For young Aussies like Jacob Lambert, the great Australian dream of home ownership is slipping further out of reach.
The 22-year-old engineering student said there was a “very low chance” he would get onto the property ladder in the near future, given the current high property prices and soaring cost of living.
“It’s too difficult to get into the home ownership market now, and I’m predicting it will be an issue well into the future, unfortunately,” Jacob told Yahoo Finance.
With his property plans now on the backburner, Jacob has decided to turn his attention towards investing, and is predominantly focusing on the stock market and gold.
Gold is often seen as a hedge against inflation, so when inflation goes up, often so does the price of gold.
“I bought it after they started talking about inflation. That’s when I knew it was going to go up and it did,” he said.
Along with stocks and gold, Jacob is also trying his hand at a more risky and controversial investment - racehorses.
There are a few different platforms in Australia that allow investors to purchase “micro-shares” in racehorses for a low cost. If the horse wins prize money, the investor is then entitled to a cut proportionate to their stake.
Jacob purchased micro-shares in horses earlier this year after seeing it advertised online and thought it seemed like a low-cost, alternative investment.
“It’s just something different and it’s a fairly cheap alternative. I haven’t put that much into it but, if all goes well, I will increase in the future,” he explained.
Jacob bought his stake through BTX Racing, which allows investors to purchase fractional shares in horses from just $75. This, however, will only give you a 0.01 per cent stake in a horse.
It’s an extremely risky investment and one that is generally only profitable for a handful of lucky investors. Jacob, for instance, hasn’t seen any return on his investment yet and noted all his horses were still in training and hadn’t competed in any races.
‘Not always guaranteed’
BTX Racing founder Steve Piek described it as an “experience-based investment” and said investor returns were hard to predict because they depended on the horse’s performance in a race and the prize money on offer.
“Not every horse wins prize money but there is an experience element to the racing,” the former accountant said.
“Owners get content [on the horses from trainers] and get to go to the races. If we win prize money, that’s great, but it’s not always guaranteed on the racing side.”
BTX Racing has recently launched a breeding option, which allows investors to purchase micro-ownership broodmares and receive a cut from the sales of the expected foals.
“The foals are about to hit the ground in August and September, so you are going to come on the experience of watching the foals grow up, through to the auctions,” Piek said.