5th/6th "Investments":
- After my purchase of Credit Corp Group in April 2012, I still had 5-6k left in savings. I kept accumulating money from my wages and my savings account kept growing. I couldn't find anything I wanted to invest into for another 12 months and I had about $18k in savings by March 2013.
- It just so happened that I needed both a new car (my old one kept breaking down, so spent $5k on a new more reliable one which I hope to keep for many more years), I had to spend over $2k on medical bills in order to sort out digestive problems that arrised and also had to pay $1k in a court claim and replace my road bike which cost $1k also after the court claim on a cyclist vs car incident was sorted through. This wiped out almost $9k of my savings so I was reduced to 10k left by April/May 2013.
- I decided to put this remaining $10k into a term deposit to earn 4% instead of 3% in my savings account. What a mistake this was!
- While my term deposit was locked away I saw the price of several shares plummet to good prices. McMillan Shakespeare (MMS) was one. Supply Network Limited (SNL) was another that dropped from $1.90 down to $1.25 or so. Another mistake was not breaking the term deposit and investing in the company at this rediculously cheap price. My term deposit finally matured in late July and I bought $12k worth of SNL for around $1.40. It is now trading around the $1.90 mark again, a 35% increase not including the dividends.
- Lesson I learned from this episode was that at the end of the day, the difference between 3% and 4% in a savings account or term deposit over 3 months on $10k is around $20-30. If I had bought SNL at $1.25 as opposed to $1.40 I could have made 50% profits as opposed to 35% so I essentially lost almost $2000 or so in potential gains by earnig an extra $20 on my term deposit. Lesson learned!
- Lesson is to keep cash available to use immediately when good oppotunities arise and not have it locked away in term deposits/fixed interest.
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