Where should you spend your hard-earned deposit?

By Your Mortgage

With housing unaffordability plaguing young people these days, many of them are sitting on a house deposit for years while trying to figure out where to invest their hard-earned money. While the most would probably deposit $100,000 for a median Sydney property, some experts also recommend other ways to invest.

According to Wealth Enhancers founder Sarah Riegelhuth, shares should be your first investment choice once you have built up your savings.

“If building wealth is your goal, then I’d suggest starting with a healthy cash position, then start building your share portfolio,” she said. “Once you’ve got a substantial amount saved and invested, then you can think about property.”

Shares also offer better diversification options, as well as dividends. It is also easier to sell if you need quick access to your money.

Creating a start-up is another viable option, especially for those with a risk-loving disposition. But to minimize your potential losses, social researcher Mark McCrindle recommends using only a portion of your savings to invest in your idea.

“It may not be too much of a risk to put $15,000 into a business idea that you’re passionate about giving a red hot go,” he said.

But if you still want to invest in the property market, houses have always proven to be sound investments. Your safest bet is to not put all your eggs in one basket.

“A house is always a safe option because you do need somewhere to live, but maybe you could also invest in high-risk shares to diversify,” said Stefanie Schurer, senior lecturer at the University of Sydney’s School of Economics. “It’s also wise to invest in health and education, and if you want to have fun for a few years, it’s good for the economy as well as yourself.”