Hypothetical Financial Question

**Ginger** · August 2nd, 2009, 12:28 PM

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

**Trillian** · August 2nd, 2009, 12:46 PM

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.

**ss_storm** · August 2nd, 2009, 12:53 PM

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.

**Olive** · August 2nd, 2009, 01:12 PM

mmmmm 2 years isnt very long inwhich to invest and see much of a return, you need 7-10 years for that. sooooooo

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

**Junglemum** · August 2nd, 2009, 01:14 PM

run away.

**Olive** · August 2nd, 2009, 01:18 PM

and take me with you

**HotI** · August 2nd, 2009, 01:24 PM

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.

**Ginger** · August 2nd, 2009, 01:30 PM

$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?

**Phteven** · August 2nd, 2009, 01:50 PM

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.

**HotI** · August 2nd, 2009, 01:52 PM

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.

**Inanna** · August 2nd, 2009, 02:17 PM

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...

**Astrid** · August 2nd, 2009, 04:04 PM

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.

**Loula** · August 2nd, 2009, 04:18 PM

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?

**Bumperstump Cummerbund** · August 2nd, 2009, 04:54 PM

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

**Karina** · August 2nd, 2009, 06:10 PM

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.

**AnyDream** · August 2nd, 2009, 07:50 PM

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!