Ask Paul: I'm 25 with $106k - where should I invest?


Q. I am 25 years old and pondering my next ''big'' investment. I have recently sold some shares for about $94,000.

I still have about $12,000 in my portfolio which I am also looking at selling.

I have about $10,000 in the bank, which I can use for discretionary spending and don't really want to touch.

ask paul clitheroe advice where should i invest

I am currently looking for my first proper full-time career job and my plan is to buy an investment property six months to a year after finding my job.

How should I invest my $106,000 in the short/medium term?

I am thinking of an exchange traded fund (ETF) but they seem complicated and not so easy to understand. - Peter

A. First up, Peter, having over $100,000 at your age, plus the experience you have had buying and selling shares, will be really valuable in the coming decades. I know what you are saying about ETFs - they are becoming more and more specialised.

But they are a favourite of mine as investors can make things as complex or as simple as they like.

A complex strategy would see you making investments in a number of specialised ETFs that "fit" with your strategy.

For example, you might have a macro economic view and focus on certain growth areas. For the sake of the debate, let's say this was health and aged care, biotechnology and resources. You could chose three ETFs to cover these areas.

Equally, you could keep it simple and go with something like a Vanguard global ETF and let it spread your money broadly across the planet.

My advice to you, though, is based on your time frame. The job market is strong in Australia and I would expect you will find that full-time job.

That would see you buying property in their next year.

I could not recommend anyone buy shares with such a short-term outlook - my minimum time frame is five to seven years. So keep the money secure in an interest-bearing account and start to do your research on property.


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.
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