Investing

12 year investment of $30,000

  • Last Updated:
  • Apr 17th, 2019 4:23 pm
[OP]
Jr. Member
Jan 11, 2017
124 posts
64 upvotes

12 year investment of $30,000

I have $30,000 saved up for my 2 kids (school, car, whatever) who are 5 and 3 now, basically all the money people/government/family give them we saved and lumped together for them. I would like to invest this money for 12 -14 years but am not sure in what. My first thought was buy an investment property but i don't know if we can afford it, i think $300,000 is the lowest we can find and would be happy if it pays for itself and enjoy the appreciation after the 12-14 years. Our current mortgage has $200,000 left on it and our household income is like $140,000 with no other debt. Can we afford to purchase something around $300,000 with $30,000?

Or should we just invest in something else? what?
20 replies
Deal Addict
Nov 9, 2013
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Edmonton, AB
XBAL / VBAL
Keep calm and go long
Deal Expert
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Aug 2, 2010
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Here 'n There
100% S&P500 Index Fund (Warren Buffett's advice, not that the greatest investor ever knows much about investing :rolleyes:)
Last edited by eonibm on Apr 2nd, 2019 10:00 am, edited 2 times in total.
Member
User avatar
Sep 6, 2018
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90 upvotes
Heres another alternative investment idea (VERY RISKY)
If you use $30,000 and buy bitcoin .... In 12 years it could turn into $500,000 or it could goto ZERO
Member
Nov 24, 2016
472 posts
550 upvotes
BadSitcoms wrote: Heres another alternative investment idea (VERY RISKY)
If you use $30,000 and buy bitcoin .... In 12 years it could turn into $500,000 or it could goto ZERO
That's not an alternative to anything. Even with your "very risky" disclaimer, it's horrible advice. This crypto thing has caused way too much misery. I know a few guys from university that didn't listen to me and got completely wiped out. COMPLETELY. If you go out and buy horse manure you're more likely to come out ahead. And it always starts with Bitcoin, but then people move on to some even shittier alt-coin.
Deal Fanatic
Jul 30, 2003
5781 posts
553 upvotes
Toronto
Rapsrawk wrote: I have $30,000 saved up for my 2 kids (school, car, whatever) who are 5 and 3 now, basically all the money people/government/family give them we saved and lumped together for them. I would like to invest this money for 12 -14 years but am not sure in what. My first thought was buy an investment property but i don't know if we can afford it, i think $300,000 is the lowest we can find and would be happy if it pays for itself and enjoy the appreciation after the 12-14 years. Our current mortgage has $200,000 left on it and our household income is like $140,000 with no other debt. Can we afford to purchase something around $300,000 with $30,000?

Or should we just invest in something else? what?
Have you done any investment before?
How is your risk tolerance?
Supply is the only metric that matters in GTA housing market!

GET DAILY HOUSING SUPPLY:
[OP]
Jr. Member
Jan 11, 2017
124 posts
64 upvotes
yes in stocks like 20 years ago and that didn't go well, it was only $2500 but the stocks didn't do well. I like real estate because it's physical and im a carpenter so i know i can pay myself nothing and fix it up to make a little more. I just feel like the appreciation would be a greater gain over 12 years (assume $100,000-$150,000) then anything else.
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Aug 2, 2010
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Rapsrawk wrote: yes in stocks like 20 years ago and that didn't go well, it was only $2500 but the stocks didn't do well. I like real estate because it's physical and im a carpenter so i know i can pay myself nothing and fix it up to make a little more. I just feel like the appreciation would be a greater gain over 12 years (assume $100,000-$150,000) then anything else.
There have been periods in the last 60 years where real estate was lower in price 12 years later. That has never happened with the S&P500 index with dividends reinvested. Hope is not a good strategy.
Deal Fanatic
Aug 17, 2008
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Rapsrawk wrote: yes in stocks like 20 years ago and that didn't go well, it was only $2500 but the stocks didn't do well. I like real estate because it's physical and im a carpenter so i know i can pay myself nothing and fix it up to make a little more. I just feel like the appreciation would be a greater gain over 12 years (assume $100,000-$150,000) then anything else.
You have lots of time. Go to your local library this weekend or buy these books by Peter Lynch, One Up on Wall Street and Beating the Street. They will help you learn more about yourself. You do some specialized work presumably as a carpenter and may have insights into companies that you don't even know. Take as an example Dewalt. I bet you saw lots of your fellow tradesman using Dewalt tools. Who owns Dewalt? B&D/Stanley Tools, SWK. Pick a point along this timeline when you noticed Dewalt tools started showing up at the worksite. https://invst.ly/afzl9 You would have done alright by investing your $2500 in SWK ~20 years ago.

Nothing wrong with RE and rental income if you are able to do the maintenance yourself. G.L
"Two Harvard finance profs are walking. One looks down & sees a $20 bill. He says to the other, "Look! There's a $20 bill!" The other prof says, "Impossible. In an efficient mkt it would've already been found."
Deal Addict
Sep 2, 2004
2343 posts
676 upvotes
The downside to real estate is that it's not as liquid, so if there's a chance you might need the money that could become an issue. Whereas if you have the money in an ETF, REIT, stock, etc. you can generally pull the money out easier.

Have you started RESPs for your kids yet? It also has some rules around it that make it not as liquid as some investments, but the government give a nice 20% grant on the money you contribute. That might be something to think if you haven't already started them.
https://www.taxtips.ca/resp.htm
Member
Feb 13, 2017
369 posts
348 upvotes
toronto, ontario
Rapsrawk wrote: I have $30,000 saved up for my 2 kids (school, car, whatever) who are 5 and 3 now, basically all the money people/government/family give them we saved and lumped together for them. I would like to invest this money for 12 -14 years but am not sure in what.
A family RESP (Registered Education Savings Plan) is a good savings account if your primary objective is education.

First, all earnings and growth is tax-free while held in the RESP. Second, each child will receive a 20% CESG (Canada Education Savings Grant) for every annual contribution, up to $500 CESG per year or $7,200 CESG lifetime limit.

Please note the RESP is a savings account and can be used to hold cash, stocks, bonds, and other eligible investments.

Very important: If your children do not pursue post-secondary education, the entire CESG amount must be returned to the government.
Member
User avatar
May 3, 2015
351 posts
134 upvotes
Toronto, ON
PhotoSmurf wrote: A family RESP (Registered Education Savings Plan) is a good savings account if your primary objective is education.

First, all earnings and growth is tax-free while held in the RESP. Second, each child will receive a 20% CESG (Canada Education Savings Grant) for every annual contribution, up to $500 CESG per year or $7,200 CESG lifetime limit.

Please note the RESP is a savings account and can be used to hold cash, stocks, bonds, and other eligible investments.

Very important: If your children do not pursue post-secondary education, the entire CESG amount must be returned to the government.
Do you retain the tax-free earnings still in this case?
Deal Addict
Aug 20, 2007
1928 posts
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Kitchener
You need 20% down for a non-principal dwelling so your 30k can only get you a 150k house. Personally, pick up some banks stocks or bank eft's ZWB.to, SBC.to. You'll be very happy in 12 years.
Member
Feb 13, 2017
369 posts
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toronto, ontario
MikeZ13 wrote: Do you retain the tax-free earnings still in this case?
Yes, you are allowed to keep all the growth and interest earned BUT they become 100% taxable now as capital gains or interest income.
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MrMom wrote: You have lots of time. Go to your local library this weekend or buy these books by Peter Lynch, One Up on Wall Street and Beating the Street. They will help you learn more about yourself. You do some specialized work presumably as a carpenter and may have insights into companies that you don't even know. Take as an example Dewalt. I bet you saw lots of your fellow tradesman using Dewalt tools. Who owns Dewalt? B&D/Stanley Tools, SWK. Pick a point along this timeline when you noticed Dewalt tools started showing up at the worksite. https://invst.ly/afzl9 You would have done alright by investing your $2500 in SWK ~20 years ago.

Nothing wrong with RE and rental income if you are able to do the maintenance yourself. G.L
Right, OP is going to start spending hours reading a bunch of investment books! Sheesh! No need to go through all that. Just take Warren Buffet (and my) advice to buy an S&P500 index fund (unhedged). Vanguard S&P500 index fund (https://www.vanguardcanada.ca/advisors/ ... /?overview) is a perfect one at 0.08% MER. Easy peasy and you'll do as well as 95% of the money managers out there.
Deal Expert
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Oct 26, 2003
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Winnipeg
MashGhasem wrote: That's not an alternative to anything. Even with your "very risky" disclaimer, it's horrible advice. This crypto thing has caused way too much misery. I know a few guys from university that didn't listen to me and got completely wiped out. COMPLETELY. If you go out and buy horse manure you're more likely to come out ahead. And it always starts with Bitcoin, but then people move on to some even shittier alt-coin.
bitcoin over the long term has the best returns
Sr. Member
Jun 28, 2018
890 posts
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Toronto
divx wrote: bitcoin over the long term has the best returns
The long term of..... how many years of existence compared to what other asset classes? lol
The Distracted Investor

Dividends through quality companies 😃 Though I usually lose money with trades :facepalm:
Sr. Member
Mar 16, 2018
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Hamilton
divx wrote: bitcoin over the long term has the best returns
1_3TbE6CE-BDthXqoZq2QlFA.png
Look familiar? Face With Tears Of Joy
Member
Nov 24, 2016
472 posts
550 upvotes
divx wrote: bitcoin over the long term has the best returns
lol
That's like saying stocks, since the 16th century, have the highest return. Something that started at zero a few years ago will have a higher return than every other asset class. Because that's how math works.
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User avatar
Sep 6, 2018
212 posts
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Buy low.... sell High...

Similar to stocks, holding anything long term MAY be hazardous to your financial health.

There is no law that says Stocks and Real Estate prices will always go up Long Term.
ownthesky wrote: 1_3TbE6CE-BDthXqoZq2QlFA.png

Look familiar? Face With Tears Of Joy

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