Australians are turning to alternative types of investments

Australians unable to buy in an overheated property market are turning to other investments to boost their wealth.

As property prices in capital cities particularly Sydney and Melbourne continue to soar and returns on cash in the bank remain around two per cent, many savers have had to look at alternative ways to grow their money.

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Ray Corcoran, 29, who runs his own marketing consultancy has put off buying property and instead is investing his money through a Robo-adviser — an automated investment service.

After having his savings in an online account collecting interest at a rate of 1.6 per cent he decided he had to take action.

“I would rather put my money with someone who knows what they are doing and can take their fees out of that,’’ Mr Corcoran said.

“I started by putting in $5000 to see how the process worked … I liked it so the next month I put in $11,000.”

Robo advice is financial advice or online management using algorithms and technology instead of a financial adviser.

Mr Corcoran said he would like to buy an investment property in Brisbane or in Sydney’s western suburbs but he thinks the prices across Sydney are too inflated which has resulted in him waiting.

Robo adviser Stockspot’s chief executive officer Chris Brycki said low rates had driven investors who would otherwise buy property or individual shares to look at other options.

The management fees for balances of $10,001 or above are 0.066 per cent.

“Everyday our systems are looking at everyone of our clients’ portfolios and working out if they are risky and then we are rebalancing them,’’ he said.

“The average amount invested is about $11,000 in the first month and then we encourage people to tip their salary in or chip in whenever they can.”

There are other types of investments that are also growing in popularity, this includes BrickX which allows investors to buy single bricks under a system called “fractional ownership.”

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Source: Australians are turning to alternative types of investments | Adelaide Now