Ask Paul: I grew up on Centrelink and now make $140k


Q. I'm in a very fortunate financial position. I'm 26, have a stable job, which I love, and earn about $140,000, give or take depending on how much I work.

I'm also studying part time to further my career.

My income is predicted to increase. I have about $200,000 in savings and $20,000 in exchange traded funds. I feel as if I've been working too much to think about my finances.

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I don't know what to do with my money. I don't have plans to "settle down" anytime soon and housing seems overpriced and a significant time investment.

What should I do with my growing savings? (I recognise that this is a very privileged question; I grew up on Centrelink so this is a very foreign scenario for me.) - Katherine

A. Hi Katherine. I am really pleased that you are aware of what a terrific financial position you are in. At times we Aussies just don't seem to realise how well off we are both as individuals and as a nation.

The key issue for you is your time frame.

Cash is just fine in the short term but I imagine you are earning around 2.5% - take out inflation and the tax you will pay on your interest and your money is going backwards. So if you are unsure about what to do, then cash is fine.

But in the longer run, by which I mean seven-plus years, history tells us that holding growth investments such as property or shares are likely to give you a better return.

I can't argue with you about prices in the eastern coast's major cities, nor that property is labour intensive, but at some stage owning a property in a growth area will make sense.

If you think that is seven or so years away, then I would look at adding to your ETF portfolio.


Paul Clitheroe AM is a respected financial adviser and Money's founder and editorial adviser. He is chair of the Australian Government Financial Literacy Board, and author of several personal finance books. Click here to email Paul your money question. Unfortunately Paul cannot respond to questions posted in the comments section.
February 2, 2018 7.53pm

Hi Paul
We are over 75 years old and have $700000 to live on . What do you recommend we do with it to earn some income.

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