Safest long term investment (1 Viewer)

[Graney]

I'm trying to figure out what is the safest long term investment possible in Australia.

I'm planning on following this advice:
http://www.yourmoneyoryourlife.org/fom-about-summary.asp
http://www.yourmoneyoryourlife.org/gh-step9revisited.asp

The plan is to be able to live frugally off conservative investments and retire asap.

Basically the investment must be as close as possible to fullfilling these criteria:

1. Your capital must produce income.
2. Your capital must be absolutely safe.
3. Your capital must be in totally liquid investment. you must be able to convert it into cash at a moment's notice, to handles emergencies.
4. Your capital must not be diminished at the time of investment by unnecessary commissions, or other expenses.
5. Your income must be absolutely safe.
6. Your income must not fluctuate. You must know exactly what your income will be next month, next year and 20 years from now.
7. Your income must be payable to you, in cash, at regular intervals.
8. Your income must not be diminished by charges, management fees or redemption fees.
9. The investment must produce this regular, fixed known income without any further involvement or expense on your part. It must not require maintenance, management, geographic presence or attention due to 'acts of God'.

Term deposits seem like the safest, most reliable option, however there are some things I'm not sure about. Unlike CD's in the USA, there's no insurance on term deposits in Australia is there.

Is there?

Because if there's no insurance on term deposits I wouldn't be completely secure from risk. Is there any other investments I could consider?

Say I invested 100'000 at 8% p.a. in a term deposit, and inflation is running at 4%, does that mean half of the profit is eaten up by inflation? I'd need to be reinvesting at least half the interest gained in order to keep up with inflation, and my real income would only be about 4% of the amount invested?

 

[Graney]

Is there any Australian equivalent of US treasury bonds? or Series I Bonds?

I was interested to read that the US government is bailing out those who had their savings in the failed U.S. banks, in the event of an Australian bank going under, is it possible the Australian government would bail out those who had invested in term deposits? It's a shame they're not insured like CD's in the US.

 

[hiphoppresident]

I thought that the goverment were guaranteeing up to $1 million in savings in the big 4 banks?

anyway, ask the banks - check the legislation

safest option would always be Australian Goverment bonds

second term deposit in the big 4 - ANZ, CBA, WESTPAC, NAB

**This is not financial advise**

**I am NOT a Financial Adviser**

 

[hiphoppresident]

I thought that the goverment were guaranteeing up to $1 million in savings in the big 4 banks?

anyway, ask the banks - check the legislation

safest option would always be Australian Goverment bonds

second term deposit in the big 4 - ANZ, CBA, WESTPAC, NAB

**This is not financial advise**

**I am NOT a Financial Adviser**

 

[hiphoppresident]

and yes, I believe your calculations re: inflation and interest are correct

Inflation is a b!tch

 

[Graney]

Things have changed so much since I made this thread.

The government's guaranteeing the lot. However returns are shit.

Hate low interest rates.

 

[L]

financial institution shares

 

[Graney]

second term deposit in the big 4 - ANZ, CBA, WESTPAC, NAB

Fuck those institutions, you'll typically lose several percent a year investing with them.

The government has guaranteed all bank accounts, not just the big four I believe.

 

[Graney]

This message is hidden because L is on your ignore list.

<3

 

[Graney]

I am using it. it's enabled. I haven't used this PC in months, I'm not sure why it's not working.

 

[hiphoppresident]

Fuck those institutions, you'll typically lose several percent a year investing with them.

The government has guaranteed all bank accounts, not just the big four I believe.

ahh yes you're right

but putting your money elsewhere (apart from the bigger 6-8 banks) may conflict with point "3" - being able to get cash at a moments notice...a run on the bank for instance

but yea all bank savings are guaranteed by the goverment (up to one million dollars)

good luck with your savings/investments

 

[alexvision]

well, safest would be bonds in a country of your choice (preferably not zimbarbwe) but they give you shithouse returns, from memory the us tresary ones were down a half a percent. But if you put a bit more risk into the equation then you will make more money, shares aren't bad in that respect, as they have a general trend up.

"not financial advice, just working off my memory when i cant get to sleep"

 

[Graney]

But if you put a bit more risk into the equation then you will make more money

Or much less.

But probably more. Yeah, I've been learning about mixed portfolio's. Like, perhaps 10-30% invested in shares or something. I have a plan.