Keep a ‘rainy day’ fund

Gay has $30k to invest but should ...

QI have close to $30,000 and I turn 70 years young in two weeks. I would like to think I could invest $10,000 for a couple of years and get more than 0.15% interest. I have a super fund with North Personal (AMP) and have $9000 in there. So I am not in the wealthy league, but would like some advice. I am on the pension.

With thanks.

Well, that made me laugh, Gay. I am 66 years young in July and also scratching my head about the cash we have earning about 0.2%.

Sadly, about all we can both do is to accept that miserable rate, but with great security, or move up the risk curve. As you are on the pension, I am assuming you have retired and are not able to add to your super. That is generally a pretty good idea. Big super funds tend to be low cost and offer a well-diversified portfolio of assets.

Investing for a couple of years makes it hard as well. If you were willing to look at longer, say over three years, a conservative income fund could be a way to go. All leading financial institutions will have one of these – a fund with a mix of conservative assets such as bonds, fixed interest, property and some shares may be returning around 3% income and a bit of capital growth. But, of course, this comes with more risk

The answer for you is personal, but maybe one plan is to keep $10,000 or so as safe “rainy day” money and look at a good, conservative low-cost income fund with the balance.