't pay interest on the $x,000. [Interest = % x (Total -x,000) ]
I think that if we wanted to take the $x,000 out again, we would just have to pay interest on this amount again. [Interest = % x Total]
That is how it would work, if i ruled the world anyway.
I am with Chloe...If you put it on your mortgage and kept paying the usual repayments there would be a fee for withdrawing the money... Unless you have a line of credit?
If it was for only 2 years to my way of thinking it's not enough time to get any sort of return on investment....
Id say thanks for the thought...
I would put it into the mortgage. Ours is a variable rate one, so we can make extra repayments and any redraw on it costs only $25.00. So I think I could afford the $25 to save $1,000's in interest.
This hapopened to a friend of mine. her mum sold her house and moved in with her parents and so gave all her children 100K until she was ready to buy again.
My GF put the money onto her mortage and then just re drew when it was time to give it back to her mum. I believe it made a huge difference even though it was only for a bit over a year, it was hard seeing theinterest going back up afterwards.
All in all it was better than her mum being taxed and her mortage interest being high over that period.
Hope that makes sense?
We're with PNCS and we have what they call a 'mortgage breaker' account - any money in there acts like it is in the mortgage when it comes to calculating interest, but we can use it as a normal bank account. So you could put the $100k in there, and then for the next 2 years your mortgage interest is calculated with you having paid an extra $100k off, which would save your a fair whack. And if you kept your normal repayments up, you'd be well over the odds at the end of it, KWIM?
And of course, while you've got $100k in your bank account, I would be getting regular account balance receipts, all printed with that lovely number on it, and make up a wall collage with them, so you can remember the good times :rofl:
i think I'd put it on my mortgage for that 2 years and then redraw it at the end. I'd have to keep redrawing the extra though so the mortgage doesnt close, but it would save lots in interest. My bank doesnt charge any fees at all for redrawing so thats not going to be a problem. Or maybe I could put some on my mortgage and some of it in a term deposit.
Rainy, check if your mortgage has a redraw facility OR a 100% offset account that you can bank it into (and if so how much it costs to redraw). The interest saved on 100K over 2 years would be a huge savings AND unlike other investments you don't have to pay tax on the benefit to you. Just make sure that the mortgage account stays open if you reach a zero balance during that 2 years. You wouldn't want the account to close and gobble up the 100 K!
thanks everyone :)
mortgage offset sounds like the way too go...woo hoo!!!
Rainy if I were you I would book a holiday to the Gold Coast with that money ;)
oobi shares???
just kidding - the mortgage offsetting sounds good - you will save a lot in interest just in that time if you have the right sort of mortgage (we put all of our salaries into ours and redraw and we save lots of int just by having as much as poss in there each day).
term deposits can also give you a risk free and easy return but it wouldnt be that big on that amount of money and that timing - but a safe bet if your mortgage isnt suitable.
For what it's worth, I think the Mortgage Offset account is the best way to go...and keep paying your regular monthly payments - you'd be surprised at what a difference it makes.
well i am borring, I would definitely put it on my mortgage - the money saved in interest could go towards paying the mortgage down even further and then I could use the leverage created against my PPOR to invest towards more property.
what's PPOR Misty?
ppor = primary place of residence
I'd lend the money to someone that is going to retire in two years, then they can put all their income into super so they don't pay any tax and give it back to me at the end with a nice return on it :D
That way, I make a good return, the money is safe and I help someone out with paying less tax.
Or sit it on the mortgage...
A tad late in the conversation ;) But thought I'd throw my 2c in seeing as we've BTDT, but with $20,000.
We parked it in our mortgage. We have a premium option home loan with a full redraw facility. We already had it prior to this so it hasn't cost us any more money to do it and I know we have saved a nice chunk of interest. Haven't calculated exactly how much though.
On a personal level it has caused a great deal of stress. The person who we are looking after it for is quite highly strung and we have come close to withdrawing if for her so we can't have it thrown back at us how much of a favour she is doing for us as she has reminded us of that several times. She did get antsy about it too and once ask if I could work out how much we are saving and pay her half of it monthly. She must have rethought that one because I said it was too hard to figure it out and I'd rather give it back.
We also did spent a chunk if it when she told us to because she said she might not need it for 10+ years, only for her to tell us that she needed it all back so we saved like mad, only for her then to say that she didn't need it all really and she just needed to know it was all available :wall: Then she took half to go toward a new car. Now she has been asking for it in dribs and drabs so now it's only $6,000 that we have of hers now.
Long story short lol take it and sit it in your loan but don't spend it and if it causes angst then take it out and give it back ;)
Raven - that situation sounds like more trouble then it is worth. I would have just given the money back and said thanks but no thanks.